Pivot - Market Madness, The Latest on Roe, and Guest Kirsten Grind

Episode Date: May 10, 2022

Kara and Scott ponder the market slide and where its worst impacts will be felt, and discuss legal efforts to jump-start a Post-Roe society. Plus, Elon thinks he can quintuple Twitter’s revenue in the next six years, and Meta is going physical. Today's Friend of Pivot is Kirsten Grind, the co-author of of “Happy at Any Cost,” about former Zappos CEO, Tony Hsieh. You can find Kirsten on Twitter at @KirstenGrind. Send us your Listener Mail questions by calling us at 855-51-PIVOT, or via Yappa, at nymag.com/pivot.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Just go to Indeed.com slash podcast right now and say you heard about Indeed on this podcast. Indeed.com slash podcast. Terms and conditions apply. Need to hire? You need Indeed. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher broadcasting from Scott Galloway's

living room in New York in Soho. I'm very excited. Hi, Scott. You're in the other room. Guest in the man cave. Hello. Hello. People do not realize that we really do spend time together now. It's really kind of fascinating. We're going to go out for drinks later tonight, just, you know, a late night, you and me at Balthazar. How's that? What do you say? We're so old. I made reservations for us at like 6 at Baltazar, this touristy place at like 6 p.m. 6 p.m.

I'm free at 10. Then we'll come home and we'll watch Murder, She Wrote, have some prune juice. That sounds good. Maybe do an ear candling if we really get crazy. That's disgusting. You probably do ear candling. In any case, I'm here at Scott's apartment because I have some meetings. And Scott is here, and it's apartment because I have some meetings.

And Scott is here, and it's unusual because we're together, and we will be plotting later in the night. Anyway, so today we'll talk about the recent market madness, the latest on Roe versus Wade. And we'll speak to Kirsten Grind about her book, Happy at Any Cost, about former Zappos CEO Tony Hsieh. I knew him very well, so I'm really looking forward to this. He was a really interesting character. But first, the latest on Elon Musk's plans for Twitter. I know we don't want to talk too much about Elon, but he thinks he can double its revenue with subscriptions alone and quintuple it in the next six years. The New York Times got a look at the pitch deck he presented to investors, which detail exactly how he plans to do that. His strategy includes cutting reliance

on advertising to 45% of total revenue. I think it's almost all of it right now. He wants to add payments business to the platform, and he plans to drive up Twitter Blue subscriptions while also adding a second subscription product he called X, which was the name of his first company, oddly enough, one of his first companies. The Times guesses it might possibly be an ad-free product. Scott, this sounds like Scott Galloway's plan for Twitter, I have to tell you. What do you think? Well, I'm going to go out on a limb here and speculate that he listens to Pivot because he's, and I also want to acknowledge that it's possible that different people come to the same conclusion around the same time. But he, essentially what's driving this is he has decided with the market starting to draw down and probably a recognition

that if Twitter went up a thousand000%, it could go down 90%. And he's trying to find new equity investors. And the pitch around fund my misadventures and free speech in the moment you ask one or two questions, what I'm saying makes abso-fucking-lutely no sense, wasn't resonating with additional equity investors. Yeah, he got a kind of a grab bag, as we said last week, for people who weren't tuning in. But go ahead. investors. Yeah, he got a kind of a grab bag, as we said last week, for people who weren't tuning in. But go ahead. And so he's moved to a more thoughtful and compelling narrative, and that is specifically a move to subscription. He's talked about getting rid of the bots. He has talked about incorporating, and he's got an investor now, payments. He wants to do a billion in payments

by 2028. But this is, I mean, granted, this is an individual who said there'd be a million autonomous taxis on the road by 2021. So a lot of this is hand-waving, but it's elegant and compelling hand-waving because going from, you know, one or 2% data and analytics and subscription to 45 is really compelling. Creating a payments platform that he believes there, you and there should be at some point some meat on these bones, over a billion dollars in payments. And I think actually that's the real unlock here. I'm usually the subscription guy, but something he started talking about and something that made me realize, if they can get to payments, they technically could position

themselves as the most credible super app. So explain what payments is for people who don't understand. I mean, the subscription is you pay for the product. You don't have to deal with ads. You get a whole bunch of features. Twitter Blue is very thin on the features. Not very helpful, really. It's got to give you things you want to use. But payments, explain what that would mean to regular people.

Well, try transferring more than $10,000 overseas. It's like trying to get a mortgage. And you set up a wire, which is time-cons consuming and expensive, and regulatory agencies come'm renting a house. I don't want to pay 3% visa fees. I don't want to pay currency exchange fees. I don't want to go through my credit card. I don't even want the US government to know that maybe I'm transferring money. There's currency controls all over the world in terms of outflows. And so the idea that you could just go on Twitter and say, okay, I'm transferring. I want to take advantage of the pounds a week, you know, and I want to pay in pounds. Or I'm transferring money back to El Salvador to friends or whatever, family.

And boom, it's as easy as sending a tweet. That's very powerful. So how would that compete with Venmo and PayPal, et cetera? That's how I pay for most of my things now, I have to say, both of those services. Right. But what Twitter has is trust, a relationship, a user interface. And what he's trying to do is get them to have those credit cards on file for what he's, and this is the most surprising thing about what he said, or I thought

the most stunning thing, is that if you have relationships, including a credit card for 100, 200 million people, and it's trusted, and it's instantaneous, and everyone is on a similar protocol or platform, you have something really powerful. Because I don't think any of these payment platforms, other than Visa and MasterCard, have that many people on them. The thing that struck me was that he wants to quintuple revenues by 2028, which let's just say what this is. It's going public then. That's what he wants to do. Well, yeah, but to go from 5 million to25 billion in what will be about five years is definitely the, you know, Venti, big up ayahuasca business plan. I mean, that's... Maybe he's selling ayahuasca. Well, seriously. Can I just say one

thing? He has been in... This is the business he started in. He started x.com. That's where I started covering him. And it merged with PayPal. So he does know this area quite well. 100%. 100%. That was his biggest... that was the beginnings of his fortune. By the way, I told you I spoke at the PayPal, this PayPal conference last week. And as I was busting into my especially angry, like, Elon Musk is not a great role model for men. It like dawned on me as I was really like getting heated that I was speaking to a company whose co-founder was Elon. Well, he didn't find PayPal. They merged them. X.com was his. It was interesting. Well, I may also say he didn't found Tesla. But anyways, okay, the guy who gets the most credit for it. No, he founded X.com and it merged into PayPal. It was exactly the same company. They

were right near each other in San Francisco. I think it was San Francisco. And they warred and then they merged. And then they were the PayPal mafia. Is that fascinating behind the scenes color coming out in your new book? Is that coming out? No, I don't care. I didn't much like them back then, that whole gang. They loved to call themselves the PayPal. They always have to do their mafia thing.

They're, like, so undangerous, these people. Do you see that picture where they hired, like, you know, what's-her-name, Annie Leibovitz, to come in? They look like the worst motorcycle gang in the world. They're literally like the Marin County Dentist Motorcycle Club. I mean, they just look so fucking lame. I was thinking me and three lesbians could take their part in very quick order. Talk about thanks. I don't want to have a boner.

Anyways. Anyhow. Anyhow. I'm just saying he has experience here. Back to Twitter. Back to the plan. The thing is he wants to quintuple revenues, which is, let's be honest, aggressive. But he doesn't – and he wants to go to subscription.

But what I found interesting, he wants to go from a quarter of a billion users to a billion. And I don't know how many of those are actually not people. So he's not talking – he's talking about differing – changing the complexion of the monetization and going to half subscription, which is the right move. But he's not talking about an increase that great, only a 20% increase from $25 to $30 per user. What he's talking about, though, and it'll be more interesting to understand why, is how he's going to do this, is he's talking about going from a quarter of a billion to a billion users. Yeah, that was a little fun. Changing your business model, usually when you go to subscription, you create a more valuable company with fewer users.

So there's some inherent contradictions here that he's going to have to answer, but he's moved away from this unfundable, irrational, quite frankly, just challenge. We're just having fun. Well, it should be less moderation. It's like, well, okay,

help me understand how that's going to help the business. He's still doing that, though. He was on Twitter sort of slapping, saying that Twitter was leftist, and then he said if he died mysteriously, something he was doing, that kind of weird treat. His mother didn't even like it. He didn't think it was funny. He's still doing his thing

on Twitter, which is his thing. Whatever. He's not going to die mysteriously. But he's gotten serious about raising money because he absolutely wants to diversify. He needs some cash from other people. 100%. He needs some believers. He needs some believers. He'll get them. I think he'll get them. So Meta's latest plan

to get more people into the Metaverse is a new brick-and-mortar store. We'll sell the Oculus Quest 2 headset, accessories, portal video chat devices, which you can't give away. It's located on the company's campus. So it's not even in a mall. It didn't even do the Microsoft route,

which was always so sad to me. Apparently one quarter of teenagers say they own a VR headset, which is pretty high, but only 5% of them use them regularly. That's the issue. As you said, with your teens, started to use it, then doesn't. Losing money on this hardware division,

Reality Labs, I division, Reality Labs. I mean, a store. Shall we go? Let's go. Let's go to that store. What do you say? I actually think this is a good idea. Okay.

And that is— Why? I don't. Do you want to go first? Why do you not think it's a good idea? No, no. Just go ahead. Tell me why.

I don't think it's a good idea. I've seen a million of them from Dell to— K-Way. There's so many. There was another one I forgot the other day. Walt Mossberg reminded me of it. It was in Palo Alto. They're always in Palo Alto on this one corner, and they're not the Apple store.

But go ahead. Well, so for 12 of the last 15 years, actually probably 13 or 14, I've been telling companies, you need to take money out of retailers and luxury brands. You need to take money out of your retail budget, your brick and mortar budget, and put it into customer acquisition online. And every year, the rents that these companies charge online, whether it's Google or Facebook or Amazon, have gone up. And what you've seen in the last two years since COVID-19 is you've seen the rents that retail can charge have dramatically drawn down. And that is for the first time, you can get percentage of revenue deals in tier A malls, which you never would have been able to

get just three years ago. And so it's changed the dynamics. So I think A opening stores is much more economically feasible than it is, but more so than anything, I think Facebook, with the types of products they have, need a controlled environment where they can explain them and display them. Yeah, but it's in their campus. It's on their campus. Oh, yeah, but that's where they're starting. Have you gone there? Yeah.

Oh, yeah, I get invited to the Facebook campus a lot, Kara. No, I don't either, but you don't get to go to the good parts where all the cool restaurants are and all the food areas. But, I mean, you know, Apple has a store, actually, outside of its main, that incredible space thing they built. And it's a beautiful store. And there was a lot of foot traffic there, I'll tell you that, even though it's kind of more remote. It's not as remote as the Facebook one.

The Facebook headquarters is remote. Yeah, but isn't, I read this as this is a proxy and a beta test for ultimately what might be eight or 12 stores in cities around the nation. Yeah, it could be. Yep. It's in Burlingame. They have a campus in Burlingame, and I forget what they bought there, which is, it's not their big campus, but it's still, they're all, if you've gone down to any of these campuses, they're hard to get to. Sure. Okay. I just watched Microsoft do it, and then there was another phone company that did it. Well, Verizon and AT&T both have stores. I mean, they have huge networks of stores. No, I get it, and then there was another phone company that did it. Well, Verizon and AT&T both have stores. I mean, they have huge networks of stores.

No, I get it, but this is not going to—you buy this thing once, this Oculus headset, and nobody buys the Portal. Well, there might be pop-ups. Pop-ups would be good. That would be good. Look, I think it is very difficult to sell over the long term a branded high-margin product that requires explaining without being vertical. And if you're going to be relying on someone else to sell the Oculus, as challenged as it is,

and the Portal and all that shit, good luck to you. I mean, the only place I've seen a Portal is in the Amazon store. And I wonder how much Amazon is excited about merchandising the Portal. I love those stores. Yeah, the Amazon for sure. I have to say, I love those stores. We have one in Washington. I like it a lot. It's a very attractive store, very well-merchandised, full of stuff. I spent an one in Washington. I like it a lot. It's a very attractive store. Very well merchandised. Full of stuff. I spent an hour in there.

It was kind of cool. They had cool stuff. Whoever's doing it, merchandising is really smart. But nonetheless, not much traffic. You know where they should sell the Oculus Quest 2?

In the Apple store. It might do well there. You think? I don't think that's going to happen. I know, but I'm just saying that's where they could explain it best for you. Yeah. I just, you know, I don't know. I'm getting happen. I know, but I'm just saying that's where they could explain it best for you. Yeah.

I just, you know, I don't know. I'm getting you one for Christmas, as you know. You're getting one for Christmas. Well, I don't know. The man who does everything. Just put me on a roller coaster and I'll throw up. Same, same. Okay.

No. All right. Last thing. Google is trying to stem the bleeding from the great resignation that the company is raising pay and streamlining the employee review process. That's after the most recent annual survey showed employees were increasingly unhappy with their pay compared to what they could make at similar work. Another company, Google, is also simplifying its promotion process, which requires lengthy forms and relied heavily on peer reviews. It will not issue a blanket pay raise to keep pace with

inflation, but they pay people rather well there. It's interesting because then the top machine learning person left Apple because he wanted to work from home and they wouldn't let him. Like there's all kinds of problems with all these companies and retaining talent. What do you think of this? I think it's really the market. I mean, the beautiful thing about the market is typically when you hit a lot of big numbers, I mean, people just couldn't from – there's a decade at a lot of these companies where you just really can't leave. And that is you look at the shares, the options on the shares you were awarded or the RSUs, and for every year you stick around,

you're going to get another $700,000 million, $2 million. And so Amazon's off 30%, Apple's not off nearly as much. And then you have Facebook off 50%. You have Google, I think, off 20% or 25%. All of a sudden, people look down and go, okay, my – and the options, if you have options, not RSUs, the tail of the whip is even greater. So, it's like, okay, instead of getting an additional $300,000 a year, I'm getting an additional $110,000, and I have this cool payment startup that's been coming after me. Or me and the other two VPs who maybe started a little bit later than me and don't have quite as much to lose, we've all thought about starting some kind of cool company together. So the bigger companies, mature companies all go through this

transition where they change their compensation from equity to current comp and their current comp skyrockets because they can no longer say to people, oh, well, you have, they no longer know when they're doing negotiations, this person has 7 million in unvested shares. That's no longer the case, right? So this is a natural part of the ecosystem. I think it's healthy. Google pays – these companies – Google actually, my understanding is, pays really good cash comp. Facebook is right there. Amazon is lagged.

But they're smart. They realize – Well, one of the things is, you know, I had – my ex-wife worked there. And I remember when she was explaining the promotion problem with Director 1, Director 2, VP 1, 2. It was, like, totally incomprehensible. And then the peer reviews were involved, but it never seemed to really matter. It seemed really crazy of how they—it seemed so random. And I know it wasn't, but it was one of the more confusing promotion processes.

The problem is, as many VCs, there's a real shutdown of VC funding. People are really pulling their horns back in. So it'll be interesting to see if they have options, right? Although, as we know, great companies have started in a downturn. But most VCs are expecting quite a severe downturn, I think, from just watching even just their Twitter discussions. There's been a lot of pullback. So I don't know where they go. You'd think they would run to somewhere like Google or Facebook in that time, but I don't know. Interesting. There will be some,

you know, in a recession, you go to the safe places when that's actually- Safety, right, yeah. That's actually the place you should, that's the time, the best time to start a company, actually. Yeah. But yeah, you can make an argument, you can make an argument either way. But, you know, the people, the best time to start a company, actually. Yeah. But, yeah, you can make an argument. You can make an argument either way. But, you know, the people when you see at any of these big companies, they're all vaguely unhappy, even though they're sort of living in full comfort. They've got, like, a warm fuzzy around them all the time and all the good food and everything else. But there's a point of making kids too comfortable.

It's like Down Abbey. Would you want to live in Down Abbey? Yeah. I always think, like, I would just— No. I'd like it Abbey. Would you want to live in Down Abbey? Yeah. I always think I would just. No. I'd like it for a week. And then I would just be like, what do they do? Like, what's their source of pride?

What's their source of meaning? Yeah, agreed. Yeah, I think they feel like they're part of a thing. Everyone I talk to at these companies is always like going like this. And I'm like, wow, that's a lot. Like, there's this person, you know, making Chipotle over there that doesn't get to do this. I don't know. It's going to be very hard to keep people engaged as the companies grow older.

All of them, every one of them. And people now want to do what they want to do, like this machine learning guy at Apple who's apparently quite high up in the organization. Anyway, they've got to figure this thing out because where people are going to work, especially these tech companies where they can move at many times, is a big deal. Okay, let's get to our first big story. After an insane last week on Wall Street, literally what is going on with the markets? Quick recap. The Fed raised rates on Wednesday and the market took off. The Dow had its best day since 2020.

But then on Thursday, it erased all those gains and more amid concerns that the Fed might raise rates again soon. The tech stocks took a particularly big hit. The Nasdaq hit its lowest point since November 2020. Netflix hit a four-year low. Snap, Meta, Apple, and Alphabet were all down. As you pointed out in your newsletter this week, Scott, roughly half the stocks in the Nasdaq are down 50% from their 52-week highs, a quarter are down 75%, and more than 5% are down 90%. So, Scott, this is, again, we talked about this a little last week. Is it less exuberance? Are people worried?

There feels like there's something in the air, you know, in terms of people, you know, coming out of the pandemic, but not quite out of the pandemic. So, do you think it's going to get as bad as 2001 and 2008? That's a tough one, but you could argue for the growth sector, it kind of already is as bad. There's, you know, you're talking about great companies. Moderna is a great company. Roku's a great company. These are, Pinterest is a great company and they're off 70, 80%. These payment platforms that felt like they were going to take over the world are down 60 and 70%. So in that sector, it's already kind of happened, but it just comes down to what I think is a fairly basic thing. We overdid the stimulus. The only way to get your arms around inflation is to raise

interest rates. We have never been able to raise interest rates like this without going into recession. Let's talk about cryptocurrencies are down. Bitcoin and Ethereum peaked in November, now down roughly 50 percent to like $32,000 for Bitcoin, I know. And also VC funding is down, as I said. VCs are down on startups because valuations are down. IPOs and exits are slowing. Venture money into startups totaled $47 billion in April 2022, which is the lowest invest in the past 12 months. Tiger Global, the hedge fund with the most investments in private billion-dollar startups, is down 44% this far.

That's a crazy number, and 15% in April alone. I tweeted a fascinating thread from tech strategist Nathan Bache, who summed up this situation in the tech sector pretty simply. He said, shit is hitting the fan. Oh, look, there's just no doubt about it. If you're one of these, if you talk to a VC, almost every fund that was deployed last year is massively underwater. Massively.

And then you have, I mean, you have this kind of perfect storm of interest rates are going up. It's very difficult not to go into recession. You know who's really screwed is Europe because at least in the U.S., we are food and energy independent. Whereas in Europe, they are neither of those things. And so you could see Europe going to a severe recession. And what everyone's hoping for here is a soft landing. It'll probably be a hard landing. But our economy is diversified. We have sectors that are still doing really well. But the scariest stat that's come out is we had record debt, consumer debt in March. Yeah, people wanted to spend after the pandemic.

Well, not only that, but young people, generally speaking, current income, the reason current income is so dangerous is you have the illusion that current income will always stay the same or go higher. And so you increase your spend to that. And then among young people who have not only increased their spending, but increased it dramatically. And then you have this, what I think is this moral hazard of, well, I haven't had to make my student loan payments for two years, and there's a chance that it'll all be wiped away. And you layer in this buy now, pay later, which is nothing but consumer debt with no guardrails masking as innovation. You had noted that to me, this buy now, pay later. There's been a lot of articles lately on this. Oh, Cara, it's a fucking train wreck. It's a fucking train wreck with lipstick on it. The innovation and young, isn't this cool? This is finding a new way to give easy credit to people who, quite frankly, should have had the guardrails of not being able to get that credit because they can walk into a free people store and buy $400 in outfits for Coachella when they can't afford it. You're going to see this is a big deal.

A credit squeeze, yeah. It's just all the moons are lining up, and then you're just going to see forced selling. You're going to see a lot of people get margin calls and start to sell. Now, having said that, about the time a guy like me says, it's going to get really bad, the market rips up again. Markets don't go straight up or straight down. There'll be some big days in the market. So whenever anyone says to me, okay, well, what do you do then, Scott? I'm like, I personally am always in the market.

It's just as I've gotten older and my Kevlar is diversification. I try to be in a bunch of different things that are somewhat uncorrelated. You can never find anything that's totally uncorrelated because diversification has meant everyone's invested in everything. But it is, I just don't think there's any getting around it.

Yeah, you should diversify. That's always something. I mean, Scott here has a closet full of ketamine right now as we speak. Where did that come from? He's been emptying it. Where did it come from? A closet full of ketamine? My brother has a closet full of things for the apocalypse.

Does he? He has a go bag? He has a – not a bag, like a closet. Like a closet, yeah. I don't know. I don't know. Two-headed glass dildo, some ketamine, a Pam Brewer video. No, oh my God.

I'm ready to go. Oh my God, why'd you go there? And my testosterone. That's it. Oh my God. But anyway, tech companies are laying off employees. This is a big deal. Robinhood cut nine, we talked about them last week, 9% of its workforce.

Meta is slowing or freezing hiring for mid-level and senior roles. And Uber, Dara Khosrowshahi, who you talked about last week, announced plans to cut costs and treat hiring as a, quote, privilege, which means no hiring. That's what that means. So what do you do with your company? Do companies go on buying sprees because there's too much antitrust settlement also at the same time? What do you think is going to happen here? How long does this last? I don't know. I think that depends on a variety of factors, including, you know, Europe's superpower, which is to start world wars, if that actually keeps happening. So,

I don't think anybody knows, but there's just no getting around it. Every company I'm on the board of, we are looking at costs for the first time in a long time. I'm on the board of another company that's laying off people. You're going to see, there's just no doubt. We've been feeding at the trough for a while and companies are going to have to tighten their belt. There's just no getting around it. We're going to see layoffs and it's going to ripple through. It started in the public markets. It's rippling through to the private markets. And kind of one of the basics of strategy is if you're in a position, you never make up more ground than when you play offense when everyone else is playing defense. That's the point. Yeah. And you're going to have companies

that are still doing really well. And even though their stocks are down, if they can feel they're confident they can get around antitrust, are going to go start acquiring companies. I mean, Peloton is a great deal right now. Pinterest. Yeah, they're looking for investors, by the way.

You know, Peloton will do a debt deal, but it's a great acquisition for somebody. Roku is probably a great acquisition for a big media company right now. Yeah, Pinterest. Pinterest. There's a lot. There's a lot of companies that all of a sudden are in the 70% to 80% off bin. Yep.

Quality goods. Quality goods. That beautiful pair of shoes that you kept for your whole life. There you go. It's a quality discount. All right, Scott. Let's go on a quick break. And when we come back, the abortion fight isn't coming down anytime soon.

And we'll speak with a friend of Pivot, Kirsten Grein, enterprise reporter at The Wall Street Journal. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank.

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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. Thumbtack presents the ins and outs of caring for your home. Thumbtack presents the ins and outs of caring for your home. Out. Indecision, overthinking, second-guessing every choice you make. In. Plans and guides that make it easy to get home projects done.

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that further confirms the Supreme Court's intention to overturn Roe v. Wade. The latest report confirms that, quote, the five-member majority to strike Roe remains intact, according to three conservatives close to the court. Senate Democrats are planning to vote Wednesday on a bill that would make abortion legal nationally, which doesn't have the 60 votes to overcome the filibuster in the 50-50 Senate. Senator Chuck Schumer is still promising to bring the bill to the floor as a strategy of making every senator go on the record about their position. I mean, it's okay, sure.

So, and there's all kinds of things about making abortion murder in some states, not allowing, you know, my brother, Dr. Jeffrey Swisher, went nuts around ectopic pregnancies. So meanwhile, telemedicine providers and groups are seeing a massive spike in the number of people requesting information about actual abortion pills, according to Politico. And Mitch McConnell said a national ban on abortion would be, quote, possible. So anyway, what do you think of the situation? People who have been telling me on Twitter to calm down. This is just the Supreme Court deciding they shouldn't be in the business of this and that it should be left up to the states and that your hair is on fire for no reason.

What do we see? The governor of Mississippi stated for the first time, had the confidence to say on network television that a ban of contraception is not off the table. cascade or waterfall back to, again, absconding the rights of people who are disproportionately people of color, disproportionately women, disproportionately people who don't have a lot of economic flexibility. You know, just this couldn't be, as the world is realizing that to be a progressive nation, to invest in prosperity involves taking, you know, giving people rights, not taking them away. We are going the other way. It's just, it's like, you know, giving people rights, not taking them away. We are going the other way. It's just, it's like, you know, you're literally waking up right now and going, is this my America? Yep. I know you were saying that. You were saying that. You were talking about that

earlier today with me. Canada has said they will let people come there to have abortions. It literally is that, you know, Margaret Atwood wrote a really amazing piece in The Guardian. It was from a talk she gave. She, of course, wrote Handmaid's Tale. And I just think she's just a good predictor. Not a, you know, she's writing about dystopia. And so, it's really quite amazing, a lot of the stuff. In that book, Canada and Mexico were the good places and the U.S. was not. And, you know, one of the things that drives me crazy is, like, we're alarmists.

You know, we're not alarmists. We can read and hear what these people are saying. And so it's really, it'll be interesting to see if it has, if they've gone too far, if they're over their skis on this stuff. You know, they're really overreaching in a way that is really significant. But they're hoping in order to stay, to be able to do this is to lock in their voting wins and then lock in a minority rule, essentially. This is a minority position.

Whether it's on gay rights, on contraception, on abortion, this is a minority point of view. And so they're hoping to lock themselves in so they can impose it on everybody else. Yeah, I mean, hopeful that it inspires people to realize, no, we've been saying it could happen and it is happening. And with it, it begins to catalyze a broader conversation around the need for moderates. It hopefully catalyzes a conversation around young men to say this impacts us in terms

of our ability to have economic viability ourselves, what it means for our daughters, our mothers, what it means for our ability to start businesses and have a workforce. You know, I hope that, you know, men start thinking about, young men start thinking about, okay, let's be honest, guys, we love to get laid. And it's always the guy's idea to have, to what the heck, let's have unprotected sex. It's always the guy's idea. And if you look at why women have abortions, the majority cause, first off, the majority are done in the first 12 weeks. And the majority of the reasons or the most prominent reason given is they have an unreliable partner. And it's always the guy that wants to have unprotected

sex. So guys, let me just put it really base. You want to get laid, this is going to severely threaten that because women have a much finer filter for who they have sex with and how often they have sex because the downsides and the commitments are much greater for them than for us. And all this is doing is vastly widening that gulf. So if you want to go back to old Spain where men had to come to the house and court a woman for 15 months before, you know, getting engaged and then having sex, okay, that's where we're headed. This is going to have all kinds of ramifications that people haven't even thought about. You spoke very eloquently about it last week. A lot of people were very moved by it.

I was certainly. About your mom and everything. But it's really, there's no such thing as too much alarmism here. We have seen it. I mean, again, the gays know when they're up to trouble. Speaking of which, there was a very good New York Times piece about Ed Koch being in the closet this week, which you should read. Yeah, it was really gripping. Really sad.

It made me feel sad for him. It was sad. Yeah, it was sad. This week, which you should read. who was an activist, said he lived in the same building as Ed Koch. And he used to say to his dogs as they were passing each other, there's the guy who killed all of daddy's friends, which was just so vicious but fantastic on some level. It's true. He was, as much as sad as it was, it was also, what a terrible thing he did and allowed to have happened and didn't really respond to the AIDS crisis. At the same time, by the way, the New York Times,

which was not in this piece, was quite anti-gay for a very long time, too, in terms of covering this stuff back then. And I wish there was a little more of that in that piece, but it was really a very moving and sad piece about the policy impact of a closeted homosexual, of which they exist today, and we know who they are. It's really, it brings up a lot of, and it's something that the straight community doesn't really empathize with, or at least I didn't have, I didn't think I knew any gay people when I was in college. And then what I found out is the majority of my close friends are gay and were gay. And as soon as they got out of UCLA, where you couldn't be gay in the 80s, I found out.

And I remember saying, and a couple of my close friends didn't come out until the late 20s and early 30s, and I just didn't get it. I'm like, we live in San Francisco or New York. None of your friends were going to judge you. Why wouldn't you just get on with living their life? And they kind of sat me down and said, Scott, do you have any idea how upset my parents were going to be, upset my employer was going to be, how upset I was going to be at myself? I had been taught my whole life there was something wrong with me. And you just, in reading

that story about the mayor, it really took me back to just how hard it is. And we don't get when you're straight and you feel like you're a progressive and you're like, well, I would have accepted you. It's like, well, maybe you would have, but the world wasn't going to. I'm having flashbacks right now. You're causing me to have flashbacks, honestly. It sucked. It sucked. And it took a lot of guts to come out, of which Ed Koch did not have, and which many people don't have. And by the way, same thing with abortion. A lot of these people pushing this stuff all either have had abortions or have directed their mistresses to have abortions, and it's good for me quietly and then do this virtue

thing where there's so many stories of those people. It really is. I would urge you to read Margaret Atwood's piece. It is Handmaid's Tale. That book is a primer on some of the future. Not every bit of it, of course, but it really is an attitude towards women's bodies. And, you know, she said enforced childbirth is slavery, really, of women. And I don't think she said that lightly.

It's a very good piece. You should read it. For more on the Supreme Court leak and its implications, you can check out some of our other shows across the Vox Media podcast that we're covering the story, including Stay Tuned with Preet, The Weeds, and Today Explained, wherever you listen to Pivot. Wow, this is a fucking bummer, Scott, in your apartment. Jesus, Louisa. So now we're going to bring on a friend of Pivot, Kirsten Grein. Kirsten is an enterprise reporter at The Wall Street Journal and co-author of Happy at Any Cost about former Zappos CEO Tony Hsieh, who died tragically several years ago. Welcome, Kirsten. So I knew Tony very well and spent a lot of time with him in this book and all the stories about his death, his untimely death.

Although for people who watched him for a while, it was also not a surprise in some ways. Can you tell us what Tony's story tells us about Silicon Valley? He was a lovely person and also troubled at the same time and almost very poignant and sad, I recall, even when he was living, even though he was devoted to happy workplaces. Can you talk a little bit about him in general? Definitely. Thanks, you guys, for having me, by the way. So, Tony, what a heartbreaking story. He was truly this legitimate entrepreneur. I feel like we cover a lot of entrepreneurs here who aren't so earnest and good as Tony was. He tried very hard to revolutionize the workplace, right? But all along,

he had these sort of hidden mental health issues that kind of popped up along the way, but were very easy to sort of ignore, gloss over if you were a friend of his or a coworker. It's really easy to just see someone drinking regularly and copiously, but functionally and just kind of ignore that. And that's what was going on with Tony. And it's kind of the reverse story in a way of like, if you think of like Adam Newman at WeWork or something, right? So these are people that truly did something wrong at their startup. But it's the same trend we're seeing across Silicon Valley all the time, which is this notion of turning these people into gods, right? And that's exactly what happened to Tony, too.

And that's exactly what happened to Tony, too. He became this sort of like business figure, happiness messiah, and became sort of not even a real person. So people who don't know it, in his company, he had this, I did a whole, I did a funny video, if you go back years ago, walking through this place. And it was relentlessly happy. And it had all kinds of things that he, like people putting on whatever they wanted on their desks. They did all kinds of weeding people out who weren't happy. It was an odd and interesting way to run a company. It was in Vegas at the time where he was, and then he did other things in Vegas also.

And he did holacracy. He was always trying to perfect the workplace because his workplace was his family in a way that was unusual, I think, although many entrepreneurs are like that. So can you talk a little bit about this? Because he had a bus that he went around on with his book about happiness. He'd always try to hug me, which was irritating. It's every level. I'd be like, I'll break your arms if you hug me one more time.

But talk a bit about this idea of creating families and happy workplaces and then not being happy. And he did drink quite a bit, as I recall. Yeah, it's funny because now that doesn't seem that unusual, right? But sort of back then when Tony was pioneering it back in, say, like 2008 to 2010, this notion of like your employees being happy was really odd. And it was, I like the word relentless because it did seem relentless to some people. I mean, stuff everywhere, paintball fights, interrupting your work, parties all the time. But for some reason, it really worked for Zappos for quite a lot of years. And they sort of, I've never talked to

company employees who loved a company as much as they loved Zappos pre, say, 2018. They just were obsessed with that place. And so he had clearly figured something out. Yeah, they were perfectly, there's a lot of cupcakes and sugar, as I recall. But Scott? Yeah, they were perfectly pleasant. There's a lot of cupcakes and sugar, as I recall. But Scott? Kirsten, nice to meet you. I find this story, what's interesting about the story is more what it says about us than the actual story. And I don't have the same affection for Tony as Kara or probably even you, having gotten to know somebody.

I just feel like he was a drug addict and like one of the 55,000 other drug addicts, mostly from opiates that died. But because he was an innovator, we're fucking fascinated with him. And I just find it's more of a kind of a weird reflection on us that Dope Sick gets an amazing series to represent the 55,000 unmarked graves of basically middle America and lower income America. But Tony Hsieh is a tragedy. You know, it's just – I find it's just strange that we find it so heart-wrenching because he built an amazing shoe company and sold it for hundreds of millions of dollars. But at the end of the day, this is, he was a drug addict. And I'm curious what you think are the kind of what this says about our society, our fascination with Tony Hsieh. And I realize I'm putting words in your mouth here.

No, I was not expecting that question, but good one, Scott. No, that's a great question. And you're certainly not the only person to feel that way. So I'll start with a little story. For the book, you know, Tony died in that shed in New London, Connecticut. He was found in a house shed, a pool shed basically, at a residential house in New London of one of his friends. And in the shed, there was a fire, there were whippets in there, nitrous oxide, there was flammables like candles. He was pulled out of the shed and then died nine

days later from smoke inhalation. And just by the way, the death has been ruled an accident. They couldn't really tell if it was self-harm or if it was just something in the shed like a propane heater that caught fire. So because of this, I had to spend some time in New London with the fire investigators. And New London's an interesting community. There's a very poor section. Tony was in a house in a very rich section. And I remember the fire investigator who had been there for decades said to me, you know, I wish that the media would care more about the dozens of people that are dying in this poor section than this one billionaire that kind of showed up in our town and happened to die in this tragic way. And Scott, I think that's kind of what you were getting at is his death has kind of been magnified in a way that it hasn't for normal people. And so we did really try hard to make this a story about all of us because that's actually what it is. It's not just a story about Tony Hsieh. And I personally

had never even heard of Tony Hsieh before I started investigating this. I don't think he's a Steve Jobs type name. But what this kind of shows is what happens when all of us are going along our lives. And we're just ignoring all these things that are happening to us. And we're focusing on the wrong stuff. Maybe we're trying so hard to be happy because that's sort of shoved down our throats in this culture. And it's sort of showing in a dramatic fashion what can happen if you do that. So that's a very long-winded answer. Sorry. That's a great answer, Christian. Can you talk about the mental illness too? Because really, what happened was it got glossed over by his series of enablers. And there were some enablers that were better than others. He was troubled,

the pandemic particularly isolated him with more and more people who were just being paid for by him. I remember going to Vegas and visiting him when he was doing the whole holacracy thing. And then he had that park in Vegas, which was really quite beautiful, the thing he made there. But it was sort of, there was all kinds of tragedy in that thing, in that there too, where he was trying to build out this perfect ecosystem of entrepreneurs. Ignoring a mental illness in entrepreneurs is really profound, I find, or as they're going around the bend. Was there any intervention by anybody or could there have been any, given how much money he had and how everybody was on his payroll? I remember saying that to him. I said, everyone here is on your payroll. So, of course, they're going to say

you're great. It's a seriously huge problem. I think mental health issues among entrepreneurs, because the same traits that are making you a great entrepreneur can lead to some of these issues, right? And so with Tony, again, his issues were easy to ignore for a long time. What happened in 2019 was Amazon, which owned Zappos, started putting a lot more pressure on him. And Jeff Wilkie, who was a Bezos lieutenant, sort of said, these workplace experiments are nice. Where's the money, right? And so at the same time, Tony's getting older. He doesn't really believe in traditional family. His friend group is getting younger. The party atmosphere at Zappos is kind of taking a dark turn. He decides to move to Park City, Utah, gets stuck there during the pandemic. His drug use begins to spiral out of control.

And that's when we start to see finally some intervention by his close friends and family. And they really tried. But at that point, he was surrounded by this group of enablers that were really blocking access to people reaching him in Park City, Utah. And then he moved. Then they got a hold of him in this place where he died, correct? Wasn't that by that time? They did.

So he had really gone downhill in Park City. And I think he knew there was this kind of secret intervention attempt being headed up by his very good friend, Jewel, the singer. And he started traveling a lot, I suspect, to avoid this intervention. And so he had been in Puerto Rico, then he was in New London, and they were like literally days away from getting to him when he had that accident in the shed. Scott? Yeah, I'm curious if it's the same arc here because I don't know the story as well. But there's kind of a narrative or a common story you find in the Valley, or just not, I want to say in success, success with males. They grow up, know what I'll call not a lot of social opportunity. They're the kid who's good

at math. They're the kid who has a business in high school and doesn't go to the prom. They're the kid who works his ass off. And by his senior year is already starting companies. The kid that has no relationships, no life, doesn't get to St. Bart's, doesn't get to fucking Saint-Tropez because they're coding till four in the morning. And they're not in good shape. They're not socially attractive. They're not sexually attractive. And all of a sudden, they become the sexiest man in the world because they're seen as an innovator and they have hundreds of millions of dollars, which is attractive to friends and romantic partners. And they literally have 40 years or 20 years of sensory deprivation of pent-up demand.

And all of a sudden, and I'm not going to say I can relate to this, but partying in amazing places and hanging out with young people and having sex with young people is a lot of fun. places and hanging out with young people and having sex with young people is a lot of fun. And when you haven't had a lot of that up until that point, you don't know how to modulate. It's like sticking my 11-year-old in the store on Atlantic Avenue in Delray Beach called Just Sugar and giving him a credit card. He's going to have a difficult time modulating. And I see this across the valley. These guys just go apeshit. And the other thing, I realize this is a speech here, I think we call them enablers. These guys made their own choices. They avoided people. They purposely chose this life. It's no one's fault, in my view, but their own. And we like to think that, oh, they were taken off course by a

series of enablers. There's no shortage of people who will hang out with you and tell you what you want to hear if you're paying for the bottles. But isn't this a common story through the Valley? That's true. Well, I'm going to push back on that, Scott. He was quite mentally ill, too, so you can take advantage of someone. I mean, he once told me that we're—I mean, seriously, Elon Musk has said this, is I think a joke, but that we were living in a simulation, so none of it mattered. He always kept telling me that. It was strange. And, you know, he was mentally, he had very severe mental problems. So, I don't know. Enablers, you could see it rather easily. So, I do blame some of those

people. But isn't this a common story? But let's let Kirsten talk. It definitely is. No, it's for sure a common story. And one thing for Tony specifically, going back to these mental health issues, is this took a while to uncover, which you wouldn't think it would be that hard to uncover. But he had this severe social anxiety. Imagine this person who's partying, who's in this candy store, drinking, seeing people all the time, living in an Airstream. Yeah, poker, living in an Airstream trailer park with this debilitating social anxiety. So he's, as well as realizing all these things for the first time, he's also sort of having to deal with coping with that, right? And another thing, not to also give a speech, but one thing that drives me crazy about this area is biohacking and how we all sort of celebrate these entrepreneurs for all their ice baths and all the stuff that we're doing. And that really harmed Tony at the end because he thought he could solve his own health problems. And through so much of the reporting, I just was sort of like, oh, can't he just like take some Zoloft or see a therapist? Like, why does he have to take like five ice baths a day or

regulate his breathing? I mean, some of that is fine to an extent. Yeah, most of us don't celebrate it. We think it's ridiculous. Yeah. Well, Steve Jobs tried to cure himself, right? He did. He killed himself in that regard. Yeah.

I mean, some of that is fine, right? I don't mean to say it's all terrible. Meditation is great. Take it to the extreme that Tony did, where he was ignoring very traditional remedies that could have really helped him, that's the issue. I just have a follow-up question. What is kind of the most, what is the one myth or the part of the narrative that the press and the general public gets wrong around what went down here? What surprised you when you sort of peeled back the onion here? You know, one thing, this is maybe a little bit in the weeds,

but Tony's family, it's an interesting family story, right? They were Taiwanese immigrants. His brother kind of had this complex where he wanted to be like him. And his brother was down in Park City with him towards the end, had been kind of sent in by the family to help. And the rumors we were hearing about what this brother was doing, just wild stuff that just never came to fruition. Back to the point of whose fault this was, this whole thing was like shades of gray. People were down there. There were some people that were outright just taking his money while he was sick. And then there were people like his brother who were taking some money, but also were clearly trying to help and were conflicted. They were dealing with an addict. afflicted. They were dealing with an addict. So one of the things that we really tried to get to the bottom of is the role of his family there, which I think had been sort of embellished along the way. Yeah. Meaning embellished that they tried to help him or embellished that they...

That his brother was like out to get him. I mean, I don't think his brother was like, quote unquote, out to get him, right? I think his brother was like a lot of people around him dealing with a mentally ill addict. With enormous money and enormously. I agree with you on your question, Scott, it made me think about it. He was, compared to a lot of these people, quite earnest. You know what I mean? Like it wasn't all bullshit with this guy. He really was a seeker. And so that's why it was tragic is because so many of the others are so malevolent and he just wasn't. He just wasn't. He was a sweet man. He was a sweet man. Right. And you know, it's funny because a lot of my work, I'm dealing with

people who I don't find that nice and sweet. And it took me a while. I really spent a lot of time asking people, was this for real? Like, was this workplace culture for real? Was this happiness mantra for real? And I actually think it really was for a lot of years, which is quite an accomplishment. He did. It was also weird at the time. It was weird at the time. I spent a lot of time at Zappos and it was weird. It was odd. I bet. And I was the malevolent person there. I remember, you're so unhappy here. I'm like, no, I don't have to say I'm happy.

I'm just realistic. Well, you had this really interesting interview. I don't know if you remember with him where someone in the audience asked him, I'm really shy. I don't know what to do if I'm speaking publicly. What should I do, Tony? What's your advice? And Tony doesn't answer for a long time. And then he says, drink alcohol. And I was like, now there is maybe a warning sign that you could have overlooked, right? I mean, what advice is that? Like drink? Yeah, he was fine for a while and then it What advice is that? Like drink?

Yeah. He was fine for a while and then it escalated. I saw him play poker a whole bunch of times and he had a special liquor he drank and a lot of it, like a lot of it became. The Fernet. Yes, that's right. Yes, that's right. He had someone pour it for him. It was very odd.

Anyway, separately talking about other stories, you're the lead reporter at the Wall Street Journal's Activision Blizzard investigation into sexual harassment and the role of Bobby Kodik. And you reported on Sheryl Sandberg's pressuring the Daily Mail to drop reporting on Kotick's misconduct. Will anything come of the investigation Meta is supposedly doing in that situation? Eventually, by the way,

Microsoft will take over this company and presumably all of the issues will be, Microsoft has its own history of sexual harassment problems, but they do know how to deal with it. So can you, where is it right now? Where, especially around meta? In terms of meta, that's a good question. I mean, we sort of have our eye on what's going on there. They were kind of narrowly looking at how Cheryl handled this whole situation with the Daily Mail. And this is the issue of her using Facebook resources to do so. She has her own

PR people, from what I recall. I haven't talked to her in years, but yeah. Exactly. It's whether she used Facebook resources specifically in her outreach to the Daily Mail, kind of on behalf of Bobby Kotick and his restraining order allegations, exactly. But it's unclear what, I don't know what's going to happen next there. I think that just came out recently, so we're still looking into it. Right, right. That's so odd. She has her own people, because I thought that would be a real mistake on her part. Go ahead, Scott. This is anything, I'm cynical. My assumption is that friends are always trying to help powerful people, other powerful friends,

and that this isn't that unusual. It just comes across especially cynical for someone who's tried to position themselves as a champion for women. But did anything really unusual happen here? That's right. That's exactly right. We all kind of just viewed it as an interesting view, We all kind of just viewed it as an interesting view, albeit a detailed one, into people potentially abusing their positions of power. Right. And I completely agree with you. I don't have like the evidence, but I'm quite sure this happens all the time. Everyone's gotten a call from Cheryl.

Let's just say. Right. I've gotten, hey, girl. No. Congratulations. I'm going to give you the other side of this story here. I No, no, no. Congratulations. I'm going to give you the other side of this story here. I mean, you can just see how. What happens to the acquisition, though?

I've talked to Microsoft people recently about this, and they feel like they're just sort of moving through it, just like trying to get everything done. It's interesting. It's sort of like I get asked that almost every day by an editor what's happening with the acquisition. It's just, you know, the problems continue to strangely keep piling up on the Activision side. So they have this SEC investigation that is very much still underway. Explain that. This is David Geffen and Barry Diller, correct? No, that's actually a separate one. So this first one is actually about how CEO Bobby Kotick and the board handled these sexual harassment claims over the years. Then the Barry Diller one is separate. That's a DOJ investigation into potential insider trading. And we recently reported that Activision and Bobby Kotick has been pulled into

that one as well. And that's, of course, separate from the Sheryl Sandberg thing. There's a whole separate issue going on with the state investigation into Activision. So these problems, they're still ongoing, but Microsoft is buying them. So I would be shocked if anything derailed that acquisition, to be honest. Still undergoing federal government. To be honest, it doesn't look good reputationally for Bobby Kotick or those Activision board members. But will it derail the actual deal? I think it would have to be pretty big. It's a good outcome for them.

It's important for Microsoft, which is interesting. In any case, everybody should read this book. Kirsten Grind works at the Wall Street Journal. She's a co-author. And your co-author's name is? Who is that? Catherine Sayre. And she covers gambling in Las Vegas for us here at the Journal. She's a co-author. And your co-author's name is, who is that? Catherine Sayre. And she covers gambling in Las Vegas for us here at the journal. It's called Happy at Any Cost.

And I know, Scott, I get your point, Scott, but it's a really, this guy was unusual and it was really tragic. So, everybody should read it. It's a really interesting book. You captured him rather well, I thought, as someone who spent a lot of time with him. Thank you so much. Anyway, thank you so much, Kirsten. Nice to meet you, Kirsten. Thanks for coming on. Thank you. Very nice to meet you guys.

All right, Scott, that was a great question, Scott. I hadn't really thought of it that way because I knew him so well. But one more quick break. We'll be back for predictions. As a Fizz member, you can look forward to free data, big savings on plans, and having your unused data roll over to the following month, every month. At Fizz, you always get more for your money. Terms and conditions for our different programs and policies apply. Details at fizz.ca. Okay, Scott, let's hear some predictions from you.

You've made several in the show already. And let's make it a happy prediction because life feels a little down right now. You're talking to the wrong guy. I thought so. You're talking to a guy who woke up on Sunday and thought, you know, is it a bad sign we're not going to have a great Mother's Day when I'm in a gas station thinking, do they have Mother's Day cards? You know you're just in for a rough day. I didn't get mine from you yet, but I'm waiting. Okay, you got me the green juice.

You get 78. You're literally, I mean, you got enough. That's like, that's, anyways, you're going to be, if you move to Japan, you're going to be the wealthiest woman in the world. Aren't they all supposed to support you when you get older? Anyway, I think that was both. Let me just say, all I did was kid stuff all day. So it was Mother Works Day. My prediction is not good. You can see how you

fall into this trap of playing up or down stories because of personal relationships. I just find it fascinating that all of these libertarians who are investing in or taking over Twitter are so critical of Twitter. But Jack's okay. Jack's one of us. It's like, no. Agreed. Come on. Agreed.

If you're looking for a culprit here, this thing was a fucking disaster under Jack. And you can blame the board, but fine. He was the CEO or the co-co-co-CEO. But I know this kid in the buy now, pay later sector, and he's just the most likable, decent, earnest kid. And I find that when I write about buy now, pay later, I find myself being reserved. And here's the prediction, what I actually think. This thing is a fucking shit show. Buy now, pay later is the equivalent of the subprime crisis brewing for millennials and Gen Z. And in California, nine out of ten dollars of all consumer loans issued in 2020 were buy now, pay later loans. Gen Z consumers have spent 925 percent more through point-of-sale services than in January 2020, because they walk up,

enter free people going to Coachella, and they say, are you sure you only want to buy a $40 outfit? You can buy a $400 outfit, and there's no credit check right now. And like all of these things, there's mendacious societal impact. 28% of black and Hispanic Americans signed up for at least one point of sale loan in January 2022, compared with 14% of white Americans. And a lot of people on both sides will say, it's not fair of you to infantilize certain segments. But the reality is young men and women of color are getting into more and more debt because of BNPL. And I find this is going to be very scary. And then you have 43% of Gen Z users have missed at least one BNPL payment. And then we have consumer debt levels for March of 2022 climbed by $53 billion, an annual increase of 14% seasonally adjusted,

which I think is the largest increase on record. Yes. Not a surprise post-pandemic, though, but go ahead. And revolving credit, which includes credit cards, surged by 22%. And then you have the younger cohort, which is really getting whacked by inflation because their wages have gone up and the media goes crazy, but the cost of their core goods services has gone up, so their purchasing power has gone down. So you have this perfect storm of bad things. And then you have some moral hazard, and that is we gave away too much money, and people will always think that that's going to last forever. And two, people get angry at me for this. I think this indecision around student loan

forgiveness is really bad because young people haven't had to pay their student loans for the last couple of years, and they're under the false notion, and maybe it's not false to them, that it's all going to be wiped out, which I think is a really bad thing. So you have this perfect storm of a debt crisis looming for young people. And that I won't have to deal with that. By the way, you're going to have to deal with that, kids. It's called debt. That's not passing. It's called debt for a reason. It may be wrong way to do it. Maybe we should reform our educational system, but you're going to have to pay. Well, here's the thing. Here's the solution. I'm trying to be more thoughtful about offering a solution.

Okay. There was an interesting tweet, and it said, should we be teaching calculus to 11th graders when they don't have basic financial literacy? And I think that if there was one piece of the curriculum I would want to see changed in high schools and even in junior high schools, we have to give young men and women some basic training in financial literacy. What is debt? What are interest rates? What are the stock and bond market movements? What does it mean for you?

Living below your means, diversifying. I would agree. Oddly enough, I just spent a lot of time with one of my sons talking about this, like going through everything, explaining, you know, he lost his bank card, I know, and I used this as an opportunity to discuss everything. And it was really helpful. And I was like, don't they teach you this in school? And of course, they didn't teach me in school. You just learn it. But you're right, 100%. That's a great idea. So, I think my prediction is you're going to hear a lot more about buy now, pay later credit in this credit bubble that is a function of a lot of things, including moral hazard of this, holding out this notion that if you take out... If you're a student

and you're about to sign up to take $100,000 out so you can go to get some Joey Bagadonis degree, are you more or less inclined to take out that debt if all debt gets wiped away right now? Why not? It might get wiped away again. So we have a debt crisis brewing that's enormous in size. That's my prediction. Big one. All right. The Pied Piper is coming for you. Okay, Scott, that's the depressing frigging show. I'm making a prediction. I'm going to see Top Gun early because I'm interviewing one of the producers. Top Gun 2. It's going to be happy. Everything is going to be good. There's a lot of playing basketball,

volleyball on a beach with oiled men. It's going to be fantastic. That's all I have to say. That is my happy place. Anyway, we'll be back on Friday for more. Please read us out. Today's show was produced by Lara Naiman, Evan Engel, and Taylor Griffin.

Ernie Indertot engineered this episode. Thanks also to Drew Burrows and Miel Silverio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business. Are you looking to feel more upbeat? Two words, first oiled, second men. Also, thank you, Drew.