Pivot - S&P hits a low, Jack Dorsey faces activist investors at Twitter and election technology — Kevin Roose joins to discuss

Episode Date: March 3, 2020

.Kara and Scott talk about the stock market's recent lows -- and how that may be a good thing for millennials. They speculate about Jack Dorsey's tenure as CEO at Twitter as activist investors grab a chunk of the company. Then, we hear from Friend of Pivot, and New York Times tech reporter, Kevin Roose about election technology. Kara, Scott and Kevin discuss whether elections are best left analog ahead of Super Tuesday. 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. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Cara Swisher. And I'm Scott Galloway.

And Cara, I want to know, who's going to touch my face now? Who is going to touch my face? Seriously. What are you talking about? We're not allowed to touch our own faces. That's right. Who's going to touch a dog's face now? As usual, you find the most selfish thing to do with this terrible coronavirus situation.

Joe Biden is now the young guy in the race. He's the young guy. He's the young guy. He is. A dark little drop down. What did you think? What do you think? I mean, he's now Buttigieg is out.

You're dreaming. You're another dreamy one. Weren't you a little sad? I was a little sad when I heard that. Not even slightly. No, really? I don't care. I don't care.

So I think you'll like this. I think elections are, and we won't talk specifically about the cantwell a little bit, but I was thinking about it last night. My dad, I used to play chess with my father. It was one of the ways we bonded. And he used to do these fun games with me. And he'd say, okay, this is a quarter, this is a nickel, this is a dime. What's the fastest way to get to 43 cents? And he would do all these kind of war games using chessboard to try and talk about strategy. And I was thinking about, I was going

back to when I used to do this with my father. If you put a bunch of pieces on a flat surface and you color-coded them by demographic groups, which I'm sure is going to outrage people, but say Mayor Pete was rainbow, Klobuchar, Senators Klobuchar and Warren were pink. And then you tilted the board to say, what does America want? Because Democrats are constantly accusing, and there's some, I think, justification here, Republican Party discriminating and being a bit racist. We've had two major cullings in the Democratic primary. The first was we took out all the people

of color, Senators Harris, Booker, Andrew Yang. The next culling is we've taken out the gay guy, and the next culling is about to be the women. If you just looked at pieces, what's happening here, and I know you're going to say this does not come of any news. But if a statistician looked at all the pieces and says, what do these pieces all have in common? It's just white dudes are the only ones that make it through in the Democratic primary. Yes, we've noticed that. Women and people of color, we've noticed that. Yeah, it's depressing. It's depressing.

But on the plus side, Hillary Clinton's going to have a podcast. Because we need another podcast. You know what else is really fascinating? I'm joining on here, but just humor me. And I didn't realize this. And that is, you know, so Biden won South Carolina. And what's really interesting, and I think people in the white community do this, and I think I'm guilty of it. We assume people of color just naturally cluster around similar values and ideals as it relates to politics.

And I thought the most interesting thing from South Carolina and what looks like appear to be shaping up in California and Texas is that the black community is actually trying to shore up the moderate side of the Democratic Party, whereas the Latino bomb that we've been waiting for is finally detonating and it's going much further left. And it looks like they're going to have the day with Sanders. But it's just, and it seems obvious, but the Black community and the Latino community should no longer be grouped into kind of this general... None of them should be grouped. As a monolith, as gays think this, nobody should monolithly. You know, it's a more complex situation. I think that's the difficulty is that if we sort of are reductive around people of color, you don't understand. Reductive, that's an awesome word. And again, everyone cares about health care and things like that. Like people have a lot of commonality of needs.

Speaking of health care, the market, let's get into the big story, Scott, obviously coronavirus. The markets keep tumbling. Coronavirus keeps spreading. The S&P had its worst week. The markets keep tumbling. Coronavirus keeps spreading. The S&P had its worst week. Federal Reserve Chair Chairman Powell is trying response coordinator during the Obama administration on Recode Decode, about this. But let's talk about what this means, like, you know, for the economy. We're going to focus, because we're a business show, on the economy. There are political implications. There's all kinds of implications. But, you know, we'll see what happens this week with the stock market.

But this is continuing to be a real problem for the economy at the same time as people get sick across the country. Yeah, it's extraordinary. And it's difficult to, you know, you can, I don't know about you, but you can, sometimes you can go, this morning, for example, I did a meeting, a breakfast meeting, and no one wanted to shake hands, which I thought was extraordinary. Everyone's talking about events being canceled. But then you look at the data, and I always think there's comfort in data, and that is, I think about 90,000 cases, about 3,000 deaths. They say that approximately the fatality rate outside of China is about 1%. It's very ageist, this virus, that if you're under the age of 40, the fatality rates basically plummet. So

far, I don't think there's been a single fatality of anyone under the age of 18. And if you look at, I mean, assume a couple million people, there's 90,000, I think, diagnosed cases right now. If it goes to 10 million, and that ends up being 100,000 deaths. Obviously, every death is enormously tragic. But say it goes to, you know, 10 million cases, we'll lose 50,000 people this year from opioid overdoses. We'll lose... I know, but this comparison, I get that. People like to make these comparisons. We're going to die. This is a Trumpy thing. Like, we're going to die more from the regular flu than this thing. Oh, that hurts. That still, it's still, sorry. No, you know what I mean? But it's, it's, look, it's still causing like repercussions around everything. And one of the things that I

think doesn't, doesn't get enough attention is the gig economy. And there was a great story. I think, I think it was the New York Times. I'm not sure about the people who just can't leave work, like baristas, Uber drivers, you know, the people that are waiting on people that are in this gig economy that can't, don't have time off. They don't have an ability to be sick, essentially. And I think the way our economy has changed so dramatically, and I, you know, back in the day, way long ago, that was the same thing. People couldn't, there wasn't any, any kind of safety net for, for people who are working class people. But it's still the same problem is that there's a limit to how much we can quarantine ourselves and wash our hands, obviously, the thing you should do.

But people tend to not think, they think they put a mask on and these people can go to work, but this is not the case. And that, I think, is a really going to be, should be studied later. But, you know, we're in this situation. And then, of course, there's the stock market, which everybody everybody's mood is about. Like and the stock market tumble really does affect people's thinking about their lives, you know, even though it probably shouldn't. But it certainly does. Do you are you concerned about the stock Market tumble? What is the area of concern you have when you're thinking about,

you know, economic downturn or economic contraction? You know, if they cancel, say, South by Southwest, which we're supposed to go to, that's enormous amounts of money for Austin if they cancel, you know, all kinds of events. You see the repercussions everywhere. There's no doubt about it, but a couple of things. One, it really is, the scale of it has shocked me. I was in a board call last week, and in an abundance of caution, the management recommended that we quarantine the products that we have manufacturing in China. And they decided that they would isolate the products to ensure that absolutely no bacteria survives on any of the products. I'd never heard that before. I thought, wow, that's taking it to a new level. But use

Austin as an example. Austin will take a short-term hit, but the city of Austin is awesome. South by Southwest is awesome. And I don't think, while it may impact them in the next three, six, 12 months, however long it takes going to be fine. I think there's companies that take a step down because people realize they stop going to movies and they realize they don't really miss them. But I think everything else is largely temporary. In terms of the stock market going down, Cara, markets are supposed to go up and they're supposed to go down. and the general viewpoint of Baby Boomers is that we have decided that the all-important sacrosanct initiative that everyone is supposed to be fighting for is to keep the markets high or basically to keep Baby Boomers rich because Rebecca Sinanis deserves an opportunity to buy into Amazon at less than 50 times earnings

or to buy an apartment in Brooklyn for less than $2,000 a square foot. And the reason why people of our generation have some wealth, hopefully, is because they had the opportunity to buy Netflix at $12 a share. They had an opportunity to buy a house in the Castro for $800 a square foot, not $2,500 a square foot. So yeah, who benefits? Who gets hurt when the markets go down? All the people controlling all the media, basically baby boomers who think they deserve to stay rich, so they want to artificially

inflate the markets. Who benefits from the markets going down? Young people. So burn, baby, burn. Oh, my God. That's a fascinating argument for the end of the stock market. But I like it. I like it, Scott. I like your dystopian way of making poor young people rich suddenly. That's a really interesting. But we'll see. This is going to have lots of repercussions. We'll be talking about a lot over the next couple of weeks. But one of the bigger stories also is activist investors buying a big chunk of Twitter. And now Jack Dorsey's job may be at stake. Elliott Management, the hedge fund that bought the stake, is nominated for directors to the board. As I – may I just say, I did say I thought activist investors were going to get involved here because I've been hearing from a lot of them.

So it only has one class of stock. He's not protected. He has no voting control like Mark Zuckerberg of Facebook. Since he's been returned as CEO in 2015, the company's shares have fallen 6.2 percent, while Facebook's have gained more than 121 percent during that time. He also has another job at Square as CEO. What do you think the strategy is? Can you explain the strategy to Elliott Management? Hold on.

Hold on. This is literally like when Ryan O'Neill and Farrah Fawcett were married and each of them fighting for the mirror. Let me get this. You're taking credit for the activism at Twitter? No, I said it was coming. Come on. Oh, God. Come on. Elliott basically showed up and signed my December 12th letter with a $2 billion pen. And you don't even acknowledge that? Yes, you're right. You're right. Okay, go ahead. Oh, jeez. Come on. Wow. Okay.

Well, you wrote this letter. Can you update us on the letter? And we're going to go to tape. Is that right, Rebecca? We're going to go to tape on this thing. When he announced he was going to be moving to Africa for part of the year. The letter speaks for itself. I think Twitter needs to start commanding the space it occupies.

I think if you were to look at any company that has the equivalent reach or influence, it's a company trading at 20 to 40x the valuation. I think there's no company in the world whose opportunity relative to its performance is this out of whack. So I'm giving you credit. You were very angry about the Africa situation. But can we listen to me? We're both right. How about that? We're both right. So I have some disclosures to make. I bought a bunch of Twitter stock this morning, and I am in dialogue with a bunch of the investors, including Elliot. So with that... And you like to be like, you like

to do this kind of thing. You've been involved in these kinds of things. Governance matters. This is a lab. This is the mother of all obvious changes at a corporate governance level. We have a company that is exceptionally important in the midst of an election that does not command the space it occupies, that trades at a fraction of the value of any company with near the reach or influence that has underperformed the market and the S&P. So I know what's the solution. Let's get a part-time CEO who spends his afternoon at a company where 89% of his wealth is. And if that's not enough, he should peace out and go 10 time zones away. This is literally the most obvious IQ test in the history of corporate governance. Jack Dorsey will be out within 30 days. The board will come to an agreement with Elliott within the next 10. What do you think happens? You think 30 days he's out? Wow, that's something.

Probably less. I think that's generous. Really? Explain how that's going to work for the people who don't understand activist investors. It's very easy. Because not all activist investors have been successful. And in Twitter, they've come at them before. Let me be clear.

I showed up to a gunfight with a squirt gun. They've shown up with a howitzer. They own about $2 million of the stock. I imagine every investor they're calling and talking, every shareholder is nodding their head, rolling their eyes and saying, I agree. The last 48 hours was a bunch of investor relations, proxy solicitors, corporate governance lawyers, the general counsel of Twitter. And they had to do these calls in the morning because Jack is in Namibia or wherever he is. And basically all the board members are coming to the conclusion they can either be Felicity Huffman and cop a deal now and give up all three board seats and let Jack go.

Or they can be Aunt Becky and go to reputational prison and be the board members who made the WeWork board look responsible. This is over before it started. It is ridiculous. It reflects our idolatry of innovators unless i expect the board to either give up three board seats in the next 10 days or demonstrate evidence that jack dorsey is jesus christ and not subject to the same space-time continuum as the rest of us this is in a word or in a term fucking ridiculous this is a corporate governance layup stock is going to scream this is a company governance layup. Stock is going to scream.

This is a company that has unbelievable potential, that is down. So we talk about the unbelievable potential. This is fascinating. So talk about the unbelievable potential. And then what could go wrong for these activist shareholders? If the board does decide to stick with them, what could happen? Well, OK. So how I learned about coronavirus. Let's game this out, Scottish. OK, just on a basic level. What logos of any company in the world are spread across every other media company 24 by 7? I mean, this company has such incredible reach and is so important amongst the most influential people in the world.

There's been a striking lack of innovation. Media, political people, entertainment. Yep. So, look, I think this has tremendous, not only I think at some point if you have some safety on the downside, because I think if the stock went down, someone would probably step in and acquire it. But any sort of product innovation here, I think advertisers, Cara, are looking, desperately looking for an option to Facebook and Google. 100%. 100%. Advertisers, Cara, are looking, desperately looking for an option to Facebook and Google. A hundred percent. A hundred percent.

One of the things I'm thinking about is how good the ads on Instagram are, for example. I was just spending a lot of time looking at them. And that was going to be Twitter. Twitter was going to be doing a lot of that. And they were, if you remember, I mean, going to Cannes, they talked about it and Adam Bain was there. And that was sort of the, and then it just went away. There hasn't been any product development. Yeah. No, not at all.

The product guy is gone in the afternoons, and now he's gone to Africa. And if you think about—I mean, essentially, this company really hasn't had—I think it looks, smells, and feels the same as it did five years ago. And also, there is a core group of people who are really arguably the most influential people in the world, whether it's actors, influencers, media, journalists, politicians, who are obsessed and addicted to Twitter. And that addiction should translate to margin, which should translate to shareholder value. And this is a company, any other company that has a fraction of the reach and influence of Twitter, trades at 10 to 25 times the value. It performs below.

You know how they say something punches above their weight? They punch below their weight. Well below. Which is interesting. But I'm looking at the board right now. Omid Kordesani, Google exec, former Google exec. I know him really well. He's not going to turn on him.

Patrick Pichette, same thing, former Google exec. He was the first CFO of Google. There may have been one before that, but he was the first CFO of Google. The first really. He was. There may have been one before that. But he was the critical CFO of Google forever. There's Jack. There's Martha Lane Fox, who is. I don't know a lot about her background, but she was put there by Jack.

There's all kinds of people like Brett Taylor, who was president. He works at Salesforce. He's also an insider, David Rosenblatt. These are a lot of insiders of Internet. They're Internet friends. Do you know what I mean? And so I wonder who's going to be the mover on this group because I don't know which one will do something. I don't think a meet will.

Okay. Okay. Let's assume. Okay. They'll turn him on. All right. Okay. All right.

Let's assume they love Jack and they think he's the right CEO. Oh, Carrie. Okay, let's assume. Okay, they'll turn him on. All right, okay, all right. Let's assume they love Jack and they think he's the right CEO. You know what they love more? Money. Their reputations. Yeah. And every day that they put up a fight here,

and this isn't a dialogue. This isn't even an issue. It's an IQ test. It's okay, no matter what you think. By the way, Jack deserves a lot of credit. A remarkable innovator.

He's garnered several billion dollars in exchange for that innovation. The question is, is what has gotten us here today going to get us where we need to be? And does this company, question one, does this company warrant a full-time CEO? Should the CEO of Twitter, in addition to focusing his professional energies 100% on this company, be within nine time zones of HQ? This isn't HQ. I can't imagine a single shareholder said, no, we're going to stick with the part-time guy in Africa. And every single metric that

shareholders are supposed to evaluate a company on as fiduciaries for the firefighters, the police, the wealthy families they represent is supposed to be shareholder return. And this company is massively underperformed. This is over before it started. All right. OK, so 10. I'm going to call this 10 days. And who's it? Who's the CEO?

Who's an actual CEO? Oh, I don't know. But think about this. This could be there's several former corporate. Todd Morgan, the CFO of Pinterest. I've gotten to know him. He's a very thoughtful guy. Dick Costolo, who gets a lot of grief and was kind of, his image was tarnished. You realize when he joined Twitter, it was 78 cents a share in the private market. And then he grew it to $38 a share. Adam Bain is considered a fantastic operating executive. Put together a list of the 25 most impressive people

to run this company. They all return the call. They may not take the job, but this is an incredible opportunity for a CEO. It's not who do you pick to be CEO. It's who do you not pick. This is going to be a fantastic assignment. The only thing is, the only issue is, I have to say, is getting into the Trumpist of it, the Trumpiness of it. Like making these big decisions on political advertising, making – it's one of the reasons a lot of these – this company hasn't gotten bought yet, which many people thought it would, that Google would move in or Apple or anybody. There's all kinds of owners of this. Salesforce had looked at it. There's that element.

There could be a purchaser. It was – every single person I talked to was like, ugh, Twitter. You know what I mean? Like, fixing the mess that is. And not so much the product mess, but the toxicity. And again, everyone thought about the product mess, but that's easily fixed, updating Twitter for the next. What do you think? You know this stuff as well as I do. Let me ask you straight up. Should Jack Dorsey be replaced as CEO of Twitter? I believe he should. I have thought that for a while. You know, I've talked about the lack of product innovation. I've talked about the nobody's home kind of thing. I think they've got some great executives. And Kayvon Beckper is lovely as a product. They've had a lot of product heads there. I think Vijay Gade has tried her best, you know, very smart. She's the CLO and has been doing a lot of the behind-the-scenes decision-making

and stuff like that. But it is a weird corporate environment. You know what I mean? I think there's individually some very good executives there. But the leadership of Jack has been – he's hard – he's not – you know, it's not like he's a pain in the neck or anything like that. It's that he's absent and godlike. You know what I mean?

Like he may speak to you at some point. He may not speak to you. And it just, to me, it's been the biggest, this is one of the greatest media properties ever and the most fun to run. And the most full of controversy and so many difficult questions. And I would love to see an active CEO in there who's really pushing, pushing advertising. You know, there's all kinds of things. I have a hundred ideas for Twitter. Like, you know what I mean? Like you could do this and you know, I'm a big user of it and I love it. There's something great. Yeah, not just that, but it's fun. A paid product, niche products. And the reality is we don't even need to go

about the rabbit hole. We just need to find the right guy or gal who comes up with their own product ideas. I'd pay for Twitter. I'd pay real cabbage for that. I'd real – I would because I really like it. And there's also not just the toxicity, and I agree there's a lot of toxicity on it, but there is the delight in it. There's also a lot of delight, and there's so much potential there to be a great media property and to – you know, what Instagram, I don't use Instagram the same way. And it's like they could take some, they could just grab so much stuff from Instagram and put it in there. And I think it's because I don't know why it's not happening there. It just,

it's been one of those companies that has it. Wait, I have an idea. I have an idea. In keeping with the board's approach to corporate governance and leadership, you and I will be co-CEOs. I'll move to Rwanda and you become the CEO of a payments company. And we'll run it. We'll run it. The jungle cat and the dog are taking over. We're going to take a quick break. But what would be if you were the CEO? Scott Galloway is the CEO.

And obviously, you're on the other side. You're fighting. Thank you for disclosing that. I own no Twitter stock. I have no dog in this hunt or whatever the express, the manly expression is. Oh, your dog's in this hunt, Jungle Cat. No, my dog's in this hunt. I just would like Twitter to innovate. I would like Twitter to innovate. That's what I would

like. A hundred percent. And I think the stock's too low for what it is. I do get punches below its words. Word and word, my sister. Word and word. All right. But what would the first thing you would do since you started this off with your main letter about Jack in Africa. What would you do the first three things? And then we're going to go to break. So the first thing I would do is fire me and bring in a CEO and tell him or her that it's up to him or her to understand and listen to everyone in the company and then come to their own conclusions around what needs to be done and as a board member support them.

So I know that I don't mean that to be a cop out. If you're going to force me for tactical issues. Yes. I think you age gate the thing, verified identity. I think two thirds of the toxicity goes away when people actually have to behave and say things based on who they actually are. And then I think a series of pilot programs around niche paid products, whether it's financial services or politics that encourage people like us to get more engaged and pay for something that is better, uses AI to screen our filters and maybe gives our voices more enhanced coverage. I think there's a ton of opportunity here. All right. OK.

And the edit button. That would be what I would do. Yeah, the edit button. Excuse me. Anyway, Scott, that's great. This will be fascinating. We're going to hold on 10 days. 10 days, right?

Oh, shit's about to get real, Kara. Wait, what were you saying? 10 days for him to go? Within 10 days. I believe within 10 days, the board is going to come to an agreement. They've lost. This is over. This is Felicity Huffman's lawyer going to Felicity, you need to cut a deal yesterday. All right. Okay. So the board is going to cut a deal with Elliot, And we're going to see Jack is Jack is going to step down. This is just gone on. This is just this is gone. Is there anything to the fact that Elliott's a big Trump Jesse Cohen. He's a Democrat. And unless they've – I don't know them well, but I know them. Unless they've totally fooled me, they have $40 billion under management.

And if they were doing – This is about money. You're right. This is about a product that is not doing as well as it should. They don't look red. They don't look blue. They look green. And if they started – if it came out that there was any political motivation here that was in any way putting their limited return at risk, they would go from $40 billion in management to $10 billion.

And the thing that gives Paul Singer his political power is money since Citizens United. And the way he makes money is being focused on one thing, and that is returns for his limiteds. Politics has nothing to do with this at all. I just want to bring it out there. I'm just bringing it up. Anyway, it's time for a quick break. We'll be right back with a friend of Pivot, New York Times reporter Kevin Roos and wins and fails. Fox Creative.

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We have a friend of Pivot, the New York Times reporter Kevin Roos, who also has fantastic hair in the studio. He covers technology. He's about to publish his book called Future Proof, which I must say I am the inspiration for. Super Tuesday is upon us. So let's have it out on our elections about whether they should be analog or digital. What's going on? Kevin writes a ton about this. So, Kevin, welcome. Thanks. I think this is the first time we've ever been on a podcast together. How is that possible? Not the last, let me just say. Let me just say. So you're an expert on, you write a lot about election security and especially the social media impact of it. Talk a little bit about where we are. I mean, after Iowa

obviously was a digital disaster. Bring us up to speed, which apps are being used for Super Tuesday, how they're likely to affect the election or not at all or anything else. Well, so we know that Iowa was a total disaster, right? And a big part of why that was was because there was this app that was, you know, tallying the votes and recording them and sending them to the state Democratic Party. And when I heard the word app in relation to, you know, the Iowa caucuses, my whole sort of like insides kind of shriveled up because this is the doomsday scenario, right? This is the thing that every election security expert is worried about is that we'll introduce some new piece of technology into

the voting process. Which we should have, possibly. Possibly, yeah. So basically, it's really interesting. When you talk to people in tech about basically any element of society, their solution involves like putting more tech into it. More tech equals better. When you talk to people who deal with elections, they say the exact opposite thing. Like they think that in order to be secure, our elections should be as low tech as possible. I see. Like basically there should be paper ballots. Rocks.

Rocks. Like I went back and did some research. The ancient Greeks actually used to throw pebbles into urns to count the votes. And like that's basically what they're saying we should do. Not so far as rocks, but paper ballots, no sort of connected voting machines. And a lot of states are now using these sort of internet connected voting machines. They say terrible idea. Those can get hacked.

So basically the people who know the most about this subject have been yelling for years that this move to upgrade our technology, our voting technology, may actually be making our elections more vulnerable. Huh. Well, that's interesting. Scott, what do you think about that? Rocks? You know, it's interesting because I think there is a gestalt in the U.S. where software is supposed to be the answer to everything. And if you look at what happened in Iowa, everything can be reverse engineered to technology, even old technologies, much less an app that wasn't beta tested. But the telephone lines, as soon as the telephone number got out, my understanding is these outside bad actors started crashing the phone lines. And so, you know, get a group of

high school students and an abacus. And let me ask you this, Kevin, do your friends call you Hanging Chad? Is that your nickname? Depends which ones. I hope not. I hope not. I hope not. I mean, yeah. So as you mentioned, like we all remember Hanging Chad from the 2000 election. There are problems with paper ballots, too. But the problems with paper ballots are at least you can go back and look at what happened. You can go back and reexamine the paper ballot and say, is that chad hanging too much? Is it not hanging? Like you can do sort of recounts and investigations. With paperless voting systems, these e-voting systems, that gets a lot harder. I had a life-changing experience on this. I went a couple years ago to the security conference in Vegas with all these hackers and they did this thing. They bought up a bunch of old voting machines on eBay that were actually used in previous voting

elections, you know, a couple hundred bucks a piece. They put them in a room and they told the hackers, like, go at it. Like, see how long it takes you to crack these machines. This is what passes for fun at security conferences. And they expected, you know, it might take them a couple days to start breaking in. These are state of the-the-art things. Within a day, like, all of them had gotten hacked. Some of them had got hacked in, like, less than an hour. Wow. So it was really startling. And what did they do? Just change votes? Just change?

They changed votes. Someone actually rigged it up so that they could, like, you know, you could play music on one of the voting apps. I don't know how they did that. Right. And these were all decommissioned. But these kind of machines are still in use all over the country. Right. And so how do you, what is the answer then? Because the idea is that you do vote on your phone because you want to bring more voting to people.

And this would be a way, aside from making everybody, giving it a holiday, making voting a holiday, which I think would go a long way towards more people voting. But the idea of doing, you're doing everything else on your phone., voting would be nice if everyone was able to vote, especially young people. For sure. And I think the sort of recommendations around voting machines sort of fly counter to a lot of the conventional wisdom in tech, which is that friction is bad and we should reduce it, right? Make it as easy as possible to do everything, including voting. With voting, you actually you want a little bit of friction in there. You don't want voter ID.

You don't want poll taxes. That's a different kind of friction that's voter suppression. But in the actual technology of itself, you actually want a little bit of friction there to prevent people from exploiting it, to prevent hackers from overseas, from breaking into our machines and changing vote totals. It's a lot harder to do that if these are paper ballots than if they're all connected computers. And what about voter lists, too? That's what I understand is very vulnerable, the idea that who can vote and the voter list changing addresses slightly and things like that. Yeah, because those parts are all administered locally. I mean, it's not like,

you know, we have one database of all the voters in America, like states, counties, election officials at the local level keep track of all those. And those are not always the most technically sophisticated people. A lot of them, you know, skew older. They haven't, you know, grown up in an atmosphere of cybersecurity training. They're just not equipped to do the kind of work that you would want them to be able to do to protect against interference. So it's a really paper. Scott, again, what do you imagine? Do you think people should vote on apps or not? I'm curious to get your thoughts on this. I've come full circle since Iowa. As a Democrat and as someone who's in technology, I was immediately a huge

proponent of it should all be on our phone. And we want to expand the participation and make it as easy as possible for people to be represented in our democracy. And the easiest way to do that is an app on Android or Apple. And in a partisan way, I thought that that would help my Democratic causes because I thought it might reach into communities that I think might skew Democrats or Republicans, try and make it harder to vote. And there's definitely a balance there. But after Iowa, I actually am coming to believe that technology, whether it's Netflix or our phones or Instagram, are slowly but surely sequestering us from interacting with each other. And I think that there would be nothing better than, as you said, Carol, like for Hearst Corporation gives people, it's a holiday for election day, than to encourage people to get out and meet their brothers and sisters and their fellow citizens and

go behind a curtain. And in faculty housing in the lobby, we're a pollster voting station. And you know what? It's wonderful. You walk through there, you feel American. There's a comedy of man and woman. And I wonder if we should go the other way, because it's very hard to hack a piece of paper. And if we shouldn't make our election days one of those moments where we all get together, touch, smell, and feel each other and just recognize how wonderful it is to be American. Well, think about this. But companies are investing in election technology. What are the key trends right now in that?

Yes, there are a couple trends. One is there are some people developing these apps that you mentioned. Like I got pitched this blockchain voting app thing. Oh, God. When you say blockchain voting, I just want to cry. Well, and, you know, I think the people

who make this stuff, like they're well-intentioned. They want to increase civic participation. I just think it's a horrible idea. Like I just think that we should absolutely not be voting on our smartphones.

Kevin loves my idea, Cara. Kevin's on my side. Apple pie and baseball. That's right. Oh, God. Do you go to your polling station, Cara? Where do you go? Or do you vote by mail? I'm going to go tomorrow. I'm going to go tomorrow. You didn't vote by mail? No, I didn't

vote by mail. I like to walk in. I like to walk into the garage or the people I see once every year and say hello to them. No, they do not. I'm not famous in voting. I voted by mail and the only bad thing about that is you don't get the sticker. I like the sticker.

I like the whole thing. It's like when you get the flu shot. But then there are also efforts within government to sort of mandate safer elections. Right. And a lot of bills have been passed. There was this bill that passed in the House called the SAFE Act, which would have made it mandatory for every vote to have a paper backup. Yeah. That you could look at in case of a recount.

But so far, Republicans are blocking a lot of that stuff. And why are they blocking that? Your guess is as good as mine. I would like your guess. I don't know. Your guess is better, Kevin. I don't know. I mean, not much is getting passed with bipartisan support.

But that's, I mean, I think that there are people for whom the current election system works fine. Works fine. All right. So let's get to Facebook. You've written a lot about Facebook's impact on elections. That's one of the things. Are they prepared for 2020? What's changed since 2016, 18? Well, I've been doing a lot of reporting on this over the past couple of weeks. And my takeaway is basically that Facebook and all the other tech platforms, they're very prepared for the election of 2016. Like they are ready to get those Russians out. They are ready to secure the platform against WikiLeaks and hacks. And they are ready to fight the last war.

Right. But they are not ready. I heard they're coordinating with the Mondale campaign, which gives me a lot of reassurance. Tell me what. What do you mean by that? What is that? Well, the threats have just changed so much since 2016. I mean, we don't see so far, you know, knock wood, the kind of like wide scale Russian trolling campaigns and things like that.

So that's not so much of an issue. But now you have all these domestic bad actors, these people in the U.S. who are imitating the tactics of the Russians. So such as? Well, such as a lot of the sort of hyper-partisan Facebook pages, some of the YouTube channels. Like they're doing the same thing, but they're doing it from inside the U.S. So there's not that much the platforms can do. So they've seen what the Russians did. Exactly.

And they're redoing it. And the platforms are, you know, for better or for worse, like much more hesitant to take action against those people than they, if they can pin it on Russia. So they can do the same thing.

So they can do essentially the same thing. So what are they preparing for? What have they prepared? Just Russian, to get rid of Iranians or Russians? I think from everyone

that I've talked to, the platforms are way better prepared for like Russia hacking, other foreign state actors getting into trolling campaigns and influence operations and things like that. So that's the stuff that they've actually like spent a lot of money and taken a lot of thought and care to sort of protect themselves against.

But then there are all these new weird ways. What's the weirdest and newest? Well, I think the Bloomberg campaign has been a really interesting challenge for Facebook specifically. Candidate. Because they've been doing all this meme stuff. They've been paying these influencers to make this sponsored content. And they just didn't have policies for that kind of thing. They didn't see it coming. They didn't think like, you know, some billionaire is going to pay meme accounts to post,

you know, fake text messages on their accounts. And so they just they've had to kind of scramble to figure out like what to do about this. What are they doing? Well, they're doing some new disclosure stuff around like if there's an influencer who gets paid by Bloomberg to say Mike Bloomberg is the coolest candidate in the world. They have to say like sponsored by Mike Bloomberg on there. But some of these accounts are private. So Facebook really has no way of tracking what's going on on them. And it's become a real problem for them. I mean they've had tons of meetings about it. So Facebook really has no way of tracking what's going on on them. And it's become a real problem for them. I mean, they've had tons of meetings about it. There's been a lot of hand-wringing internally about what to do about this. These are just the kinds of things that they didn't see coming. And then what are the Trump people doing? What are they up to?

Well, they're putting out a ton of ads. I mean, they are flooding social media with millions of ads, spending a ton of money doing it, and by all accounts, like, doing it pretty effectively. So they're doing basically 2016 on steroids. And, you know, people who study this kind of thing are on the Democratic side are really worried about it. What are the Democrats doing? I mean, they're spending a lot on digital advertising. I think, you know, they're starting to catch up in terms of how much money they're spending on Facebook and Twitter and not Twitter. They don't allow political ads anymore, but on YouTube. But they I think they realize that they have some way to catch up. And

in some cases, the Trump campaign has, you know, an easier time because they already got that huge audience. They know which kind of messages work and they don't have to spend their money, their time raising small dollar donations to get into the debates and things like that. Kevin, what's your view on political advertising on these platforms? and that we can't, you know, if we say that you can't lie in your ads, that that's tantamount to, you know, telling you who to vote for or something like that, that that's swinging elections. I actually am more, I'm less worried about the advertising. I'm more worried about the organic side, the stuff that people aren't paying for. Explain that. Explain. Well, because for advertising, there's, you know, there's transparency now. Facebook allows you to search, you know, who's running which ads on which platforms.

And there are, you know, sort of limits to how much stuff can spread through advertising. There are limits to the effectiveness there. The organic side is kind of still the Wild West. I mean, that is still where you get people sort of doing these engagement hacks to get more shares and likes and clicks on their stories. That's where you get the sort of partisan media organizations doing their thing. I mean, if you look at the organic side of Facebook, I'd be terrified if I was a Democrat. I look at the top 10 list every day of which stories are performing best on Facebook. And it's like, you know, Fox News, Ben Shapiro, Daily Caller, Fox News, Ben Shapiro, Daily.

It's like it's all almost all right wing news every day. Let me ask you, is that a function of that's where America is or that those entities are just better at misleading users of the platform? I think it's a couple of things. One, I think it reflects who's on Facebook, right? They tend to be older. Maybe they tend to be whiter than other platforms. So I think since 2016, you know, who's on Facebook has changed. But I also think it's because these organizations have gotten really good at sort of hacking the newsfeed and getting their messages out and picking the stories that are going to

aggravate people or, you know, make them angry at someone. Kevin, engagement is enragement. Exactly. You would make a great social media manager. Anyway, so what are they going to do? So what's going to happen? What's party leadership doing? Obviously, the Republicans love this, and they're doing a good job in sort of letting Brad Parcell do everything he wants. So that's in his hands. But what is there anything that can happen to make this more fair or that these companies can do? Yeah, I mean, I think they could do a lot. They don't have to allow political advertising.

There's no there's no reason that there's no law saying if you're a platform, you have to let people pay you money to spread political messages. Google was in the middle and then Facebook's the outlier, I guess, or not the outlier or whatever the other side. Totally. I mean, I think they could do, you know, sort of more on the organic side to sort of prevent misinformation from going viral. They now have these third-party fact-checkers at Facebook, but there are only, you know, a couple dozen of them. It's kind of slow. They're overworked. They have, you know, too few staff and too few resources to do what they need. And by the time they get to fact-checking something, usually millions of people have already seen it. So I think that there are a lot that they could do on that side, but that would require sort of rethinking the whole model.

All right. My last question. Bloomberg, do you think it's a good thing what he's doing or not? Or he's just living the life that we live now, essentially, or playing to that. I think it's fascinating. I mean, I don't think people quite understood how rich Mike Bloomberg is because there are like tiers of really rich guy, right? There's Tom Steyer, who's a billionaire, but not a 60 billionaire. And for Mike Bloomberg, I mean, we've never had someone in U.S. electoral politics who can spend a billion dollars like that and not miss it. And so what I think is we're seeing effectively like a subsidy for anyone that runs advertising in the United States is having a great quarter because of the Bloomberg campaign.

But I also think we're going to see if there is a limit to the effectiveness of digital advertising. If you spend $500 million in six months running ads on social media, does that move the needle? Can you actually convince people to do something that they wouldn't have otherwise done? Yeah. Can you bring a wallet to a gunfight? And it's so interesting what you said about Michael Bloomberg, just in terms of proportions. LeBron James will make $50 million this year in salary and endorsements. So if he plays basketball another 1,200 years, he'll catch up to Michael Bloomberg. Oh, my God. Exactly.

Sports. Of course, sports. In any case, Kevin, we really appreciate being on the show. And your book, Future Proof, we're going to get it. You're coming on the Recode Decode podcast to talk about it. Anytime. It's called Future Proof, right? Is that the right way?

Yeah, you have to say it like that. Okay, exactly. All right. So it's about how to prove yourself from the future, which will be great. Good hair. Thank you so much, Kevin Ruse from the New York Times. He's a wonderful columnist. Read his things. Thank you for coming. Thanks, Kevin. Thanks for illuminating us.

Thanks, Scott. Okay, Scott, wins and fails. Obviously, you win for the letter writing to remove Dorsey as CEO, but we already knew that. You get all the credit. I get a tiny bit of credit saying I thought the hedge fund people would come in. I'm hearing from them. All right, but you get all the credit for get a tiny bit of credit saying i thought the hedge fund people would come in like i'm hearing from them all right but you get all the credit for removing from office thanks mom i am desperate for your approval i am desperate for your approval you what you are is attacking ceos with excellent hair i see that what's going on here and i would worry i'm trying to think who has really good hair. Who has good hair? None of, let me think of, well, no, not Zuckerberg. So you're not going to. Newman's gone. Newman's gone.

Anyone with good hair, you're in big trouble because Cod Gallery is coming your way. Anyway, win and fail. Give me some wins and fails. I always loathe to give the Trump administration any credit, but I think the peace agreement with the Taliban and our exit from this 18-year war is a win. I think we overlook the incredible sacrifice of the 2,500 men and women who gave their lives, the 3,500 of our coalition forces, the 30,000 men and women who were severely injured in this 18-year war, the 170,000 Afghanis who died, including 40,000 civilians. I worry that we get into these forever wars because unlike any other past wars, we've outsourced it economically and from a tragedy standpoint. And that is in World War II, you knew people who died. You knew people who lost their sons. You weren't able to get a Hershey bar or a steak, and you paid higher taxes, and we made Maytag stop producing washing machines and produce B-17 superfortresses. And I worry because we're dependent upon debt, because we've outsourced military honor and

service to a group of military families and certain demographic groups. We no longer feel the pain of wars and we're willing to endure them because we don't really feel them. I am with you 199 percent. I think this is right. It's also the plot of Homeland this season. It's scary, isn't it? Are you even watching Homeland? I know.

I love that show. I love that show so much. It's amazing. I can't even tell you. It's the last season, I think. I have to say it's exactly the plot, which is – it's not going so well for the homeland people. But it's a really interesting – I agree with you. This is a forever wars.

But 18-year wars. And people immediately leap to – and they should be asking questions. What happens to women's rights? What happens? Are they really going to hold true and not fund al-Qaeda? But you know what? As you get older, what I've come to the conclusion of, there just is no moral clarity around geopolitics. And we have been there 18 years. It is time to get out. Yeah, that's exactly what Beau Bridges said last night to

Carrie Matheson. In fact, there were 18 years of this. It was really interesting because he was talking about the idea of the sacrifice over that much time. I would agree with you. I think that's good. What about a fail? What's your fail? So my fail is, I think there's tremendous opportunity here. I think the real fear or the real tragedy around the coronavirus is not the real danger, the real risk isn't contracting coronavirus. The real fear is you contract it and then pass it on to someone who's vulnerable. And that is the vast majority of the population would survive, and there's even a large portion of the population that wouldn't know they would have it. So the question is, how do we rally the resources and the acumen

and the kind of leadership to ensure that, A, we can get cheap testing kits out? And I think there's an opportunity. Unfortunately, our tech companies have become more like nation states states and they have the most IQ, the most capital. And what I'll say is my fail is an opportunity. And that is I would love to see a Mark Benioff, a Satya Nadella say, how do we use Android, Apple, CRM technology, manufacturing supply chain technology to, if people are willing, find out if potentially they've been exposed, get them a cheap testing kit as quickly as possible. If they're worried about testing, put them on an Amazon show using Amazon Alexa and Salesforce. And in a moment of

alliance, a moment that brought together the British, the Russians, and the Americans, said big tech is going to figure out a way to coordinate with the CDC and try and cauterize this. I think there's a big opportunity for the technology players to come in and push back on a existential threat that could be really ugly. And I haven't seen a lot of discussion or all the discussion has been around, what does it do for our stock price? What's it going to do for our supply chain? Well, you know what? Pretend we're in a war. Pretend that the Commonwealth comes before shareholder value.

What is it you are going to do? We're just talking about shareholder value. That's true. I agree with you. I like when you're like this, but you were just talking about shareholder value. You've got to clean this up for shareholder value. They don't care about politics. And there's an opportunity. So Mark Benioff, Satya Nadella, there are some incredibly impressive leaders here who are who are civic minded. There is an opportunity to get everyone in a room and say, what could we do? What could we do to flex our muscles and put our shoulder down into this thing? And just as splitting the atom arrested the march of Hitler, how can science and technology and the resources these companies have cauterize this thing?

Yeah, I like it. I like that. That's very nice. That's really good. My win was my brother and the Surgeon General Jerome Adams, who asked people to stop buying surgical masks during the coronavirus. Dr. Swisher? Dr. Swisher.

Jeffrey? He got really whacked on Twitter. He did a whole long stream about that you shouldn't, these masks, even N95 masks, do not help. during the coronavirus. Dr. Swisher? Dr. Swisher had, he got really whacked on Twitter that he was, he did a whole long stream about that you shouldn't, these masks, even N95 masks, do not help. And then he explained it,

like he's a doctor and he's like, this doesn't, these don't get in and this is why you shouldn't do it. This is the things you do, which is basically wash your hands

and stay home if you're sick or you seem sick. And it was, and Jerome Adams said the same things as there, people are buying up these surgical masks

and causing kinds of, they need to be there for healthcare workers. And so they had to get more. But people in their hoardy ways, you know, everyone is going to the store and buying beans and stuff like that here in San Francisco and elsewhere. He's – the idea, Surgeon General Jerome Adams said this, stop buying surgical masks during coronavirus years because they're not going to help and they need them for healthcare workers. And it's critically important. And I thought that was a win. And it's a fail on the part of people. I get panic, but you have to really think, you have to not fall prey to scare tactics. And a lot of people are scared. Like they, it seems it's really interesting. And then I think a fail, I don't really have a fail this week. I think it's, I think, I think – I think Jack Dorsey has to think really hard about what he's done there and what to do.

And I agree with you. It probably isn't going to save his job. But I think it's too bad because there's a property that really – a lot of opportunity there, especially right now when it's so everyone's using it so heavily. And it's it's been a fail for that board. I'd say the board is at failure more than anybody else. Hundred percent. It's it's it's he might lack self-awareness, but the gross negligence here has been on the part of the board. I'm sorry I was interrupting your fail. That's OK. That's my fail. That's my fail. You're right. You're right. You're gross negligence on part of board. Well, we'll see what happens, Scott Gallery. See if you can get another scalp of yours.

Let's hope the stock market, even though you don't think it's the proxy for everything, it is important to a lot of people, the global coronavirus outbreak. And elections have all sorted themselves out. There'll be Super Tuesday, and we'll see what happens in that by the time we next talk. Can we have a bonus one? Okay, go ahead. First openly gay man to win the Iowa caucus to win a state primary. Forged a new path, made it easier for number two and three youngest man. Well, he's not done.

Do you realize he can run for president the next 10 elections and still be younger than Bernie Sanders? Yeah, he's not done. And I think, look, he brought decency, intellect, a lack of identity politics, in my view, public service. And everyone said, I just, you said earlier in a piece that Bloomberg was my favorite candidate. Mayor Pete was my favorite candidate. Yeah, he was. Remember, he called him a dreamer. I just think Bloomberg has the best chance of winning.

But I think Mayor Pete demonstrates so much about what's wonderful about America and some of the progress we're making. And I think he ran a wonderful campaign. And there is a real dignity, and we've talked a lot about this, to leaving the stage while people are applauding versus too late. He is the first person that's done that in this campaign. You're 100 percent right. And you didn't say anything about Tom Steyer. I can't believe it. He left, too. Yeah. Whatever. Anyway, remember, we love your questions. He has a really nice tie. If you have a question about a story you're hearing in the news, please email us at pivot at Vox Media to be featured on the show.

Go for the credits, Scott Galloway. Our producer is Rebecca Sinanis. Our executive producer is Erica Anderson. Special thanks to Rebecca Castro and Drew Burrows. If you like what you heard, please download the podcast and subscribe wherever you listen to podcasts. And remember, nothing is ever as good or as bad as it seems.

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