Pivot - Square withholds from its merchants; Twitch’s female streamers have had enough and a Listener Mail on contact tracing apps

Episode Date: June 26, 2020

Kara and Scott talk about how Square has been taking about 20% off of merchant transactions, as Jack Dorsey helms both Twitter and Square. Meanwhile, Twitch has been facing backlash from womxn gamers who are alleging that the company is allowing for sexual harassment and assault, while they create content for the company. This comes several years after the industry dealt with "Gamergate". We get a Listener Question about Apple and Google's contact tracing app as covid-19 cases climb around the country, Learn more about your ad choices. Visit podcastchoices.com/adchoices

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I'm Kara Swisher. And I'm Scott Galloway. That pause says it all. We're sort of befuddled prey. Even we don't know how to address all this shit. I know. Today I woke up and they're complaining that James Earl Jones, a black man, played Darth Vader, a white man. And it comes in the wake of several actresses quitting roles,

which just were two years ago, that were cast two years ago. Kristen Bell and Jenny Slate, great actresses, they're playing biracial characters. And they quit and said, let's hire someone who is actually biracial or make way for a person of color. And literally the first thing, I don't know what else to say, but the racist people went on about James Earl Jones, which was cast 40 years ago. And let me just be clear for people who

aren't tech type people, Darth Vader is like a machine has become not a man anymore. He's all machine. And it's, it's, I don't know what they're going to do when they find out that, that George Lucas is married to an African-American woman, but it's just an astonishing array of pushback all over the place, putting back Confederate statues. It's crazy. It just seems like insane at this point. But I don't know, Scott. I don't know if you have anything to say about this

or should have anything to say about it. Just Star Wars. I believe when Darthth vader had his mask taken off at the end when he was dying he then it was a caucasian actor i think yeah and by the way every white man in the world dreams of having james earl jones or morgan freeman do their voice i mean that's yeah the two are not analogous i thought what was so interesting about that was it kind of highlighted you you know, it gets really to one of the cores of the economic apartheid that's taken place here where Latina and Black families

or households have about $30,000 in average wealth, white families about $160,000. And it was just, wasn't that, it was really interesting that when you think about Hollywood, these little, I don't want to even call them little, but these, this progress, this slow creeping progress that's always there, that's insidious, or that creates this economic apartheid, that these biracial characters, they end up giving the work. And I bet it's great work. I bet they make 10 or 15, 25,000 bucks. An episode goes to two white actresses, right? It kind of, it kind of sums up a lot of the problem here. Well, one of the things that's interesting, I mean, you know, it's throughout Hollywood, this sort of, Hollywood has been, there's been dozens of articles written about this, which is really interesting. And nobody's done anything, which I think this moment is a really

interesting moment, because even though I've read, not just people of color, trans people, trans people playing trans characters, et cetera, et cetera, white people playing Asian people. It's a really, nothing much happens. There's a hullabaloo, and then everything goes back to the same thing. And I think in this moment, even the actors are like, this is just, the way the system is set up is ridiculous.

It's an interesting, we'll see where it goes. We'll see where it goes in terms of the things. But the pushback to me is really the most ridiculous part of the entire equation is that we're trying to have a cogent, substantive discussion about these issues and make actual changes, and then it doesn't change. Anyway, I think any studio that does not get behind this is, as you said, is like, they're not thinking 10 years ahead, which is what you have to be doing right now. It's, it's, it's, it's, it's, the pushback is what really disturbs me the most,

I think, of all the things, but maybe there's so many things to be disturbed by at this moment. There's, I did an online class earlier in the week, and some of the students brought up what I think is a really important point, and that is oftentimes in the heat of the moment when things are so raw, there's more outrage and there's more anger than there is what I'd call data-driven, evidence-based discourse. And if you don't at some point move to an evidence-based, data-driven discourse, you're not going to bring along enough people across the middle and even the other side of the aisle, which you need for landmark change or tectonic shifts. And I said, I absolutely get that, but I would err on the side. If you just look at historically, if you want to be on the right side

of a stock trade, you want to be on the right side of a stock trade, you want to be on the right side of a trend. If you look at all what you would call these progressive movements, whether it was protesting against the Vietnam War, you know, marching for fair housing, marching for civil rights, people who march, you know, or I would call these progressive movements, they're usually on the right side of history looking back. You know, like Anita Bryan and George Wallace, it's usually their comments don't age well. So as it relates to kind of progressive movements, yeah, we need to have that evidence-based argument.

We need to be thoughtful about ensuring that everyone feels that they're bought into this movement. But if you just wanted to say, all right, how would you play this? You know, you look back and you think, don't you wish you were the straight guy that supported, that was more supportive of gay marriage, right? Obama didn't support it in his first administration. The Clintons didn't support it. Don't you wish you were that guy who surprised his or her- Gavin Newsom for president. Gavin Newsom. Exactly. But don't you wish you were that guy? And you know what?

It's pretty easy. It's pretty easy to predict. You know where this is going. We know which direction the world is headed. Let me interject then. Then these boycott Facebook campaigns, another reaction to it, powered by groups including the NAACP and the Anti-Defamation League. It's gaining steam.

Those groups are pushing Facebook to stop spreading hate speech for businesses to stop profiting off of it. Magnolia Pictures, Ben and Jerry's, Eddie Bauer joined REI, Patagonia, and others to stop advertising on Facebook in July, just in July. I know we talked about that it's just, this is not the month to do it, but in that vein, even if it's just a momentary thing. How do you assess what's

happening? Cause this has never happened before on Facebook, which, you know, there was one quote where one of the advertisers, of course, not without naming themselves said, I hate this company, but I have to use it. It was really, it was the most astonishing brand statement of, of that I had seen that they don't want to advertise on it. So how do you play that? You do that sort of symbolic thing by doing that? Or what do you make of this growing distaste with advertising on Facebook? I don't know if it'll stick, but it's an interesting trend.

So first and foremost, quick trivia. One of those companies you mentioned that is boycotting Facebook, I served on the board of 15 years ago. Which one was it, Kara? I don't know. For a free lunch, outdoor lunch. I don't know. I don't know. Tell me. Well, guess. You only named four or five. REI. No, they wouldn't have you. Anyway. Okay. REI is way too cool. Look, so the boycott of Facebook by these companies is similar to the League of Nations, 80% of CMOs and all organic house cleansers. It's a nice idea and it's cute, but it's totally ineffective. And that is, if you think about Facebook, if you think about the tensile strength of

Facebook's business, Fox News loses seven advertisers from the Laura Ingraham show, and it has a real impact on them. Because I would bet 200, their top, not even that, probably their top 100 advertisers are 80 to 90% of their revenue. Facebook has 8 million advertisers, and the largest 100 only account for about 24%. Facebook is really a miracle of small business. So one, it will have almost no economic impact. It has a symbolic impact. But if you look at the companies doing this, it's more show than substance because they don't have large marketing budgets and quarter their brand are progressive values. So this in itself is a bit of a marketing play for them. And the problem with Facebook and

the recognition, this is almost to a certain extent, strategically good for Facebook because it gives some people a chance to yell. They do a conference call and it creates the illusion that there's progress and Facebook will pretend to learn from it. But this is like saying, okay, I'm against emissions. Coal is the dirtiest energy. I live in Florida. That's it. I'm not turning on my lights. Facebook is a monopoly. If you are a small business, you really have no choice. There's a certain huge swath of the economy that has no choice but to be on both Google and Facebook. They have a stranglehold on top of the funnel marketing for tons of businesses.

There's no good to this. There's no good to this. It can't gain momentum. Well, I think it brings attention. I think it makes us feel good. But I actually think it might even be bad for us because it gives us the impression that something is happening. It's not. These guys are the pimple on the pimple on the elephant

that's in a different universe on a gnat that gets smacked against a windshield of 7,999,000 other advertisers. I think that's the plot of Horton Hears a Who, just so you know. That's the plot of Horton Hears a Who. All right. So I want to get to their big story and I want to mention one other one, but what do you do? Nothing? Nothing. It's got to be users stopping using it or breaking it up. What do you do is you elect Biden who funds the DOJ and the FTC, and they go after Facebook. I mean, at this point, Facebook is more likely to break up the government than the government is to break up Facebook. That was an Onion headline.

I decided that the government, yeah, you stole my thunder. I was going to credit them, that they're going to break up the government because of their monopoly control, stifling innovation over companies like Facebook. I thought that was genius. Well, speaking of government, it did hit back. Trump will suspend the H-1B visa. There are huge implications for Silicon Valley who rely on it and other companies. I mentioned it in my Twitter feed. And boy, did I get a debate going about whether it's a good program or a bad program, whether Trump was right to do it or not.

And we're going to talk about that on Monday. But it's a very big story, this idea. What's the argument for right on this? Well, I'll bring them on Monday. That it does, that it helps the companies and not the workers and that they're stuck in these jobs. They can't leave. They can't move. And then it puts people out of work too.

And that we don't, they don't spend the money training Americans. It's an interesting, it was really, it raged on my one question. I was surprised by the reaction. On both sides, it was interesting. And it was interesting debate. It wasn't even both. It was like 10 sides of this whole thing. What it needs to be is reformed is what I from what I after reading, reading it. And so we'll try to have a more nuanced conversation about visas on Tuesday's show. Well, Ingenuity, Satya Nadella, the CEOs of MasterCard and Adobe, who've created, you know, tens or hundreds of thousands of jobs all came over on temporary visas. This is nothing but, you know, a racist whistle call. It's as if we have decided that, okay, we're in a shooting, a non-shooting war with the Chinese and a race for global leadership. I mean, if you have Shaq and Kobe on the same team,

they're just not going to get along. So let's assume we're not going to get along with the Chinese. We've alienated our allies in Europe. And now let's think, okay, how do we really geopolitically fuck ourselves? Let's find the emerging power, the other emerging power, India, and let's, let's put in place a ban that disproportionately impacts them negatively. I mean, the Indian, something like 200, it's 280,000 a year, 85,000 are renewed, a disproportionate number of really incredibly talented Indians who come here, educated here. Yeah, and they're incredible job creators. And that's like, OK, who else can we alienate just to ensure that we lose our position as a global power?

It's as if we've strategically said, how can we play into the Chinese and Russian hands? It's not only bigoted, it's just really fucking stupid. I agree. But there is a lot to it that really does hinder the workers and does benefit the companies unnecessarily. So we'll talk about that. Yeah, that's called capitalism. I know, but we're going to have an actual nuanced discussion about this, Scott.

It's an interesting issue. Oh, that was a little passive aggressive. Sorry about that. Okay, we're talking about Square. We're moving on. We've got lots of stories going. Scotiab nuance. I am moving on. I am moving on, as you always say about me. Scotiab nuance. Okay, let's get into big stories. Let's talk about Square. The mobile payments company headed by Jack Dorsey, your best friend, hasn't had an easy COVID-19 ride and recent policy changes pit them against their own merchants. For years, they've been popular with brick and mortar stores, which means as the stores close

down during the quarantines, they've been hit harder than competitors like PayPal and Stripe. They typically make money by charging 2% to 4% every time a transaction occurs. In Square's most recent shareholder letter, it reported a $106 million loss for the quarter. This is a company that was doing rather well. Now, small businesses that use the app to process credit card payments are saying the company is withholding 20% to 30% of these transactions for months. These small business entrepreneurs say they were little warning before the move was made,

and the company claims it was made to protect against risky transactions. Over the last month, over a thousand business owners have signed a petition to asking Square to end this policy. I mean, I was talking to someone there, and they were like, this is not good. This is, you know, this was a company with a lot of bright, really, innovation and doing well. And this COVID, we hadn't even thought about Square getting hit so hard. But what do you think about this idea? One merchant told The Times that it totaled about $3,000 and he couldn't pay his mortgage. This is not a good look for Jack Dorsey. Yeah. So back to me. In 2007, I was on the board of Red Envelope.

The company I co-founded, Red Envelope. I remember it. Basically, the dirty secret. You remember. I know you remember it. Thank you for that. Erotic fortune cookies. That was you ordering all those all the time, right?

Okay. Move along. Biggest seller, erotic fortune cookies. Anyways. Good to know. So 2007, the dirty secret of retail, especially retail, is you lose money for about 47 weeks a year, and then you make a bunch of money in the five weeks between Thanksgiving and New Year's week. And you have to finance all that inventory. And we finance all our inventory.

It ends up on a cargo ship stuck eight miles off of the Long Beach Harbor. There's a longshoreman strike in Long Beach. We need to go get more capital to buy new inventory in Wells Fargo. Some analysts at Wells Fargo saw the credit crisis, was very prescient, and saw the credit crisis coming and pulled our line of credit. And literally, seven weeks later, we were Chapter 11. We went from a company that was fairly healthy to Chapter 11 because our credit line had pulled. So let's be clear.

When the people supplying you credit or people buy your products and then the credit card company holds those fees because they perceive you as a credit risk or some algorithm has deemed you a risk and is holding the capital for longer, it can devastate the business. But at the end of the day, there's two sides of the trade and the retailers and the merchants can go to another payments platform. I think it's a pretty competitive environment. I don't think anyone has a monopoly like Stranglehold on it, unlike Facebook, Apple, Amazon, and Google. So this is the machinery of commerce. And I think those merchants can go find someone else. I don't know. Yeah. I think the bigger issue here, the bigger story, Cara, and again, I want to make a nuanced

argument. I want to make a nuanced argument here, Cara. Okay. All of a sudden, didn't it remind you when all of a sudden in the press, Square has mostly stayed out of the press except for the stock price. Didn't it also remind you like, wait, what the fuck? Jack Dorsey is the CEO there too. So he's in the midst of an emergency, probably working 18 hours a day trying to put out this dumpster fire. Oh, but what happens if there's a dumpster fire at Twitter,

which happens every 36 hours? For me, this was more highlighting just how ridiculous it is that the boards of Square and Twitter tolerate a part-time CEO. I think that's the biggest story here. He's got a lot on his plate. But do you think anything's going to happen? I mean, first of all, you're right. They're going to lose business. And they've worked really hard to get in those stores.

And they're in a lot of stores, let me just say. But Apple Pay has certainly made inroads. All the different versions of this is something. But all I know is every time I talk to a merchant, they hate all of them, of course, and even Square. They just take fees. Yeah, a lot of small merchants, especially like cab drivers, I'm thinking. The people that have them do not have the money to have it withheld. They just don't. They just simply don't. And their business has dropped so drastically.

And so I think this will attract the attention of regulators. I think it's this is just the kind of story. They're hurting small businesses and it's not good. And you're right, Jack, not having, you know, having another job. And he's very Twitter's got a lot going on. He's going to call more attention to it. And I think what was good for Jack was that Square was sort of working on all cylinders.

And that sort of took the pressure off of the fact that he had two jobs. But in this case, Square, just like a lot of businesses like Airbnb and some others, which by the way, Airbnb is seeing a lot of recovery. You're not going to see recovery because stores were starting to open up. They're starting to open up in DC and places, but they're also starting to close again as COVID really rages in certain states.

So it's going to put a lot of pressure on Jack Dorsey, although I still don't think anyone's going to do anything about it, either board. That's my feeling. I don't know. Yeah, as long as the Square stock, I mean, it's been such an incredible performer. 90% of his wealth is from his equity stake in Square. What's interesting, or you just mentioned Airbnb, just a quick data point. I've been trying to find shares in Airbnb. I think Airbnb is going to be, I think it's a juggernaut.

I think it's going to come back stronger, leaner, tighter, more profitable and return to not only pre-COVID levels, but benefit from the fact a lot of people are going to decide to try and monetize these assets they're dwelling. And there'll be more demand because more and more companies will want to save money. But anyways, I think it's going to do really well. When I was first looking for shares in the private market on these secondary exchanges about three weeks ago, the shares were priced at $65. The latest trade, and I didn't buy any, the latest trade is at $100. So that surge or that recovery has already been priced into a 50% gain in Airbnb secondary shares in the private market. So the markets agree with you that Airbnb is coming back. Yeah, I mean, it is. It's the numbers, right? I was actually searching for an Airbnb the other day, which is interesting. I haven't done that in a while.

My mom, I'm trying to escape from Florida, essentially. I'm trying to get her out of there and wash her down with a hose before she comes in the house. I don't know what to say. She's been out a lot in Florida. And she's like, our area doesn't have any. I'm like, it's up 4,300% or something in her area. She doesn't look at statistics in any way. It's a forest fire.

And I was going to park her at an Airbnb for two weeks, like, and like throw food through the door, essentially. But it's an interesting, that was my only- Have a drone supervisor. It was near my house. Yellow door shut. Let's go Chinese on Lucky. I think a drone supervisor. He was near my house. Let's go Chinese on lucky. I think that's racist. But anyways, the Chinese government is in fact, I mean, shit fires up in Beijing. They lock that shit down.

No, I know. But I'm not dead lucky in any case, besides your tasteless joke. It'll be an interesting time for Jack Dorsey. I think, you know, I think there's so much going on. Boards will do nothing, but they will, it is certainly a moment for this company, which was, they do have a very strong executive bench. Let's be clear.

That company's got a lot of- Square? Executives, yeah. A lot of them are women. A lot of the women are, a lot of women are running quite a lot of that. Jackie Reese's, there's a whole bunch of them there. And so it's an interesting company.

We'll see. Anyway, Scott, we're going to take a quick break. When we come back, we're going to talk about new complaints of sexism in the gaming industry. Analyst or male, try not to be completely offensive. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer

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of these Twitch streamers who broadcast their games on the platform for money, it's a fascinating business, has made hashtag Twitch blackout trend over the past week. They're calling for a blackout because they think that the streaming site can do more to recognize victims of sexual and racial abuse. In response, the CEO Emmett Shear said the company would take actions which may include banning and removing partnership or removing people from promotional opportunities and activations if we have concerns based on credible accusations and their historical behavior on Twitch. But people on Twitter quickly came out to voice their concerns over Twitch's continual lack of action and accountability. I would agree with them.

This is plain sight. Of course, we had the Gamergate issue. This is not something fresh and new that these people should be surprised is happening in the gaming industry. If you remember Gamergate back in 2014, what do you think? Do you think they will, again, do anything to change things? You know, something I don't know, I know so little about the gaming industry. I see this as just part of, you know, one cell in a much bigger cancer, and that is, for some reason, distance reduces our empathy,

and that is we're not as philanthropic with the poor that live 2,000 miles away versus 1,000 versus our neighborhood, which sort of philosophically makes no sense. And when you can hide behind a game handle or a game set or a fake Twitter account, you just turn into a different human being. And these platforms have hid behind this notion that they're not responsible for this behavior when all of them are. And so we're starting to see some progress, I think, across the bigger platforms. And what's clear with this is that the Twitch platform is guilty of the same thing. It's just a temptation to put your hands over your eyes and ears and let bad behavior and what sounds like really

dangerous behavior just run unfettered, permeates or infects all of these platforms. And again, it just comes back to the same thing, the gross idolatry of dollar, ignoring damage to the Commonwealth or damage to individuals in terms of, in this case, in harassment. The amount of harassment online is crazy from all kinds of parties to another. Well, gaming has been, you know, the particular, what happened in Gamergate was just, you know, I could go into it in detail. Can you say more about that? Can you give a summary of Gamergate?

Yeah, it was a really complex issue. It started off as a sort of a very fake attack on a prominent woman gamer who was allegedly sleeping with a journalist to get better stories. It was not true, but it created, let me quote the Guardian here, an online hate storm that silenced, harassed, and doxed progressive figures in the gaming industry, largely women. There's also a protest about perceived ethical failure in games journalism, but that is not what is about it, degenerated into a misogynistic attack on women in the industry. And this is the exact same thing.

And Brianna, there's all these amazing women who tried to stand up, but they got really terrified and threatened. And in this case, this is sort of a different version, which is sexual harassment by all these various people, including people who, there's so much money to be made, just like it is in, you know, I'm thinking of Tony Hawk and

skateboarding. These Twitch gamers are famous and popular and they get lots of sponsorships and misbehave. And so misbehave is a kind word of what's going on and behave in certain ways. And of course, several of them, and they all have these anonymous names and these strange names and operate. And the women are now not releasing their names either because they don't prefer to get attacked and doxxed, essentially. And what's amazing is that it's in plain sight, a lot of it, and some of it, of course, isn't. And it's the same old, same old, same old. And nobody, again, nobody stops them. And that is really the astonishing thing is Twitch benefits from these famous gamers and young men, especially watching them play games and things like that.

And this is at the heart of their economics of this. They love these gamers and these gamers then abuse their position. I don't quite know what they're going to do except throw them off. And when they throw them off, that's going to hit their business really hard. Yeah, the reason to be hopeful, though, not hopeful about harassment online getting better, but the reason why you might be hopeful that Amazon might take more action than some of the other platforms that have just deployed delay and obfuscation and these weapons of mass distraction, is that the underlying cancer in all this is an ad model. Because this type of controversy or harassment that enrages both

sides gets one side excited, enrages the other side, which leads to more engagement, enragement, clicks, more Nissan ads, and then Mark Zuckerberg gets wealthier. Twitch has a subscription model. It's subscription revenues and advertising. And so the underlying business model isn't driven on rage. There is content here. There is expertise. There is artisanship, if you can think of it that way, in terms of gaming. And I think Amazon is more likely to move aggressively against these guys because they haven't grown up with a business model that is cancerous to the core.

And that is an ad-driven business model. So while Twitter and Facebook are long practice in the art of ignoring, you know, of ignoring hate content and rage. I don't think Amazon's grown up with that business model, and I think they're more likely to be offended by it and more likely to move in on it. Amazon Media, they had to fire that guy. Come on. They had to fire the head of their media group. They replaced him with a woman.

But huge amounts of issues of sexual harassment. Amazon Media has done a fraction of the damage. I'm talking about their actual person who was running it. They had a guy running it that they had to fire due to this issue. I thought it was Amazon Studios. I thought that was fire. Studios, I'm sorry. Or maybe it was both.

Studios. I don't know what his job. In any case, he was a beautiful guy. You asked me, is anything going to happen here? And my understanding is this is a, quote, unquote, a systemic issue on the platform. And I think Amazon, my point is I think Amazon is more likely to move, show some actual action versus the non-action that Facebook and Twitter have become so skilled in. I think Amazon is likely to do something here as opposed to just trying to delay and obfuscate. You don't think so?

You don't think they're going to do anything? I don't because I still remember Jason Del Rey's excellent story about the management of Amazon. It is white and it is guys and it is overlooking things. And so you just, you know, you just – I don't think everyone's awful there. I don't think – I think a lot of people try. But it's just a homogenous culture there. And I just think, I think a lot of people try, but it's just a, it's a, it's a homogeneous culture there. And I just think this doesn't, this stuff doesn't happen by accident. It happens, it's not designed, but it certainly is designed into the process.

And to not amateur, to not have noticed this, by the way, is just, come on. I just, it's, it's unbelievable, actually. It's, it's, it's just a, and then be, you know, shocked and I shall do something about it. Why didn't they do it before? It's the same thing. Why didn't they do it before? Why did the entomopram continue? We didn't know it was still there, but it was.

Like, why suddenly? I just think they won't do it. I think they will clean it up, but they should have before. And I guess you can't go back in time, but it certainly is disappointing. And I'm glad these women are really, these stories are really quite- If we could turn back time, Cara. Oh my God, don't even sing that to me. If we could turn back time. Oh my God. If I had your hair, I'd grow it down to my waist.

I'd be so fabulous. I'd grow it down to my waist. You know what? I'm ignoring you. I'd wear poochy dresses. I'd wear Manila Blahnik shoes. I'm not letting you do this. Listen, we're going to go to a listener question, shall we? Hair harassment. Rebecca, save me here and please play the tape. You've got mail. Hey, Scott and Kara. Donovan from Los Angeles here.

Apple and Google put out a big press release in April saying that in May they will be releasing contact tracing API with an app to follow. The tech has only been picked up by three states so far due to the decentralization of the data. How can these giants integrate privacy but also protect public health? Thanks. Yeah, I read these apps aren't getting any take-up. What do you think here, Carrie? I think that people have done contact tracing for lots and lots of hundreds of years, kind of thing. And they've done it. They did it in 1918. You know, New York hired—it's people on the ground getting information because it's very

hard. There was a great story in the Times about this, about how hard it is to get this contact tracing information. I don't think people are going to input it in these apps. I know Pinterest, the Pinterest CEO was working on one where people talk about their health. I just don't think people, I think you have to go follow people like detectives and that's what they do. They hire hundreds of people. And even then it's incredibly hard to do it because one Americans, apparently, you know, the Germans cooperate, other countries cooperate. Americans don't seem to want to cooperate that much. We're exceptional at not cooperating. And I, so I don't think that, you know, I think it's a good idea, like in concept, especially if privacy is protected. But in general, I think technology is not the solution here necessarily, except when it comes to crunching the numbers later or doing AI or, you know, I just don't.

And I think you, you know, especially as Trump is scaling down federal funding of testing and contact tracing, I just don't think necessarily that the tech giants help that much. And it also raises all kinds of issues about their data. I do think people, states, are going to have to do this themselves because the federal government has abrogated its role completely. So I don't know. What do you think? Yeah. Well, I think you're right. Tracing is still one of those things that can't be outsourced to technology. The technology can be a tool, but at the end of the day, it's got to be an innovative, high EQ person that has the presence to reach out to someone and say, hi, we're here to help and sit down with them and really ask

them the right questions to try and understand who they've been in contact with. And we have 2,500 tracers in the United States, mostly focused on foodborne illnesses and STDs. And there's an opportunity, and we've talked about this before, to take all these out-of-work kids and maybe 500,000 of the 11 million students that aren't going to be returning to college campuses in September 1 as we figure out we've been deluding ourselves about opening again. But that's another story. And turn them into a corona core of tracers. And it could be really powerful. Tracing is kind of the, you know, if our response to the virus, which is the worst in the world at this

point, the weakest of weakest links right now, I would argue, is tracing. And to just assume that like everything else, we're going to figure this out in 0.005 seconds. If Google is involved, you're right. It's feet on the street. It's boots on the ground. And we need an army of tracers. What is interesting is there are some really hopeful bills that have received bipartisan sponsorship around social service or public service that potentially could evolve something like a core of tracers. But the bottom line is if we had more

competent, more creative governments, if we hadn't totally gutted the coffers of our local health administrations, we would be in a position to rally, and maybe we still are, an army of hundreds of thousands of young people who aren't immune but are largely are less damaged by this virus to begin the mother of all tracing using handheld technologies. But to assume you got to have the hands to hold these technologies. And that's what we're missing. Yeah, I agree. I mean, I think inputting and things like that, but you do need it. You can see people with iPads and things like that. That's how technology be used rather than paper. I just, like, it seems like it's not, technology does not solve all problems. And you're right. This is something that is,

it's detective work. And sometimes detective work is DNA. Sometimes it's, you know, a lot of stuff has been solved through technology, but at the same time, there's nothing like a good detective or sometimes there's bad, there's a lot. Yeah. And sometimes it's just, you know, you know what a lot of it is. A lot of it is just empathy. You find out someone's been exposed and they have to they have to get they have to leave their house because their kids don't have child care to potentially affect other people. And you figure out a way that individual not not no amount of processing power. I don't care if the singularity or I can match the nuance of someone who sees something is going on in this household. How can we help such that you don't go out and infect dozens of other people and we get R less than one?

So they're not only tracing, they're really about suppressing the R. I think this is an enormous opportunity for us to try and figure out a way to rally some of the millions of people who are all of a sudden out of work and give them a sense of pride and agency and something greater than themselves. Stand shoulder to shoulder with other young people and serve America. I think it's a huge opportunity. I think tracing could be something really interesting. Yeah. So am I going to have to send my son to do tracing? He's coming to NYU, Scott.

He's coming for you. In any case, I think it's really, it's an interesting question. I think the issue is the federal government not stepping up here and that these states, as these states, as they wax and wane in terms of the numbers and it's going to continue through the fall, whether we can bring the data together. And I think that's where tech companies can really help and lend their resources is that there's data all over the place. And they certainly have the capabilities of marrying it in some way. There's all kinds of innovative ideas they could bring to get the data and get the proper data so officials in states and localities can make better decisions.

But I think I would be nervous if I was a state or local thing, especially without support of the federal government, to have to then try to vet a Google or Apple app, even if they work. And I think a lot of people's experience is smart to put the brakes on it. In any case, all right, Scott, one more quick break. We'll be back for predictions. Support for this show is brought to you by Nissan Kicks. It's never too late to try new things, and it's never too late to reinvent yourself. The all-new reimagined Nissan Kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the performance, all the way to features like the Bose Personal Plus sound system, you can get closer to everything you love about city life in the all-new reimagined Nissan Kicks. Learn more at www.nissanusa.com slash 2025 dash kicks. Available feature, Bose is a registered trademark of the Bose Corporation.

Do you feel like your leads never lead anywhere and you're making content that no one sees and it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI powered customer platform that builds campaigns for you, tells you which leads are worth knowing and makes writing blogs, creating videos and posting on social a breeze. So now it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. All right, Scott, we're back. You know, I don't know what we're, I don't have a prediction except that the number of COVID cases rising is, you know, we're going to have to really start focusing back on that again is really a disturbing trend.

Obviously, a victim of opening up too soon and opening up stupidly. So talk to me about what you think is going to happen, not necessarily with COVID. You can predict anything you want, but I'd love to understand what you think, you know, what companies do now with the opening and closing and opening and closing of our, of our, of our businesses. It's really, it's really interesting. It's, it's just so, it's just so unusual that we

have a narrative and the narrative when something like this, you know, a tolerable number of deaths, some tragedy, it would kind of disappear because we like to think it's summer loving, you know, a tolerable number of deaths, some tragedy, it would kind of disappear because we like to think it's summer loving, the heat, the beach, the virus is going to give us a break because it's compassionate and worried about our summer plans. There'd be somewhat of a relapse in the fall by the time we had a vaccine and then boom, we're back to normal. And it's clear the virus didn't get the memo. We're not going to need a relapse because we have a forest fire. It's just continuing. It's just continuing to grow. And my prediction leads into this notion of American exceptionalism and ignorance kind of dethroning us or depositioning as the global superpower.

And I was reading this article about how the Suez Canal, essentially the British, the Israelis, and the French invaded the western part of the Suez Canal in, I think, 54. And the failure of it, and to try and also unseat the Egyptian president Nasser at the time, and the failure of it sort of laid bare just how weak this global superpower Britain had become. And I think in retrospect, we're going to look at COVID-19, whether it's our inability to manufacture cotton tip swabs. If you think about this just going out, again, this theme 10 years forward, China was on a trajectory to seize the mantle of global leadership.

It's just happening in weeks now instead of a decade. Our acquiescing and China's seizing of the global mantle, the baton, I wonder if this is that moment. And China's off its heels, onto their toes, have made infrastructure investments. They've been more aggressive. Even though the virus started there, corruption is kind of their call sign in terms of their government and their data. But they are, in fact, getting off their heels, onto their toes. They're funding the World Health Organization. They're participating in a more global dialogue. They've

said if they come out with a vaccine, they're going to distribute it for free. They're participating in a more global dialogue. They've said if they come out with a vaccine, they're going to distribute it for free. They're making loans to people who are in financial strife because of the global pandemic. And we're telling people that they can't come over on temporary visas. I mean, it's just we are withdrawing. And we can't go to Europe. We may not be able to go to Europe. It's just that story. Go to Europe.

You're not supposed to go to New York if you're from Florida right now. No, I know, but Europe doesn't want us. We're like grouped in with a bunch of countries. Who wants us now? But look, I wonder if this is our Suez Canal. And that is when we look back, if in fact China does grab the baton. And you know what? You know what Britain or you know what the U.S.?

Eisenhower didn't want Britain to go into the canal. And you know what he threatened to do if they didn't get out? didn't want Britain to go into the canal. And you know what he threatened to do if they didn't get out? He threatened to sell their bonds, which he had purchased as they were racking up deficits. Imagine what China could do if they threatened to sell our bonds. What would happen to our interest rates? What would happen to our interest rate expense, which is now greater than how much we spend on defense at record low interest rates? They now have us by the balls because they have all our debt. I mean, you could see something very similar play out to what happened in 54. Yeah.

Yeah, that's a bad—wow, you're reaching back in history. I can't believe this. I don't know how we got to the Suez Canal. It's the edibles talking. The Suez—but I think you're right. I think that's a really good—I think it does have—I I think I'm really looking forward to, you know, businesses reacting. You saw Disney workers are worried about opening up Disney World. Like it just it has so many iterations. And meanwhile, James Earl Jones, I mean, honestly, like there's something like deeply wrong at the heart of this that is not just Donald Trump. It's the entire... That's the problem. I mean, that's what's so tragic here, is that when you have an administration setting off hydrogen bombs,

you can't even, you don't have time for the dumpster fires. This H-1B visa thing is so stupid. It's such a tragedy for us. If you, so many of us come, my parents came over on a steamship and America loved, what is our secret sauce? If you had a company and that company just magically attracted the best and brightest

from all four corners of the earth, you couldn't help but be successful. And that's been America, the best and brightest globally, always wanted to get to America. That's our secret sauce. And we've decided, let's take the secret sauce and make America allergic to it through a bunch of racist tropes. This is our superpower. It's like we've decided we're Superman and we're just going to decide we don't want to fly. Remember that scene when he decided he didn't want a superpower and he got the shit beat out of him at a truck stop? Well, that's what's happening now. Why on earth would we give up our superpower, which is embracing the most talented people in the world and opening our arms to immigrants?

It just makes no sense, Kara. Let's go back to being Superman. That's because Darth Vader's running things right now. Getting back to Darth Vader, that's because the Death Star is running things. But we'll see how that goes. You know, they use that analogy online. Brad Parscale used that analogy online. Brad Parscale used that analogy online.

Margot Kidder and Annette O'Toole. Two hotties. That's what you get in your Superman. But at the end of that movie, he went back and he beat up the guy. He pushed him down. That's right. He goes back. Christopher Reed. Gosh, that guy was incredible. May I say a small personal thing? I went to school with him.

I went to high school with him. Did you really? Yeah. I know his brother's friend. Was he Robin Williams' roommate? He was the star in all the high school productions. He was a lovely guy. He loves a lovely guy.

Yeah. Tragic what happened to him. Yeah, he seemed like a really decent man. Yeah, very decent fellow. He was very lovely. He was the star of the high school plays and everything else. Anyway, let's hope we have more Christopher Reed, even less Darth Vader. Anyway, Scott, I really appreciate it.

What are you doing this weekend? What's going on? So I am sheltering in place, unfortunately. I came back to New York. Stay safe. sheltering in place unfortunately i came back to new york stay safe and now so i basically went to i'm in my loft in soho and not allowed to go anywhere and so i'm probably gonna go back because you're from florida you're like lucky i could send lucky up there with you if you want i know i know yeah you know what's inspiring i got a reality show in in florida we have what a record number

of cases i think 5 000 No one's wearing a mask. You come to New York, they've really handled, I would argue that they've, I don't want to say handled it well, but I think they've shown a great deal of citizenship. No, handled it well, I'll say that. And I think we're in the low hundreds of cases now, and everyone on the street is wearing a mask. It's like the citizenship of Manhattan. Same thing in Vermont. Let me just tell you. Yeah, it is. It's really, it's nice to see. And so anyways, I am, I'm not doing a whole lot. I forget.

I forget. You need to stay two weeks, my friend. You better not move from that. I'm going to put a sensor on you or something. I'm going to put a contact trace on you. In any case, don't forget if there's a story in the news and you're curious about what you want to hear our opinion on, email us at pivot at voxmedia.com to be featured on the show.

Scott, I will talk to you Monday. I'm leaving Vermont. I'm going back down to D.C. where I will have better Internet access. In any case, read us out. Today's episode was produced by Rebecca Sinanis. Our sound engineer is Fernando Finete. Erica Anderson is Pivot's executive producer. Thanks to Drew Burrows and also to Matt and Rebecca today who helped me with my technology as I am in quarantine or self-isolation. Make sure

you're subscribed to the show on Apple Podcasts or if you're an Android user, check us out on Spotify or frankly, wherever you listen to podcasts. If you like the show, please recommend it to a friend. Thanks for listening to Pivot from Vox Media. We'll be back next week for another breakdown of all things tech and business. Luke, I am your father. That wasn't very good. and it's never too late to reinvent yourself. The all-new reimagined Nissan Kicks is the city-sized crossover vehicle that's been completely revamped for urban adventure. From the design and styling to the performance,

all the way to features like the Bose Personal Plus sound system, you can get closer to everything you love about city life in the all-new reimagined Nissan Kicks. Learn more at www.nissanusa.com slash 2025 dash kicks. Available feature, Bose is a registered trademark of the Bose Corporation.

Do you feel like your leads never lead anywhere? And you're making content that no one sees and it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you,

tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers.