Pivot - Twitter and the Saudis, Facebook’s 'Switcharoo', and the 2020 digital ads race

Episode Date: November 8, 2019

Kara and Scott talk about former Twitter employees who were spying on user data for Saudi Arabia. They also talk about a big leak of internal Facebook emails that further shows Facebook's conniving use of data. A year out from the 2020 election, a new progressive PAC is trying to beat Donald Trump in the digital ad space. Kara and Scott agree it's a drop in the bucket. Scott bids a farewell to his presidential hopeful and "dreamy man crush" Beto. Kara's win is Airbnb's transparent handling of a few recent incidents. Meanwhile, in fails, SAT-takers names and data are being sold to elite universities ... so those schools can have a higher rejection rate. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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a lot of AI systems feel like they're designed for specific tasks performed by a select few. Well, Claude, by Anthropic, is AI for everyone. The latest model, Claude 3.5 Sonnet, offers groundbreaking intelligence at an everyday price. Claude Sonnet can generate code, help with writing, and reason through hard problems better than any model before. Hi, everyone. This is Pivot from the Vox Media Podcast Network. I'm Cara Swisher. And I'm Scott Galloway. But Cara, do you know what my close friends call me? What? Abu Bakr al-Big Doggy. That's right. Oh, my God.

Really? Drawing a reference. A terrorism joke? Drawing a reference between me. Is there nothing you will not joke about? Me and the deceased leader of ISIS, so offensive on so many dimensions that it's not offensive. Do you know, they're not talking enough about it, said Trump last night in Louisiana, about his role in that. About him bringing down an even bigger terrorist.

Yeah, I know. Okay, and we're off. Listen to me. There's a lot of news. There's a lot to go in. It was your birthday this week, wasn't it? And I completely forgot. That's a shocker.

That's a shocker. I forgot. Listen. I'm lying about my age, by the way. Do you lie about your age? You, of course, don't lie about your age. No. I lie about my age.

No, not at all. Of course not. No. How old are you? I'll be 46 in November is the official line. No, you won't. Oh, my God. My kids don't know how old I am, seriously.

So just keep it to yourself. That can be easily found. I'm just going to consult Facebook data in a second. We'll get to that big story. Listen, Scott, there's a lot of news. We've got to get to it. Okay. I think, but first of all, first of all, I have a thing I want to talk to you about, about the business itself. I think we're going to rebrand Pivot to P-I-V-O-T, all caps. That's right. It's Facebook's new brand. Yeah, but all caps, it's, so let's talk about

that. It's sort of interesting. When I was in my second year of business school, I was inspired by this professor named David Ocker, the father of modern branding, and started a company called Profit, my first firm, a brand strategy firm. And we used to do this for a living. We would show up and charge large corporations a lot of money to figure out what their brand was supposed to mean and then figure out the visual metaphors that reinforced that meaning. And I was trying to figure out what the meaning and the focus group and the ethnographies would be around Facebook, trying to understand the DNA of the brand. And what I came up with is they need a logo that reinforces this association and this

core identity, if you will, of reconnecting with loved ones such that you can find out that they're racists. That's the DNA of Facebook's brand. I think all caps kind of gets that apart. Let's just say it again. Facebook! Okay, listen to me. It's not Facebook. It's Facebook!

It's Facebook. It's how it's screaming at you. It annoyed you before. Now it's screaming at you in all caps. I'm surprised they didn't add some bangers on the end just to drive you crazy. Listen to me. This huge story is developing.

You cannot make this stuff up. There was a huge news dump of leaked documents that showed just how conniving Facebook has been profiting off your data. And now the California attorney general is suing Zuckerberg and Sandberg for their emails because he says they're not cooperating with them. This is an attorney general who's super aggressive. But someone put out 4,000 pages of documents detailing internal use of data. This is amazing. I can go through them if you'd like, or we can discuss it. But one was the switcheroo.

It sounds like a Seinfeld episode. It's actually Facebook's internal plan. Facebook has been cutting access to user data for app developers from 2012 to quash potential rivals while presenting the move to the general public as a boon for user privacy. It was contemplating forcing companies to pay access user to access users' data, and it didn't follow through on the plan. There's just so much in this Trevor Trove, which is essentially what we thought they were doing, which is trying to quash rivals and trying to manipulate your data. So there we have it.

Yeah, I'm not sure it's anything that any other company doesn't do. It's just that Facebook's been better at it, and it's more frightening. And the level of—they're just so disingenuous getting up and saying we want to give voice to the unheard when they could give a flying F about First Amendment rights. Or they're just trying to promote this notion that we don't want to have any sort of, I don't know, throttle on our business model. But, yeah, you see just inside the organization just how disingenuous they are about everything. Yeah, I keep saying that. No one believes me. The compromise level is so high.

Yesterday, David Marcus was on stage at the New York Times event in New York, and so was Makan Delrahim, who's going to be the one suing Facebook for antitrust issues. And he was saying, I think it's not so much being big, and I did a panel with Chris Hughes

and a whole bunch of people, Craig Newmark, about bigness. And everyone was like panel with Chris Hughes and a whole bunch of people, Craig Newmark, about bigness. And everyone was like, it's not so much big, it's what if you abuse your big power. And this is like showing this is exactly this. These are the kind of crumbs that federal prosecutors need to put together a story of using like a very Microsoftian story. So I think it's, I think these leak dumps, it's not the way you'd want it to happen, but it certainly is, it shows there are documents out there, as we know there are, of their behavior. And what do you think happens? Do you think it's California that takes the lead on it? Do you think it's Washington? What do you think happens?

I think all of them. I think this is just, there's just too much good stuff here. And with Gates, there was just a few documents that were sketchy, as I recall, or maybe there was more, but there was not these so incriminating documents, which, you know, Facebook is saying for their, let's be fair, that this paints a skewed picture out of context of old emails. And, you know, that's their excuse. But it's not good to have this stuff, to have actual documents. And that's the, you know, it just doesn't link to Katie Hill. But if you don't want to see something later, you don't want to see something later. Like, it's just, they did these things at a time when they were much looser and thought it was, were smaller. But now in context,

it doesn't look very good that they're, that they're trying to block other people's business, which everybody accuses them of. And they're in the, and instead, and now there's proof of it. So, I think it's problematic on lots of levels. You know how they could solve this in about 90 days and their stock would go up 30%? Tell me. Well, it's what the kind of the patriarch of the family in succession, which is a great series, says when he comes under fire. And that is, all right, it's time for a blood offering. That was right. That was right. That was crazy.

If Mark Zuckerberg said, look, we're proud of the progress we've made. This is an incredible company, but our role in society and the economic growth we provide, the economic security we provide, the connections we provide are so important. This has grown beyond me and similar to Bill Gates. I'm going to kick myself up to chairman. And by the way, Sheryl Sandberg has announced she's leaving to start a foundation focusing on, you know, name whatever, I don't know, the latest fabric softener for her reputation is. The stock would be up 20 to 30 percent in 90 days. This company, there's never a company that's needed so badly to turn the page.

I really think there's never a company that's needed so badly to turn the page. And it's interesting that people really don't talk about the notion that it is so time for a change of management here. And it's weird that we just don't talk about it because we assume that's an impossibility. And at some point they're going to say, you know, all right, enough already. It's time to move these, be the kick them upstairs, but to bring in somebody who has, who can kind of hit the reset button. Who's going to do it? Well, you said Brad Smith. I don't know if that's the right guy or gal. Yeah, but who's going to actually get Mark to do that?

It's got to be Mark doing this. No, the board. So it doesn't, there's not, there's. There's only one way it can happen. There's nobody on that board that's going to do this. The board's got to hold hands and say, we want you out, or we're putting a press release out saying we wanted you out. Why should they? The stock is at a high.

Why should they? They're not going to do it. Sorry, Scott. I think that's a valid point. This isn't Logan Roy's situation, which is very tenuous at the end of last season. This is a company at full bore, like it's going crazy. And, you know, Gates didn't have this kind of control. Nobody had this kind of control.

And I think this is a board which is sort of like the Trump cabinet plus Lindsey Graham. They're just not going to do anything about it. Power absolutely corrupt. Speaking of the Trump cabinet and a segue to our next story, you know who's going to do absolutely nothing and start making excuses for the Saudis is our president after we found out that they, in fact, had infiltrated Twitter. They're also a shareholder of Twitter, by the way, big shareholder. The Saudis are the fund? Yeah, one of the crown princes, this current crown prince put in jail, was a big investor. I mean, I assume they still have the investment.

It was large. It was quite a big chunk of room of that company. Can you sort of break down or give a summary of what's happened to Twitter? Because I read through it, and I think I understand what happened. But can you sort of summarize what's gone down there? Yeah. Well, they have these employees. And believe me, I've chased down stories,

not just about Saudis, but Russians at Google, so-and-so at Facebook, that there's placing, that these countries are placing people in these access points, which makes total sense. I've never been able to. 100%. I'm not a national security reporter. I think it's the FBI's job to figure this one out. I don't have special powers to catch these people.

But I've had so many rumors over the years that I've never been able to. I'm just not a good enough reporter to do it. But employees access Twitter's information on dissidents who use the platform. This is the first time federal prosecutors have accused the kingdom of running agents in the U.S., which should come as a shock to zero people. One of them is implicated in the scheme, of course, is Saudi Crown Prince Mohammed bin Salman, MBS. He was the one who the CIA has concluded killed Jamal Khashoggi. And so it's just crazy.

It's just they're just using it as their way to track people, their own little CIA. And I don't know what the companies can do to prevent it. Like, they have to really, the vetting on these employees, I don't even know if they could do it correctly. I don't blame these companies because they've got thousands of employees and who knows which one is working for which country and et cetera, et cetera. So. Oh, you can blame them. If you were to, if you were to start. Less so. This is, this is, go ahead. Go ahead. Tell me how, because I think this is a really tough situation.

I don't know. You start putting Facebook or Twitter executives in prison, they'll figure it out. They'll start figuring out. Oh, okay. They'll start figuring out the same thing we do at our national security agencies that can damage. If information comes out of the CDC or the CIA, people die or their privacy is massively violated. We're going to find out that Khashoggi or some other horrible acts have gone down because of the poorest nature

and the lack of oversight and the lack of concern for our commonwealth that these platforms demonstrate in every way, every day. The kingdom of Saudi Arabia has figured out that these platforms can do tremendous damage to our country. Our national security apparatus has figured this out. The only people that haven't figured this out are the people running these companies because it might cost them money. But if other organizations can figure out a way to plug the leaks, so can these guys. But for some reason, we give them a hall pass, and we decide, oh, when there's a threat to our national security, how did they know that Khashoggi was in a foreign embassy getting a wedding license at a very specific time? My guess is it was probably an operative inside one of these platforms that had access to his email, access to his social

media. I mean, this stuff is, it's so obvious that the best investment a foreign intelligence firm can make is to plan operatives inside of these companies. It's just not – it doesn't take a rocket scientist to figure it out. It also doesn't take a rocket scientist to figure it out, to protect against it. It's like, why do you rob banks? That's where the money is. 100%. I mean, that's the thing.

That's where the information is. That's the kind of concept I was trying to work out in my head. It goes to a bigger problem, and that is I'm just barely old enough to remember the Cold War and the duck and cover and the fact that there are foreign adversaries who are trying to undermine our way of life. We have a world with a finite amount of resources. We're all competing for it, and some of us are ideological enemies. And I don't think this generation of leadership in tech has a shared or collective history around our threats. And also, I don't think— Around bad guys.

Yeah. And I don't think they—they think of themselves as global citizens. And they're making money. They're making $200 million from Malaysia. So Malaysians must be good people who share our interests. And I'm not—I don't mean to pick on Malaysia. But they also don't—they've never—I mean, what we had in the 50s, 60s, and 70s, and I'm not saying that was the best era for politics, but there was more bipartisan cooperation because the majority of our leaders had served in the military together.

And I wonder if we need some sort of national service, whether it's teaching or the Peace Corps, where there's some collective shared regard or empathy, not only for one another, but— They definitely don't see it that way. I'll say you're right. I agree with you. I think everybody should serve. I tried to, but I was unable because of don't ask definitely don't see it that way. I'll say you're right. I agree with you. I think everybody should serve. I tried to, but I was unable because of don't ask, don't tell. But there is no shared sense of this. Although they have like Google tangled with China when it was hacking into their systems. That's why they pulled out. So they have a sense and they're battered every day from, you know, they're fighting nation states.

So what's the problem is that we've created these massive information centers that are just catnip for intelligence agencies. I mean, I hate to tell you, but that's what Edward Snowden said. It's like this is like Facebook is an intelligence officer's dream. 100%. Like, yay. They don't even have to try hard to, like, find anything about people. And so it's really, we've created our own spy system by giving them our information, which is really kind of disturbing on many levels.

But it's still creepy that Saudi Arabia did it. And by the way, in perfect timing, Travis Kalanick took $400 million from the Saudis today. Nobody's touching their money. Like, everyone's, like, at least pretending it matters that these guys killed a journalist and are spying on us via Twitter. And, of course, he collects. Just as you said that, someone at Twitter is getting your home address and phone number. No, that's all right. They know where I live. It doesn't matter. But it's not all right. It's just, it's really, I don't, it's really disturbing on so

many levels that they can, that there are so many access points. And honestly, I agree with you. They need to have a better sense. But someone was like, what should we do at Facebook? And yesterday at the New York Times thing, I was sort of like, is there anything we can do? It's so big. Oh, no. Don't go there.

The world isn't what the world is. The world is what we make of it. We can absolutely fix this problem. I felt it. I was like, oh, you can't there. The world isn't what the world is. The world is what we make of it. We can absolutely fix this problem. I felt it. I was like, oh, you can't fix something. You can't. You should just shut it down. But talk about Kalanick cashing a $400 million check.

Is this for cloud kitchens? Is that what it is? Cloud, the kitchens, yes, the kitchens. Explain that concept because I don't entirely – I get it conceptually. Well, it's actually not idiotic. He's not an idiotic man. it conceptually? Well, it's actually not idiotic. He's not an idiotic man. I actually made a remark publicly at the New York Times when, because Uber's CEO was on stage, Derek Khoshoggi, who replaced him. And I said, you're better than Travis, but that's a low, a really extremely

low bar. And everyone's like, that's so mean. I'm like, watch, just wait five seconds. He'll do something like this. But yeah, he took, it's a cloud kitchen. So Uber Eats is getting big, obviously. And so he's, even though he's on the board of Uber, he's creating these kitchens. It's sort of like the munchery idea, but not as a brand. So it's a white label kind of things that, that will, will, they can, they can cook for their ghost kitchens essentially. they can cook for their ghost kitchens, essentially. And so they cook and then take out people, can use them to— this delivery area is growing like crazy. It's actually—so he's in the white label part of it. It's sort of like—and it's a great idea.

It's actually—and it also takes advantage of a business he knows well. And so it's on lots of levels. It's smart. But at the same time, he took $400 million from, according to the New York Times, from the big Saudi sovereign wealth fund. So he don't care. It is an issue. So the idea is to, if I understand it, is say you're great at cooking Indian food, but

you don't have access to the capital to start your own restaurant. You can rent a kitchen and then they will provide all the infrastructure and the delivery such that you can offer Indian food for delivery and be up and running really quickly. Something like that. Yeah. It's an interesting— It is interesting. There you have it. And the Saudis are deep in Uber. The Saudis are deep in WeWork, obviously. Talk about yet another event the dog wasn't invited to, the New York Times event. You know what? I have to tell you, top executives came up to me and said,

we love Pivot so much. We love it. And I said, Scalloway is back. They listen to it regularly. I've literally, I've alienated every important institution. I've alienated everyone except my dozens and dozens of fans.

So thank you, all of you out there. I'm just telling you, you got fans at the top of the New York Times. They listen to it for sure. For sure. You bet. All right, one more quick story. Go ahead.

What was the event? You were there. What was the highlight of the event? It was Andrew Ross Sorkin. Dreamy. Dreamy. He has a deal book. He had Bill Gates there.

He had Dara Khosrowshahi. He had Kim Kardashian and Kris Jenner. And then Kanye West was there, too. Like, he was sitting in the audience watching them. I said hi to Kim. She's great. I like Kim Kardashian. And then who else?

It was every—Killary Clinton was there. What were the highlights? Any interesting insight or any interesting moments? I thought Megan Delrahim was interesting. I thought he was—he had to say. I thought Brian Chesky did a great job. I did a podcast with him later about what happened with the thing. I think they talk about a different way to respond to a crisis.

He was instantly responsive and blaming himself and saying, I fucked up. And trying to fix it. Here's what we're going to do. Being genuine about trying to fix it. Yes. I was like such a, he's very close with Mark too. So that's an interesting contrast. Anyway, it was great.

It was great. There was a lot of good stuff. Andrew Ross-Zirkin throws a nice conference, I have interesting contrast. Anyway, it was great. It was great. There was a lot of good stuff. Andrew Ross Erkin throws a nice conference, I have to say. Yeah, he's very talented. In my next life, I'm absolutely coming back as him. He's got everything. No, you can't.

No? He does. He's a sweetheart, too. Anyway, all right, so very quickly, last thing, one year away from the 2020 election, the $75 million progressive pact that's trying to beat Trump at his digital game, I think that is chump change. But it will focus on swing states, Arizona, Michigan, North Carolina, Pennsylvania. They're just not spending very much. Trump has spent more than $26 million so far on Facebook and Google, more than four of the top Democrats.

This organization is trying to catch up. It'll include advertisements on Google, YouTube, Facebook, Instagram, Hulu, Pandora. And David Plouffe, who worked for Obama, a campaign advisor, is on the board. But it seems like a small little effort. That's my feeling. It's pissing in the ocean, not only because of the small amount, but because of the way they're allocating it. If you wanted the highest ROI capital expenditure that would guarantee Trump's demise or that Trump would lose is if Bloomberg, Tom Steyer, Howard Schultz, any of these billionaires that claim they're looking or were looking at running because as concerned Americans, they realize we're under,

you know, so many of our values have been compromised and we need to restore and repair. If they were really serious about that, all they would need is $100 million. And if they took $100 million of their $50, $70, and $80 billion in wealth, respectively, and they did one thing, they called Mitt Romney and said, you're the man, and I'm the first $100 million into your campaign as president, as an independent, and a Democrat will take the White House. That would be the most effective allocation of capital is if a billionaire steps up, leverages the situation, similar to the way that Adam Neumann leveraged the massive ego and face-saving Amasayoshi-san. The opportunity here, the glitch in the matrix, is to leverage the massive ego of every senator that wakes up every morning, looks in the mirror, and says,

hello, Mr. President. If you convince any of them, call them and say, you're the man, you should run as an independent. They will believe you. They will run as an independent. Got to find a Republican. They will take three to eight points from Trump and we are back in the White House. But none of them will do that because they only pretend to care about allocating their billions when it's putting their own face in the White House. We need someone to step up and fund an independent from the right. All right. Okay. All right.

I like that. What independent is that? Yeah, it could be Mitt Romney. It could be Evan McMullin, obviously both from Utah. He could shave off three to seven points. He's a rational, thoughtful man. All you need is— He's been on stage at Cove.

Three to eight points. That's all we need. Yep, yep, yep. All you need is— He's great. He's been on stage at Cove. Three to eight points. That's all we need. Yep, yep, yep. All right. To finish up this section, before we get to wins and losses, if you need to take a moment to mourn your great political love, Beto, we can give you a minute. Oh, my gosh. I will remember you. You know, have a montage of moments.

You know, have a montage of moments. I appreciate the fact that we should recognize and take pause when the hottest person leaves the race. That is, it is seriously, he is by far the hottest guy running for president. And we've lost, everybody got, I mean, literally, these people now brighten up a room by leaving it. It is the debate stage. You are such a lookist. It's so offensive. Oh, my God. The debate stage is so less sexier without Beto. Okay. I don't think sexy is the point. It's always the point. What other point is there other than survival?

Did you have a little weep into your thing? I told you Beto was going to lose way back when everyone was on his thing. I told you he was a man-boy who just literally irritated me. I said he turned me into a lesbian. He was a boyfriend that turned me into a lesbian type of person. But let me just tell you I was right. My prediction was correct.

You were right. Anyway, we're going to get to wins and fails when we get back and predictions, obviously. Fox Creative. and predictions, obviously. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at scale. There are hundreds, if not thousands, of scam centers all around the world.

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if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim and we have these conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash zelle. And when using digital payment platforms, remember to only send money to people you know and trust. Support for this podcast comes from Anthropic. You already know that AI is transforming the world around us, but lost in all the enthusiasm and excitement is a really important question. How can AI actually work for you? And where should you even start? Claude from Anthropic may be the answer. Claude is a next-generation AI

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There's so much stuff. So my win isn't probably that much fun. My win is the SoftBank deck from 2010 that's circulating. Ah, yes. Oh, my gosh. It is so hilarious. It's literally as if—so now in high school, we've replaced civics classes with computer science and entrepreneur courses. And that's how we end up with Mark Zuckerberg, is we've decided

that our idolatry of the dollar and innovators would now have entrepreneurship classes. This deck reads as if an 11th grade team, the night before their presentation on entrepreneurship, said, I know, let's get really high and pull this thing together. I was gonna go to class before I got high. I have this thing pulled up. Okay, slide 69. It's the worst clip.

It's literally the worst clip art in the world. So pick any three slides and have a few drinks and then just look at those three slides. So, okay, slide 69. It says natural disaster, terrorism, unknown virus, meteor. It's got four terms. And then slide 70 says, yet people long for love and get hurt by love. And then-

I think that's your message in your whole book, Scott. And then slide- Sorry to tell you. And then slide 71, information revolution, happiness for everyone. I mean, you can't make this shit up. I know. But, you know, Masa talks like that. I have interviewed him many times.

I'm trying to get him to come to code. He talks like this. Trust me when I tell you this is out of his brain. He's done this before, and it's his brain dump. It truly is. All right,, an invitation. I invited to Satya Nadella to Coachella, and he called my bluff, and his office reached out to me and said they would meet me in Coachella, and I choked. I just couldn't handle the idea. What? So, anyways, I'm issuing an invite to Masa, me, him, Tulum Edibles. This guy knows how to roll. And I will pull together his new deck. I have, I mean,

I come across as rational compared to whoever he has running around in the sick of fans. It's him. It's him. Building his decks. But literally, download the deck from SoftBank 2010. It is literally kind of- There's new ones, too, about the WeWork problems, too. There's these new ones about them sort of laying it out in all its glory. That's my win. One of them said, one of my favorite, reduced price of existing commitment, USD $1.5 billion. Exercise price, USD $1.10 a share, valuation of $47 billion. And then a little arrow mark that just says, reduced substantially, US dollar. dollar 1160 a share after exercise.

And I love the little arrow that just says, reduced substantially. Like, it's cut to a tenth. And it's probably not even worth that. Anyway, it was my favorite. They just sort of put it out there. Do you have a win? Well, what can you do? So many wins.

So many wins. I do think, I do, I know people, I have issues with Airbnb, but I do like the response that Brian Chesky had. And I think you'll see in this interview, like we talked about Jersey City and he didn't hide from me. He's like, well, we spent billions of dollars and that was shot. Like, and here's why we wanted to do it. And New York's been an asshole and here's why, you know. And it was, and then he was like, but I do see why. He just was, he's a very thoughtful guy.

And I think they did, they're trying, I think one of the issues I have with him, like I have with everyone else, is I knew about house parties. So if I know about house parties, they should know about house parties. Like everyone knows that people rent Airbnbs to use house parties. I honestly didn't know that. Yeah, and there's going to be something bad that's going to happen at a house party. Anyone who's seen a teen movie at any point in their life knows what's going to happen at the end of the story. So it just, the anticipation part, and so we talked a little bit about what he anticipates is the next thing that's going to, like, his whole job is like, it's a list of, like, horror shows, like, you know, that could happen in any of these

houses when you're putting people together with people and the opportunity for scams, the opportunity for scams on both sides by the guests and by the hosts. And so I think he, you know, they've got to put more money into safety and whether it hits his bottom line or not, because they actually, their business is, I think it's going to show a pretty decent S1. He made a joke about it because everyone asks him about WeWork and he's like, I think you'll see that we know how to, we try not to have disclosures in our thing by fixing them before we go public, like the bad things. And so I think it will be interesting to see how that public offering goes next year. I think it was a win. I think he handled it really well, and I think he's really

come into—I've watched him. I met them when they had three guys living in an apartment when they started Airbnb. I met him in a coffee shop. I think they've come a long way. And I know the issues around, I get the issues around gentrification and the people venting. But they've tended to work with cities, except for certain big ones like New York, pretty well. And they lost in Jersey City, and they did. So I think they're a win. And your fail? Your fail? So my fail is all the self-appointed spokespeople for the entire economy who keep saying that Senator Warren, if elected, the markets would get cut in half. And the only thing that's consistent in terms of a day—

That guy cried. That billionaire cried. Did you see it? Cooperman? Oh, yeah. He was so upset about the prospect of the markets going down that he just couldn't. He was overcome with emotion. But you know what? It's total bullshit because the only data set we have is that during Democratic administrations, the markets tend to go up. And during Republican administrations, the markets tend to go sideways and down. And it's just kind of ridiculous because the notion that a disjointed foreign policy,

income inequality, massively blowing up our balance sheet with crazy debt, that that's good for the markets long term is just incorrect. We don't know how the markets would respond to her presidency. In addition, we're studying to the wrong test. We're acting, these people decide, okay, the Dow Jones Industrial Average is the most important indicator of the health of the U.S. And 90% of the stocks are owned by the top 10%. So all it is is a proxy for the wealthy. And if there is, in fact, a cohort that could probably absorb a hit right now, it is the Dow Jones Industrial Average.

And Josh Brown, who I think is this incredibly thoughtful guy, is the CEO of Ritholtz Management, told me or kind of clued me into something that I hadn't thought about. And that is if the market were to go down, markets go up and go down. And they have to do that to be functioning markets. But if the markets corrected, yeah, the people who own stocks would obviously get hurt and be worse off. So baby boomers own the majority of the stocks. Old people own the majority of stocks, top 10%. But the people coming into their earning years, 20s and 30s, who had the opportunity to buy shares at a more reasonable price, benefit from a lower price market.

Similar to the way we talk about housing being so expensive and recognize that if the housing markets were to come back a bit or check back a bit in San Francisco or New York, you might actually find people in their 30s who make just a paltry half a million dollars a year could actually afford a house. So the notion that we have to keep the markets going up, it's just not accurate. Yeah, but people have bought into this whole thing. Just everyone has, because that's how they think about it. Even if they don't have stock, they're like, oh, the stock market's down. It's a mentality. Like, there was a really good quote the other day of people like, people don't like, like rich people. Poor people

like rich people. They don't like elites, professionals. So they sort of give these rich people a break over and over again, whether it's aspirational or whatever, or they were smart to get the money. But rich people they love. It's the professional class, the elites they don't like. And it was, it's, you know, they do link the stock market with their own fate, even if they don't have stock. And it's, you know, it's the similar thing that goes, it's been going on, you know, in terms of backing Donald Trump, who's just never, not done anything for these people, but they back him because they, because he says, I like you, I guess. I don't really know what the dynamic is there. But it's a really interesting psychological dynamic.

Again, setting to the wrong test, the question in the next debate, and what I'd love to see people asking the candidates is, which of you is going to reverse the scariest trend and the scariest number in our society right now, and that is three years running the decline in life expectancy. That's a more important number than the Dow Jones fucking industrial average. We're dying sooner. What difference does it make if your 401k is up if you're dying sooner? So which presidential candidate is going to implement policies that helps people live longer and healthier and more prosperous lives. But no one ever asks, okay, let's talk about life expectancy. It's all about the doubt.

We are studying to the wrong test, Kara. I agree. I agree with you. What can I say? And let me just say, one more, I think, fail that—well, there's a lot of fails I would talk this week. I think, you know, the Saudis, once again, proved they are the thuggish thugs of Thugville and the tech for giving them money. But I said that before.

But I do think this, you, the Wall Street Journal, this is something in your area, and I have a kid applying for college. The Wall Street Journal reported the SAT takers' names and data are being sold to colleges to buy applicants and boost exclusivity. Isn't that awful? Isn't that just awful? The nonprofit administers ASCs selling data about test takers to universities. The universities then use the data to target applicants they won't likely admit but recruit them anyway. Ultimately, it gives the university appearance of more exclusivity and more income from applicants. Just like, what the hell is going on?

That's what a 17-year-old needs, right? More rejection in their life. Right. It's like, who's he? Talk about losing the script. Universities are not only supposed to be places of upward mobility, which we have lost the script and now we're just the caste system. We've now decided that we're going to be points and additional points of darkness and depression for young people when they're applying to schools. It's just that it's just—

This should be illegal, right? This should be—this data sale should be illegal, correct? Am I wrong? I don't think you can make it illegal. I think if you really work— Why not? Because buying a data set and encouraging people to apply, I don't understand what law you would apply to make that illegal. I think we do what you do really well, is we just quite frankly shame them.

The media writes about this. It's a practice. The majority of faculty that I know, the majority of leadership I know at universities are good people. majority of faculty that I know, the majority of leadership I know at universities are good people, and they can talk themselves like anyone else into incremental decisions where they create a luxury brand in the form of a university so they can charge more money and pay themselves more. But I think when faced with this data set and the cold, hard truth about just how ugly and wrong this is, I think they will correct on their own. I don't think you need a law for this. I don't know. I got to tell you, the encounters I've had with them, and I'm not – like, I shouldn't even say it because, like, I wanted to move something.

And they're just – it's like dealing with the – like the Soviets. It's like, no, you cannot. Like, it has no, like, customer service, first of all. None of it does. Like, just the – Well, they're monopolies. Just the counters. Every big city has two good schools.

And then they have the rest. Every big city has two good schools and then they have the rest. And they play to your fears. 100%. You know, I'm the one actually telling my kid, don't worry about it. You goals and then they have the rest. And they play to your fears. 100%. I'm the one actually telling my kid, don't worry about it. You'll, something will work. They don't even play on your fears.

They prey on your hopes and dreams. And that is, if you're a middle class, upper middle class family, you've worked your ass off and you think, the indicator of your dream against studying the wrong test

is if I can get my kid into a good school, then I have lived the American dream. I've checked that box instinctively, instinctually, and provided my son or daughter. And we as universities have taken advantage of that emotion, and we've raised prices faster than inflation, greater than tech, greater than health care. And now we've become a source of moral bad. The university system wildly needs to be disrupted. We keep talking. Anyways, we keep talking about this, and I know, of moral bad. The university system wildly needs to be disrupted. We keep talking.

Anyways, we keep talking about this. And I know your son is applying. It's an incredibly stressful time in households. You pretend it's not. You seem to be very chi about it. Well, because I don't care. Well, I am trying to be because it's like, but now, like, you're not just fucking with my son, Louis.

You're also fucking with his data. Go fuck yourself. Like, I just, I literally got so furious at this. I was like, are you kidding me? Just to make him feel bad? Like, oh, just like, and then it's so unfair to everyone along this, the chain here. Like, all the kids at every level of income, it's just like, it's fixed. Like, ah, like, there really is no, it's not a meritocracy in any way, like, that seems—makes any sense.

It's like everything's being bought and sold. And it's—you do have a sense that universities aren't like this, but of course they are. Of course they are. You've got to abolish tenure. You've got to start taxing endowments at any university that doesn't grow their freshman seats faster than inflation. We need a Marshall Plan for land-grant universities to massively expand wonderful organizations like the University of Texas, University of Florida, University of California. We need an absolute reconstruction of our university system and also local and state junior colleges, which are this kind of unsung heroes of our society. Predictions.

Should we go to predictions? You wanted to keep it tight. Yes, we will. But let me just tell you something. Yep. You should be the HECC Secretary of Education in the Buttigieg administration. There you are. Okay?

Oh, I like that. Yeah. I just put my shoulders back. It would end in a terrible scandal, obviously. 100%. But it'd be interesting. It'd be interesting. You would be so taken down, but it'd be so entertaining.

Oh, my God. The question is, would you defend me or would you be like, I knew it. I knew it all along. I knew it. I knew it all along. No, here's what I'd say. I'd go, I had no idea, but I'm not surprised. Yeah.

You know, you'd be like, I'm disappointed but not surprised. I have to say, I'm not surprised, but I didn't know anything about it. Like, that's how I would do it. I get it. Predictions. So I would keep my distance and yet at the same time insult you. That's called every woman in my life. Go ahead. So, we both predict that Facebook banned political ads by Thanksgiving. I actually think Gates' idea on stage at the New York Times yesterday and also Ellen Weintraub, who said that they should adjust them. I think

that's what they're going to do. Now, I've shifted from your prediction, which is that they're going to ban them. I think they're going to adjust them and remove targeting. What do you think, Scott? That's something we can take credit for. So, first off, just revisiting some of our predictions. We said that Uber was going to go down 20% to 40% in the next 30 days, and we've already gotten that right. Uber's gotten taken to the woodshed, massively overvalued.

The lockup came off. It's gotten hammered. It's still going to continue to go down. But we have a market that's just incredibly overvalued. And I think we're going to see, we've talked about this, private market unicorns cut by 30% to 60%, and public market stuff is already getting taken to the woodshed. But my prediction is about WeWork. And that is what Afghanistan and Vietnam were to Russia and the United States, WeWork is going to be to SoftBank. And that is that they've thrown good money after bad. And my anecdotal evidence that this thing can't get, they can't pull the nose

up on this thing. And it will be a bankruptcy or some sort of restructuring probably by Q4 2020 or Q2 2021, is that I've started a new business, and I made just such a rookie move, overhired, spent too much money on office space, and it's literally taken us six months to unwind that DNA and get back to an agile organization that's where it should be again. Take that times 2,000, and that's what we're talking about at WeWork. And my piece of anecdotal evidence, although I do think it's telling, is I have a friend that runs an architectural firm, and he was telling me the other night that they got a resume from a woman who's an architect who works at We, because obviously they're laying off a lot of people. And it's a very liquid market for recent architects or architects who are recent graduates, and he knows exactly what they should earn. And he said, this individual should make between 90 at the low

end and 110 at the high end, and she's making 205 at WE. The DNA, not only the DNA of the cost around the numbers of office and the growth, but the DNA they have set in terms of their cost structure around compensation, that if she's an indicator, and you can't take salaries down. So you have a DNA of cost structure here. Well, it's much easier to fire people than it is to reduce their salary. It's trying to reduce someone's salary. But I have had people come and say, I burned this much. Bloomberg was like a crazy payer. I'm like, okay, I'm not paying you that. Yeah, but that's enough. They've already made the mistake. They've already hired this. My point is,

as somebody who's tried to unwind bad DNA of an organization and sees how difficult it is, even when the organization is only 20 or 30 people, when you have an organization of 12,000 and you have that sort of horrible DNA, you can't. You just, you can't unwind fast enough. So they're going to have to take it into bankruptcy. 100%. Okay. That's a good prediction. Cloud cover bankruptcy, Q4 next year, Q1 or Q2 of 2021.

That is good. I like that. I like that. I think that's a good one. I don't have a prediction except to say that you should read these Facebook documents. I think, you know, and people saying this is okay. I know what Facebook's going to say. And I met a really delightful Facebook PR guy, John Panette, yesterday.

I got to say. You know, I'm good friends with John. He's not a good look. I'm good friends with John. Oh, yes. He's your pal. He's lovely. What a delight.

He's gone to the dark side, but he is a wonderful man. I did. He told me. He told me he told me that. But let me just say he's delightful and smart and interesting. I just don't know how—it's going to be an incredible PR job for him and others there to be like, okay, let's tell you what this really means. And so I think that is to watch what this goes out because they've sort of—

it feels like a moment, like it's got to stop. And I have to tell you, a lot of people on this panel I had, a lot of people at the conference were like focused like a laser on Facebook more than anything. So they're in a real tough position. Blood offering. We need a blood offering. Although you know what I'm doing? You know how that turned out? We're not going to say for those who haven't watched. But Facebook has added a ton of value to my life because I'm literally, they are such geniuses at delaying obfuscation and wallpapering over corruption. We have this new rescue dog, Gangster, and we're not sure if it's a dachshund or a Doberman, but I think it's a dachshund because dachshunds are impossible to house train.

But my only job at home is when he is out of the crate is to watch him. And of course, whenever I'm home alone, gangster goes and he takes a big dump on the only expensive thing we own, this carpet that's worth a good four or $500. And then my wife comes home and goes, ape shit. And I am so good. You know what I say now? I'm like, you know what? We need to do better. Or I'll say to her, I'll say to her, I'm sorry. I need to reestablish trust. Trust is the most important thing. Or I'll say to her, when the dog's in the crate and hasn't shit in 10 minutes, I'm like, I'm proud of the progress we've made. So I'm announcing here and now.

I'm taking this to the next level. I am going to start dressing as Sheryl Sandberg at our live events. We're talking Oscar de la Renta. We're talking Christian Louboutin. You are not going drag to our events. Oh, my God. I am so ready to go drag. No.

I have more legs than a bucket of chicken. Now, we got to pick. You do not have nice legs. On Twitter, I want to hear from our dozens and dozens of fans that our next live pivot, should I cross-dress as Sheryl Sandberg or Rebecca Newman? Rebecca Newman's more poochy. She's a little bit. But I can go there.

I am so ready to cross-dress. I'm Johnny Depp in that movie. Straight guys cross-dress. I'm Johnny Depp in that movie. I just want to tell I just want to tell listeners. It is time. I literally want to tell listeners that I knew nothing about it, but I'm not surprised. So ready. Women's fashion is so much more interesting. And I have a model's body if I were a woman. I'm so ready. There were inklings that Scott was a problem. Oh my God. But you know, I am so shocked by this behavior. Scott, it's time to go. Seriously, in a poochie dress, I am a tall drink of lemonade. A tall drink of lemonade.

Starting with inappropriate terrorism jokes and moving on to drag, it's time for us to go. I'm so ready. If you have a question or idea or company Pivot should mercilessly take down over the next couple of months, shoot us an email at pivot at voxmedia.com. Also, we're hiring for a new producer for Pivot. Please apply at voxmedia.com slash careers if you think you're the right person to join the team and can deal with this giant situation with Scott. This situation. Which, of course, you didn't know about, but you're not surprised. There we go.

There we go. Wait. Hold on. Our credits. We got to do our credits. Go ahead. Do it. Our producer is Rebecca Sinanis.

Our executive producer is Erica Anderson. And special thanks to Rebecca Castro, Drew Burrows. If you like Pivot, tune in next week or leave us a review or download wherever your favorite podcast can be found. I did that. Wrote from memory. Oh, my God. Thanks for listening to Pivot from Box Media. We'll be back next week did that, wrote from memory. Oh my God. Thanks for listening to Pivot from Box Media. We'll be back next week after another breakdown of all things

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