Pivot - US budget deficit will hit $1-trillion; AAPL, MSFT, GOOGL, AMZN, FB earnings breakdown; and Britain sides with China on Huawei

Episode Date: January 31, 2020

Kara and Scott talk about the Congressional Budget Office projecting that the U.S. budget deficit will pass the $1 trillion threshold in 2020. They also get into tech earnings, who did well last quarter, and what we can expect going forward. In listener mail, Kara and Scott talk about Huawei Britain defying Trump's plea to ban their plans for 5G expansion. Kara's win is Michael Bloomberg's ad campaign. Her fail is Facebook's oversight board running late (and not asking her to be a member). Scott's win was media outlets who highlighted Holocaust Remembrance Day. His fail was Chipotle violating child labor laws. And Scott predicts that Uber will spinoff "Uber Eats". Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Oh, my God. Yeah, that's pretty rough. We're going to talk about that first. But let me just say, last night I had to go on a nanny, a nanny, like, it was like, not Tinder, but that's not the right thing you want to do. It was like, I visited, we're thinking of doing a nanny share, and you have to, like, interview with the people

who you're sharing with to see if they like you. But I understand, so it's a nanny that's split between two families? Two people. Right, yes. And so it's the other family that has to decide they like you, not the nanny? And the nanny, too. The nanny, I would imagine. Isn't there an app for that?

No, but it was really interesting. It took me back to when I was trying to get my kids into school, you know, into preschool. I'm sure Big Tech will offer us an app where you just click a button and a nanny who's going to trade off flexibility for making 70 cents an hour will show up. Yes, they're not making 70 cents an hour. But nonetheless, it's really, it was a really interesting thing.

You could actually, it's so disorganized. We were on listservs and everything else. You know what? It is a business opportunity for Kara Swisher. In any way, it was really interesting. But coronavirus. So as everyone might know, the Trump administration doesn't just say the quiet things out loud. They say the horrible quiet things out loud.

And Wilbur Ross, the Commerce Secretary, who I didn't know was not still sleeping, managed to say the worst thing, which was that this could be good for U.S. jobs, meaning that shutting down of China. I'm assuming he's not referring to deaths, but who knows with this guy. And, you know, bringing jobs back here, which is just a ridiculous, it's such a short term, there's not going to suddenly open a factory in Texas because there's coronavirus in China, unless it's ongoing, which would mean it would be come over here, and it has been coming over here. So, you know, he does bring up a question, not so much that we want to bring jobs here,

which is a horrible way of looking at it, but the impact on tech companies, which are highly, you know, involved in manufacturing in China, especially Apple, and some others, and Apple had great, we're going to get to tech earnings later, but Apple had great earnings this quarter, and a lot to do with the iPhone 11 selling well and AirPods and things like that. But there's tons of tech companies that have so much business in China, as do many other businesses. But tech is particularly tied to China and including the Chinese market, selling into the Chinese market. What are your thoughts on this coronavirus situation? Well, I want to flip it back to you because I find stuff like this, and you have to be careful because it's the stuff you're not

worried about that hits you hard. And granted, there are now officially more diagnosed cases of coronavirus and the SARS virus. So, it's officially bigger than SARS now. But there's only been five cases presented in the U.S. where it probably hits economically, and we always have a tendency to go to the economics versus the human cost, is that people initially said, so, for example, with Apple, well, 20% of iPhone sales are in China. But it's not sales that could be affected. It's their supply chain, right? Supply chain, right.

And there's been a couple things, I think, over the last 12 months that have – and coronavirus might be one of them, depending upon how, you know, if it continues to march on. But the tariffs have forced every U.S. company to look at how diversified or non-diversified their supply chain is. So, if you're an apparel company and you were sourcing 90% of your products out of China, you started rethinking that. And then this will probably give people more positive. It turns into something. So far, it's more perception. It's more hype than horror in the sense that economists are taking growth down. But I mean, five cases in the U.S., 8,000 cases in China, which is, I think, about 170 deaths, which on a country of that scale, it's all about the potential. It's the low probability,

high severity scenario that everyone's working out that it hasn't presented itself. You know, related to this, let's get to the next story, the trillion dollar budget deficit. Again, another slop, you know, just tax cuts and therefore we're going to pay for it, our children, as you talk about this. According to the Congressional Budget Office reported this week that the U.S. budget deficit would reach $1 trillion barrier in 2020. The deficit is expected to average $1.3 trillion between 2021 and 30, rising from 4.6% of GDP to 5.4% over that period. You've talked about this, but again, this is another thing that will later be impacting

not just tech, but other parts. You can't keep fueling this, doing this to fuel economic expansion. Well, so I'm just kind of shocked that Stephen Mnuchin, he promised me that the tax cuts would pay for themselves, and they're not, apparently, which is just shocking, Kara. And think of it this way. Think of the government just as a business, and that is, it provides your customers or taxpayers who pay taxes, and in exchange, they expect a certain level of national security, take care of our old people, build our roads. It's a business, right? And right now, this business

of the government is taking in $3.5 trillion, and it's spending $4.5 trillion. You might say, okay, they're in growth mode. They're like a VC-backed company. They're losing $1 trillion, or they have negative operating margins of 25%, which must mean they're in growth mode. It was announced or released today that our growth is 2.2%. So we've effectively said, okay, we're going to get these massive budgets, and are we investing in infrastructure that'll make us productive? Do we have high-speed trains to get us places? Are we investing in

education that will create a new generation of productivity from intellectual or human capital coming up to the Python? Are we investing even in defense that secures our peace and prosperity? No, we're investing in tax cuts, thinking that this, again, this fetishization of wealthy people being our most productive citizens thinking they would invest in new businesses. New business startups are not up, right? CapEx is not only not up, it's down. I mean, it's just— Keeping it for themselves. Keeping it for themselves.

Yeah, or companies are reinvesting, buying back shares, which, again, increase asset prices. And what do you know? Home prices are up. Stock prices are up. So people who own those assets, i.e., old people, baby boomers, get wealthier. And young people are not only not able to buy anything, but they have this debt hanging over them that at some point they're going to have to pay back. So this is – Yeah.

This is just like this, we are kind of, I hope we're at peak negligence in terms of our approach to government and deficits. But I think this is going to be, it's not an issue until it is. And the moment interest rates spike, the interest rate payments on our debt are now greater than what we spend on national defense. So, if interest rates were to, say, go from 2% to 4%, which would not be historic, it would almost be cyclically normative, you would have—the U.S. would all of a sudden be saddled with paying for the largest defense budget twice in a matter of potentially 24 or 36 months. So, this to me is a really creeping, months. So, this to me is a really creeping, ugly issue. This is a guy that knows about deficits or bankruptcy. So, you know, it's just, I think

we'll see how it affects, you know, the stock market isn't necessarily immune from this, like they don't realize this is hanging over their heads, you know, and you can't fakely pump things up for that long in general. Now, let's get really quickly then to tech earnings because Apple had a really great quarter on the holiday iPhone sales. The 11, I have it. It's a great phone. It's, you know, the AirPods turned out to be a pretty, you know, everyone was like great diversification of Apple away from these devices, but these devices did really well.

And they've been moving into sales and services. You know, Apple TV Plus had a strong quarter, although it's free. I mean, it probably is losing a lot of money, but it's de minimis to Apple. So the diversification of its things, that's why it's so important, this China thing. They get away from just the whole ecosystem

versus just the device. So Apple did really well. Microsoft, Facebook did not, on the other hand. People worried about a rise in expenses. And so it's – it hit $2.5 billion. But slower profits, you know, it's just not – they're not finding as much. But it's really getting – you know, it's just not – they're not finding as much. But it's really getting – you know, it's getting crushed today, the Facebook earnings.

And then there's Amazon will report later today, and we'll see how that does. But in general, they're not bad. You know what I mean? Like in terms of growth, they're not doing that badly. So what are your thoughts on the earnings? Well, let's break them down by company. So Apple had just a monster quarter, and that is you have over 50% of revenue coming from the most profitable product in history

where you have Toyota-like production volumes at Ferrari-like margins. And everyone was worried in the last three quarters iPhone sales have declined year on year. And this year, they renewed their growth. So, it's like the golden goose is back, you know, laying golden eggs. In addition, you had the services business up 19%, again, moving towards this recurring revenue model, the Rundle. And the surprise, the blowout here was a 38% increase in the wearables group. And the wearables group now,

which consists of the Apple Watch and the AirPods, and the AirPods are looking to be- The AirPods. The AirPods are moving the whole thing. They're wonderful. Just taking alone that group, the wearables group is now a Fortune 150 company. And if you were to have a product for the last decade, it would probably a toss-up between Amazon's Echo and Apple's AirPods, which goes to the notion that anyone that believes these companies aren't monopolies should just act are the only real product innovation taking place at Apple or Amazon, or does infinitely cheap capital, a channel that you control, a captive base, the ability to put competitors out of business have anything to do with that? No, no, it's a great product. control, a captive base, the ability to put competitors out of business, have anything to do with that.

No, no, it's a great product. It's a great product. I don't wear the Apple Watch. Oh, 100%. I don't like it as much. You know what I mean? People do wear it, and they love it. It's a good product.

But I'm saying it's a great—it's an innovative. I don't see any—I've tried every other ear. I'll go anywhere on those, and they're just the best. They really work the best. You know what? The other day— But the thing is you don't know that because the Bose in-ear noise-canceling product was as good or better, but it doesn't connect to your iPhone as well.

And the iPhone, Apple, what do you know? You're right. Fair point. But the whole ecosystem, no one else can elbow their way in. And it's just, what is the probability that the two most innovative products of the last 10 years happen to be from the two biggest monopolies. But anyways, back to earnings. Apple revenues up 9%.

Microsoft, great. Apple up 9%. And Apple Plus doesn't seem to be hurting it, even if it's losing money. It's a good investment. People like that. It's sweat off their brow. It's sweat off their brow if they sell a few more iPhones.

And it's a good investment. And if they move more and more revenue to this recurring revenue services model, they've experienced multiple expansion. And you want revenue services model. They've experienced multiple expansion. And you want to talk about the mother of all multiple expansion. Apple's earnings over the last 12 months are not up a lot, but the stock has doubled. So the marketplace, Kara, has recast Apple. Why?

Because they're starting to see signs of, you guessed it, the Rundle model, right? So all of a sudden, it's gone from a P of 12 to a P of 24. Revenue's up 9%. Earnings up 19%. This is just a monster quarter. We're going to go to another company. Microsoft's another one. I have to go to another company.

So, we've got a bunch. Unbelievable. Unbelievable. Yep. Sort of catching up to Amazon in the cloud area, like cloud area. 62% year-on-year growth of Azure. And this might be a seminal moment in business because if Amazon, after the close of business today, comes out with AWS earnings or AWS growth that is underwhelming, what you might see today is one of the greatest pivots or the greatest handing off the batons in kind of modern business. And I don't know if anyone will observe this, but if all of a sudden, if Azure is growing

62% year on year and AWS reports less than stellar results today, we're going to see a new leader in the cloud, at least from a market standpoint. And it'll go from Amazon to Microsoft. And you're talking about the most profitable, fastest-growing part of tech. And Microsoft may become crowned the leader in cloud this afternoon based on what AWS announces. They got Jedi, which is under controversy because of Trump attacking Amazon.

But then they also got Salesforce to have the marketing cloud service for Azure to run it, to be on the – you know, it's just, it's really interesting. Yes, they definitely, I think we're having, he's really, he's really doing, the CEO has really turned this company around by focusing on things like this and not the other noisy stuff. So you have Apple's staggering quarter. You have Microsoft's unbelievable quarter. And then the only thing that's. But let's look at it, all right?

Facebook growth. Let's look at it. all right? Facebook growth... All right, let's look at it. Explain what happened. People are... It's off because it's been growing. It's up to billions of users, right? The growth is up 25% year on year. A company that's growing 25% year on year, its top line on this type of revenue base is just extraordinary. It actually beat estimates on the top line. However, its costs accelerated 50%, which has compressed margins and dramatically compressed earnings. It's the first time it's had a full year of sub-30% growth. Its margins are compressing. The piece of business or the thing that people missed that I think was really or could signal what's ahead for Facebook was this $550 million class action suit they settled around violation of people's –

Yeah, that was cool. What? I know. I was like, huh? Where'd that come from? Yeah, where'd that come from? So the state of Illinois led a class action suit against people who filed a class action vis-a-vis an Illinois law saying you can't violate people's biometric privacy. And biometric includes photos.

So Facebook was uploading photos. And if you tagged your one photo, they would then use technology to put your name on photos elsewhere around the network, which is technically a violation. That's right. And it's interesting. And you'll love this because you're a privacy person. But I do find it's very interesting that privacy experts are especially worried about violations of your biometrics because whereas you can change your credit card number, you can even change your social security number, you can't change your retina.

You can't change your fingerprints. And so they're very sensitive about what people do with that data. Although some people say that the focus on facial is too much. Like it's not as – you know, all of it together is important. You know what I mean? Like, I agree. But biometric gets people going. Like, wait a minute.

And I think it really does bring into sharp relief the power of Facebook or whoever is doing these things. Probably Amazon and Facebook in that regard. I think biometrics, everyone's like, hmm. They start to get uncomfortable with that part of it, even though everything else is being strafed from their personal data. But this hits home in a different way, I think. And this settlement was quite surprising. And I think they have more to come. Other states have got to see blood here. Despite this, Facebook did have a beat on the top and the bottom line. But we're used to Facebook. The market

is used to Facebook absolutely blowing away their earnings. And it's really the first time. People say, well, it's the third time they just met earnings. And that's not true. One time they missed it was because they absorbed a full $5 billion fine from the FTC. Another time it was because they moved to a different accounting method. The market has become so used to Facebook blowing away all estimates, and they didn't blow them away. They just slightly beat them, that the stock was off 7% in after hours. Also, what was interesting, if you listen to the earnings call,

was that Zuck took on a fairly defiant tone. He didn't say, we've learned a lot here, we're going to have to make big changes, or our moderation, our investment in privacy is paying off. He basically said, we have a rough year ahead of us. Suit up. He sounded very, very defiant. And it was sort of a little bit, I don't know, I thought it was very disappointing the tone he took. But basically, Apple— Oh, he's always like that. Oh, God, I've listened to that tone of voice so many times. They never can, like, ever have any humility at that company. I'm sorry.

And he's not arrogant in the traditional sense. It's sort of in the peak. I think he's just clueless. He's like a 19-year-old that's never done anything but started a company that became one of the wealthiest. He's totally detached. No, because it's not the same thing. It's a really weird, like, it's sort of like I can't even explain how irritating it is to listen to all of them. It's that interview that, you know,

the Times did what I thought was not a very good story on Adam Massari. But his quotes were like, I don't know. I just was like, oh, God, shut up. Like, stop it. Like, can you entertain the fact that people might be nervous about you people? Like, what is wrong with all of you? Like ugh. Ugh.

You're getting in our way. Ugh. Karen Swisher has had it. She's had it up to here. No, no, no. They have the ugh. They have the ugh. They dismiss you, your concerns about facial recognition as problematic,

and then they turn around and pay someone. I'm sure they sat in that room and it's like, let's pay them off, those assholes of Illinois or wherever. Anyway, so last thing, very quick before we get to the break, let's talk about Amazon, Uber, and Lyft. Amazon will be reporting at the end of today. We're taping on a Thursday, and so we will know by Friday, but also Uber and Lyft, which will be dropping their earnings reports at the beginning of February next week. What are you expecting? Trouble, I'm sure. Amazon's going to be just super interesting. I think everyone's going to be just super interesting.

I think everyone's going to be focused, very focused on the cloud. I just, it's, you know, the march of Amazon, it'll be very interesting to see. What I think you'll see is if it doesn't, if it doesn't have a good quarter, I think people are going to start asking if Bezos has lost any focus.

But he's like, everyone's waiting on Amazon because Amazon is probably the most interesting company in the world right now. Uber and Lyft, I just think these companies have terrible business models and the gig economy

really does represent kind of all the digital exhaust or the carcinogen of tech moving to this third era of exploitation. So I'm a bit biased here because I don't like them, and I hope that they, what's the term, shit the bed. But we'll see. But I don't see any reason why they would report especially, we'll see, maybe the expectations are so low. Mark Mahaney, who is an amazing internet analyst, actually thinks that the stock is a buy, which I don't quite understand. I think what you will see over the course of the next 12

months, though, is I think they're going to exit the Eats business and try and sell it to somebody. I don't think that. I think that market is consolidating, and they need more focus, and I think they're going to get out of it. Oh, they have been, like, touting that. That's it. Well, put that in predictions, because that's something I haven't heard. They need to get out of that business. It's an undifferentiated business with overfunded players, and Uber needs to show some focus and margin growth in its core business, which probably could be a good business if it got much smaller. Oh, and by the way, I feel like a journalist. I'm getting tips.

I'm hearing from a bunch of people domestically from OYO who say that 75% of the sales staff has been laid off in the U.S. and that OYO is starting its— Have you confirmed this? I need to teach you journalism, my friend. You can't just say it, the rumors you hear. You know that, right? Who would I call? How do I confirm it?

Say more? That's step two of journalism. You can't just go, I'm hearing. Are you Robert Redford or Dustin Hoffman? No. I'm so Robert Redford. I am so Bernstein. Wait, which one's Woodward, which one's Bernstein?

No, that's Woodward. He played Woodward, Carl. I want to be deep throat. Let's meet in the men's room. Carol, I have information. Oh, God. You know what? In any case, we're going to go.

I see what you mean. But you can't just repeat rumors you hear just so you know. Why the hell not? I'm not a journalist. I can do whatever the fuck I want. I got that. I'm the dog. But you just said, I'm such a journalist. I can do whatever the fuck I want. I got that, but you just said I'm such a journalist.

I'm like, okay. If I want to jump on the table and grab that bone, I will. That is not good enough for even a high school newspaper. I'm not a purebred dog. The dog is a mutt, but he's friendly. He's nuts. I will give you some tips when next we meet. I have no desire to present myself as a journalist.

There's a thing called a phone you call around for information. Why would I do that? Or you get a comment from the company. I'll help you with that. I'll help you with the sort of basics about lock and tackle. But when we get back, we're going to listen to some listener mail about Huawei and wins and fails and predictions. Fox Creative. This is advertiser content from Zelle. When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night.

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I've got to watch my back, obviously. Go to the tape. Hey, Karen Scott. So last week when I co-hosted, I mentioned how President Trump had discouraged U.S. companies from selling their semiconductor tech to Huawei, tech that could have helped them to quickly scale their 5G ambitions. their 5G ambitions. Well, over the pond this week, Britain said it would not ban equipment made by Huawei from being used in its new high-speed 5G wireless network. This obviously is a hit for Mr. Trump. Do you think America should double down on this campaign against Huawei or follow Britain's lead? So, Scott, I mean, Britain, I guess the relationship between Boris Johnson and Trump is not going well because they decided not to ban equipment made by Huawei being used in its new high-speed network.

They said they're going to keep it away from the more sensitive areas, but it's obviously ahead. And it looks like probably Europe is going that way too in different parts, even though there's a lot of pressure to bear that they've tried to do. But Huawei is going around the globe, and I think, you know, what's going to happen? What do you think? It hasn't worked. The Trump administration's efforts here have failed miserably. I think this is the most important story of the week, and it represents a lot of things

on a lot of levels. And the first is that the damage being done here is similar to what you were saying about a defection of scientists from the administration, our inability to attract the best and brightest as we continue to deny science. This is big because effectively what you have is the British have said, look, boss, if you're going to insult us, if you're going to insult our intelligence agencies, if you're not going to shake the hand of Angela Merkel, eventually that shit comes back. Karma's a bitch. And so the strongest alliance in the world, the North Atlantic Treaty, is fraying because of the short-term ass-clown behavior of our leadership. And we now have Britain, which has decided to say, okay, we are going to choose China.

And that is the U.S. has basically said there's something called the eyes of the five. And it's basically a bunch of nations who share intelligence. It's New Zealand, Australia, the U.S., Britain, and I forget one other. It seems like kind of the ultimate white guys club, like I'm sure Canada and Northern Norway are going to join at some point. It's like a James Bond movie, yeah. A hundred percent. And the British have basically said, okay, we are either going to give up U.S. intelligence, which is what the State Department has been threatening, or we're going to have to deal with the economic retaliation of the Chinese. And they decided that the economic retaliation of the Chinese was more of a threat than losing U.S. intelligence.

This might be a seminal moment where we see the West or Europe start to choose China over their ally based on our poor decisions, our inability to continue to solidify our relationships with our brothers and sisters and the greatest treaty over there. And also, if in fact China does supersede or ascend to the most powerful geopolitical force in the world, it will happen. But we won't realize or acknowledge it for 10 years because as a nation, we're narcissists and we tend to think that the U.S. is always number one. But looking back, if we were to say what was a key moment in this, it was when probably our strongest ally in the world decided to choose China's economy over the U.S. And this is effectively what happened and what's the problem with it. showed up to the British Services and Culture Ministry, which for some reason oversees some of this infrastructure building, and said, okay, we can offer you that same antenna or cell tower that

you were paying $9 million for for $1.9 million. And they said, are you interested? And they're like, yeah, we're actually, that sounds pretty good. We're pretty interesting. And Huawei, which is probably the least well-known juggernaut in the world. Huawei is the largest manufacturer of equipment that enables fifth-generation wireless technology, the largest equipment maker of technology that enables fifth-generation cellular technology. Let's just be clear. This is key technology, and we can't even compete here.

That's the thing. We can't compete. So it's a really interesting problem. And it's just a lose. And Europe's going to go that way. And again, it's all our own fault in that regard. 100%. 100%.

Why would they? Why would they? If someone said to the dog, you can own In-N-Out or you can own Huawei, I would, of course, pick In-N-Out because In-N-Out is awesome. But it would be a hard decision, Cara. All right. Let me just make one further point. Huawei prediction on Huawei, this whole fifth-generation equipment thing, that means they're going to make like what you call a shit ton, bazillion, gazillion dollars. And our strongest ally has chosen China, Cara.

They choose China. Here's the thing. They're saying they're going to keep them away for the more sensitive areas. Good, good frigging luck with that and the Chinese. I'm sorry. They're like the only part I'm with the Trump administration on and most administration, most intelligence people is they are going to get in there and they're never going. It's like a, it's a mold.

Like they're going to stay in there and it's not going to ever. It's really problematic. It's a really big deal. And the efforts by the Trump administration have been so ham-handed in dealing with this. It's just not been – it's so – like a lot of things, they're ineffective. Like it doesn't – like they say one – like it's like the North Koreans, like ineffective. It doesn't matter.

Blah, blah, blah, ineffective. Like it doesn't get what we want. And so, you know, there we have it. We're going to move – I would agree with you. This is important. It is very important for people to pay attention to it. So, wins and fails. Wins and fails.

I'm going to start. Go ahead. Bloomberg's ads yesterday were so funny. On social media, he's all over social media. His numbers are going up. I know you're the Bloomberg man. I'm going to give it to you. His numbers are up rather substantively.

Double-digit. Double-digit. He's now moving into three and four position. Yeah, that's right. I know you're the Bloomberg man. I'm going to give it to you. His numbers are up rather substantively. Double-digit. Double-digit. He's now moving into three and four position or four and five or whatever. But he's right in there, and his numbers have risen. And these ads are fantastic and so good. He had the dogs talking. Not where he shook the dog by the snout because I do that too.

Where he had the dogs, I like Mike. I lick Mike. And then he had the dogs. I like Mike. I lick Mike, you know. And then he had another one that was all in Spanish. Then he had another one that was about – the only issue I have is there's a lot of them in different areas. There's one about John Bolton. There was one about health care. I forget. I tweeted a whole bunch of them, and they were all fantastic.

The one about big gay ice cream, there were funny ones. They're really getting their mojo here, I have to say, and I think it's effective. I was sort of pretty interested in it, but we'll see. I think he's going to really, if nobody wins in Iowa this week on Monday, or there's no clear winner, he's going to have a big move on Super Tuesday, I think. Well, that's exactly right. We've said that path or we've made that prediction that the other candidates beat the shit out of each other, run out of money, exhaust themselves through Iowa and New Hampshire, and then show up to Super Tuesday. And there's a billionaire that's just got the best seats in the House and has bought up all the airtime,

and we go to an open convention, and it's Bloomberg. And you know what will be really interesting is the Super Bowl. got the best seats in the House, and it's bought up all the airtime, and we go to an open convention, and it's Bloomberg. And you know what'll be really interesting is the Super Bowl, Trump's running an ad, Bloomberg's running an ad, and it's going to give a billion people around the world and the 200 million people in the U.S. to watch the Super Bowl, it's going to give them the sense that that is already the foregone conclusion in the matchup that's coming. And it'll be sort of a self-fulfilling prophecy. I think that was the thing. I think they're doing a beautiful job of it.

And we'll see, you know, if people, you know, I tweeted them and everyone's like, oh, he bought his way into it. I'm like, uh-huh. So, like. Well, that's politics. That's American politics. I was like, welcome to Citizens United, my friend. A hundred percent.

Yeah. Sorry. That's the way it goes. And I'd rather have him buy them. Yeah, the world is what we make of it. Yeah. I know. So, that is my win.

My fail is not really a fail. Facebook announced the oversight board. They only picked the—they'll hear it this summer. They've selected an administrator who's exactly who you thought they would pick from an NGO, I think it is. And they haven't announced board members. I've heard they were having—people are going back and forth on whether to join this board. You know, this is six months late, I think. I've written about it before.

So I'm just like, is it really going to have an effect or is this a Potemkin village? I'm still unclear on that. So the oversight board is really slow and I think, you know, they're waiting for everything to die down on complaints about them. So I suspect that's a fail from my perspective. What about you? I think that's going to have tremendous governance and make everything all right and probably on its own solve the anti-vax and climate problems which are largely being fueled by Facebook that lives on rage. Yeah, I'm excited about that.

They haven't asked me to be on it yet. That's a shocker. You should be the next head of – They should ask me. I want you to be the next head of the CDC when you meet people and shake their hand. You're like, don't touch me. Don't touch me. Okay, so my fail, and this is a tough one.

I had my heart broken this week. As you know, through no compensation, I talk a lot about Chipotle, and I absolutely love the product. I eat there a lot. I think it's fantastic. Rice and beans. All right. Rice and beans. Go ahead. There you go.

And they settled in the state of Massachusetts around some serious violations around child labor laws. And as someone who has a 12-year-old son, one of the things I'm most proud about of my son is he's really excited about getting a job. And I had jobs from the age of basically 11 on. I was a box boy. My son, too. I delivered newspapers because pretty early on, my mom did a good job of connecting work and money and a better life. And one of the things I love or I'm really excited about is my son. We were at CVS, and he went up to Cashier and said, can I get a job here? And they said, we have to be 14. And he said, OK. He's been telling us, I got 17 months before I can work at CVS. and he went up to Cashier and said, can I get a job here? And they said, we have to be 14. And he said, okay. He's been telling us I got 17 months before I can work at CVS.

But anyways, I would – and I don't want to be cancel culture. I don't want to just shame them. I love Chipotle, and they love me. They sent me a card where I can walk into any Chipotle and get for a year a free anything. I can just eat up. Anyway, that was very exciting for me. That was a nice moment. And I love the company. I love the product. So, I think this is an opportunity for them to make

a grand gesture and do something around supporting youth employment. And I would love to see the CEO say— It was keeping people too late. It's having them work more than— Yeah, kids, right? These are kids. Right. But no, a lot of kids work a lot, and a lot of kids have to work a lot. And there's nothing wrong with that. That's a great thing. I think it's right. But, no, a lot of kids work a lot, and a lot of kids have to work a lot. And there's nothing wrong with that. That's a great thing. I think it's important. But I think this is an opportunity. There's only three things you have to remember in a crisis, and that is to acknowledge the problem, to have the top guy or gal address it, and to overcorrect.

And so what I would like to say to this company, that I love, and to the leadership there, this is an opportunity to overcorrect and make an investment in youth employment across your network that does what it's supposed to do, and that is gives young people some additional income, gives them an opportunity to establish the grid, gives them an opportunity to reinforce what is one of the greatest brand attributes of America at a young age, and that is we work, Kara. We work. So, I would like, my fail that could be a win is to call on my brothers and sisters at a company I absolutely love, and I want to be clear, I got no compensation from them other than free burrito bowls, which arguably is huge compensation is for them to make a grand gesture and cover up. Well, good for you to go to turn on your eating place. I thought it was going to be canoes from Rupert, whatever, canoes, the Rupert Murdoch. Are you speaking Finnish? What are you doing? What are you talking about? No, they have the canoes. You know the Canoes, Rupert Murdoch. Are you speaking Finnish?

What are you doing? What are you talking about? No, they have the Canoes. You know the Canoes? It's this new Google News alternative. Oh, yeah. It's called Canoes.com. Right, right, right.

It's a news aggregation platform. They're trying to compete, I guess, with Google. I don't know. That's going to be about the fact that it's that to aggravate hundreds of top news outlets. And to help smaller outlets, they believe, it's going to be fair and balanced, whatever. The name of it and the colors, they have this yellow color that's just like breaking your eye. I thought canoes was going to be that. I thought canoes was you're going to attack that.

But I guess you don't care. I'm a complex person. And then I came in with the burrito bowl and child labor. Or perhaps I thought that Ben Smith going to New York Times as a media columnist, leaving BuzzFeed, a big, important online media person. You have no commentary about online media. Yeah, speaking of BuzzFeed, BuzzFeed put pressure on Facebook. Someone went on Facebook and created a Facebook page devoted to the business of a 15-year-old's private parts, and she's been trying to get them to take it down for four years. And finally, BuzzFeed reported it and shamed them into taking it down. So good for BuzzFeed, bad for Facebook.

But that's the kind of shit that Facebook is loving across small instances of emotional havoc across the world. I don't know how I even got this. Let's talk about my win. Let's talk about my win. So unfortunately, because of all the news on Monday around the helicopter accident and the death of Kobe Bryant, it somewhat overwhelmed the media airwaves. But Monday was also the 75th anniversary of when the Russian army liberated, or liberated is even the wrong word, but discovered the camps at Auschwitz and Birkenau. And it's really – I think it's frightening to think about, you know, the history that repeats itself is the history we forget and the collision of ideology and propaganda and the demonization of immigrants and this cold comfort that it can't happen in a modern society.

Well, all of those things happened, and it wasn't too long ago when they liberated. I was thinking about this today when they liberated or came to Auschwitz. My father was 15 years old. He's still alive, and he was living about an hour and a half away by today's jet transportation standards. So this could absolutely happen again unless we remember. And the vehicles or the most effective means for remembrance has been the survivors. I remember going to Temple with my mother at Temple, Isaiah and Westwood. And every year, they would honor the survivors and they would ask them to stand up. And no exaggeration, 35 or 40 people would stand up. The first apartment I rented in New York, the guy would come over, and every time

he'd come over and talk to us, he would show us the tattoo of his numbers on his arm. And they're all— It's still chilling. They're all dying. And I worry that— Well, you know what's incredible? There is a thing today— You're interrupting my Auschwitz story? Yes. Go ahead. Go ahead. my Auschwitz story? Keep going. Keep going. So my win is there were some great media stories, outlets. The New York Times and The Wall Street Journal, I thought, did really nice touching. And this is a difficult topic because the bottom line is people don't want to click on it.

You're going to make more money elsewhere. It's an upsetting thing. So this is the kind of story you think, oh, I'll read it later, because it's just incredibly upsetting. But there is, you know, I feel as a non-practicing Jew, the one thing I've always thought that's really important for anyone who has a connection to Judaism, my mother's Jewish, is to ensure that even though we're losing the survivors, that we make sure that this story and what happened here and continues to move on such that we can recognize the dangers and have an intolerance and awareness for the type of fascism, which is defined by nationalism, demonization of immigrants, a refusal to get in the way or stop violence

against ethnic minority groups. It feels like all of those things are starting to rear their ugly head. Totally. Totally. I mean, just, you know, America First was— My win as a media outlet is to keep it in our minds. That's what prevented people from stopping those camps earlier, America First, that was trying to not get us into that war. Charles Lindbergh and Joe Kennedy, like those groups that were slowing down. And it was the same phraseology about immigrants and not getting involved and not being global.

And it really is. And it's including the Supreme Court decision last week that the Trump administration, if you draw upon, you don't have essentially your poor and you draw upon social monies from the government, you might not be eligible to be an immigrant. And think about all those immigrants who came over after the Holocaust who had nothing. And there was a great thread on Twitter about someone's grandmother,

grandmother I think it was, that came back and had no money and she and her grandfather created all these businesses. But they had nothing when they got here. And that to me is just the echoes of how important it was to bring those people here and allow them to thrive in this country after such an incredible tragedy. At the commemoration, they had all of these world leaders there, and it's become very political. You know, Russia is basically – Putin is accusing Poland of not taking members of the Lauder family, he stood up and he said something very powerful. He was talking about a lot of the demonization of immigrants and anti-Semitism around the world now.

And he said, this is not a metaphor. It's a recurrence. And when he said that, all of the survivors immediately leapt to their feet and began clapping. And all of the people on stage and all the world leaders looked very shamed, which they should be. They should be. But this is, anyways, my win is the media companies that are foregoing clicks and money and clickbait to talk about these important stories and ensure that when we no longer

have those stories from the survivors, that the stories continue. And I was especially moved by actually some of the reporting from the Wall Street Journal, The Post, that the stories continue. And I was especially moved by actually some of the reporting from the Wall Street Journal, The Post, and the New York Times. It's old media that takes their journalism serious and their role in society. Because quite frankly, Monday, all the stories, all of the online media was totally overwhelmed by Kobe. And everybody has the right to mourn for whoever they want, however they want, but I worry that story got a bit buried. Yeah, agreed. I think it's critically important.

It's similar. It can never be covered enough, and making these links to today are critical because it's systemic, it's ongoing, it's persistent. It is a plague. It's a plague of humanity, of human morality, really, to bring it back to Corona. It just is. It never goes away, humanity, of human morality, really, to bring it back to – it just is. It never goes away and people think it does and you just see the – you don't want to say everything is the same, but it is in lots of ways.

That's very deep. Between Chipotle and this, you're very woke. You're a social justice warrior, Scott Galloway. Yeah, that's me. That's me. You are. Secretly, you are. Secretly, you's me. That's me. You are. Secretly, you are. Secretly, you hate capitalism.

Capitalism wrapped in empathy and democracy is the engine for all good, Kara. I think that's socialism. Touche. Touche. I know you're a Bernie bro underneath your Bloomberg glove. If that's true, I'm a closeted Bernie bro then. I mean, I'm so closeted, I don't even know it. Oh. There you go. Squat. Squat.

When I'm 55, I'm going to tell my wife I'm moving in with a socialist named Javier. Okay, good. That's great. I'll come to your wedding. Listen, your prediction. We need a prediction. We've got to get out of here. You made one a little bit. The Uber Eats thing, that was kind of came out of the side there. Uber Eats is no more. They're going to get out of... I have not heard that from them.

They're out. They think it's a big growth business. Oh, my. They're out. Well, if you have another prediction, please make it. No, no, that's my prediction. That's like, that makes ride hailing look like. Tell me why. That is a bold prediction. Because it makes ride hailing look like a good business.

And ride hailing is a shitty business. And the pressure is going to come. Whatever, typically what happens with a company when they start, their earnings are declining and they're under fire and it doesn't look like, okay, it looks like this is for real. And Dara got a honeymoon because he's very likable. But basically, the go-to strategy is always, okay, we need to focus. And they're going to say, what's our least shitty business here? And they go, ride-hailing could be a decent business.

It's got decent margins. And they're going to say, all right, let's focus on ride-hailing. And then if you look at, if you just do any analysis of the food delivery business, it's a terrible business with no points of differentiation on the supply or the demand side. So, it's got tremendous cost pressure. And it's got all these crazily well-funded companies from SoftBank has two players in it. It has one company that's public. It's just they're going to look at it and say, let's sell it. They've already sold their food delivery business in India, I believe. So they're already starting to divest themselves from this business. I don't think they double down. I think they get out.

I'm just telling you, he talked about it on stage with me as essentially their future and their Hail Mary and everything else. That Uber Eats was their growth engine. Yes. Yep. I'm just saying, I agree with you. I think it's just a crazy business in terms of the competitors and where it's going from Amazon to everybody. You know, just everybody is in this business.

What is Kara Swisher up to this week? Oh, wait, weekend. Oh. Where are we? Weekend. Weekend. Nothing. My kids, my one son is going to visit his girlfriend away somewhere else, and my other son is going to Vegas for debate club.

So I have a lovely weekend with my- So those are terms you never hear in the same sentence, Vegas and debate club. That's where he's going. He's hitting Vegas. He never hears that. Vegas and debate club. You don't hear that a lot. I don't even understand it. I just wrote the check. Anyway, he's preparing for it. I don't know. Debate club is good. They're both. So I'm just going to hang out and just lie around on my back trying to recover from this ridiculous cold. What are you doing, Scott Galloway? We're moving.

So this is an awful weekend, and it's Super Bowl down here on Monday, so I might go to a— Oh, that's right. It's the Super Bowl. Which I could give a shit about. I don't even know who's playing. It's the San Francisco Giants. I know that. The Giants?

The San Francisco Giants? Is that a purposeful joke? Did you actually just say that? The San Francisco Giants. I know that. The Giants? The San Francisco Giants? Is that a purposeful joke? Did you actually just say that? The San Francisco Giants? No, I was teasing you because I hate sports. Well done. It's the Chiefs, right? And I didn't realize, unfortunately, my nine-year-old is getting better at soccer,

and he joined this demonic instrument called a traveling team, and I'm spending Saturday and Sunday in Palm Beach Gardens both days. And I'm like, I'm not going. And then it's like, I didn't realize. Traveling. I never let my kids get near that stuff. Oh, my gosh.

Unfortunately, he's getting, it's just terrible. I'm going to have to sneak in, I don't know, and kneecap him or something because he's becoming a better athlete, which is really infringing on my leisure time. Oh, you're going to traveling. Oh, sorry, Scott. Right? I'm so sorry. Right?

Speaking of plagues, oh, God, traveling teams. You will go everywhere. And they're far. It's like always a two-hour drive. Yeah, and then there's one game at 10 and one game at 2, which gives us enough time to, like, go get a— Get some Chipotle. Yeah, get Chipotle. And then go back.

And make sure the kids are not working that's right make some money anyway scott yeah god can you please read the uh read the credits please i will talk to you next week we'll talk about the super bowl and the ads the trump ad and the bloomberg ad there's so much to talk about and then obviously impeachment is still going oh yeah that's right there's a lot there's a lot going on there yeah we'll'll talk about it Monday after you get back from your traveling team and Chipotle eating. Please read the credits. Today's show is produced by Rebecca Sinanis. Erica Anderson is Pivot's executive producer.

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