The Prof G Pod with Scott Galloway - Conversation with Congressman Dean Phillips — Raising the Foundation for Americans

Episode Date: November 9, 2023

Dean Phillips, a third-term Democratic Congressman from Minnesota, and now a Democratic candidate for President of the United States, joins Scott to discuss his decision to run against President Biden and the key issues he’ll be focused on throughout his campaign.  Scott opens with his thoughts on WeWork’s bankruptcy and niche AI bots.  Algebra of Happiness: demonstrate vulnerability.  Learn more about your ad choices. Visit podcastchoices.com/adchoices

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NMLS 1617539. Episode 275. I-275 is a 60-mile-state highway serving the tampa bay area in 1975 jaws was released and became considered the first summer blockbuster and bill gates and paul allen founded microsoft no joke i rented jaws on vhs and played it backwards it's actually the heartwarming story of a shark that helps disabled people put their lives back together. Go, go, go! Welcome to the 275th episode of the Prop G Pod. In today's episode, we speak with Dean Phillips, a third-term Democratic congressman from Minnesota and now a Democratic candidate for president of the United States.

We discuss with Representative Phillips his decision to run against President Biden, as well as the key issues he'll be focused on throughout his campaign. So bottom line, bottom line, he's 54, he seems very thoughtful. And he's a Democrat. And so I'm a big fan. I think we need a full body contact primary. What's the problem right now? What's the problem? We're playing not to lose. We're taking someone, an individual who, in my opinion, would and could go down as the greatest president or one of the great presidents in history, lowest inflation in the G7, walked us back from COVID, created more jobs in two and three quarter years than any president in four years, is handling the Middle East well. And if he decided it's time for a new generation, biology waits for no man, I'm opening it up. I think he'd go down as one of the greatest presidents in history. And I worry that he is going to go down as a Ruth Bader Ginsburg or Senator Feinstein, who is just seen as a narcissist who put his own desires and needs ahead of the country's. So I'm a big fan and want to bring more attention and sunlight to anybody

who decides on the Democratic ticket to run for president, such that we have a full body contact competition that produces the most viable, robust, tensile strength candidate who can beat President Donald Trump. Anyways, what's happening? Back in London for the week. It's wonderful to be back with my family. I have trouble with jet lag. There's something about it that sets off my amangala, whatever that part of your brain that makes you an asshole. That has definitely flared up. And also the weather, I don't know if you've heard this, the weather in London is not great. It's not great. I'm not a morning person. So by the time I get my shit together, it's easy nine, 10. And all of a sudden it feels like the sun starts to go down. So that's a

difficult one for me. And I didn't realize how much the sun impacted my mood. And let's be honest, the dog needs all the good mood and pig's ears he can handle. Pig's ears, the universal treat. If you ever want a dog to just decide you're the bomb, give it a pig's ear. These things are so disgusting. And there's something called a lamb's lung, supposedly they go ape shit for. Anyways, don't know how I got the pig's ear. These things are so disgusting. And there's something called a lamb's lung, supposedly, they go ape shit for. Anyways, don't know how I got to pig's ears. WeWork has officially filed for Chapter 11 bankruptcy, and it's about time. Back in 2019, the firm was operating on an illusion of a $47 billion valuation. I took one look at the prospectus and toured a part of my newsletter, No Mercy, No Malice. We'll spare you the details. Not really. Give you a few details. You can go read it on profgalloway.com

and search for WeWTF. But anyway, it became clear to the markets that this firm was an absolute shitshow, consensual hallucination, ridiculous jazz hands, where we had decided we were falling in love with anyone with long flowing hair who could use a bunch of fancy. I mean, literally the prospectus said to elevate, our mission is to elevate the world's consciousness. They had something called community-based EBITDA, which was basically, they didn't include real estate costs. They subtracted the real estate costs out when attempting to calculate a term that usually means some reasonable fact, some way of profits. This thing was so ridiculous. After working my ass off for 30 years, I was an overnight success with that blog post, but the whole thing kind of unraveled. And to a certain extent, you could

argue that it was a victory for the markets because the fire door of the markets, the public markets, slammed shut and said, sorry, we're not going to let you foist this total unicorn feces on tourists in the unicorn zoo. And institutional investors lost a lot of money. Now, a lot played into this. Adam Neumann totally played Masayoshiayoshi Son blanked and bought Neumann's stakeout for over a billion dollars such that U.S. vultures wouldn't come in and seize a bankrupt company. And that would have been a loss of face for Masayoshi Son. So he poured more billions into the thing. And now it is definitely kind of the end of an era. What does it signal the end of?

Specifically, Amazon and Netflix retrain the markets to value growth over profits for much longer. And that is as long as you keep adding subscribers, as long as you keep growing sales year on year, we'll continue to bid your stock up. And Adam Neumann got wind of this or decided, okay, I'm going to go crazy with this and I'm going to throw so much money. I'm going to give you $100 worth of co-working space and only charge you $60. That way, everyone will see it as an amazing offering. And it was. The refracted glass, the IPA beer, the community. You basically got $100 worth of desk for $60, grew fast, and kept raising more and more capital and creating a company that, unlike a tech company, that once it hits break-even, if you will, starts to get profitable. Let's talk about gross margins. The gross margins at Amazon were about 20% in the

early days. That's not a lot, but at some point, if you have enough sales, that 20% of gross margin will cover your fixed costs and you start to make money. The fixed costs or the gross margins at something like Facebook are probably 80 or 90 points. It's not an expensive product to deliver incrementally, which means once you get to a few billion dollars in revenue, it becomes massively profitable. But here was the problem at WeWork. Every time they grew their business by $100 in revenue, they grew their cost by $150 in revenue. There was no economies of scale. There was no scale at all. It wasn't a digital product. It had negative gross margins, meaning that the faster they grew, the more money they were hemorrhaging. The New York Times reported that in June,

WeWork was renting nearly 20 million square feet of office space, which was more than any other company in the U.S. It's had major management shakeups, has laid off thousands of people, closed a number of locations, seen its stock fall off a cliff, and faces long-term lease obligations of more than $13 billion. So what happens here? What happens here? With hotels, there's kind of this common dictum that the third owner makes money. The first person is someone with a big ego that wants to own the Four Seasons in Manhattan and finances it and builds it and hemorrhages money. And then the bank takes it back and they sell it to someone else. And the bank or whoever they sell it to doesn't know what they're doing. And then finally, a hotelier comes in and buys a thing of 40 cents on the dollar and makes money. Usually, it's the third owner. I think the third owner of WeWork, if you consider Adam Neumann, was sort of the first. Then it was a new management team, kind of the second. I think the third owner here, and that is the people who bring this out of bankruptcy, are going to make money. How are they going to do that? What I would do is buy the bonds on the cheap, go in, reorganize the company, go to the most profitable ones, and say,

okay, under the auspices of bankruptcy, you can now renegotiate the lease, and we're going to a franchise model. You're going to pay a 6%, 8%, 12% of top-line revenue. You're going to get the brand. You're going to get the tech platform, the marketing. When people come and type in WeWork Barcelona, we'll send them directly to your site and essentially move to a Four Seasons-like model. The Four Seasons only owns, I think, one of its hotels, their flagship in Toronto, which is lovely, which is lovely. But I think they should move to this model. And also bankruptcy was basically tailor-made for retail concepts. And at the end of the day, this is retail. Why? Because they can get out of those $13 billion in leases. They can cherry pick which WeWorks are still profitable and renegotiate those and just exit the ones that aren't profitable. So this could really, under the cloud cover of bankruptcy, the equity gets wiped out. And that's fine. The common stockholders who bought into the SPAC and that this thing was ever going to

work get wiped out. Sucks to be a grown-up in capitalism. The debt holders probably only get pennies on the dollar, but it'll be converted to equity. And under the auspices of bankruptcy, they'll be able to get out of those leases, keep the ones they want. And I think WeWork version 3.0 is actually going to work. Just a thought. Just a thought. Okay, moving on to some AI news. AI, what is AI? I haven't heard a lot about that. ChatGPT now registers 100 million weekly users, cementing its place as one of the fastest-growing technologies in history. During OpenAI's first developer conference earlier this week, CEO Sam Altman announced the release of GPT-4 Turbo. This new AI model can rely on knowledge of world events up until April of 2023, before I think it was only the previous version could only only tracks up until January of 2022. So that includes I guess it includes information about Barbie and Taylor Swift. Anyways, this new model can also is anything happened other than Taylor Swift in the last year?

Let me think. Not much. This new model can also summarize up to 300 pages at a time versus the previous 3,000-word limit. I guess that's interesting. If you put in a 300-page book and say, distill the book for me or look at the new AI executive order and distill it down to a memo for me or tell me what are the best and worst parts of this, it can absorb more and come back with more thoughtful answers. OpenAI also announced a new service for individuals and small businesses to easily create their own personalized bots. This service is only available to those on the ChatGPT Plus subscription plan, which is $20 a month. So instead of the months and thousands of dollars we spent developing PropG.AI, they've said, hey, for 20 bucks a month, you can do it. Well, it looks like we should have waited a little longer. And what does it mean for the company? It means they're moving from kind of an app to a platform, where they'll be the underlying engine, almost like the App Store, of other people's AI apps. I think this is really powerful. I think this is a well-run company.

I'll note in the developer conference that 2 million developers use the platform, including more than 92% of Fortune 500 companies. I think this stuff is very exciting. In other news and AI that's less exciting, Elon Musk's relatively new startup, XAI, announced a chatbot called Grok that allegedly will have a rebellious streak and answer, open quote, spicy close quote questions that other chat models reject. Elon said that Grok's access to Twitter's information will be a massive advantage over other models. Look, I have a bias against Elon Musk. I don't like the guy. I think he's a terrible role model for young men. But I think this is a good idea. One, Twitter is sort of the pulse of news and society. It's become a pulse that has terrible arrhythmia, specifically of violence or of,

is it violence, sir? Probably not, of hate and dysfunction and just general weirdness and trolling. And I don't know. I describe Twitter as the sewage system of a sewer system, but it does have a ton of quick real-time data. So I would imagine that is good input into an LLM. Also, also to his credit, I think he's identified a white space. What is that? That is that the current LLMs are much more anodyne. I learned that word from my podcast co-host, Kara Swisher, and that they're sort of bland, generic, politically correct. And whenever you type in something, it comes back with all sorts of conditions.

It doesn't want to offend anybody. My guess is the people on these LLMs have prompted it, if you will, or programmed it such that it's unlikely to say anything that off color. And I think a lot of people will enjoy and receive well something that is more, I don't know, R-rated, red pill, provocative, tell it like it is, not be afraid to use foul language, be more terse, more blunt, say no, you're wrong, or whatever it might be, or have more of a sense of humor. Anyways, we'll see where Grok goes. But in the meantime, in the meantime, Twitter continues to be the worst impulse purchase in history. Supposedly sales or revenues are down 40 to 60%, something like that. So it'll be interesting to see if Grok is able to, I don't know, inspire sort of a recovery in the value of Twitter, which has probably lost all of its equity value so far. We will see. We will see. AI, there's going to be a ton of these LLMs. I think they're going to go niche. I would be shocked if they didn't have LLMs

focused on different sectors in the finance sector, whether it's distressed credit or growth equity, what have you. I think that there's going to be a ton of niches here. It's going to kind of evolve, I would imagine, as retail evolved. And that'll be sort of Walmart and Amazon, call it. Might be kind of Microsoft. And would it be Google? Would they be number two? Shit, I don't know. It's probably Microsoft or maybe OpenAI. Anyways, and then there'll be especially retail. There'll be a Lululemon of AI and that might focus on a specific niche sector. How do you compete against the big guys, the specific crowds out there in general?

And you say, we're not gonna sell every toaster, we're gonna sell the best too. Do a little Electrolux because I have better taste in kitchenware electronics than you do, C above Williams-Sonoma. I think you're gonna have a lot of niches here and a lot of companies are gonna use AI to complement their offerings. I don't know if you saw Expedia's results. Expedia just crushed it. Their stock soared. And I think some of that is they're

starting to implement different kind of core AI functionality to make the search for the ideal vacation more robust, faster, more creative, if you will. But I could be wrong. We'll see. We'll see. All right. Doolet toaster. Daddy likes his toast in the morning. That's right. Keeps him regular. Actually, it's the Zacapa I drank the night before that keeps me more than regular, if you know what I mean. We'll be right back for our conversation with Congressman Dean Phillips. Welcome back. Here's our conversation with Dean Phillips, a third-term Democratic congressman from Minnesota and a Democratic candidate for president of the United States. Representative Phillips, where does this podcast find you? Finds me in Manchester, New Hampshire, on the campaign trail.

I think you sort of burst onto the scene. Before we dig into it, can you give us the headline news or the cliff notes on Representative Phillips, your background, points of inspiration, things that have kind of shaped your worldview, if you will? Yeah. Lost my dad in Vietnam when I was six months old. That's how my life began. My dad already grew up poor in St. Paul, Minnesota, couldn't afford college. So earned an ROTC scholarship to go to the University of Minnesota. I was sent to Vietnam right before I was born.

Got to hear and I think see the U.S. moon landing in July of 1969 and was killed in a helicopter crash just a few days later. And my mom was 24 and widowed. And we moved in with my great-grandparents for the first two and a half years of my life. And that's how it began. And when I was about three, my mom met and remarried a remarkable man, Eddie Phillips, who adopted me and brought me into an extraordinary family, Business, philanthropy, great character and principles, and I've lived on both sides of advantage. Joined our family business after graduating from Brown University, getting my MBA at the University of Minnesota. I grew up in a family business that said business is a means to an end.

The end is not to aggregate as much wealth as possible, rather to share it. And my great-grandfather told me regularly, he said, Dean, money is like manure. If you stack it up, it stinks. And if you spread it out, it fertilizes. And that was our family ethos. It's my ethos in Congress now. It's how I grew up. And I feel quite deeply it's one of the great tragedies in the United States right now, the aggregation of wealth. Ran our family business, built Belvedere Vodka, sold it to LVMH, then Talenti Gelato, sold it to Unilever. By the way, very similar templates, if you will. Two big brands that compete each other to the bottom. In the case of vodka, it was Absolute and Stoli. We introduced Belvedere above them

and did very well. In the ice cream business, it was Ben and Jerry's and Haagen-Dazs. As they fought to the bottom, we introduced Talenti above. And I'll get to that analogy in politics because we got Democrats and Republicans doing the same thing. Needless to say, watched the 2016 election with my daughters, my family, and was shocked by the outcome. Woke up the next morning, my 16-year-old was in her bedroom crying, my 18-year-old at college in her dorm room crying, and I sat at the breakfast table, and I promised them I would do something. I raised them to be participants, not observers.

And we all reached that moment, Scott, where you've got to stand up, and I did. And I looked around, I saw a district in Minnesota in which I lived that had not elected a Democrat since 1958. And the man who I would eventually take on had won by 14 points. But I did it against all odds. It was the most joyful journey of my entire life. And we won by 12 points, joined Congress in 2019. And that's where this story begins. Because what I found on day one in the United States Congress is the very root of what's wrong in our country and the world. You know, systemic segregation as practiced by some of the most powerful people in the world who do not have our best interests in mind. And that's why I find myself right here today with you.

So you've been in Congress for a short period, a relatively short period, four years. What do you identify as sort of your crowning achievements there? Or what are you most proud of in terms of your legislative accomplishments today? Building relationships. I mean, it sounds so old-fashioned and maybe insignificant, but it is indeed, I think, the great disaster in our country, certainly the great disaster in our political system. And that's what I focus on. When I mentioned my first day in Congress, I really thought that we would get to Congress, all the new Democrats and Republicans, sit down at a table, get to know each other, have a dinner, tell our life stories, do a ropes course maybe and build

some trust. But Kevin McCarthy and Nancy Pelosi had different ideas. We were on different buses, going to different events. You know, what I call the systemic segregation started immediately. And if you can't build a human relationship, you can't do anything. That's true in business. It's true in politics. We spend our time on screens, increasingly separate. And so if I have a superpower, if I have a mission, it's to break down those barriers.

President Trump invited me to the White House soon after I was elected in 2019 to help solve the shutdown, which he had started. I was one of eight at the table, and we did it. That's what the problem solvers, that's what we do every day. We're the workhorses, not the show horses, which is why I have to introduce myself to 300 million Americans awfully quickly. Most important achievement was probably the Paycheck Protection Program Flexibility Act. During COVID, businesses were failing. People were about to be laid off. The PPP program was a good startup, but it did not work effectively. And who did I work with? Chip Roy, of all people. And I was ranked, I think, the first most bipartisan member of Congress in the last Congress. Number two right now, Chip is probably 428. But an example of what's possible when you just sit down with people who see things differently.

That's what I find is the joy in Congress. So Chip and I passed that bill. President Trump signed it into law. He did not invite me to the signing ceremony. Chip went to it. But Chip gave me that signing pen, which sits in my office to this day because we achieved what most thought would be impossible, which is helping people during a really critical time. But back to what I care about, it's getting people together. And if we don't literally, Scott, repair, we don't repair relationships, this country, it doesn't matter what your most important issue is. We're not going to get it done. Just look at Congress. We're

rewarding the wrong behavior with the wrong people at a time of extraordinary consequence. You tweeted that your campaign will be about four main things. Walk us through those four things. Well, let me start with repair. I'm running, by the way. Let me tell you why I'm running, which is I care deeply about this country. I know everybody listening right now does as well. The fact that we have millions of people around the world that still want to come to our country. Nobody's

clamoring to get into Russia or China or Iran. They're trying to get here for a reason. And I'm terribly concerned about what will happen in the next election because the fact of the matter is, I respect President Biden, but he's going to lose to Donald Trump. And that's the truth. So that's one. Number two is repair. If we do not engage with one another, if we don't celebrate differences, political differences, racial differences, religious differences, we have failed as human beings, let alone as Americans. That is one of my core, core priorities. Economic suffering. You know, as a business leader, as someone who has built businesses, shared success, recognize what is so easy to do relative to policy, to encourage more capital provision, to raise the very economic foundation in America so that people have a foundation to

pursue the American dream. I know how to do that. It's possible. And our policies right now literally are working against people. You know, life is unaffordable. Healthcare, we don't have healthcare. We have sick care. It's completely a disaster. We're the only country in the world that does it like this. We pay twice as much for care as any nation in the world.

Our outcomes are mid-pack. We pay three, four, five times more for pharmaceuticals than any nation in the world. And we reward the wrong behavior. Fee for service instead of investing in health. And I can talk about that later as well. And I think we need a more comprehensive foreign policy as well. I serve on the Foreign Affairs Committee. I'm the ranking member of the Middle East Subcommittee. That's a time of great consequence, of course, in the Middle East for reasons we all know. How we handle the war in Ukraine, how we handle the circumstances in the Middle East, how we handle our relationship with China and our adversaries is a great consequence.

And my contention, Scott, is that President Biden, who has spent his entire professional career in Washington, 50 years, I was three years old when he became a senator. If we Americans think that doing more of the same with the same people, the same systems and the same structures is the path to success, I just see it differently. And then lastly, you ask about my priorities. It's to fundamentally change how the executive branch of the U.S. federal government operates. I want to see zero-based budgeting. Right now, we simply layer more and more money on every program, every agency, every year. I want to have a cabinet that represents the very best and brightest. I don't care about your politics. I care about your principles, people who know how to manage organizations, people who prioritize customer service. I will appoint a common sense czar, a gun violence czar, and I

will include a seat at the cabinet table for youth in America who have some of the best ideas, are the best lobbyists, and right now who are completely disconnected from their government. So you said you thought that the president was going to lose. I would argue it's still very early, even too early to know. But you have a president that's had record. We have the lowest inflation of any G7 country. We're growing faster. Our stock market is up. It's created more jobs in two and three quarter years than any president has created in a four-year term. I would argue so far in the Middle East, at least from my perspective, has handled it well.

Why do you think you would be a better president for the next four years than Joe Biden? Everything you said is true. I respect the president. As a member of the House leadership team, I helped market his priorities and his programs, and I voted for them. This is not a campaign of condemnation. It's simply recognizing what Americans are saying. But back to your first, the economic intention. Yes, the macroeconomic environment is pretty good. But when 60 percent, 60 percent of Americans are living paycheck to paycheck, when 40 percent cannot afford a $400 emergency, we can make an economic case, macroeconomic case as long as we want. Talk about Bidenomics as much as we want. But the fact of the matter is people are suffering immensely and housing is too high and it's unaffordable and unavailable. We've got to produce more. Fuel is still too expensive, especially here in the Northeast. In New Hampshire, we have winter upon us and heating oil is too expensive. Thousands and

thousands of people needing subsidies just to get by. Groceries are too expensive. And we're affording more benefit, tax benefits to corporations who can deduct some expenses that I think American families need. I think there are some ways, Scott, to through health care, through child care, through some tax benefits that I think are underappreciated, child tax credits. We can raise the foundation for Americans, not not not redistribute wealth, if you will, but raise the foundation. I've not seen a president attempt that. And I think it's time we can do that in a way that I believe in a bipartisan fashion that would be not just magnificent, but that will keep this country together, because I'm afraid that inequities relative to wealth and income are going to be what destroys this country if division doesn't do it first. Those are my two priorities. As for foreign policy, I celebrate the president. I think he's handled Ukraine appropriately. I think his support for Israel is terribly important. This is not just about two countries far away. This is about the free world and those in democracies defending ourselves against tyranny. And that's true. It's

a hard case to make to Americans right now when so many are struggling every single day and they see how much we're sending overseas. They see how much money our corporations are making in, say, health insurance. They see that we have a trillion dollar, almost a trillion dollar military budget when people are when veterans are literally sleeping in our streets. Scott, this is underappreciated. This is not rocket science. You know, this is the truth. And I'm just afraid that people who have been doing this in the same place, in the same positions, in the same way for so many years are leading us down a very dangerous path. And the fact is, Americans are making it very clear. They do not want Donald Trump and they do not want Joe Biden in the next election. I think almost all Democrats and probably some Republicans

would acknowledge that income inequality and the spoils, the enormous spoils in prosperity that America has registered over the last several decades has not found its way into many, much less all corners of America. Can you give me three specific economic policies or programs you would implement, say, your first 24 months to try and address that problem? Well, let's start with minimum wage. I mean, the federal minimum wage is still $7.25. It's absurd. No one can live on that. I don't want any policies that would be inflationary to hardworking people, but I do believe we've got to raise the minimum wage. Childcare. The fact is that we have too many Americans right now, both young parents who have to stay in their homes because they cannot afford childcare, even when they're

working. So what choice do they make? They make the choice to stay home, which in my estimation is a terrible drag on the U.S. economy, especially as you and I both know, enterprises are begging for talented staff. Our workforce is insufficient, which we should also talk about immigration. That's another conversation. But child care and elder care, I think, are important priorities that can be subsidized, that can be reduced in cost so that we can encourage people to work. Right now, our policies are encouraging people in many cases not to. I think that is a horrific, horrific challenge. Catastrophic health insurance. I do believe we should migrate to a system that has a national health insurance mechanism. It is what Roosevelt to Truman to Richard Nixon, many presidents in between Democrats and

Republicans recognized that we would be the only nation in the world that pursued this system. It is an unmitigated disaster. I'd like to see a migration. I can make my case for it. But I think health care costs and pharmaceutical costs can be addressed expeditiously. And I also know that to be the case amongst my Republican colleagues, because their constituents are complaining about the same things. Those are three areas that would significantly, significantly raise the foundation for families, reduce and relieve their challenges and afford them the chance to save some money and live decent lives. I think it's time for more compassionate capitalism. And believe me, I'm a capitalist, but I also recognize the consequences of our current path and it's unsustainable. And lastly, when we talk

about the debt, you know, this 33 trillion in debt, we can accommodate it. Still the reserve currency. I think our economy can certainly accommodate even more, but 2 trillion annually now in deficits. The most important part that nobody's talking about is our debt service. You know, we are going probably from $450 billion to probably $800 billion a year plus in our annual debt service because of rising interest rates. What the struggle there is that we do not generate enough revenue to have almost any discretionary dollars left to invest in anything. We haven't even talked about education and the agriculture. There's so many things I want to go into. But

the fact is, we are struggling to find dollars to invest in America because we're paying so much for the past that we have nothing left right now to invest in the future. That is what's unsustainable. And that is what has to be addressed. So four4.5 trillion in receipts, $6 trillion in spending, $34 trillion deficit. Debt. Debt. Excuse me, debt. What is it? $1.7 trillion a year? Yeah, just about $2 trillion. Yeah. So which side of the coin do you focus on first? And specifically, what would you do in terms of increasing revenues? Where would you raise taxes, if anywhere? And where would you cut spending? So the first is to assess every single federal program. It hasn't been done in some time. I would outsource that to one of the leading consulting firms in the world to take a look

at every single federal agency, every single federal program, staffing levels, make propositions as to how we can pursue our mission using less, with better technology, better systems, better structures. That's first. I would appoint a common sense czar to identify on day one ways that we can start reducing areas where we are spending and generating very little return. We're facing another shutdown here in about a week because we can't even in Congress get our act together to fund the government. That's part of the problem, is the way we're doing it. So zero-based budgeting. As for revenues and expenses, there are ways to save, I believe, hundreds of billions of dollars, if not more, if we can make reformations to certain systems, including healthcare. I think we can save about a trillion

to a trillion and a half dollars if we migrate to a new system. All the money's in there right now, wouldn't cost any more. It's simply how it's allocated. As it relates to revenue, you asked about generation. I believe the estate tax should be enhanced. I believe the carried interest loophole is something that we have to plug. I believe those who have been successful, immensely successful in this country, should share more, but I don't think they should share more until they have confidence that their federal government will allocate those dollars in a fashion that generates a return. And I do believe those things can be accomplished. Our military budget, closing in on a trillion dollars a year, one trillion. I believe that we

should be pursuing a 21st century defense policy by actually, I think we could probably spend less. I'm not proposing we do, but I think we should reassess our military spending. The Pentagon has not passed an audit in gosh knows how long. That is job one. Our procurement operation, I think, is woefully structured. And I believe our military industrial complex that President Eisenhower warned us against is making decisions about American national defense, not our military leaders, not Congress, but actually the very vendors that are making all the money. And these are just truths. Money in politics is a significant, significant driver of these bad outcomes. They're perverse incentives. There is money. This is the most extraordinary, wealthy, successful nation in the entire world and world history. It is not for lack of resources. It's how we invest them. Education, by the way, Scott, you know, if we don't completely reinvent American education, I'm afraid nothing will be successful. We are falling behind fast. Teachers

are struggling. Students are struggling. The data points are horrific. We don't value educators. We don't train them. We don't identify them earlier in life, which is the best practice, because quality teachers mean quality outcomes. These are all fixable. And by the way, they're not political statements. These are actually universal. And my contention is that my relationships in Congress is the way forward. So you mentioned just around reducing spending. You mentioned a specific around possibly reducing military spending, which I appreciate. I think everyone in theory is a big fan of cutting government spending but doesn't want to offend any potential constituents with actually naming specifics. My understanding of government spending is that if you're really serious about reducing spending, that all roads lead to entitlements, that it's eating up more and more of our budget every year. Kind of three big things, right? Interest on the debt, the military, and then the biggest of all are entitlements. Do you see any areas in entitlements, Medicare, Medicaid, Social Security, that you think are warrant hard look and potentially reduce spending? Absolutely. You know, but let me start by, I know that's the terminology, entitlements, but, you know, to millions of people who've really worked hard, really hard for decades who paid into that system, especially Social Security and Medicare, you know, I don't consider those entitlements. I consider those benefits that have been earned

in the trust of their government that they deserve and that they need. Social Security is the most successful anti-poverty program in world history, not just U.S. history. But to your point, our trust funds, the five major trust funds that benefit those programs, they'll be going under soon.

Let's start with Social Security, 2033 roughly. It'll force about a 25% cut because of our demographic changes. I was working with Senator Romney on something called the Trust Act. It took a lot of heat from labor because they thought it was going to undermine those programs you just discussed. My point to them was no. There are a lot of Republicans with whom I work that want to see us do nothing because it will result in an automatic 25% cut. So how do we solve it? The social security cap right now, I think it's about $160,000 a year, is a very regressive tax. I think we should raise that. If we raise that to $250,000 a year, we will extend that program easily until probably the 2040s, even up to 2050.

That's a start. I want to also provide a mechanism. This is pretty unique. I want to provide a mechanism by which Americans who have done very well in their lives, of which there are many, many millions, who do not need their Social Security. I want to create a program whereby they can forego their benefits at their election. It will be returned to a pool and then redistributed to the most struggling seniors who rely on social security. By the way,

it has not kept up with inflation. And we have a lot of seniors both suffering from diseases of despair, isolation, and very limited economic resources. I know there are millions of Americans who, if they had confidence that that money would go to people who really needed it, would do so, not return it to the Treasury. But those are two actionable solutions that can prop up Social Security. That is terribly important. Medicare, Medicaid, and American health care, I think, have to be talked about in unison. And that's why I do believe, at the very least, every child in this country should have health coverage, period. I believe every American right now should have catastrophic health care because I am getting

really heartbroken talking to people who have literally gone bankrupt, who have incurred tens of thousands of dollars in medical debt, because they're just one illness away from economic tragedy. That's why I do think a thoughtful national health insurance solution, similar to what Republicans have proposed in the past and some Democrats, is the answer. I'm not calling it Medicare for all because I think it should be entirely new and I think there are ways to achieve it. I do not want to change the provision of care. I think that should always remain in the hands of the private sector, nonprofit sector, even

the for-profit sector if they are more efficient. But by changing the payment system, we can do a whole lot better. And by changing the structure, the fee-for-service model, so that we actually provide an incentive to the care providers to keep people healthy. You know, Scott, this is, everything I'm talking about ultimately comes down to incentives and disincentives as it relates to behavior. You know, anybody who's a parent knows, anybody who owns a dog knows that we live in a human enterprise and in a animal enterprise and in a world that essentially operates on incentives and disincentives. And right now we are rewarding the wrong behavior. What are your thoughts on a wealth tax? I've seen it. I've seen them used in

countries around the world. Often they don't work and then they have to change the policy. I prefer, like I said earlier, I really do prefer rather than a government mandating distinct redistribution. I would rather see our government migrate to enhanced foundations that will naturally spread out the wealth. Like I said earlier, you know, when you spread it out, it fertilizes. Let's fertilize, right? With all that said, my point is this, you know, in my cabinet, my White House, when I'm president, I will have

great thinkers from all political perspectives to come with ideas. I'm really tired of a Democratic set of ideas, a Republican set of ideas, when the fact of the matter is we just need good ideas. I'm really tired of a democratic set of ideas, a Republican set of ideas, when the fact of the matter is we just need good ideas. And I think anything should be on the table. And I think we need the best and brightest to participate. But as long as we have this sickening culture and politics, when we are telling basically young people it's not worth it, their voices don't matter, why bother? Apathy, To think that's going to be a solution is nonsensical. We need to inspire people. And that's my intention. So before we get to foreign policy, I'll kind of wrap up domestic with our economic policy with a bit of a lightning round.

So thoughts on the southern border and the migrant crisis? I have too many co-workers in Congress who make their decisions based on social media and screens. And I believe you got to go check it out yourself. And that's what I've done two times, two trips to the southern border. It's appalling. It's embarrassing. It's inexcusable. It's a massive failure of both Democratic and Republican administrations for the better part of my lifetime. I'm 54. I've never been so horrified by American policy as I was when I went to see the facilities that held human beings. When I saw, frankly, the disconnect between what was being portrayed on MSNBC relative to our border patrol agents, who I think were misportrayed. I saw them use such grace and compassion in

helping young mothers carrying babies across the Rio Grande, put blankets around them, give them food, take care of them. I saw border patrol agents on 24-hour duty looking after babies in strollers who were abandoned, whose parents we probably will never know. And I'm not saying, just like in any industry, in any profession, of course, there are some bad ones, but my goodness, I saw compassion. I saw human beings kept in cages. It made me sickened, sickened.

I don't care about your politics or your race, religion, your country. It was horrifying to see people in cages, to see the lines of human beings waiting in line to do it the right way at our 1970s infrastructure that is just embarrassing and woefully out of date. And my proposition is this. Two things not just can be true at once. Two things are true. We need better border security because it is a national security issue. It's true on the southern border and no one's talking

about the northern border. I'm a border state. We are at risk. That means barriers. That means technologies. That means better training and certainly better border control facilities. But because I come from the business world, once the problem's at our border, it's too late. So we have to start using our foreign aid dollars to invest in the very places where migrants are coming, cost us a whole lot less, keep people safe and secure,

invest in the economy so people have opportunity. And then lastly, we should be adjudicating asylum cases in countries of origin. Those people coming to the U.S. are following our law, which forces them to make that journey, pay $7,000 to coyotes to bring them across the river. By the way, that's their life savings for most of them. And then the only way to become an American is to declare asylum. Then they're let into the

country until their cases can be heard, which is often many years. And it's a totally failed system. So one of our thoroughbreds in America is the technology sector and incredible prosperity, incredible value creation, but also a lot of externalities. What are your thoughts on whether or not we should rein in big tech and how would we do that? Would it be antitrust, increased regulation, or do we just let it continue, you know, continue to do what it's been doing? It doesn't matter if it's pharmaceuticals, high tech, industry, you know, we have to encourage, promote, and foster innovation, period. I mean, that is what makes America remarkable, and it has to be protected.

But to do it in a fashion that's unbridled or unregulated is equally foolish, and I think even the most purest of capitalists would recognize that we do need some regulation as it results in, well, let's talk about social media and tech. You know, it has been a great boon, I think, to the world, and it has been a great challenge. I think it is destroying lives in ways that psychologists clearly recognize. The anonymity in condemnation is a big problem.

I would love to see—in fact, I asked Mark Zuckerberg when he had testified in front of a committee on which I served, why they don't just use verified accounts? Why not just attach your name to an account? It's freedom of speech. That's great. Why just use verified accounts? Why not just attach your name to an account? It's freedom of speech. That's great. Why not have verified accounts? And his response was, that would put us at a competitive disadvantage. That's where government comes in.

That's the great equalizer. You know, banning TikTok is another example. A lot of people calling for banning TikTok. It's a function of the Chinese Communist Party. And yes, I think it is a threat. And I understand that. But I don't think we should ban individual platforms. I think we should have a standard that applies to every platform

and hold them accountable. We'll be right back. So foreign policy is such a huge kind of elephant to try and take on. So I'm going to propose a series of scenarios and you tell me how you would respond as the president. Do you think we should have a ceasefire in Gaza right now? As it relates to the circumstance in Gaza, I believe there should be a cessation of hostilities to ensure that all civilians are extracted. My proposition is to set up camps, temporary camps in either Jordan, more likely in Egypt. I think that's an imperative. With that said, Hamas has to be destroyed. They're the enemy of Israel. They're the enemy of Palestinians. That's the truth. Prime Minister Netanyahu is part of the problem. I think the settlements

have been part of the problem. I believe deeply in the preservation of the state of Israel. It is integral, not just to the United States, but to the world. I also believe in the Palestinians and statehood and self-determination. And I look forward to being the first Jewish president in the United States of America who will sign the documents that establish a Palestinian state, because I believe in Israel. I believe in Palestinian self-determination, and I believe Hamas has to be wiped out, and then we have to afford the chance to get Palestinians to vote for the first time since 2006, let them choose between war and peace, and it's time for Israelis to make a choice too, war or peace. So as it relates to kind of the here and now,

I think it's a nice idea that we could extract the civilians, put them in camps until the hostilities, there's a cessation in the hostilities. I don't find that realistic. My understanding is Jordan doesn't exactly have their arms spread out and the ability to relocate a couple million Gazan residents is just not practically reliable. So I'll propose another scenario. We can't relocate at the scale we need to, and Hamas continues to bunker down under civilian targets, recognizing that the only way we're going to get rid of Hamas is going to involve substantial collateral damage. What would you urge Israel to do or for allies to understand? Simply put, if taking out Hamas, which it sounds like you believe is an imperative here, is just unfortunately going to involve a great deal of collateral damage, which is Latin for civilian deaths. What are your thoughts?

My thoughts are just what I said moments ago, Scott, that we share billions in aid with Egypt. They are in a position with the right invitation, encouragement, and demand, not just from the United States, but like-minded allies around the world, to do just that. This is the 21st century. We're the wealthiest nation in the world. We know how to stand up shelter for hundreds of thousands of people, if not millions, quickly. We've done it before. It should be an all-hands-on-deck approach. And I think that is the answer in the meantime. And I hear you. But I think the notion that Israel can accomplish its mission under these circumstances without putting itself in a position where its own security and future is at risk, I just believe is not possible. But by the way, I think once the hostages are released, I do believe there should be a cessation in hostilities. I think that is important for humanitarian purposes. But this notion that nothing is feasible is absurd. And I do believe Egypt has to play a significant role using the resources that we've been providing for many, many, many years. And again, this is a Palestinian choice. And Scott, days before the October 7th massacre, there was some polling

done by an agency in Gaza that was clear. Most Palestinians do not favor Hamas. They are subject to Hamas. That's why I think this is such an extraordinary time, despite all the bloodshed and horror, that we start moving towards the establishment of two states. This is not tenable. Israel cannot occupy Gaza. They cannot provide security. It's not going to work. I think that is the only solution. But that, again, is why I think reasonable, competent ideators from all politics should come together right now to identify possible solutions. But to let this just play out the way it's going to play out without intervention, I think is absurd.

And I do believe deeply, deeply in the preservation and protection of Israel. I also have to say, as a Jewish American, Prime Minister Netanyahu is affecting our safety and security in the United States right now. And I know any member of the Jewish community here knows that. This is now reaching our shores. It's no longer just an issue between Israelis and Palestinians. And that's why this conversation has to occur now. So let's go to another hotspot. So a Ukrainian general just said we're at a stalemate in the war between Ukraine and Russia after Russia's invasion of Ukraine. And it also polls show that Americans' enthusiasm for the war is waning. If we're faced with some sort of negotiation that would involve Russia maintaining some of

their ill-gotten-captured territory, whatever you want to call it, do you think this is, they have to, a total withdrawal is what we would demand and should continue to support? What are your views on on Ukraine and America's support for what might be a realistic outcome there? Well, first of all, at the root of this is Ukraine is an independent, sovereign nation, and that will be their choice, not ours. We are not deploying American troops. It is not our boots on the ground. It's theirs. They're the ones spilling blood. We are supporting their effort because it is existential. I have to say, I believe this started when Putin moved on Crimea about almost a decade ago. Then President Obama, frankly, didn't do anything. And I do believe that is the root of where we're

at right now. You know, people like Vladimir Putin respond to one thing, and they will keep pressing forward until they are met with resistance, kinetic resistance most of the time. The absence of that gave him essentially the hall pass, if you will, to do what he's doing now. So we lost that, I think, then, and we wouldn't be in this scenario if something had been done at that time. By the way, Syria, the red line in Syria, very similar.

As for the stalemate, I do believe we have to support Ukraine until this hostility ends. It will be their choice about what they're willing to concede, what they're willing to give up. That is not our choice. Well, I would just, I would push back a little bit there because the reality is I get that it's their choice. They're fighting it. But we give more aid than the rest of the world combined. And if that aid were to be reduced or stopped, the reality is they would be playing with a much weaker hand and would probably have to come to win it, it might take years, it might take hundreds of billions of dollars, it might involve NATO troops on the ground. Who knows? Is your viewpoint, until Russians leave Ukraine, America is in this to win it, full stop? Or is it something more nuanced than that? I believe America and our allies, by the way, which I believe need to step up in much more significant manners. I believe America and our allies who believe in the preservation of democracy and free nations have to support Ukraine until they win. And anything

short of that, Scott, in my estimation, is exactly the hall pass that was given to Vladimir Putin when he took Crimea. Iran is watching, North Korea is watching. China is watching, especially as it relates to Taiwan. So, Representative, last question. You've been very generous with your time. I recognize how busy you are. In terms of your core values, kind of what shapes or has shaped who you are, the really like if you try to get to the ground zero of understanding your view around politics, economics, relationships, the country, is it most informed by faith, by family, by capitalism, your mentors? Like, what at the core of Representative Phillips could best identify who you are if people want to understand you. Yeah. I start with loss. I've suffered great loss in my life. And the other is gratitude.

I believe that people who have been fortunate, like me, after incurring loss and tragedy, everybody in the United States has faced trauma and loss, despair. I've been there too. I'm a human being. But my gratitude is my core value. I am so lucky to live here in this country, to have an extraordinary family, to be protected by a history in this country of people, a million people have given their lives to ensure that we have these chances. I'm grateful to know that I'm here and there are probably a billion people around the world

that would give up everything they had right now, everything they had to become an American. That's what informs me. Gratitude, the recognition that there's a fine line between success and failure, and that if I can dedicate the entirety of my life to ensuring that more people can pursue their dreams. That's my ethos. And I'll end with this. My dad was killed when he was 26 years old.

And I remember the day that I was the same age as he was on the day he died. And the morning after, my life changed forever. I went from someone who was relatively apathetic, somewhat uninspired. And that gratitude and that loss intersected on that very day when I was 26 years old. And I determined I would take advantage of every moment I had. and recognized the power of the American presidency, the power of the American brand, so many thousands of miles away, at a place where my dad was given education by the American government and his life was taken away in a war to which they sent him, that's when I decided what gratitude and need really are. And that's why I'm doing this. And that's what informs my whole life right now. Dean Phillips is a third-term Democratic congressman from Minnesota and now a Democratic candidate for president of the United States of America. Prior to entering

politics, Representative Phillips founded and sold Talenti Gelato and was active in the nonprofit sector. He joins us from the campaign trail in New Hampshire. Representative Phillips, you know, I feel the same way Bill Maher. You're thoughtful, you're a Democrat, and quite frankly, you're 54. And I think a lot of people are going to be a hard look. So thanks for your time and best of luck on the trail. Hey, keep the faith. Thanks for the invitation. See you soon. Algebra of Happiness. I was really moved by USC's quarterback, Caleb Williams. I never thought I would say that.

I hate the Trojans because I went to UCLA and Cal, and the Trojans consistently sort of was kind of ruined our chance to get to the Rose Bowl. Anyways, but this individual, he's probably, my guess is he'll go number one in the draft. He's going to make tens, if not hundreds of millions of dollars. And he was in his most recent game. It looked like they weren't going to get a national championship. He was just despondent, really upset, and went over to the stands, kind of jumped in the stands and embraced his mother and was very emotional, started sobbing. And I think this is a big moment. I really do. I think this guy has demonstrated the self-actualization and the courage to be emotional in front of others in what is an incredibly masculine setting, if you will.

And here's the thing. That's part of growing into being a man. And that is, one, turning to your parents. You know what your parents really want more than anything? You know what they want more than anything? They want you to be successful, but they also want the opportunity not only to celebrate in your victories, but to have the opportunity to comfort you. I can't tell you how wonderful that mother probably felt. She was sad for him, but that closeness that her son is willing to express that type of emotion to her and that he has that courage is so important on so many levels. The number one addiction that has the greatest incidence of suicide is actually gambling. Now, why is that? If you're addicted to alcohol or meth or opioids, people usually figure it out and then will try and intervene. And that's what you need. You need intervention. The problem with a gambling addiction is you can get in really deep and nobody knows, and you get into a situation where you think there's no way

out and you decide to end it. And key to having intervention from other people is an ability to express your emotions. I am struggling. I am upset about this. That is what makes you not only feel closer to people and people feel closer to you, but that's part of the healing process. When I am moved by certain creative, when I'm moved by certain literature or certain TV shows, whatever it might be, it informs what I enjoy. When I am moved by certain scenes that involve fathers and sons, it indicates to me that the most important relationship in my life is the relationship with my sons, and I start investing more there. well, why am I moved by that? Because I want to be seen as someone who is creative and brave. It is going to be difficult to allocate your finite human capital to its greatest return, its greatest reward, unless you allow yourself to feel real emotion, which will inform what is

important to you. But getting back to Caleb Williams, this was a huge moment for masculinity and a huge moment for men. We can't be afraid. We need to be unafraid to share our emotions and say to people who love us and who we love, I am upset. I am upset. And I am sharing that with you because I love you. I know you love me. And I want you to know that I think you can help me and I have no preconceived notions around what it means to be a strong male other than taking care of others, providing for others, and being a good person and being on the right end and being supportive when people are brave enough to share their emotions with me.

This episode was produced by Caroline Shager and Jennifer Sanchez is our associate producer. Andrew Burrows is our technical director. Thank you for listening to The Prop G Pod from the Vox Media Podcast Network. We will catch you on Saturday for No Mercy, No Malice, as read by George Hahn, and on Monday with our weekly market show. Microsoft or Bard or Claude. Claude? Claude? Claude? Claude? Anthropic? Claude? Is Anthropic French? Is it Claude?

I think it's Claude. I don't think they're Canadian either.