The Prof G Pod with Scott Galloway - Office Hours: TikTok and Political Disinformation, the Insurance Industry and Climate Change, and the Work-Life Balance Conundrum

Episode Date: August 16, 2023

Scott answers a question on how TikTok poses a security threat in the context of Taiwan’s upcoming presidential election. He then discusses how climate change is affecting the insurance sector and wraps up with advice to a listener asking how to balance work with family.  Music: https://www.davidcuttermusic.com / @dcuttermusic Learn more about your ad choices. Visit podcastchoices.com/adchoices

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cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. Welcome to the Property Pod's Office Hours. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question, please email a voice recording to officehoursatpropertymedia.com. Again, that's officehoursatpropertymedia.com. First question. Hi, Scott. My name is Chris. I am 28 years old, living in Manhattan with my fiance, and I'm a big fan of your content. I've been following the debates of TikTok's growing

influence in the United States, and I, like you, believe this to be one of the biggest threats to the United States. You have been mentioning that part of the challenge with this debate is that the primary threat from TikTok is not their data collection practices, but something much harder to measure, their ability to weight the algorithm just slightly in the direction of pro-China, anti-American rhetoric. Although I agree with the difficulty of this challenge, I believe there is a very real opportunity for researchers and academics to study this theory. Taiwan is currently preparing for the very real threat of an invasion from China, as well as preparing for the upcoming presidential election, where the two leading candidates have very different views on how to handle the aggressions

from China. The candidate from the incumbent party wants to increase military spending and will prepare to defend the nation, similar to Ukraine's defense against Russia. The other candidate wants to pursue talks with Beijing and is likely more willing to give up, quote, painful comprom give up, quote, painful compromises, end quote, according to the Wall Street Journal. My question for you, if there is ever a time and situation for China to exercise their propaganda power via TikTok, isn't now the moment they would do so in Taiwan? And if so, shouldn't any and all academics, researchers, and U.S. intelligence be watching intently to understand the extent and execution of this power? Thank you for your time, and I'm a big fan of the show. Chris from New York City. A very thoughtful question and something I think a

lot about, although I'm not sure I have a lot of answers here. So just some background. TikTok is, in fact, becoming a battleground for political disinformation in Taiwan ahead of the 2024 presidential election. Taiwan has been a testing ground for disinformation because of its importance to China and its ties to the U.S. It's sort of caught between a rock and a hard place, if you will. discovered influencer networks of fake accounts targeting Taiwanese audiences, along with popular political TikTok accounts that promote Chinese interest. In fact, Bloomberg reported that Taiwan's National Security Bureau reviewed more than 1,800 cases of online disinformation just in the month leading into mid-July. Like, this is a complicated one. So first off, let me say, I love TikTok. I just think it's amazing what they've done there. The idea, it's not really social, but it's essentially one, it's a cable network that has one channel, but that channel is all you'll ever need because it figures out that you like to watch other people

get adjusted and see Great Danes. And also people talk about social justice issues that happen to also be very hot. That is what the algorithm has figured out I like. God, I can watch for hours. I can look down, turn on, you know, hit TikTok. And it's a couple of things from a marketing standpoint. One, I think choice is vastly overrated. It's seen as a feature. I think it's a bug in most consumer marketing.

The whole basis, especially retail, is that William Sonoma doesn't have 200 toasters. It has two, but they're the right two. And no matter which one you pick, you know that someone with much better taste in kitchen appliances has picked it out. And that's what TikTok is. It's the ultimate specialty retailer that's merchandise a voice, but that voice is specific to you.

So I just think it's a phenomenon. I would like to see the people at TikTok get really wealthy. I think they deserve to. I think it's an incredible company that's created a ton of shareholder value. Having said that, if it's not spun to U.S. interests or international or non-CCP interests, I think we should ban it from the same thing. And we had a social media platform that had enraptured, encapsulated, captured the majority of attention of young people in the age of 25 in China. I would slowly but surely run content that tries to make the argument for why you should not invade Taiwan. I would have content on there that puts their thumb on the scale of pro-American content and pro-democracy content. You'd be stupid not to do this. And guess what? The CCP is not

stupid and they're doing it to us. I mean, I think they'd be stupid not to do it. And not only that, it'd be impossible to trace. It'd be impossible to attribute. I think they're doing it right now and it's a national security risk. And to your point, the mother of all disinformation is going to happen in the 2024 U.S. presidential election and, as you referenced, the Taiwanese election. And that's where we're going to see the first major, in my view, negative externality of AI. Because I think AI is going to be fed with a bunch of prompts that say, make America feel worse about Joe Biden. And they'll come up with millions of tweets, posts, images, and they will elegantly figure out a way to take advantage of an amoral leadership in big

tech who will find out after the election that, oh, what do you know? Our platforms were weaponized, but we're proud of the progress we've made, and we know we need to do better. Yeah, fuck you. Anyways, I don't think it'll be as bad in Taiwan because I think their security forces and their elected representatives, quite frankly, are just a little bit more sane than us and haven't conflated First Amendment and free speech with propaganda from Russians and Chinese. It's just hilarious how badly the far right perverts the term First Amendment. First Amendment is that no law shall be passed by the government that inhibits free speech. They haven't done that. I think this is a big issue. I would like to see TikTok either banned. I think this is a big issue. I would like to see

TikTok either banned. I think once it does become a reality that it might get banned, if I'm the CCP, I'm like, well, just wait, they'll get distracted with something else. And there's a non-zero probability that might happen. But I think on the eve of the ban, a national ban, they probably agree to spin it. Why? They have 300 billion reasons why. Specifically, this company is worth a minimum of 300 billion. It's probably worth closer to a trillion. And there's just so much money on the line, including from American investors that I believe even the CCP goes, okay, if we can't have this ultimate propaganda tool. By the way, do you think the Chinese in a million years would ever let us infiltrate their society with a social media platform that had direct ownership and direct influence from the CIA.

I mean, it's just hilarious, the asymmetry here. But I think that your analysis is spot on. I think we need to take this seriously. But this, in fact, is a huge national security threat, both for America and for Taiwan. Sorry for the word salad. Un ensalada de palabra. Next question. Hey, Scott. My name is Grace, and I'm a 16-year-old from Maryland who really enjoys listening to your show as well as Pivot, which I'll admit is a little weird for a 16-year-old. But my question is about climate change and insurance markets. So I've been thinking a lot about if climate change is such a pressing issue, why don't we see, you know, companies taking advantage of this and providing some sort of

insurance for future damage that climate change will cause? You know, what does it say about the actual severity of the issue? Looking for some insight. Really enjoy your show. Thanks. Grace from Maryland. Let's review. You're 16 and you're thinking about the link between climate change and insurance markets. If I could buy stock in a person, I would be going long grace right now. I was thinking, what was I thinking about? I don't know. I was thinking about, well, at 16, I was just thinking all I wanted was a car. That's literally what I thought morning, noon, and night was how did I save up enough money

for a car? And occasionally I'm trying to think, what was I doing at 16, 11th grade? I don't know, Star Wars? Anyway, so you're well ahead of the game and where most people are at 16. companies, you could argue they're struggling to keep up. I would argue they're just raising their fees and they're killing it. I'm in Aspen and a friend of mine is in the insurance business and he's having his best year ever. And they claim that it's hard, but the bottom line is the premiums have just gone way up. I'm trying to renew my flood and hurricane insurance at our home in Florida and I'm blessed. So I might in fact pay off my mortgage because I don't have a lot of mortgage on this house because interest rates have gone up so much. But the nice thing about not having a mortgage is I don't need to buy insurance. And when you look at insurance, 45 cents on the dollar on average go to profits and administration, meaning that if you think of it as a product,

you're giving them a dollar and you're giving 55 cents in claims back, which isn't a great deal. But at the same time, you have to be in a position of privilege where you can afford a big one that you could... I could afford, if my house got swept away, I could afford to rebuild it. So insurance is yet another transfer of wealth from the poor to the rich. Research from Columbia University revealed that cumulative cost of disasters over the last 10 years exceeded $1 trillion. Meanwhile, the total cost for 360 events from 1980 to 2023 exceeds $2.6 trillion. So what is that for 43 years? 43 years, it was $2.5 trillion, and it's $1 trillion just in the last seven years. So we've had almost half the amount of cost just in the last seven years as we've had in the last 45 years. And why are the costs rising?

Because both climate change and of human factors, according to Redfin, a real estate company, more people move to high-risk areas than low-risk areas from 2016 to 2020, specifically Florida. Also, Georgia, South Carolina, Tennessee are growing faster than the national average. And due to the frequency and severity of natural disasters, insurance companies are faced with paying out more than claims. According to Swiss Re, the world's largest reinsurer, property losses from natural disasters caused by climate change could increase by 60%. And a lot of them are just refusing to insure certain areas. And look, it's like with climate change, we can either pay for the transfer to renewables or some sort of carbon capture or something, taxes and investments to move us away from an earth that continues to cook us. Or we can just pay for it in other ways that are,

quite frankly, going to be more expensive and take a much greater toll on our physical and emotional well-being. So it strikes me that we're going to have to deal with this. In terms of the insurance market, Grace, I would argue, if you ever meet someone't make a shit ton of money. So I would like to see a massive investment in the requisite programs and taxes such that we can begin to lower the temperature in the earth. It's also going to require there's just no getting around it, massive bilateral or cross-border cooperation, because a lot of it comes down to China and India. And we need to set a role model, and we're obviously a big contributor, but a lot of this is going to be outside of other markets. But let me just circle back. If you're thinking about these issues, it strikes me that you should think about business school. I'm just trying to think. It's just so impressive you're even

thinking about these issues. But yeah, insurance is just a function. They do actuarial tables and they say, okay, greater likelihood your house is going to go up in a super fire or flood. Let's just raise their rates. So all it means is that individuals, yet again, especially young people who have to get insurance end up paying more for health insurance, end up paying more for fire and wind insurance. So, see above more taxes on the people who can't afford it. But yeah, the insurance industry is just going to raise its rates, Grace. And after you graduate from business school, call me and I'll invest in your private equity firm that will roll up the insurance market. Thanks for the question, Grace. And keep on keeping on. 16 and thinking about these issues.

Jeez, what an impressive young woman. We have one quick break before our final question. Stay with us. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have

shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Support for this show comes from Constant Contact. You know what's not easy? Marketing. And when you're starting your small business, while you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter. Luckily, there's Constant Contact.

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Welcome back, question number three. Hey, Prof G, big fan of the podcasts and your books. I've always valued your opinions on the delicate balance between building financial security and family. As you said, it can be hard to have it all, especially at once. I've also heard you recommend focusing on the financial security while you're young so that you have that for a family later. That's not where my path took me. I fell in love young and had two kids before 30. I have been able to work my way up at a prestigious insurance firm,

but I am becoming ever increasingly aware of the passage of time, especially for my kids. I did not want to look back in 10 years and realize that I prioritized clients over them. Any advice for somebody in my shoes? Thanks. You're nameless, so I'll just call you nameless. I'll just call you dad, so dad or insurance dad. This is a deeply personal decision, and there's no silver bullet here, and there's no right way. I can tell you what my way was. My way was I decided to work pretty much around the clock until about the age of 45 because I wanted economic security. I didn't want to change the world for the better. I didn't want to be even happy, if you will. That wasn't my

priority. My priority was I wanted to take care of my mom who got sick. And I wanted to have the life that I saw people had with money in a capitalist society. And it came at a cost. It cost me my first marriage. It cost me my hair. And even when I had kids, it cost me a lot with them. I tried to be home for bath time, but a lot of times I wasn't. I remember several times, several times when my kids were really young, coming home after like three weeks on the road, trying to bang it all out. I'd come home, I'd be late, I'd go into my kid's room, and I could visibly notice that one of my sons had grown while I was gone. And I think, God, is this worth it? And the reality is, for me, it was. I get to do these wonderful things and not have financial stress. And I'm much happier and more relaxed. And they get a lot of opportunities because of our economic security. So for me, it was worth it. But I think balance is a myth. And you just have to trade off. You just have to decide, along with your spouse or your partner, what is the right balance for you? And you might decide I'm not one of these people who lives to work. I'm just not going to do go your path, Scott. That's just not me. And then that's fine. You just have to have an honest conversation around what that means around your burn. Where are you going to live? Are you going to lower your cost of living such that you don't have economic stress? Because economic stress, you know, economic stress is worse than not having time with your kids.

Economic stress is the number one cause of divorce. It'll make you less present with your kids. It'll make you not as nice a father. You know, you're going to be wildly stressed. And that whole household is going to feel it if there's real economic stress. So maybe you decide you're going to work to live and you're going to work a reasonable amount of time and be a good, solid citizen. And there's nothing wrong with that. But what does that mean in terms of your lifestyle? So I think these are very personal questions that only you and your spouse

can answer. I decided to trade off a lot of time with my kids when they were very young, such that I could have more time with them when they were a little bit older. And there's no guarantee. A lot of people work their asses off and still don't get the kind of economic security or professional traction they'd hoped for. There's an X factor to all of this. house around what are the trade-offs here? What are we willing to sacrifice? Because, you know, I get into arguments a lot with my kid's mother around, you know, you're not spending enough time with the kids. I'm like, well, you know what? No one's going to pay me the kind of money we need to hang out with the kids all fucking day. So it causes stress in our relationship still. And I would reach out to some people in your life that you trust, be very transparent with them, ask for their advice. But I'm going to finish with, I missed a lot and it was worth it. It was worth it.

Thanks so much for the question and good luck to you and yours. That's all for this episode. If you'd like to submit a question, please email a voice recording to officehoursofproptumedia.com. Again, that's officehours of Prop2Media.com. This episode was produced by Caroline Shagrin. Jennifer Sanchez is our associate producer, and Drew Burrows is our technical director. Thank you for listening to the Prop2Pod 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. Hey, it's Scott Galloway, and on our podcast, Pivot,

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