The Prof G Pod with Scott Galloway - The Evolution of Money and the Demise of CNN+ — with Eswar Prasad

Episode Date: April 28, 2022

Eswar Prasad, the Tolani Senior Professor of Trade Policy at Cornell University and author of “The Future of Money: How the Digital Revolution is Transforming Currencies and Finance,” joins Scott to discuss the state of play regarding the global financial ecosystem, the role of the US Dollar, and the opportunities and risks of cryptocurrencies and decentralized finance. Follow Eswar on Twitter, @EswarSPrasad. Scott opens with his thoughts on Discovery's decision to shut down CNN+. Algebra of Happiness: functions of success. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Join Capital Group CEO Mike Gitlin on the Capital Ideas Podcast. In unscripted conversations with investment professionals, you'll hear real stories about successes and lessons learned, informed by decades of experience. It's your look inside one of the world's most experienced active investment managers. Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Support for PropG comes from NerdWallet.

Starting your credit card search with NerdWallet? Smart. Using their tools to finally find the card that works for you? Even smarter. You can filter for the features you care about. Access the latest deals and add your top cards to a comparison table to make smarter decisions. And it's all powered by the Nerd's expert reviews of over 400 credit cards. Head over to nerdwallet.com forward slash learn more to find smarter credit

cards, savings accounts, mortgage rates, and more. NerdWallet, finance smarter. NerdWallet Compare Incorporated. NMLS 1617539. Episode 158. People born in 1958. Michael Jackson, Prince Madonna. I met Michael Jackson when I was six. It was a touching experience. I purchased Prince's album for 20 bucks, but partied like I bought it for $19.99. And what do you get when you suck all the Botox out of Madonna?

Betty White. Oh, my God, the dad joke trifecta. Hello, Daddy. Go, go, go. Welcome to the 158th episode of the Prop G Pod. I'm feeling a little emotional. I am literally sitting in a glass house of emotions right now. So I had my show canceled, or worse than that, I had the entire network carrying my show canceled.

I mean, I'm literally the virus that pushes this shit over the edge. Let's review. Vice, I hated this show so much that I pulled the plug. Bloomberg, Quick Takes, heard anything about Quick Takes? Boom, my show didn't even get started, but it was enough to put a ventilator on Quick Takes. And then boom, CNN Plus. Wednesday, they call me and tell me that my show is the most popular weekly show. And then Thursday, I read in the New York Times that the entire network is being shut down. In addition, I just read, and we're recording this around, I don't know, sometime on Monday afternoon. I've lost all track

of time. When you're my age, you don't even buy green bananas. But supposedly Elon Musk is taking control of Twitter. Jesus Christ, I could not have gotten that one more wrong. I didn't think he was going to be able to get the financing. I didn't think the board was going to accept the offer 25% below the high from last year, but Bill Cohen from Puck called it perfectly. He did raise the money. No other bidders. Board appears to have no choice. So what do we do here if it closes? I think you got to give the guy some running room and the benefit of the doubt and see if he unlocks value. Unlocks value. There you go. Anyways, in today's episode, we speak with Ishwar Prasad, the Talani Senior Professor of Trade Policy at Cornell University and author of several books, including his latest,

The Future of Money, How the Digital Revolution is Transforming Currencies and Finance. Okay, what's happening? You've probably heard the news that there's a new Quibi, a new Scaramucci. That's right. CNN+, the streaming service that yours truly was very excited about and launched a show on, has shut down after a mere three weeks and $300 million investment. So did we see this coming? Somewhat.

I saw the bull coming, but didn't realize it was going to gore me and then turn around and back up and start trampling me to death. How this thing went down absolutely surprised me. It going down did not surprise me. This was the right move. Simply put, since I signed my contract in August of 2021, where Netflix was trading at about $700 a share,

Netflix, which is the tail that wags the entire streaming dog, that's what everyone looks to in terms of the economics and what the forward-looking indicators are for the streaming space. Netflix has gone from 700 bucks a share to 200, wiping off about, I think, a quarter of a trillion dollars in shareholder value.

And everyone is freaked out because everyone thought, as long as you were adding consumers, it didn't matter the economics of those customer acquisitions. As long as people were pulling out their credit cards and buying more Handmaid's Tale and more Mandalorian and more WandaVision, everything would work out. Despite the fact that streamers only had one-third of the profits, they commanded two-thirds of the market cap of all of

video content or video media. To give you a sense of just how fucking batshit crazy this got in terms of overinvestment. So supposedly somewhere between $200 and $240 billion will be spent on original content this year just from the streamers and networks that have streaming offerings. So what does that mean? Look at the United States. 115 million U.S. households. Probably 20 to 30 million of those households don't have TVs or they don't stream content. They have hangers as antennae and they don't want to pay for that bullshit or they're very far right and don't want that heathen material or they're very far left and tell all the friends that they only read The Atlantic and they don't watch TV. But let's assume that the total streamable market is 80 million households.

$240 billion would be $3,000 per household. These guys are spending three, when I say guys, the streamers are spending $3,000 on content per household every year. And I'm not talking about your cable. I'm not talking about your phone bill. I'm talking about what they were spending on every household. The average household income in America is something like $60,000 or $65,000, but someone was spending $3,000 to send you Bridgerton, to send you Better Call Saul, to send you Euphoria. And what a shocker, that wasn't sustainable. So let's think about it another way. Netflix spending somewhere between $20 and $24 billion on content. They charge approximately $12 a month. So consumers have been taught to expect $2 billion in original content investment for every dollar a month they spend.

Let's go to CNN+. Said they were going to charge $6, went on sale before even launch, so let's call it $3. That means the market was expecting about $6 billion in original content, and CNN showed up with $300 million. And some, CNN Plus was a squirt gun that showed up at a howitzer fight. It never had a chance. Now, what shocked me here, what shocked the shit out of me, is I thought that they would use it as an R&D lab and start peppering all that content. And some of the content was resonating. Supposedly reliable sources with Brian Stelter, five things with Kate Baldwin, is that her name? Kate?

Anyways, was resonating. Chris Wallace's program had made news interviewing Jim Psaki. Supposedly my program was doing well, at least that's what they were telling me. I would have thought that they would slowly but surely seed and nest that stuff into the other points of distribution in the Discovery Network, whether it's HBO Max or Turner or the core CNN platform, and use it as sort of of these contracts across the anchors and a lot of the talent has already been spent. The marketing money has already been spent. So why wouldn't they try and get some return on that investment and put it on the other channels of which are going to be equally hungry for content? Why would they do this? And quite frankly, let's be honest, this makes us look stupid. This makes Discovery, CNN, CNN+,

much less the talent, including yours truly. We look stupid. We didn't see this coming. We read about it in the New York Times. No one at Hudson Yards, that is CNN, knew this was coming. Why would they do this? And the only thing, and I'm speculating here, is three words. First, little. Second, dick. Third, energy. Usually when you find kind of an irrational business decision, there's anger and ego involved. And I think that's what happened here specifically, specifically. Supposedly, Jason Keillor and Andrew Morse,

the two folks running the network, or two of the three legs of the stool, the other leg is Rebecca Cutler, basically stuck up the middle finger to the suits of Discovery and said, look, we're launching CNN Plus whether you want us to or not. And I think Discovery had said, we don't want you to launch it. We have some views on this. Please wait until the transaction is closed. And the word is the folks at CNN Plus said, no, we're going to get you half pregnant. We're going to get this out of there. We don't care.

We're launching. I think that was a mistake. Discovery was going to be their partner, was going to be their owner. It sucks to be a grownup. They should have waited. So what do you have? Discovery then comes in and says, wait, bitch, I'll show you who's on top. And they not only unplug the thing, they smother it with a pillow. They literally say, we're going to show you. Like, yo, you said, fuck me? No, fuck you, boss. And boom, it was over just as quickly as it started. What does it mean? It means that just as we're seeing a meltdown in the public markets around the growthy stuff, everything from Netflix to Moderna to Roku to Clover, I mean, on and on and on. LendingTree, PayPal, everything's off 60% and 70%, as is Netflix. You're going to see the streaming market wake up from this really crazy

fucking party where they've gone on like a Robert Downey Jr. like cocaine bender. And the hangover here is going to be vicious. And how is that going to play out? Consolidation, massive cost cuts, a lot of hallucination around all we need to do is add advertising. By the way, I think Netflix adding advertising is a new Coke kind of risk. I think that is really stupid. I think that Netflix commands such a strong part of our gray matter in terms of expectation. And the expectation is I can relax and I don't have to have my antennae out wondering when are they going to start selling me a light beer, a South Korean car, or tell me that my legs are restless, or that I have opioid-induced constipation. That's my favorite, although I'm sure that's not pleasant. Anyways, if this risk blows up in their face, they all of a sudden become Viacom or they become Disney. And then

despite the fact they've lost 70% of their value, if they start trading like an ad-supported network, the stock gets cut in half again. In addition, the brand just means a certain surety, a certain relaxation, a certain gestalt, a certain lower blood pressure where I'm at the movies and I'm not going to be sold to and it will be uninterrupted storytelling. Speaking of budget, speaking of budget, Stranger Things, they're going to spend $30 million an episode on. So what was CNN Plus? CNN Plus was 10 episodes of Stranger Things in terms of an investment. C-Above showed up with a squirt gun to a howitzer fight.

I mean, this was just, it's like most wars are over before the first shot is fired. Just looking at the number of tanks, although maybe Russia and Ukraine doesn't bear that out. Anyways, you get my point. You get my point. I am still reeling from all of this. I don't mind it because it was about 5% of my income. It was about 20 or 30% of my time, which is a lot more than initially was pitched to me. They told me I could get the show done in a day a week. It was taking two days and I think it was going to take three days to do it really well. The thing I am most upset about is I just love doing it. I hate advice.

I didn't enjoy Bloomberg that much, although I didn't really get to see the light of day there. And I love this. Why did I love it? I've wanted to do TV for a while. We figured out books. We figured out podcasting. We've liked, I think we figured out newsletters, do really well in terms of speaking gigs, had We figured out books. We figured out podcasting. We've liked, I think we figured

out newsletters do really well in terms of speaking gigs, had not figured out TV and wanted to check that box. And the team at CNN, they were literally turning chicken shit, i.e. yours truly, into chicken salad. These are some of the most talented people I have ever worked with everyone from the cameraman, Raf, to the on-location producers, Ursula and Molly and Lamar, to the guy writing comedy for me, Alex. I mean, they were just doing – the editors were fantastic. I was just so excited to see the product, and I felt like we were going to get a chance to leave it all on the field. And now I'm thinking I'm feeling a little bit sorry for myself that, okay, third time at the plate, and I just got beamed in the face again. Maybe the gods are trying to tell me something around TV. But my gosh.

Also, also, Discovery, is that the way you roll? Is that the way you roll? We find out about this in the New York Times. You couldn't call us maybe five minutes before it hit the wire and say, FYI, we've really enjoyed working with you, but this just isn't in our plans. I get it.

I totally get it. It's just, it kind of goes to what my friend Dev Seidman says. It's not what you do, but it's how you do it. And I can't imagine there aren't a lot of us who don't feel, quite frankly, like you just made us look like fucking idiots. You made us look stupid.

And everyone says, oh, that's the world of media. Bullshit. I've served on the board of media companies. I have invested in media companies. I've been a CEO of a company. This just isn't the way you conduct business in my view. And I think that in an environment that is about courting to

and maintaining strong relationships, do you think Chris Wallace is anxious business in my view. And I think that in an environment that is about courting to and maintaining strong relationships, do you think Chris Wallace is anxious to do another deal with discovery communications right now? Anyways, I think this was a really bad move and it just reeks of anger and it reeks of ego. In sum, when the story is written about CNN Plus and what happened here, the book should be called Little Dick Energy. Stay with us. We'll be right back for our conversation with Ishwar Prasad. 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. Constant Contact's award-winning marketing platform can help your businesses stand out, stay top of mind, and see big results. Sell more, raise more, and build more genuine relationships with your audience through a suite of digital marketing tools made to fast track your growth. With Constant Contact, you can get email marketing that helps you create and send the

perfect email to every customer and create, promote, and manage your events with ease, all in one place. Get all the automation, integration, and reporting tools that get your marketing running seamlessly. All backed by Constant Contact's expert live customer support. Ready, set, grow. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial. ConstantContact.ca professor of trade policy at Cornell University and author of The Future of Money, How the Digital Revolution is Transforming Currencies and Finance.

Iswar, where does this podcast find you? I'm in Washington, D.C., Scott. Nice. So let's bust right into it. We came across your research after we were introduced to your latest book, The Future of Money, How the Digital Revolution is Transforming Currencies and Finance. So let's start there. How would you describe the current state of play and the future of the financial system,

specifically in the United States? So things are changing fast, Scott. In particular, the use of cash, that is physical currency, is fast disappearing. And we're all moving into digital forms of payments. But the reality is that the U.S. is pretty far behind much of the rest of the world when it comes to of payments. But the reality is that the US is pretty far behind much of the rest of the world when it comes to digital payments. In countries like China and Sweden,

the future is already here. Hardly anybody uses cash anymore. In the US, we still use cash to a significant extent and we use credit cards and other modes of payment that are not used that widely in the rest of the world. Low-cost, efficient digital payments are really becoming the norm much faster around the world. So the U.S. is really playing catch-up. And what's the net effect other than a lack of innovation? It feels like our fintech firms are as valuable as anyone's in the world. I think the market cap of our fintech firms is pretty

formidable. What's the net effect of the fact that we are lagging the rest of the world? So it means that we have a significant part of the US population, not a huge amount, but it's a non-trivial part that is locked out of easy access to the financial system. So you and I can use Apple Pay or Google Pay, but we have to have that connected to a bank account or a credit card. And about 5% of households in the U.S. are still unbanked or underbanked, so they don't have easy access to low-cost digital payments, and they also don't have easy access to banking services,

even basic products for managing savings, risk, credit, and so forth. Now, fintech platforms are beginning to fill in that hole. They're also providing more direct channels for savers and borrowers to be connected. But here, too, I think the rest of the world, including even an economy like China, has quite a few steps ahead of where the U.S. is right now in terms of this evolution. Yeah, it definitely feels, I mean, it's weird. It feels as if some places like Argentina or even Brazil are sort of skipping landline phones and going straight to digital payments. The issue around the unbanked was so great that they seem to be more innovative than us. And what is the problem?

Why has the adoption not been faster? Is it regulation? Is it consumer misunderstanding? Why are we behind? So to some extent, it's because in the rest of the world, there was a real dearth of easy access to digital payment systems and also regulatory void that was filled by payment giants. If you think about China, WeChat Pay and Alipay filled in that void because China had a rising

middle class that demanded better payments, and the government sort of stepped aside. Here in the U.S., we have big players who are very eager to protect their territory. So, for instance, the interchange fees that merchants pay on credit card transactions are far higher in North America than anywhere else in the rest of the world. And the reason is because credit card companies have been very smart. First of all, they have used their revenues essentially to buy off the politicians and keep regulations in their favor. And then of course, they bribe us by essentially making it worthwhile for us to use credit cards for transactions because we get

money back, we get points back. And so, at least in North America, credit card companies have figured out how to maintain their market power, which has been very quickly eroding for them in the rest of the world. Who are the biggest losers when fintech and digital payments get the traction, the same level of traction that they've achieved overseas? Who are the big losers domestically? Is it the credit card companies? Is it the banks? Who is it? Is it the central bank? Who loses here? So it's the entire financial architecture, the traditional financial architecture that gets threatened. Now, we've certainly seen the biggest disruptions coming in both domestic and international payments where there are huge inefficiencies, especially in the US. But then you can think about even the traditional functions of the banking system, you know, matching savers and borrowers of those funds, being essentially

disintermediated, that is having their lunch eaten by some of these fintech platforms that are able to provide services at much lower cost, at scale, and with perhaps greater efficiencies. So I think there are different pillars of the traditional financial institutions, starting with the payment providers, but especially the commercial banks that see serious threats to their business models. What do you think of Visa? It just strikes me that Visa and MasterCard feel vulnerable, and yet they continue to appear to be bulletproof. What about the credit card companies? They face what I view as existential threats because it's really not a viable business model they have to provide payments with such large fees being charged. In China, again, which I keep bringing up as an example, you can literally use digital payments to buy a piece of fruit or a dumpling on the street because the costs of transacting are so low.

The same is true in other countries like India and even advanced economies like Sweden. So it's hard to imagine that this sort of competition won't start eating away at the market share of Visa and MasterCard. But again, these are companies that have a lot at stake and they've used the regulatory structure to their advantage, but that advantage is not going to last that much longer. And what about the USD? We talk about the idea of a digital currency or a digital coin, an Eagle coin or something. Do you think that's going to happen in the US? I know that the Fed or the US government's been talking about it. Where and how do you think that plays out? So this is the reality that central banks around the world are facing, that the use of cash is disappearing. So they have to figure out if there is a way to keep their currency viable,

if not in physical form, in digital form. So countries like China and Sweden have already initiated central bank digital currency or CBDC experiments. The Fed has been somewhat more cautious about it, partly because it doesn't want to move forward with any haste because it doesn't need to. The US dollar still remains the dominant currency by far, and it's not going to be threatened by cryptocurrencies or other countries' digital currencies. But having said that, the Fed is also bowing to the reality that if it wants its money to remain relevant at the retail level, it's going to have to be digital. And there are also some advantages to having a central bank digital currency. Essentially, it would provide a very low cost digital payment system that everybody has access to.

It could also act as a portal for basic banking products and services that could be provided at very low cost. But there are some costs as well. You could end up in a world where if the government or a central bank is providing a payment system, it could be difficult to have private sector payment providers compete with the government agency, which of course is very deep pockets. It could also mean threatening the banking system. And of course, it is going to mean a significant threat to our privacy. The one big advantage of cash is that you can conduct transactions, which may be illicit transactions or illicit transactions, but you have privacy. But the notion that we may move to a world where you cannot buy a cup of coffee without either a private payments provider or the central bank knowing about it

is certainly something that we need to think hard about. I've always thought that similar to, I'm getting on a flight this afternoon, I always thought our invisible infrastructure is our airways and that people don't appreciate the infrastructure that is our skies. And at the same time, I've always thought the U.S. dollar was the most powerful aircraft carrier squadron that we don't talk about, that our ability to track the payment of capital or track the flows of capital give our sanctions real teeth. And that every day, if we're about 20 or 25 percent of the world's GDP, but we're two-thirds of the world's reserve currencies, we have a disproportionate amount of power vis-a-vis the USD. Does any of this threaten the USD and that soft power? It's going to

be something under threat, but not a huge amount. And here is where there are going to be some changes coming. And these changes are already underway, but certainly what we've seen happen in the aftermath of the Russian invasion of Ukraine is going to accelerate these changes. The reality is that the U.S. dollar's role as a payment currency is going to decline because we now have countries like China that are setting up their payment systems that can more directly communicate with the payment systems of other countries. So you don't necessarily need to go through the dollar as an intermediary currency. But even if the dollar's role as a payment currency declines, a reserve currency has very different attributes. A reserve currency is essentially one that is held as a store of value where foreign central banks hold their rainy day funds, so to speak, as it's denominated in that currency.

And for that, you need financial markets that are very deep and very liquid, meaning where you can easily buy or sell huge amounts of those assets. You also need some important elements of an institutional framework that is foreign investors, including foreign central banks, need to be able to trust the issuer of those assets. And the U.S. has a very powerful institutional framework, an independent central bank, the rule of law and institutionalized system of checks and balances. So if you add that up with the size of the U.S. economy and the depth and liquidity of its financial markets, I don't see a serious threat to the U.S. dollar's role as a reserve currency. But certainly, the decline in the dollar's role as a payment currency is going to mean that in

the future, sanctions, which the U.S. has been able to very effectively enforce, are going to become somewhat less potent. And so we have an entire generation of people who aren't as worried about privacy, as far as I can tell, aren't as worried about hacks, and feel very comfortable paying for stuff. I've always thought that privacy, there's some consumer dissonance, that people talk a big game about privacy, and then they take selfies of themselves and announce where they are via gps or via uber it seems to me that privacy is something that for people over the age of 50 in brussels or dc are the benefits are the upside

of the government being able to track illicit activity do those outweigh the violation of privacy i know this is a more of an conversation here, but will we end up with the kill of, just as some people have burner phones, do you think we'll end up with burner digital currency that can't be leaked back to an individual? What do you think wins out here, utility and government protocols, which are important for the emergence and health of any market, or privacy? Because so far it strikes me that privacy is losing in almost every, in terms of consumer behavior. Yeah, this seems to be a generational thing, Scott.

I care about my privacy. My adolescent kids don't seem to have any expectation of privacy. They're perfectly comfortable, as you pointed out, being tracked all the time and in fact seem to relish that prospect to some extent. Now, I think even for those who value privacy and confidentiality in their financial life, the convenience of digital payments is going to win over because from the point of view of consumers, it's very easy to use digital payments with the swipe of a phone. For businesses, not having to deal with the hassle of handling cash and having it be vulnerable to loss and theft is a benefit. And for governments, it's a boon because it means that central bank money cannot easily be used for illicit activities such as trafficking and terrorism financing.

It also brings a lot of economic activity out of the shadows and into the tax net. So I think for consumers, businesses, and governments, the advantages are significant enough that we are all going to bow to the reality of digital payments. But having said that, the interesting thing is that technology, while it might lead us to some dark places, is also giving us potentially a way of resolving some of these contradictions. So, for instance, China is moving forward with the central bank digital currency, but the Chinese central bank is introducing, but you can use those digital wallets only for low value transactions or to hold small balances. So the idea is if you want to use government issued money for larger transactions or to maintain large balances, you have to identify

yourself, you have to know your customer requirements and so on. But perhaps there is a way if you just want to buy a cup of coffee using a digital payment system provided by the government, you can still maintain some degree of privacy. So let's talk specifically, when we talk about fintech, it encompasses so many things. Let's talk about Web3, tokens, NFTs, and DAOs. I'd love to just get your top line on what you think the prospect

is for each of those three sectors and more broadly, Web3. So the aspect of Web3 that I find particularly appealing links up with one element of cryptocurrency-related technology, which is the notion of decentralized finance, the notion that you might be able to build new products on decentralized blockchains. Now, Web3 does not necessarily line up well with the notion of decentralized finance, because after all, at least some elements of the metaverse, you would have centralized control. But here again, the notion of undertaking a lot of activities in the virtual sphere certainly does have some appeal, but whether it is going to connect to real life in a way that is tangibly going to have either major benefits or deleterious consequences is still not entirely obvious to me. So between Web3 and things like NFTs and other products being pervaded on blockchains,

there is certainly a bit of an intersection. But I think these two will proceed on parallel tracks. They may not diverge that much, but ultimately we might be moving to a world where certain elements of decentralized finance and so on can exist and actually have some tangible effects. While Web3, it's hard to imagine that it's going to remain viable in a way that it really connects with, you know, the day-to-day realities of our lives. We'll be right back. Hey, it's Scott Galloway, and on our podcast, Pivot, we are bringing you a special series about the basics of artificial intelligence. We're answering all your questions. What should you use it for? What tools are right for you?

And what privacy issues should you ultimately watch out for? And to help us out, we are joined by Kylie Robeson, the senior AI reporter for The Verge, to give you a primer on how to integrate AI into your life. So, tune into AI Basics, How and When to Use AI, a special series from Pivot sponsored by AWS, wherever you get your podcasts. Think about those businesses that grew their sales beyond their forecasts.

Companies like Momofuku or Feastables by Mr. Beast or even a legacy business like Mattel. When you think about them, sure, you think about a product with demand, a focused brand and influence-driven marketing. But part of their secret is actually the business behind the scenes. As in the business that makes selling and buying simple. And for millions of companies, that business is Shopify.

Nobody does selling better than Shopify, home of the number one checkout on the planet. With their Shop Pay feature, they can boost conversions up to 50%, meaning way less carts going abandoned and way more sales going... So if you're into growing your business, you want a commerce platform that's ready to sell wherever your customers are scrolling or strolling, whether that's on the web, in your store,

and everywhere in between. Because businesses that sell more, sell on Shopify. Sign up for your $1 per month trial period at shopify.com slash voxbusiness, all lowercase. Go to shopify.com slash voxbusiness to upgrade your selling today. Shopify.com slash voxbusiness. So you're a professor of trade policy. And when I look at a lot of these big trends, when I think about companies wanting to create a more diverse supply chain so they're not as reliant on China, when I look at sanctions, when I look at cryptocurrency, when I think about exogenous shocks that put into question your food supply or your energy supply. And I

look at the U.S. in terms of the innovation, the market capitalization, our access to different trading partners, the fact that we're effectively food independent, energy independent. And I'm a glass half empty kind of guy. I don't see, I see a further consolidation of power or a leakage back that the momentum that China has to the U.S. Or put another way, just geopolitically, I feel very bullish on America's position in the world. But I'd like you to respond to that thesis. I think the U.S. has one element that is going to be crucially important, which is soft power and financial power that provides the soft power. And we spoke about the importance of the U.S. dollar. Ultimately, what matters in the international sphere when it comes to economics, geopolitics or finance is really trust.

And the question is whether foreign investors, foreign actors more generally are going to trust a country like China. But having said that, I think the U.S. too has certainly lost some of the trust that it had because, you know, there was a period not too far back when even traditional allies of the U.S. found that they could not count on the U.S. to watch their backs. So a lot of the world right now is trying to diversify itself in terms of economic and financial linkages, but also geopolitical linkages. That provides an opportunity for China, certainly. But people are going to perhaps move into Chinese financial markets, perhaps develop closer relations with China out of the sense that they need to diversify their relationships rather than they're really going to fundamentally shift away from the US. And the reality, I think, is that even though economic power and perhaps even military power

has shifted somewhat towards China and other emerging market economies. Financial power still remains very firmly ensconced in the West, led by the U.S. And we've seen that play out in the context of the Russia war and Russian invasion of Ukraine and the fallout of that. So they might be seeing a bit of a fracture developing in the international economic and geopolitical system with the U.S. and other Western economies on one side and emerging markets and developing economies on the other side, with many countries trying to straddle the two. And after spending as much time looking at or examining China, as it relates to America, are they our competitor or enemy?

I think they view, and I too, to some extent, view the economic relationship as not necessarily a zero-sum game, although it has certainly become a zero-sum game in the last few years. They are going to compete with us on some areas that the US is very good at in terms of innovation, in terms of high technology, and so on. And this is because they want to transform their economy to being a powerhouse in a very different way, not just a low-wage manufacturing powerhouse. But that's going to be just a low-wage manufacturing powerhouse. But that's going to be a little difficult to achieve. Now, on the geopolitical front, it is a zero-sum game. And I think one problem is that the geopolitics and the economics are becoming inextricably linked so that we are competing in both areas.

So I expect that in the next few years, we are going to see a ratchet of competition in practically every sphere between these two superpowers. So I can't resist. Bitcoin and Ethereum, are you bullish or bearish on these assets or stores of value or payment protocols, whatever you want to call them? Bitcoin as a store of value, no. Ethereum as a foundation for a really exciting new financial ecosystem, very much so. And that ecosystem, is that NFTs? Why are you bullish on Ethereum? Say more. I think the notion of building new financial products and services on decentralized blockchains, including a variety of features

like smart contracts that will allow for a broad range of financial transactions without needing trusted intermediaries. That sort of functionality is much more present on the Ethereum blockchain. So NFTs might be a passing fad in my view because it's not clear what exactly they represent in terms of intrinsic value. But the ability to create new products, like I said, at scale in a way that it can even provide bespoke financial products and services to low income households, low net worth individuals and so on. That has really tremendous potential in terms of democratizing finance. And I think the Ethereum blockchain has the sort of functionality to make that happen.

Last question. Advice to your younger self or advice to a recent college grad who's interested in the fintech space. Should they go to business school? Should they go to work for the government, for the IMF? Should they go to work for one of these fintech space? Should they go to business school? Should they go to work for the government, for the IMF? Should they go to work for one of these fintech startups? What would your advice be to somebody who says, I buy into what Ishwar is saying and I want to be at the center of it? What advice would you give to an emerging professional around where to go in the sector, how to learn? A little bit of each. I think it's really important at the beginning to

get a good handle about the technical elements and the basics of how these things work. But then ultimately, if you want to make a difference, I think being in the policy world and really get your nose to the grindstone in terms of making possibly small but important differences in the policy world is really crucial. But before you get there, I think understanding and getting a firm grasp of the technical elements of any of the new technologies or whatever financial markets you're interested in, that is really crucial. So study a lot, get some work experience,

and then move to the policy world and try to make a difference. Ishwar Prasad is the Talani Senior Professor of Trade Policy at Cornell University, also a senior fellow at the Brookings Institution, where he holds the new century chair in international economics and a research associate at the National Bureau of Economic Research. He was previously chief of the Financial Studies Division in the International Monetary Funds, or the IMF, research department, and before that was the head of the IMF's China division. Ishwar is also the author of several books, including his latest, The Future of Money, How the Digital Revolution is Transforming Currencies and Finance.

He joins us from Washington, D.C. Ishwar, thanks so much, Professor. I really enjoyed the conversation. Scott, that was really fun. Good luck with everything and best wishes. Algebra of happiness. Nothing is ever as good or as bad as it seems. I had the honor of visiting

my high school on Wednesday, university high school charter, spent time with the principal, and it was going to be a show on CNN Plus, at least until Thursday it was going to be a show. And I spoke to the leadership class. I was in the leadership class, and although I was not an elected leader, and they asked me what, essentially the questions all come down to the same thing. What's the key to your success and how can I be successful? And what I told them was that the thing I took away from high school was resilience. I was cut from the baseball team. I was cut from the basketball team. I ran for sophomore class president, lost. Ran for junior class president, lost. Ran for senior class president, lost.

And ran for student body president lost, asked Amy Atkins to the prom, and she said, no, I did not go to my own prom. Fortunately, I went to another prom, so I'm not a total, I wasn't totally depressed. But I endured a lot of rejection, and it never set me down for that long. I never, I developed calluses. They weren't, you know, I could. I got stronger. The muscle got strained and I came back stronger. I have professionally stepped up to the plate and been beamed in the face. I mean, in the fucking face. And I mourned for a little while and then I get up and I step back to the plate. So the key to my success is failure or specifically my ability to endure rejection. If you aren't getting rejected a lot by romantic partners that you're interested in, I'm not talking about

stalking or harassing anybody. If you don't know the difference between being aggressive and trying to punch above your weight class and bothering somebody, you got bigger problems. But be aggressive when it comes to relationships. You know how I ended up with someone much more interesting, much nicer, and quite frankly, much hotter than me? I wasn't worried about rejection. I went up to this individual in the middle of the fucking day in the broad sunlight

when she was at a pool at the Raleigh Hotel, when she was sitting with another woman and another guy. As far as I knew, that was her husband. But I went up and I said, hey, where are you guys from? And I started talking to them. And I made it clear to her that I was interested in her. And my son's middle name, 14 years later, is Raleigh, after the Raleigh Hotel. And we have kids together.

And that is solely a function of my willingness to endure rejection. I applied to nine business schools. I got into two at the last minute. If you aren't willing to subject yourself to rejection, then you are not going to be crazily successful. On Wednesday, I was told that my show at CNN Plus was the most watched weekly show. And on Thursday, the entire fucking network got unplugged. Nothing is ever as good or as bad as it sounds.

Life isn't about what happens to you. Life is about how you react about what happens to you. Life is about how you react to what happens to you. And when you are rejected, when you endure obstacles, that's a sign that you are on the right path. Our producers are Caroline Shagrin and Drew Burrows. Claire Miller is our associate producer. If you like what you heard, please follow, download, and subscribe. Thank you for listening to the Prop G Pod from the Vox Media Podcast Network. We will catch you next week on Monday and Thursday. Hello. It's a little party. Pull out the pig's ears. Pull out the lamb's lungs. The dog deserves

a little treat. And then Thursday morning, I start getting text messages blowing up my phone saying, are you all right? So I think, what the fuck? Un otro manada. Si, me gusto Madonna. Anyway. Support for the show comes from Alex Partners. Did you know that almost 90% of executives see potential for growth from digital disruption? With 37% seeing significant or extremely high positive impact on revenue growth. In Alex Partners' 2024 Digital Disruption Report, you can learn the best path to turning that disruption into growth for your business. With a focus on clarity, direction, and effective implementation,

Alex Partners provides essential support when decisive leadership is crucial. You can discover insights like these by reading Alex Partners' latest technology industry insights, available at www.alexpartners.com. That's www.alexpartners.com slash V-O-X. In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters. You know that feeling when your favorite brand really gets you. Deliver that feeling to your customers every time.

Klaviyo turns your customer data into real-time connections across AI-powered email, SMS, and more, making every moment count. Over 100,000 brands trust Klaviyo's unified data and marketing platform to build smarter digital relationships with their customers during Black Friday, Cyber Monday, and beyond. Make every moment count with Klaviyo. Learn more at klaviyo.com slash BFCM.