This is grift on a very explicit scale

and also like, yeah, that's right. I'm

taking it. I'm cheating.

>> Hi everyone, this is Pivot from New York

Magazine and the Vox Media Podcast

Network. I'm Cara Swisser

>> and I'm Scott Callaway.

>> We should get to the news. Actually,

there's a big piece in this. Why not?

>> Yeah. First, let me just tell you Donald

Trump's embrace of crypto is paying off

in a big way. Trump earned about $1.4

four billion dollars over the past year

from crypto, according to a new

financial disclosure, which I think is

underounting all the grift he's doing. A

big chunk of that came from sales of his

Trump memecoin and digital tokens for

the Trump family crypto company, which

he gets paid no matter what. And

everyone who's invested in it is losing,

just so you know. He got all this money.

It's not just crypto. Trump pulled in at

least 2.2 billion in total income for

the year, up from 622 million in 2024

before he returned to the presidency.

That includes more than 620 million in

real estate, hotel, and golf related

income, which is almost nothing. Um,

plus 86.5 million from legal settlements

from ABC, CBS, YouTube, Meta, and X. Uh,

this grift is just

and it turns out we're paying for the

East Wing. We're paying for the Kenny

Center. We're paying for all manner of

things that he is up to. Um, which he

said the public wasn't paying for. So,

this is astonishing. I think they're

underounted. What did you I mean,

nobody's surprised, but the grift is

really quite astonishing.

>> Well, there's the grift and there's the

I mean, there's the micro, and that is

2.2 billion in personal income, you

know, while sitting

as you're occupying the Oval Office, and

1.4 billion of it from crypto, a

financial system that he now supposedly

regulates. It's it

>> it's not a conflict of interest. It's a

business model. Yeah. And essentially

what you have in America is slowly but

surely we're monetizing everything. We

monetize healthcare.

>> We monetize education.

>> We monetize uh enragement online. And

now the president is monetizing the full

faith and credit and power of the White

House. He went from 622 million the year

in net worth before taking office at 2.2

billion after.

>> He's essentially set up a toll booth uh

for the American government. And the

memecoin would have been a five alarm

scandal for anyone else but him.

>> Absolutely.

>> It's a financial instrument with no

underlying value that goes up when the

president tweets about it. And that's

securities manipulation with a big red

hat. And the fact that he did it the

Friday night before his inauguration

under the cover of dark, you know, that

he called people and said, "Thanks for

giving me 10, 20, $100 million for my

campaign. FYI, the coin coin gets

announced tonight. Uh it'll it'll go up

and then you can if you dump it, you

dump it. Uh but on a larger level I was

thinking about our 250 year anniversary

and in I mean this is the reality that

since 1991 childhood poverty has gone

way down way down crime has been cut in

half.

>> Y

>> we have a the number of people have gone

gotten educations has gone up. We have a

healthier better educated populace uh

than ever before. The crime is at its

lowest rate ever in New York. Right? But

happiness, as Jimmy Carr says, or

satisfaction isn't a function of what

you have. It's the delta between what

you have and your expectations.

And what's happened in America, because

there's now a normalization, an

algorithmically normalized.1% in terms

of your expectations. I'll give you an

example. From 22 to 42, I did nothing

but work. And I think my first vacation,

the only vacations I took with my mom,

we went to Niagara Falls once. We used

to go to Magic Mountain because we

couldn't afford to go to Disneyland.

>> And I remember going to Club Med in

Masalon when I was like in my late 20s.

>> Oh wow.

>> And I thought it was [ __ ] I mean it

couldn't have been any tackier. Bad

daquiries, not a very nice beach.

>> All you can eat, but that you wouldn't

want to eat all of it.

>> And I thought it was amazing. I just

thought it was the most I was bra I I

brought back Club Med shirts. I had a

Club Med hat.

>> Oh my god. I just thought Club Med was

the most amazing thing. And I was

talking about

>> Did you pay by beads? Was it? Didn't you

have beads?

>> Yeah, you get beads for bars, for

drinks.

>> It's amazing.

>> Oh god.

>> Yeah. Because here's the thing.

>> That's a tell.

>> I had never been to nor was I being

reminded 105 times a day as people

vomited their experience at St. Barts

and Mkos. My expectations

>> were low

>> were dramatically lower. And then you

combine that with the following. The

people who are supposedly in charge are

exhibiting a level of corruption and

depravity that just makes us feel bad

about institutions.

>> Right. Exactly.

>> So you have a coarsening of our

discourse where quite frankly there's an

economic incentive to [ __ ] post

everything. It's happened a lot during

the Biden presidency. It's also to a

certain extent happening now. You have

social media vomiting everybody's wealth

in your face and giving you the

impression that if you haven't made $3

million on Ethereum and your boyfriend

doesn't have a six-pack, you're failing.

And also the people in charge seem to be

genuinely like low character people and

>> grabbing everything, all the good news.

>> Yeah. And people don't trust the CDC.

They don't trust the Supreme Court. It's

like what William Gibson said, the

future's here. It's just not evenly

distributed. Prosperity is here. They

see it everywhere. But people don't feel

like it's evenly distributed. So people

now a quarter of a people under the age

of 25 feel good about America. It's 3/4

of people our age. So, it's definitely

like Kylo Scan coined the term vibe

session, but the 250th anniversary if

you if the well, you're down there.

What's the vibe like?

>> Well, you know, I think people feel like

this this guy grabs everything like and

what my my worry is that it goes we all

hate everything because of these people,

right? We think everything's on the take

and it sort of makes you feel like

nothing works or or that there's no

payoff for anything. And you know, I was

really struck by a really interesting

exchange this week between, you know,

Elon Musk attacked Roana for saying he's

killed children with the cuts of US ID

that he bragged about, you know, putting

it to wood chipper, etc. without any

care for the impact. Um, and then Nick,

he said, "Show me one person who's been

killed." And then Nick Kristoff, who

does amazing reporting, the New York

Times, here's some names. And by the

way, there's

>> and I saw them thousands and thousands

and thousands and thousands more. And

then instead of like actually engaging

him, which he did exactly what Elon

asked for because that's his thing. It's

like name one person who's hurt that's

their little stupid trick and he does

and then he's like Nick Kristoff is

evil. I was like you [ __ ] like what it

made me think. It sounds really

including this crypto stuff. It's like

what is wrong? I I wanted to fight the

feeling of everything sucks and it was

really hard for the first time. I was

like, "These people have no care." The

same thing with Steven Miller spouting

off about the um they won all these

Supreme Court cases, but they lost the

one that they really care about, which

was birthright citizenship, right? And

so, they just can't stop the hate. They

just have endless pools of hatred and

grift. And I wonder how you survive

that. And especially if you're a young

person looking at it, like what is your

reaction? I mean that that that to me

was like I even feel exhausted by their

enthusiastic villaining and stealing.

Like I find them exhausting and I just

don't know what I would do if I was a

young person looking at all this.

>> Yeah. It's look there's a lot of issues.

I mean the the number of people in the

middle has gone away and young people

have a

a rational reason to be to be upset. the

the the traditional means of of building

a life, finding a mate, developing

economic security, advancing up the

ladder, which is typically some sort of

certification, either vocational

programming or a college degree, and

then buying a house. The incumbents have

weaponized scarcity to make it more

expensive for them to get those things

such that the people who already own

them, a college degree in housing, can

see the value of those things go up. and

also our tax policy which continues to

transfer wealth from them to to the

incumbents. Right. Loosely speaking, our

tax policy over the last 50 years has

taken $50 trillion and transferred it

from the bottom 90% to the top 10%.

>> Rich old people. Yeah.

>> Yeah. So they're they justifiably

um can be very, you know, very upset. Uh

having said that, if you actually look

at the data, things aren't as bad as you

would believe in terms of the vibe. But

again, and this is the great Jimmy Carr,

your happiness and your purpose isn't a

function of what you have. It's the

delta between what you have and your

expectations.

And the downside of a meritocracy and

especially when social media speedballs

it is everyone believes if they're not

in the top 1% they're failing.

>> Except when they're looking at the

president just stealing, stealing,

stealing%.

>> That's really it. Like there's just no

even pre like look grift has been around

the game has been around forever from

the beginning right from every every

country every historical thing but this

is grift on a very explicit scale and

also like yeah that's right I'm taking

it that's right I'm cheating and let me

tell you let me let me put out another

story that came out politico is calling

this week's Democratic primaries in

Colorado an anti-establishment avalanche

obviously was happening in New York

which was no surprise with Mum Donnie

getting you know backing a bunch of

people, one of whom is really

problematic. Colorado Attorney General

Phil Weiser, though, upset longtime

Senator Michael Bennett, who you and I

both have a lot of regard for, who

looked like a lock for the nomination a

year ago. We thought he'd be governor of

Colorado. And then 29-year-old

Democratic socialist. Meot Kirros

unseated a 15 turn 15 term congresswoman

and Manny Rutell, a progressive state

representative, defeated a moderate

Democrat. The results add up to a

growing string of progressive

anti-incumbent. And I think that's

actually Steve Bannon was very cany on

this stuff. Victories notably with what

happen in New York and there are a

number of primaries still to come over

the next few months. Um all this is a

New York Times uh Sienna poll showed

Democrats within striking distance of

putting the Senate majority back in

play. I want you to not go negative yet

because I want you to understand talk

about these victories and what what they

are. And let me read something that

Robert Rich wrote on Substack about

these elections. Pundits eager to

declare a new movement or sound the

alarm about socialism are having a field

day. But they're wrong. Voters who who

have supported these candidates haven't

done so because they've been

particularly attracted to the idea of

democratic socialism. Most even don't

know what democratic socialism is. In

reality, voters have been attracted to

vigorous young people who are committed

to getting stuff done. Steve Bannon said

nearly the same thing, which was really

interesting. And I would agree talking

to like Louie like he's just sick of

people not getting stuff done like and

looking for something else which is

interesting. What are your thoughts on

this? I think R and I hate to say it

Bannon are correct.

>> I think that's exactly right. The

establishment didn't lose on policy here

Cara they lost on energy.

>> No.

>> And look I've been calling for

disruption in the Democratic party. I

think leader Jeff and Minority Leader

Schumer are absolutely the wrong people

to provide the kind of robust energetic

push back that the Trump administration

warrants. But here's the thing about

disruption is you don't get to pick the

exact calibration of your disruption. So

for example, I consider myself a

moderate and I'm convinced that the true

litmus test of someone who's truly a

moderate is everybody hates you. So

think about the senators who are

moderates like Fedterman and Mansion.

Everybody hates them. So people claim

they want a moderate, but when someone

actually shows up and occasionally

agrees with the other side, they become

an apostate.

>> At the same time, guys like me claim we

want disruption. We need to disrupt the

Democratic party. And then when it

happens,

>> we freak out about it.

>> Yeah.

>> But here's the bottom line. There's a

lot to like here. And I say this full

disclosure. I have given money to

Senator Michael Bennett for everything

he has run for for the last 10 years. I

hosted a fundraiser for him for

president.

You know, by the way, if you get money

from me, it's not a good sign. Uh, but I

I think the world of Senator Bennett,

former school superintendent, one of the

most credentialed people in the Senate,

>> qualified,

>> lost to a state agent nobody had ever

heard of a year ago. But here's the

bottom line. If you want disruption, you

don't get to pick your form of

disruption. And these candidates,

they are, there's a lot to like about

these candidates. They're young. They're

energetic. They're unafraid.

They don't have a bunch of blather about

how you would go about universal

healthcare. They're just like Medicare

for all. So, there's a lot to like about

them, but the reality is for those of us

in the center, we don't get to pick our

flavor of disruption. What I would say

that bothers me is that democratic

socialists effectively want socialism

through democratic means. The reality is

if you really look at history, socialism

just doesn't work, folks. And they will

always point to what about Northern

Europe? Northern Europe is actually more

capitalist than we are right now. They

just have a social safety net and they

spend

>> They call themselves that though, don't

they? I mean, you you always you always

um threat um Sweden, for example, or the

Netherlands.

>> Here's the system that's worked.

Democracy, individual rights, and

capitalism. Call it what you want. When

you start believing that you should have

government sponsored grocery stores or

that you shouldn't have border, I mean

that [ __ ] quite frankly, it just not

only doesn't make sense, it threatens

our ability to win the midterms. Rahm

Emanuel had a fantastic statement in the

thread we were on and he said it

publicly. We have to stop arguing and

atomizing ourselves between blue and

cobalt blue. So, I'm more focused on my

energy on, you know, the the the grift

and corruption and just stupid

decision-making of the Trump

administration. The thing So, I there's

a lot I like about this disruption. It

you don't get to pick your flavor of

disruption. And you know what? Young

people just want change.

>> The interestingly, I was just on

Scaramucci's podcast and he said he

actually has been impressed by by

Mandani and he was very against him. He

was sort of where you are, right? Kind

of thing. That's right. And he's like, I

have to say he's effective. And I do

think they're not looking for

necessarily just upsetting the

incumbents. They want people who do

[ __ ]

>> And I one of the things about Wiser, and

I was watching this thing, is he was

just a more energetic campaigner. He

wanted your vote more. And he was he

wasn't necessarily much more

liberal. It wasn't that cuz Michael's

pretty liberal, relatively speaking,

right? Especially in Colorado. He just

looked like he could like he like he

just was energetic and not just fake

fake energy

maybe like what Kennedy felt like back

in the 60s. It was like I literally just

want you to do your job. Like I want and

and I do think I think you're right

about capitalism. I agree with that. But

it should needs to have everyone gets

healthare. That is not that I think

that's a really good message of the

democratic socialist and everyone else.

Everyone should get good healthare.

Everyone should get a good minimum wage.

You know, and and what's incredible,

I'll tell you what really absolutely

struck me and I re I finally realized

that the Republican party is [ __ ] in

seven ways to Sunday. What's coming

next, not I mean post Trump was uh

Mandani said, "Can we can everyone like

we have an electrical grid problem

coming up with this heat because there's

a huge heat warning all over the east

coast including in New York and he said

if you could put you know your air

conditioning to 78 versus 74 that would

be great." That's all he said.

Immediately Ted Cruz and Nikki Haley, I

told you she can't help herself, said

communism, right? Or social, this is

what socialism is. Immediately there

were tweets from years ago when she was

governor of South Carolina. And he the

same thing in Texas where they asked

people to put their put their air

conditioning down surfaced. What is

wrong with them? Like he was asking a

normal thing that they themselves had

asked for. The minute they jumped on it,

they were trying to do socialism. They

look like idiots and everyone can see

it. And that's that's why I told you

Nikki Hilly is impossible. She's never

going to win anything because she's so

such a suckup in so many ways. It was so

not sensible. He was saying something

sensible and everyone sees it and did

not immediately think communism about

the air conditioning even though I love

air conditioning. And so that to me is

they're they're vigorous. They're

vigorous young people who want to be

effective. That is what I think is

attractive.

>> I don't I I don't disagree with any of

that. And the thing that Mum Donnie and

some of these people are doing, the most

admirable thing about Donald Trump,

President Trump is actionorientation.

It's ready, fire, aim. It's like, no,

I'm going to do this. We're doing it.

And the courts might challenge it. We

might have to roll it back. But

Americans really respect that. And

Mandani, to his credit, immediately

imposed certain taxes, certain policies.

And I think young people think, "Well,

at least he's [ __ ] doing something."

Now, the the glass half empty for me is

the following. The whenever the far left

and the far right agree on anything,

it's a really that's a tell it's a

really bad idea. They are both antivax.

I believe they both the far left and the

far right come together on what I

believe are anti-semitic themes. They

both come together on an isolationist

foreign policy. And what I see here is

they both come together on a cert on

socialism as an economic policy. Donald

Trump is investing in Intel. Donald

Trump is entertaining the idea of

investing in open AI. Donald Trump

believes that the government should have

a golden share in US steel. All that

happens when you do that, all that

happens when you do that is you end up

with warehouses in Ireland full of

Deloreans and Air France. And you see a

lot of that rhetoric from the far left.

I we absolutely need a more progressive

tax structure. But here's how you get to

a progressive tax structure. The thing

we spend the most money on is not the

military. It's not our debt. It's not

even social security. The thing the

American government spends the most

money on, we spend $2.2 trillion on

givebacks from the tax code in the form

of loopholes to corporations and the

wealthy. We need to reduce spending on

tax l loopholes and give backs to the

wealthy and corporations.

And if you look at Northern Europe,

they're very capitalist. They let

companies go out of business. They don't

take stakes in Spotify. Their tax rates

are either the same or a touch higher

than ours. But what they do is they

enforce them and they say, "Spotify, you

don't get to ride off your jets, your

plant property, and equipment." And in

the richest people don't get to have

donor advised funds where they get to

ride off donations they haven't made

yet. So quite frankly there's some

things that really bothered me about the

winds in New York because I felt like

like being anti-Israel was a litmus

test. Obviously as a Jew that concerns

me.

>> Well there was one there was one

theander is not

>> Shiovalier.

>> Yes. Shiovalier is the problem. Yeah.

>> By the way she's going to be the poster

child. She's about to become the poster

child for Republicans.

>> She's problematic. No question.

>> Anyways, let me circle out to where I

started. I don't get to pick the

calibration in the color and the flavor

of disruption.

Disruption, they're youthful, they're

energetic, they're unafraid,

and that for me is 70 or 80% good. Do I

worry that they're embracing a form of

socialism that has never worked

throughout history? Yeah, I trust

there'll be modulating forces from the

center on both sides on that. But the

reality is we need the the Democratic

Party needs to shed its skin. And I

gotta be honest, leader Jeff and Schumer

are getting clear signals.

>> Yeah.

>> No one gives a [ __ ] what you think. You

have become

>> institutional endorsements have become a

liability. Just as we thought US bases

in Gulf States would provide a veil of

protection. They become bullseye. You're

going to start to see Democratic

candidates say, "Senator Schumer, please

do not come to my rally."

>> They are. They are actually. They're

like all talking about whether they'd

vote for him. He's got to go. I've I

told him that to his face. He thought I

was kidding. I was like, "No, you need

to step down." It was like He's like,

"Haha, Cara." I was like, "No, time to

go. Time to move along." I mean, we

don't want to

>> Mitch McConnell

situation here. We want to move along.

Anyway, we need to go on a quick I agree

with you. It's very It's It's exciting.

I find it exciting.

>> We need a disruption. Good for them.

Youth energy. Have at it. I think it's a

good thing, too.

>> I like non-cautious people. I do. I

think the Democrats have played it too

cautious. Anyway, um let's go on a quick

break. When we come back, the Supreme

Court finishes its term with some major

rulings. That was something.

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Rules and restrictions may apply.

Scott, we're back with more news. It's

been a big week for the Supreme Court as

it wrapped up its term. Let's go through

a roundup of some of the cases the court

ruled on. Uh the court struck down a

federal law that bars the president from

firing members of the FTC. So he no more

independent agencies essentially. They

lifted limits on how much political

parties can spend on advertising and

other expenses with candidates. A

problem and more more Citizens United

upheld two state laws barring the

participation of transgender female

athletes from girls and women's sports

team. and upheld birthright citizenship

striking down uh an executive order.

Let's hear some thoughts from uh Leah

Litman who co-hosts the podcast Strict

Scrutiny which breaks down all things

Supreme Court. Hey Cara and Scott, here

are some quick thoughts on the most

recent Supreme Court term. We came

within a single vote, one vote of saying

the Constitution doesn't mean what it

says on birthright citizenship and

nullifying a constitutional amendment

that is the foundation of our

constitutional order of multi-racial

democracy after the Civil War. They have

also been systematically undermining our

democracy, killing the Voting Rights

Act, enabling partisan and racial

gerrymandering. They've also just killed

campaign finance regulations that were

designed to prevent political

corruption. As a result, the super rich

will be able to effectively funnel more

than $500,000 directly to candidates in

the upcoming election. and they have

been killing Congress's capacity to

govern at expanding presidential power

against a backdrop of a president who

has been engaged in corruption and

paytoplay and that is just the start of

it.

>> Yes, I think she sort of articulated it.

I the ones that really upset me and I

I'm the birth rate citizenship was far

too close. Far too close and

>> that was disturbing and and by the way a

lot of the Trump people have to go back

home wherever they come from. The two

that really upset me to me are is this

the um the voting rights act obvious

voting rights act absolutely but the

finance to me it's all the money the the

finance regulations uh designed to

prevent political corruption that was

more more citizens united was the last

thing we need and then secondly the

ability of the no independent agencies

on things that deserve independence like

the FTC and you've seen what Brandon

Carr has done although one of the

justices did say Brandon Carr was a

[ __ ] in part of his essentially said

that in in his ruling I think it was

Kavanaaugh could have been Gorsuch

whatever they look the same to me. So

those two were like giving more power to

the president in general which I think

will be just as bad with a Democrat and

is terrible with Trump um was two

problems but the money to me was the

focus focus I had. What about you? Yeah,

Citizens United is arguably one of the

worst things that's happened in recent

history to the US because of the 900

billionaires, they they make up a third

of political giving. It's probably more

than half of influence because they can

be much more targeted. You know, unions

just give money to whoever's the union

candidate. But a private equity firm can

give $700,000 to Senator Cinema and say

just be the hold out for the

infrastructure bill and ask that they

strip out the carried interest loophole.

And that cost 20 or$30 billion which is

the most ridiculous loophole in history

see above 22 trillion dollars spent on

loopholes where private equity owners

get their commission on investment gains

in the form of long-term capital gains.

It's it's totally indefensible.

So that's that's bad. Th this silver

lining, the dotted silver lining on on

this out of control spend is that what

we're finding is it's gone past its

utility. And that is it used to be 20

years ago like 97% of the time who

raised the most money won. It's no

longer happening. Like Tom Styer spent a

quarter of a billion dollars and didn't

win. It's almost like the full local

news station employment act. The amount

of money they're spending on the whole

it's really bad. But what you are seeing

is it's no longer the key fulcrum for

who or the key lever for who wins. The

thing that upset me the most that which

is so frightening that it was even this

close

>> was um birthright citizenship.

>> I mean this is the constitution, right?

>> Just straightforward. The constitution

says if you're born here

>> Yeah.

>> you're amendment. It's right there.

>> And I'm going to give you a couple

anchor babies. Uh Balagan who got a red

card unfairly. the attack the the

premier striker for the World Cup team.

His parents were here. I forget. She

couldn't go home. He was born.

>> She's too pregnant.

>> She was too pregnant. I think the

airlines said you're too

>> good for us, right? And also it's a

fairly small number. It's only 7%. It's

a fairly small number of babies.

>> It is. And I would argue

>> the whole word anchor baby is so [ __ ]

ridiculous.

>> Not only that, but to a certain extent,

this is what we don't like to talk

about. Immigration is not only the

secret sauce. It's the most illegal

immigration is probably the most

profitable form of immigration because

they're risktakers and they generally

fold back across the border when the

crops are picked or there's not enough

demand for them and they pay taxes and

they usually don't stick around to to

collect social security and they usually

don't call the fire. They they commit

crimes at a lower rate than citizens.

The reality is we didn't just wake up

and find oops, there's 15 million

undocumented workers here. Republicans

and Democrats have looked at each other

and gone wink wink. It's nice having

cheap housing being built in Phoenix,

Arizona,

>> or grapes picked for cheap or whatever.

>> How are we going to get all these people

to wipe grandma's ass for 11 bucks an

hour? I mean,

>> Haitian immigrants are the biggest um

nurses nurses aids.

>> I mean, so it's not This has been an

economic decision. Has it gone too far?

Absolutely. But be clear, folks. We

didn't just wake up and let this happen.

So Balagan is one anchor baby. You know

who else is an anchor baby? Carolia.

No, the Trump. Baron Trump.

>> You could say she's a male orderer

bride. She's not an anchor baby. She

wasn't born here.

>> That's true. Sorry. Who?

>> Your co-host, Cara.

>> Oh, right. You're an anchor baby.

>> My parents at the ages of 19 and 24 got

on steam ships from Glasgow and London,

respectively, and they landed in Canada

where my mom was a stenographer and my

dad was a candle salesman. They met at a

dance. They fell in love.

>> They had sex there. So, the conception

was Canada. in Toronto. They claimed

they got married and had me. I'm not

sure if that's true. I'm not gonna argue

it. I don't care.

>> Uh but they decided they could not also

>> I'm a bastard.

>> That was my dad. Ankle a few inches we

short to the blanket, whatever that

means.

>> And by the way, he was a bastard. He was

born he was born in Australia unwet to

an unwed woman who was a mc nanny at the

Mcvigger family.

>> The entire family was really

>> Yeah. literally were bastards all the

way through. I'm the Jon Snow of Jon

Snow's.

>> Mhm.

>> And and anyways, my father basically my

father's my father's mother freaked out,

said to her boyfriend, "We got to get

out of here. I've already sold the baby

to this wealthy family." And they went

they literally went to the dock and got

it shipped to Glas, Scotland. Anyway, my

mom's seven and a half months pregnant.

They said that we cannot endure another

winter here in Toronto. and they read an

article in the Toronto Globe and Mail

saying that the best weather in North

America was in this town called San

Diego,

>> San Diego.

>> So they loaded up my mom's Austin Mini

Metro, which is basically a lawnmower

with doors. Like if you've ever seen Mr.

Bean, that's the car. And seven and a

half months pregnant,

>> no idea you were.

>> My mom and my dad drove to San Diego and

something like 37 days later, I was born

at Lao.

>> They were not hospital. They were just

visiting.

>> And let me make a flex. I'm a US

citizen.

>> Why didn't I know this about you?

>> I am a US citizen. I've had to pay US

taxes.

>> Yeah.

>> Me and my companies have paid well over

hund00 million in taxes over the last 30

years.

>> It seems like it's worked out for

everybody. And I just want to notify the

IRS and the Trump administration.

>> My mother, I am an illegal anchor baby.

I think my citizen should be revoked.

And by the way, when I sell my next

company, I'm going to be in Dubai and

I'm not going to be subject to US taxes.

I am down for you to revoke my US

citizenship. And also abdicate, absolve

me of all and refund me of all the tax

payments I have made because my parents

decided to come to the US and, you know,

drop a nine pound stone called Scott in

San Diego instead of Toronto.

>> Wow. And I would imagine that there is

more of uh Balagan and Galloway than

there are people eating cats and dogs,

>> right? Or just showing running across

the border be pregnant. This the screed

from Steven Miller who I cannot wait

till he gets his reckoning

>> is astonishing. So hateful and like

ridiculous and full of lies that it's

it's so full of li this whole their

whole and let's not use the term anger

because it's so gross. It's such a gross

way of and hateful way of looking at it.

I had no Scott, you could have been sent

back wherever. Where would you Canada?

Where would you have been sent to? Do

>> you hear that [ __ ] weirdo talking

about eugenics that people should be

sterilized before they get here?

>> Yes, I know, right? Are they not allowed

in if they're

>> boss? 19 1939 Germany's calling and

wants you back.

>> I know. Wait a second. Where would you

go? What country would you go to?

>> Now,

>> that's the that's the other thing. Where

do we send them back to? Right. Cuz

would you go to Canada if this passed

like you would

>> send them? People are leaving. Last year

was the first time in since World War II

we had no negative immigration.

>> Lost at the Supreme Court which it could

have, right? Where would they send Scott

Galloway back to? Was it Canada or is it

England or is it Scotland? Like what

country do you are you

>> what country are you from?

>> Well my parents my parents my dad is a

or was a Scottish or British citizen. My

mom became a citizen of the US but I

guess back to the UK. I don't know.

>> Oh god, I had no idea. Well, okay. Well,

I'm glad you're safe.

>> I'm opening a bar in St. Barts, so I'm a

French citizen.

>> Okay.

>> But then I have to vote. Then I have to

root for team France, and I just can't

do that.

>> Oh, yeah.

>> I just can't do that.

>> All right. Well, this is some news I

didn't know.

I

>> after seeing after seeing team Japan,

has there ever been a product that's

better been better for the umbrella

brand than team Japan? Did you see what

they did after they lost in a

heartbreaking loss to Brazil? They all

walked over to the Japanese side and

they bowed to apologize to their fans.

>> Oh, they did. Oh,

>> these I I I think I'd like I want to

move to Japan anyways. Yeah, I would

love to spend more time in Japan.

>> Lived there for a couple of months. I

loved it. Um All right. Other Supreme

Court news. Wow, Scott, this I'm just I

I'm need to calculate the situation now.

>> You need to get me kicked out.

>> I need to get you kicked out. All right.

So, um in this week in I'm going to ask

everyone for their ID when they come and

be a guest host. In other Supreme Court

news, by the way, NPR retracted an

article saying that Samuel Alo, another

piece of [ __ ] Sorry, Samuel, but you

are, had retired, uh, reporter Nina

Totenberg has said she heard retirement

announcements were coming and mistakenly

assumed it was Alto, prompting her team

to publish a pre-written story. Uh, that

seemed like odd. It seemed like that. I

think he's probably leaving, right? He's

going to have they're going to have to

he's got to he's got two years left to

put in, you know, younger versions of

Alto and and and um Thomas, I guess.

Correct.

>> Why would you think these people are any

less narcissistic than Ruth Bader

Ginsburg? They all think they're going

to live forever.

>> Oh, they may not leave. Oh, interesting.

You don't think they'll do it for the

take one for the team kind of thing?

>> Well, that's what Sudter did. I I think

it depends on the individual and I just

don't know him well enough. Yeah, he

seems like

>> RBG RBG I mean RBG and Senator Feinstein

both lovely important women who really

>> forged paths

>> screwed who really put a a a unfortunate

punctuation mark at the end of the

sentence of their career by not

believing they would ever die.

>> Yeah. Oh, you think Alita will just

stick around because he loves I have no

idea what he's like

>> all his like things. And by the way, in

Thomas's whatever his his anti-

whatever, he he like mentioned

DreadScott an awful lot. He's like,

which of course was a terrible thing.

14th Amendment is here to protect all of

us. So, it's glad that it's there.

They're going to try to they're going to

try to take it down, but they're going

to be a successful

>> protect podcasting and erectile

dysfunction drug sales.

>> Exactly. Anyway, let's go on a quick

break. When we come back, we'll talk

about SpaceX donating to Trump accounts.

Scott, we're back with more news. The

Trump administration has talked with

SpaceX about donating stock to the

administration's Trump Accounts child

savings program. It's unclear whether

Elen Musk has agreed to that or how it

would be structured. Trump accounts are

set to launch on July 4th with over 6

million children enrolled. Other big

donors include uh billionaire Michael

Dell and his wife and companies like

Black Rockck and Bank of America which

have agreed to match donations made by

employees. The Open A is reportedly also

discussing giving Trump administration a

5% stake in the company. uh proposal

reportedly involved other US uh AI

companies also giving governments

similar stakes. To me it was really

interesting. Paul Graham had a really

interesting point. The reason that

OpenAI was doing that is because they

don't get asked for 10%. Like I thought

that was true. This all feels like a

shakeddown or you get something in

return for doing this kind of stuff. I

don't hate the idea of accounts. I don't

I wish we will hope we will be renaming

them from Trump accounts to something

else. USA accounts. Um, but it seems a

little uh socialist to me. I don't know.

What do you think?

>> Again, it's where the far right and the

far left meet that with just different

objectives and different claims. Open AI

offering the government a 5% equity

stake is essentially to buy protection,

neutralize regulation, lock in a

government anchor client. It's not

patriotism. It's protection money. It's

a moat. and and you don't think they're

going to be the first to get government

contracts versus other AI startups. It's

also the beginning of what I think is

going to be the one of the biggest

bailouts in recent history. And that is

we're starting to see cracks

>> AI. Yeah.

>> Cracks in the wall where there's fewer

companies have actually figured out a

way to create demand. There's only a two

now. Open AI and Anthropic consistently

and their their spend and capex

commitments are so out of control that I

think Sam Alman says I like the idea of

the full faith and backing and maybe

even governmentbacked debt. Yeah. So

>> from the president

>> bailout

>> and here's the bottom line. The

government should not the government

should not be taking equity stakes in

companies. They just shouldn't. I I mean

there are some exceptions occasionally

when I do think you can make an argument

in the great financial recession that it

made sense for the government to bail

out the automobile industry because it

was a huge employer but they didn't

start saying you can only buy Fords or

>> they save Tesla's ass back when it

>> these companies have gotten trillions of

dollars in market cap let them run I

mean this is just straight up cronyism

privatize the gains socialize the losses

>> yeah can I ask you a question one of the

things Al Karp is in seems insane every

time he opens his mouth and and and you

know hopped up on something. But he was

he was going on sort of trash.

>> Very cogent.

>> I thought he was very cogent.

>> I do too. And I had to listen for a

second because he's so nuts. He always

throws in some nutball thing on the side

and and his manner is so But what he was

saying is something that Mark Cuban had

said to me previously is this token

maxing is going to come back to bite

people and that when people find people

are cheaper than the tokens, it's going

to sort of collapse. Mark said Mark

Cuban said this absolutely first to me.

Um months and months and months ago and

and Karp was was articulating this idea

of these open uh systems mostly from

China as you predicted Scott um taking

the place of you know with regular

corporations um and two things he was

saying is one keeping your data yours

and not giving them to open AI and

anthropics and secondly the cost of

these tokens is really untenable and I

as nutty as he is and he he took a

number of like slaps said competitors

cuz he can't help himself. He made a lot

of sense. I can't believe I'm saying

this too, but but he did as I was listen

I had to listen to it twice and I was

trying to think if I could put it in

someone else's voice. Um cuz I every

time I hear him he says nutty things but

tell this is the kind of thing I was

like we're we're going to this is going

to collapse and a bunch of economists

all of these world economists are all

worried about these cracks that you've

talked about. So talk a little bit about

this because this idea, you had the idea

of China, these open systems from China

replacing and and sort of knocking the

stuffing. You have these economists

saying this, you have Karp saying this.

Again, I want to give credit to Mark

Cuban for being the first to mention it

to me. Um, talk a little bit about this

cuz all this like government

intervention seems really problematic

going forward.

>> The government intervention is bailout

cosplay growth and Karp is right. cheap

models are eating the expensive ones.

The token consumption of Chinese models

has surpassed the token consumption of

frontier models in the US because all of

a sudden the CFO of of Uber goes our

entire AI budget was burned through in 8

weeks and I don't see any consumer

talking about the improvement in ride

hailing service. I I don't

>> or it's not improving it. It's not

improving.

>> Well, it's sort of like experimentation

is over. This can no longer be a magic

trick. you either have to incorporate

this into in the plumbing and show me

ROI. We're going to reduce our budgets

here and AI is following kind of the

same curve as cloud computing and that

is margins compress.

There's this reminded me of 99 and tell

me if you think this this analogy is

that okay so the internet comes and we

think everyone's going to buy their dog

food and their cars and Pepsi's going to

buy their sugar online on the internet

and we're all going to buy not just CDs

and books but we're going to buy

everything online and there's the front

layer so everyone invests in Amazon and

etoys and you know pets.com

and it ends up that they're just not

nearly creating enough demand and not

enough commerce is going through

e-commerce to justify anything

resembling the valuations these

companies are getting. So they go, "Oh,

wait. We're not sure which part of the

application layer, which LLM, if you

will, is going to win. So let's all

invest in the infrastructure layer." And

everyone invested safely and like I

can't pick the winner. So I'm going to

invest in Cisco or in Telco

infrastructure. And Cisco hit an

all-time high, lost 93% of its value

from 99 to 2001. And I see kind of the

same thing here where everyone's saying,

"All right, let's invest in the demand

side." You know, XAI, Llama, uh, uh,

Grock,

Anthropic, or excuse me, Claude, uh,

Chat GBT, and all of a sudden it looks

like the demand may not be as

exponential as we thought,

>> or it's too costly, or it's too

>> or it's too expensive, which lowers

demand. And some of the players who

thought they were going to need

infrastructure for their own demand,

specifically Meta and XAI, have said,

"We overestimated the demand of our own

LLM, so we're renting out our

infrastructure." Right?

>> In a matter of 30 days, it looks like

we've gone from a supply crisis to a

demand crisis.

>> And what you'll see, I think, is just as

in 99, the first companies to crash were

the B TOC, then it went to B2B. Oh,

wait. I not pets.com. Let's go to

remember Internet Capital Group. Well,

they're selling

>> sugar in between.

>> I forgot about from farmers, right?

>> I totally forgot about that. I wrote so

many stories.

>> It had a valuation greater than General

Electric. And then everyone figured out

no one was buying [ __ ] anything. And

it was easier to fax your orders than it

was to go on the Internet Capital Group.

>> Yes.

>> website. And then everyone went to went

B to C then B2B. B TOC gets creamed. B2B

then gets creamed. And then the

infrastructure guys got creamed. I think

we're sort of going through a similar

cycle right now

>> overbuilding

>> and we're starting to see the beginning

of the cracks at the application layer

saying people are questioning the amount

of money they've they're spending on

anthropic and open AAI. What's evidence

of that?

>> Open AAI and Anthropic are considering

delaying their IPOs. I agree and I I do

think one of the things I think will

recover would be computing demand

because there's only going to be more

computing demand eventually and I think

that's what happened with all those

internet companies like look there were

a million like I forgot about ICG oh my

god I you just to brought me back um you

know everyone remembers pets.com but um

you know eventually there'll be a Google

right eventually there'll be a Facebook

>> the technology will survive these

companies will survive

>> I would bet computing isn't area you

would want to eventually like when it

once it crashes buying it up would be a

smart thing right computing um apps

would be an important thing like

understanding where it's going but

you're right these are a lot of these

companies aren't ready to buy these

things and prices have to come down and

then that'll have a knock-on effects of

Oracle and all the others who have you

know a lot of other companies will be

affected in the in the blast radius of

this I agree I think these economists I

was reading the report from this thing

and usually I don't pay that much

attention to like predictions but I was

like this makes perfect sense of where

it's going and it does have a feel

you're absolutely right of 1999

>> Amazon's an amazing company from 99 to

2001 and I it lost 92% of its value

>> yeah then you buy

>> um Meta is an amazing company four years

ago in 2022 it lost 72% of its value

these companies the natural curve of

these companies is very volatile

and the technology and these companies

will survive and they will be great

companies

or can they go down 90% in value? The

answer is yes. This feels it just feels

so 99 to me. It's

>> the government meddling makes it worse.

The government

>> Oh yeah. propping them up because Trump

is like my entire administration is

America is a giant bet whether it's the

the GDP growth, capex spendings,

earnings growth in the S&P is all a big

bet on AI money. His political if these

guys go down is going to be really rough

for me. I I'm telling you a bailout is

coming.

>> Yeah, one would assume. Yeah, cuz

they're the future of America. Yeah,

you're right 100%. All right, Scott, one

more quick break. We'll be back for

predictions. Okay, Scott, before we get

into this week's predictions, I want to

play a prediction you made last week at

CAM.

>> My prediction is the biggest IPO in

terms of First Day Pop is going to be a

European the Berkshire Hathaway I

forgotten internet brands and that's

this company called Bending Spoons that

I had not heard of until two weeks ago.

I'm kind of fascinated with it.

>> Well, Scott, take a victory lap. Bending

Spoons surged 40% after the company's

IPO this week. What's next before you

get to your prediction? Well, so first

off, the company was up. So SpaceX was

up, I think, 22 or 23%. We predict it

would be up 20. Bending Spoons was up

close up, I think, 42% yesterday.

They're going to have to show that they

can scale a model of buying stuff at,

you know, Xibbita and

>> these orphans and then substantially

reducing costs, which is Latin for hire

younger people, and replace the

expensive 40-year-olds. And to their

credit, they have some of the highest

revenue per employee of any digital

company right now or any internet

company. But they're going to have to

show that they can consistently make

these accretive acquisitions. What this

really is is like Martin Surell kind of

pioneered this model. He went and bought

all the big agencies. I don't even

remember them now. Oglev Mayor, he could

go in and buy these companies at seven

times or eight and they'd immediately

he'd take their earnings and the market

reward him would would reward them with

12 times. They're going to have to show

that they can that this model, this

private equity-like model of acquiring

companies, they don't get them cheap.

They get them for a good price. You

would argue that their ability to reduce

costs, continue to see growth, add some

growth organic, and then the market will

give them a markup. They're going to

have to show they can continue to do

that.

>> Slightly down right now today. They're

going down today.

>> Well, to be clear, the valuation last

year it was about 7 billion. It came out

at 19 billion. It's trading at about 23

now. The stock's not expensive, but you

would argue that they are going to have

to show sooner rather than later their

ability to continue to scale these types

of accretive acquisitions.

So, but I thought when I talked to when

I looked around and I said, "Okay, all

of the oxygen had been sucked out of the

air for SpaceX." And when these guys

came out at seven or eight times

earnings and all of those brands and the

fact they were only raising a billion

half dollars, I thought this thing's

going to get I mean this is the sad part

about IPOs.

This is what I believe JP Morgan and

Goldman Sachs are doing and that is they

use AI and their incredible market

insight and their incredible marketing

machine. They are the new engineers.

They engineer a 20 plus% pop on day one

because the reality is that is the

ultimate branding event. Everywhere in

the news today is that bending Italian

company bending spoons is up is up 20%.

And personally I wanted to see the

company go up and the reason I brought

some sunlight to it was because I am so

sick of talking about American AI

companies. I love the idea of a European

company that's not AI

>> and also cleanup a cleanup company. You

know what's interesting is that I'm just

looking at the meta thing that they're

at 20

the PE ratio is 20 which seems healthy.

Um and and and that SpaceX is more is

valued at 500 uh billion dollars more

than them is insane.

>> I don't care how good they are at

robots. It's just nutty. What he'll do

is he'll fold Tesla into this. But

>> as I've said many times,

>> which is another anchor, two anchors.

>> Yeah.

>> Two anchors each other. Um, but it is

there are some real values here, right?

Like Meta seems to be I mean I don't

even usually make

>> Meta on a price earnings basis I don't

think has ever been this cheap and the

cheapest of them all was my big tech

stock pick for 26. The uh Amazon has

never had a price earnings ratio this

low.

>> Yeah. What is theirs? Wow. You know

Google Alphabet is 27. Meta is 21.

Amazon you're right is low 29.

>> Yeah. And it's usually its average over

the last 20 years has been 55. Um, and

anyways, industrialized robots all gone

forever. But, uh, so my prediction is um

um that essentially, and I said this,

we're starting to see uh uh cracks in

the wall around

um evidence. And I think it's nuance,

not definitive.

It's not cracking because AI doesn't

work. It's cracking because investors

are starting to ask much more pointed

questions. Specifically, can we actually

earn a return on the trillions of

dollars being spent here and the

evidence the there's evidence that the

narrative around AI is changing and that

is capex is outrunning

uh monetization. The largest cloud

companies are on pace to spend 6 to 700

billion on AI infrastructure just this

year. Yet many enterprise customers are

struggling to demonstrate measurable ROI

and that is the narrative's move from

can a can AI work to can AI pay

and it used to be spend more money this

is the future infinite demand and it's

like well hold on CFOs are starting to

tap the brakes here and the market is

splitting JP JP Morgan noted uh the

divergence AI infrastructure suppliers

continue to outperform form uh and the

companies writing the biggest AI checks,

the hyperscalers have begun to lag. And

that's reminiscent again of latestage

infrastructure booms where the suppliers

prosper before the customers earn

adequate returns. And also Wall Street

as it does eventually focuses on ROI.

And the debate has shifted from 12

months ago the debate was who can build

the biggest model. Now it's who can make

money.

>> Right. Yeah. And and one of my role

models here are this fantastic chief

economist Paul's Torston SL. He puts out

these fantastic emails every day with a

chart and he argues that the markets may

be pricing and productivity gains that

will take years, not quarters to

materialize.

We're starting to see central bankers

issue warnings.

>> Yeah, they are. They're all over the

place.

>> And here's the thing, Cara. If the AI

trade unwinds, the most vulnerable names

are generally the ones whose valuations

depend most valuable on continued AI

infrastructure spending. The tier one

risk level is Nvidia, Astera Labs, and

Marvel technology. These companies are

extraordinary businesses, don't get me

wrong, but they're the most exposed to a

slowdown in GPU and networking demand.

>> They're the Cisco. Nvidia is the Cisco.

>> And then the tier 2, Verdive, Super

Microcomputer, Coreweave. uh these are

effectively picks and shovels for the AI

gold rush. And then and then you go to

the third level, the Microsofts, the

Alphabets, the Amazons, the met there

will be nowhere

there would be nowhere to hide here. And

that is the technology story is intact.

It's just that the valuation story is

beginning to get stress tested and I

don't think it's going to survive that

stress test. So what's the prediction?

you know, all eight or 10 of those

companies, a basket of them, uh, down 20

to 40% in the next 12 months. And by the

way, still great companies, the

technology will survive. I believe that

the the the better AI players are going

to be juggernauts in 5 to 10 years, but

we are entering uh these guys are just

way out in front of their skis.

>> Yep. I would agree. I'm going to make a

short prediction, too. Thing that we

started beginning with the Trumps. I

just noticed this New York Post on Trump

family corruption, which was

interesting. I think it's not Trump

that's going to pay for this cuz I think

he's going to die before we can get to

him, but I think his children and the

children of the Lutnik and the rest are

going to get it. I do think they're

going to

>> get it. You mean be prosecuted?

>> Yes. Here's why. This is the New York

Post. The Trump sons, meanwhile, are

part owners or investors in companies

neck neck deep in key defense contracts

to mine tungsten reserves in Central

Asia. It stinks to high heaven. If the

president's family making bank from

obscure resource companies in the former

Soviet Union sound familiar, maybe it's

because Hunter Biden's lucrative

connection in Berisma Ukrainian gas

company was a major scandal in the 2020

election and beyond. Republicans,

including Donald Trump, were justifiably

outraged at the obvious influence

pedaling.

These kids are going to pay a price.

That's my prediction.

>> You don't think they'll get pardons? I

think he'll try, but I think they're

state they're a state. There's all

manner of ways to go get to them. I just

think they're in for a I think they're

uh in for a lot. Um anyway, that's my

prediction. Anyway, but I think it's all

part of the same thing like you're

talking about that we cannot save these

internet companies. We cannot keep

intervening for friends of Donald Trump

or family members. Anyway, it's gross.

It's it's socialism is really what it

is. Anyway, communism really. Anyway, we

want to hear from you. Send us your

questions about business, tech, or

whatever's on your mind. Go to

nymag.com/pivot.

Submit a question for the show or call

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