Trump’s Economic Playbook Is Failing

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“Alright, bitch, you tell the joke now. I do. Three days a week. You do a joke?”

Oh wait, that's right. I've watched the show. Those are jokes. Yeah, those are jokes. Those I thought those were clever British Princeton twist surprise. Indulitably. My jokes are good. My jokes and they've gotten better. That's because I spent hours late at night trying to figure out what to say. Have you guys heard about the new AI robot? They can take off all your clothes and then give you a whole new outfit? No.

I've seen it change people. That was going dirty. They didn't. Yeah, that was good. Clean. I think I like the F.N. I think that's good. It's a good nutty joke. It's a dad joke. It's like kind of slightly maybe politically incorrect, but not really perfect. It's exactly what we need. Well, you know, male AI units, the reputation for when they have sex. They just nut and bolt. So that it's

interesting you mentioned, not joke. Because that is the joke that got you canceled from iconic, absolute from Bloomberg television. Tell us story. Tell us story. Tell us story, favorite.

“Okay, there is a waving here. Everyone's heard the story. Really?”

That's good. Yeah, that was I'll give the five second summary. That was the joke that's got

told when we were producing a show for Bloomberg. Bloomberg had it. Didn't like it. Cancel the show. End of story. What's going on with you, Ed? Let's see. I'm in New York. I'm doing a panel tonight with Chris Evans, who you may know as Captain America, which I'm pretty excited about. He has this new organization and they're going to have me in to talk about affordability issues for young people. So I'm going to meet Captain America tonight and very excited. I'm not sure,

but I think I peed next to him at the Oscar party. I'm serious asking. I complimented him on his jacket. I think that was Chris Evans. Handsome guy, movie star. Handsome, very tall. I mean, exactly.

“Yeah, I'm probably in all seriousness. I think we we peed next to each other at the Oscar”

at the party. Well, that will be my opening line. You peed next to my boss. Say the guy who complimented your coat in the men's room, which is a little strange. I generally try to try not to initiate a lot of banter in the men's room, but I'd say that's my colleague and my co-host. I will let him know. I'll let you know how he responds. Your job is to bring this panel back to me. Yeah, so how are you doing? What's going on with you? I just had a wonderful pocket. I love

Dan Harris from 10% happier. He gave me therapy. He's like so comforting. He's like human zanx. I just feel my blood pressure just comes down. He interviewed me about my book. And yeah, it was a yeah, but I also did a lunch with someone who's doing a financing and so I advise

but before we do it, I am excited to announce that starting next week, all of our

property markets YouTube content will go to its own property markets YouTube channel. So if you watch on YouTube, we're spinning off from the property pod channel, we're going to have our own channel.

“So if you want to go subscribe to that channel, please click the link in the description”

and you will get all of our episodes on that channel starting next Monday. So please do it. Very important that we really smash it coming out of the gates here. Otherwise, I don't know, Scott's going to fire me or something. Something bad's going to happen to us. He's going to fire Claire. I'm likely. Yeah, but I mean, exciting thoughts on our new YouTube channel.

I'd be honest, I didn't know we had a new YouTube channel, but no, I'm it's going to be great.

Very good. Yeah, we're spinning out. So the the whole point is I was like to bring this back to business. You want to have diversity of revenue streams, you want to enterprise value, you want to multiple assets and one of the ways that multiple assets or the ways of creative distinction between your products is we put them initially on the mothership on our RSS feed of property, which gives them sort of gets them from aid, a call it G fast, because

it gets the people struck to the YouTube channel and the RSS feed, they automatically get the stuff downloaded or they get it sent to them. And then once something has its own momentum in its own

“identity, we spin it out and try and create it as a distinct asset. And that's what we're doing here.”

And that now property markets has a big enough following, such that it should have its own enterprise value, its own branding and its own YouTube channel. That's right. It's very exciting, really exciting stuff. Okay, well, I'm going to move us along to our show here today. We're discussing Trump's economic problem, prediction markets legislation, and the results of the meta Google

social media trial, so let's start with our first story. Now at the time to buy, I hope you have

plenty of the wearable. The US economy might look strong on the surface, but that strength isn't translate to how consumers actually feel. There are only so many ways people actually experience the economy, and in most of those areas, the trend is moving in the wrong direction, just to name a few, people are struggling to buy homes, mortgage demand fell 10% last week, and refinancing dropped 15% people are struggling to find jobs. To run power, said the job creation, the private sector

was, quote, effectively zero, and just 28% of workers say now is a good time to find a quality job down from 70% in mid 2022. And even every day costs are rising, as we've discussed, gas prices have

“jumped 30% since the start of the Iran war. So Scott, I think this is quite an important point here,”

especially when it comes to Trump and his approval ratings and the polling that we're seeing, which is as we go get to it's sort of tanking right now, but it seems that there are two different ways that you can kind of get there. Two categories of economic data. There's the economic data that technically matters to economists and to analysts, things like GDP growth, things like stock market growth, and those, both of those things are pretty good. GDP grew more than two percent last year,

S&P rose around 15% last year, and these are things that the administration is really talking about. They're also talking about these investments that they're getting from other nations. It's not actually clear if that's really happening, but those are the kinds of things that the administration likes to brag about right now, the kind of macro stuff. But on the other hand, you've got this real problem, which is that all the ways in which regular Americans and voters

actually experience the economy through their job, through their housing, through the price of groceries, the price of gas, et cetera, all of those signals are flashing bright red and it is getting quite dark. To the point where we are seeing real issues in terms of polling, it's going to have ramifications probably in the mid-times, perhaps in the next election cycle too. What do you make of what's happening here in the economy specifically, the economic touch points

that consumers and voters are actually experiencing? The way I would describe it is how William Gibson described the future, and that is prosperity is here. It's just not evenly distributed. And that is the top 1% now on 32% of total U.S. wealth. And that's roughly equal to the bottom 90% combined. So the top 1% versus the bottom 90% of my favorite stat that I keep talking about is a genico-efficient. When it's in zero, it means everybody has the same amount. When it's

in one, it means one person owns everything. And when France was at 0.83, they started separating people from their heads, and we're at 0.85. So GDP growth, the outside strong, there's prosperity,

four or five percent off of highs, which means it's incredible. But the top 1% since 2016, of capture at 33% of the total wealth gains, and the bottom 50% of only captured 6%. So they aren't even beating inflation. And essentially, the top 1% have gained more than 100 times more wealth than the median household. And the top 0.1% gained nearly 1,000 x more than the

bottom 20%. And the problem is, the bottom 99.9, I reminded 210 times the Davian notifications on

“their phone that they're not in the 0.1. And look how amazing the life is for the 0.1. And also,”

I think there's just a disparity in life now in a capitalist society. And that is, when I was a kid growing up, my dad's boss had a, you know, he had a, like a catalach, and we had a grand term, you know, we had a three-bedroom house, he had a five-bedroom house, but it was in the same neighborhood, and we were all members of the same country club, and they used to golf together, went to the same schools. Now, if you're in the 0.1%, you have your, you live in a different planet. You're not subject

to health care or health care debt because you can afford it, and you have a private close to yours, and maybe comes to your house. You don't have, you have your own security, you probably have a dormant, and live in an area that is over-policed, or that has security

“cameras everywhere. You're not subject to the fears and around, teachers not getting paid enough,”

and the eroding quality of our public education system, because your kids are in private school, there really is a substrate of America that is the most prosperous country offering the most unbelievable services in history, and essentially the bottom 99. I would even describe the bottom 99

percent are nutrition for the 1%. So the top 10 US billionaires gained $700 billion in a single year

last year. And effectively, what we have is that in 1989, the top 1% used to have 23% of wealth globally, and now it's 31% and it's even more skewed in the US, and even when we talk about 90% about assets, but income to top 1% income is up 162% since 1980. It's only up 36%. Now, so that it leads a very real notion that the system is rigged, and what the incumbents will claim is that it's network of facts, and are most talented. No, these are decisions that we have

consciously made through legislation. Mortgage tax, interest rate deduction, capital gains, favorite, favorite treatment are all conscious decisions we have voted through, or that it have been voted through by a passive minority ruled by special interest groups who get 1 or 2 centers to block legislation, and money has, here's a stat, 300 people, 300 billionaires are now responsible for 20% of all political giving. And not only that, that doesn't even tell the story,

because that 20% has way more influence, because pack representing unions or services workers, they have to give their money to certain people who are focused on certain issues. Whereas billionaires can be much more flexible with their money and give it strategically on a specific issue for a specific vote coming up. So, what we've lost is that lawmakers used to take very seriously the following

truth, or punctured they never bought the myth that the far right or the right will tell you,

and that is that the middle class is a self-healing organism, and if you just let the market run, the middle class will be fine. No, when the market is left with its own devices, a middle class goes away. It is a greatest innovation in the history, but it requires constant investment, and let me use the R word. It used constant, it requires constant redistribution, and wealthy people and corporations have gotten in the way of that wealthy redistribution,

and we are actually moving back to general law of the jungle, the way the majority of societies have been through the majority of time, and that is more and more capital and opportunity, I regates to the top one percent, and then at some point, the bottom 99, see above 0.83,

“Gina coefficient, rise up, and get very, very angry. Yeah, I think that this is indicative of”

the problem here, which is you have the people who are in power right now. The fact that they are bragging about things like GDP growth right now is an indication that they don't understand the severity and the significance of those economic touchpoints that most Americans are actually

Those are things that the very wealthiest who are generally in power at this point, I think this is the kind of the point you're making. Those are those are economic touchpoints that they don't

really feel because they're generally priced in sensitive. Gas prices rising 30 percent, again,

“not really a problem for the people in power, airline tickets rising 20 percent, that's what”

you know, I did see you told us because of what we're seeing in the price of oil. Again, that's not going to be a real problem. The TSA line, lasting four and a half hours, which is the highest wait time in TSA history, if you're extremely wealthy, if you're someone like Trump, then that's probably not going to be a problem for you because you're going to fly private and you're going to fly air force one. And you made a very important point yesterday, which I think is worth mentioning,

which is if all private air travel were forced to be grounded today, this TSA funding issue would

probably be resolved within 24 hours. You'd figure out some way to get the funding to the

DHS such that we could reopen air travel once again, figure out this TSA problem. But the trouble is there are two different classes of people. And it seems that the people in power don't really experience all of the things that the rest of Americans actually experience. And this is true of many, I mean, we're just talking about TSA lines because it's a very obvious example. We're literally experiencing it on the ground right now. But inflation is another important one, like grocery prices,

which have risen fast and then pretty much every other category over the past year. That's another thing that the people in power don't really feel so they're probably not going to get that worried about it. And I want to play you a clip from an interview with Kevin Hassett, who is the director of the National Economic Council. He's really in charge of a lot of the economic policy, under President Trump. This is what they were asking him about what this war does to the economy

and how it might affect American consumers, basically just regular American people. And he essentially

said the quiet point out loud. So let's play that clip. If it were to be extended, this it wouldn't really disrupt the US economy very much at all. It would hurt consumers and we'd have to think about, you know, if that continued what we would have to do about that. But that's like really the last of our concerns right now because we're very confident that this thing is going ahead of schedule. We essentially says, I mean, not essentially, he does say, if the war hurts consumers,

that will be the last of our concerns, which seems to be literally the policy from this administration right now. Don't worry about all this stuff that's affecting your life. Don't worry about the gas prices. Don't worry about the food prices. Don't worry about any of that. The stock markets up and GDP grew because we're building a shit town of AI data centers. Meanwhile, we're all sitting here like

“who cares. I can't afford anything. What did you make of that clip?”

That was just plain stupid. We don't care about consumers. We're in a consumer economy. Two terms of our GDP is if consumers aren't doing well, the consumer economy isn't doing well. I think if I think you'd have a lot more credibility if the Dow went down 10,000 points and he said, look, the majority of 10% of the stockholders on 90% the bottom, the 60 through 90 on 10% of the bottom 50 own debt. So a recalibration in the markets and the wealthiest among us and corporations

losing some equity. That's not a big deal. But to say that we don't care about consumers. And just going back to the point of this kind of vibe session, if you will. The way people evaluate or feel their own success are lack thereof. It's relative versus absolute. And that is, people don't evaluate their lives in a vacuum. They ask themselves, how am I doing relative to others? Not relative to how I was doing 10 years ago. Not relative to a 26 year old

“Princeton grad in 1945, right? They say, how am I doing relative to others? And I think we”

underestimate the impact when everybody has an incentive to vomit a flow much wealthier fake version of their life out to every one 24 hours a day. It's just impossible not to think, wait, how on earth did she get to make a nose on a private chat? And I'm struggling to figure out a way to get, you know, to to Ron Concoma for a weekend at the beach on the subway. So you don't, people don't think that way. Telling people, GDP is up, you're actually things aren't that bad,

what they see is my success relative to others is just, it feels like I'm failing. Even though my life might be, you could argue that young people's lives have tangibly increased over the last couple decades, certainly over the last several decades, but they don't see it that way. They see it

people in their 40s and 50s own a home, and they're like, there's no way I can own a home.

I'm killing it, and I still can't own a home, right? That one relative to previous generations has gotten worse, just flat out. I mean, previous generations of my age were able to approach and being able to buy a home. That's not the case now. The average age of first time buyers. Now 40, it was literally 31, just 10 years ago. I'll use a personal exam. When I got out of business school in 2002, 92, I was offered a job for $100,000 so to consulting firm. And I bought my first

house with my partner in Petro Hill, San Bruno in 18th for $285,000. $2.85 times, first year salary, out of business school. Now the kids at Haas, average first year salary is around 200 grand.

That's an exceptional living. The average home in San Francisco is $2.1 million.

“So it's gone from $2.8 to $10.1 in San Francisco. And I think that's largely indicative of what's”

happened across the US. And what's interesting is that I did a deep dive on our sub-stack around declining birth rates. For every increase in housing prices of 10%, birth rates decline one percent. And that is, it ends up that increasing home prices are effectively birth control. And think about it. If you, you and Claire in relationships, you don't realize how powerful a means of connection and path towards commitment, monogamy and children saving for buying a home,

painting a room, blue or pink in case the little one comes along, getting a dog, you get on a path

towards commitment and for savings. And when you're saving for a house, you stop doing stupid shit,

like going to Vegas or or spending money on a new pair of shoes. Now you know what I mean? Yes. It creates a saving for a home as a fantastic motivator in Garbrio. And I worry that a lot of people year age have just given up, just totally given up on that notion. There's like there's no way I can find the 20% I'm going to need. And also not only is it an incentive, it's like a prerequisite for having a kid.

If you're going to need a place to live, and it's going to need to have another room or not. But that's I mean, it seems very, very simple and logical. Not only is it a motivator,

“it's like you need to have the ability to get your hands on property and make your life”

make it easier to actually build a family. The other thing you mentioned there is like this idea of the vibe session, which has been a really interesting point that Kyla Scanlan came up with our friend Kyla, and it's become very popular. And it points to this idea of like there's a divergence between the way that the economy is actually doing versus the way that people feel about the economy. And that is an interesting and fair point. But where it gets into trouble, I think,

is when people start to say it to voters and to consumers, like you just have high standards. You think that your life is bad, but your life is actually good. Trust me, I'm looking at this data here, and I can tell you, and I'm going to wag my finger at you and tell you, your life is actually good. And in the world, I mean, if we're talking about the world of politics, which we are here,

“that doesn't work. Like you can't just tell someone that their life is actually great, and then”

point it at a GDP growth chart, and then point it, you know, that the price of a smartphone today versus the price of a smartphone, 30 years ago, and say, "See, your life is good, actually," because that's not giving nearly enough credit to the person themselves who's probably evaluating all the things in their life, and then making the call themselves, actually, this isn't working out for me. This doesn't work for me. And, you know, you can make the argument, yeah, but you can order

Uber-Eats, and you can do that 30 years ago, it's like, "Well, is that really changing fundamentally the way people feel about their lives?" The fact that they can order food, and it gets delivered to their door at a slightly cheaper price than 10 years ago, or do we need to think about the more fundamental things, the ability, as you say, to be able to get your hands on a home, and build a family, the idea that you could really build up a career that can build

an actual asset base from which you can then launch your life. Like, these are the things that actually matter, so I think it gets, it's not going to work essentially at my point when the administration says, "Yeah, but look at GDP growth, look at the stock market." That's not going to

When they literally telling you, "No, it isn't." Yeah, people don't optimize for GDP growth. They

“optimize for security, progress, emotional health, and also in relative standing. Also,”

things are something to the notion that I don't think young people just have as much fun and joy in their lives. I don't think they have a sense of community. They're not going to religious church attendances in an all-time low, sports, being outdoors, being in the company of strangers, drinking is at an all-time low. I just don't think quite frankly, people of your generation are having a much fun, and then when they do have fun, they feel as

if they need to work and post it. Let's show how much fun we're having. Let's not eat the food.

Let's take pictures of it. Then constantly being reminded that they're falling behind on a

relative basis and just think of it just to tax their emotional well-being and the thing that there's a study that came out that when daughters here, their mother's voice on the phone almost immediately, their blood pressure goes down. It's like when do young people's blood pressure go down? When are they in the company of strangers? When are they with friends? When when do they unplug from a cycle of dopamine from their phones such that they can just sort of

“relax and experience joy and fun? I think it's tough and to tell them that wait, but you”

actually on a lot of levels have a better life than most people. I get it. Everyone's freaking out

about a 10% youth unemployment rate. That's not actually historically. That's about average.

But again, that's not how people think people think in relative terms, not in absolute terms. I think it would explain the approval ratings which are now for Trump. Some of the worst approval ratings we've seen has approval ratings hit a 36% low and most of it is about the economy. Only 29% of Americans approve of his handling of the economy. That's one of the lowest ratings ever. It is now lower than the really bad lows that we saw during the Biden administration

when we saw that historic inflation coming out of COVID and his worst issue is inflation and prices. That approvals down to negative 39 continues to decline. 7 in 10 Americans say the cost of

“living is not very affordable or not affordable at all. 61% say the economy is not working for them”

personally and that is up from 57% in May. So people, I mean, we could tell people, oh, your perception is wrong, but their perception is all that matters here. At least if you're trying to get votes, if you're trying to win a political body, you can't just tell them, don't trust your own thoughts. You have it wrong, things are great. They will decide that for themselves and they've decided that things are not working out right now. We'll be right back. And for an exclusive live stream

on the science of storytelling from our research lead, Mia Solverio, sign up for our sub-stack at profftomedia.substack.com. She will be going live with paid subscribers tomorrow. It is an excellent presentation. Don't miss it. Subscribe now. Department who's already got too much on the plate responds with, yeah, we'll get to it. Thousands of businesses from early stage startups are choosing to build their sites in

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/markets rules and restrictions may apply. Support for the show comes from BCX, the public ticker for private tech. For generations, American companies have moved the world forward to their ingenuity and determination. And for generations, every day Americans can be part of that journey through perhaps the greatest innovation of all, the US stock market. It didn't matter whether you were a factory working

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This is advertiser content brought to you by Virgin Atlanta. Again, a couple weeks back. I got you a birthday gift not to pair myself on the back, but it was a pretty good one. It was, indeed, you surprised me with Virgin Atlantic upperclass tickets to London. So tell us all about it.

It was pretty incredible. From the moment I entered that upperclass cabin, I have to tell you,

“I felt like a VIP. Anything I needed, a drink, snack, assistance with the seat,”

flat seats, flat seats, exactly. Had the four-course meal, got my champagne, very delicious, and joined the food. The journey home was great. I went to the Virgin Atlantic LHR Clubhouse. That's the Heathrow Clubhouse. Heathrow Clubhouse was awesome. Got myself a coffee, headed over to the meditation pod that they called the soma dome, kind of felt like a sort of spaceship where you relax and think nice thoughts. So I did that for a little bit. Then we went

over to the wing, which are these acoustically sealed boots, where you could do some work. You could even record a podcast. I didn't do that, but maybe I should have. It was a very enjoyable experience. So, Ed, they cool real question here. Is what do you plan to get me from my birthday? See the world differently, with Virgin Atlantic flying should be more than just transport.

It is part of the adventure. It's version at lantic.com to learn more. Tickets in lounge access provided by Virgin Atlantic. We're back with Proof G Markets. A new bipartisan bill could shake up one of the fastest growing corners of finance, prediction markets. Two senators introduced legislation that would ban supports related betting on CFTC regulated platforms, such as calcium polymarket. It also prohibits

them from offering casino style games in the future. That includes everything from slots and

blackjack to video poker and bingo. Notably, this is the first bipartisan Senate effort aimed

at regulating prediction markets. So Scott, this new proposal that it's called the prediction markets are gambling act. Just a quick summary of what it would actually do. It would essentially just ban all forms of sports betting on these prediction markets. That's the main event. It also says it's banning these prediction markets platforms from hosting games like casino style games,

“poker and blackjack, bingo, all this stuff. I think that's a misleading provision because none”

of these platforms actually host those games. You can't play blackjack on calcium or any of the other platforms, but they basically say you can't do that in the future. So the real meat of this proposal is no more sports betting, which has become a very significant market on these platforms. So I

guess we'll just start with your reactions here to this proposal that is bipartisan. So first off,

I should disclose just before I make my comments. The calcium is a data provider for property. We absolutely love their data on economics and earnings predictions and geopolitics with respect to this legislation. This is a tough one because putting the opportunity for wagering in a more risk-aggressive, less developed prefrontal cortex, we've seen how that can go wrong. I think the challenge is parsing between these different segments. There's gaming, quote unquote traditional

gambling. There's the prediction markets, and then there's options contracts. And effectively what the prediction markets are doing is they're offering what feels, smells and looks like an options contract. And that is, you're paying for a certain amount on an outcome against someone else who believes in another outcome. So what will be interesting is if, I mean, my viewpoint is whatever legislation they should have should apply to all of it, right? Something I would like to

see, you can't, my 15-year-old is dying to go to Vegas with me. I'm not sure it's going to be

I would like to see age gating across all these things. I'm not sure a 19-year-old needs to be playing

options zero-day options or gambling. I, you know, 80% to 90% of stock market purchases and sales are effectively speculation. You're not investing for the long term. And then, and then there's no getting around it if you're on badmgm or in certain instances on these prediction markets, you are essentially trying to get a dope a hit on a belief that you have insight into something and you're trying to make money and the risk of winning or losing creates a hit. The question is,

should there be legislation disparate by market? Because I don't think the options markets would want age gating at 21. I think you'd see, I think you'd see stock exchanges or

stock market platforms trying to fight against that. So the question is, do you, what I'd love to

see is, are it look at those three categories? What is the ramifications on the mental health and the rates of addiction across those three categories? And does it warrant distinct or different levels of regulation? And if not, why wouldn't you just have one set of regulation around age gating certain limits on how much you can spend or, you know, not being able to use your parent's credit card, whatever it might be or have certain AI driven prediction algorithms that say,

“you need to take a break or we've shut down your account, whatever it might be. But this is definitely”

going to be a very interesting period because, you know, who's most scared of the regulation of prediction markets, is the options markets? Because the options markets are looking at this and going, okay, how are they going to be regulated? And then, and then, how are we going to say we're different? Because our contracts look shockingly similar? I mean, you started with, this is a tough one. And then I think you actually did the tough plot, the whole plot of the tall scheme, which everyone's

been talking about, which is, I mean, the question is, where do you draw the lines? Like, how do you categorize these different things? But you did that. And in my view, you did that correctly. And that is, you said, there's sports betting, which is a form of gambling. And there's options and futures trading, which you can maybe say is kind of like gambling. But we both probably agree, it's different from betting on the outcome of sports games. And, you know, this is the, I think

some of the slightly facetious pushback that we've gotten from the prediction markets, players, they say, how are you supposed to draw the line here? Where do you draw the line? And my favorite line from, from John Oliver, the great John Oliver, he said, where do you draw the line? You draw it somewhere. So what we've done here and what you've just done is you've drawn a line, which I completely agree with. And that is that there is sports betting, which has its own form

of regulation and it has its own federal framework. It most of the regulation does happen at the state level and depending on what state you're in, there are different laws in some states. There is

“an age requirement. You have to be 21. And so in other states, you can be 18. Most of the states”

have similar rules around how to gamble safely. You have safe advertising rules. You have rules on displaying resources for problem gamblers. There are all of these different rules. But you need the framework. You need the lines and the boxes to be drawn in order to start regulating this stuff, which we have done with sports betting. And it doesn't work totally, but it gets us somewhere. Then there's options in this future's trading. And currently, we treat that legally as a different

thing. This is where you bet on the price of stocks, going up and down, you bet on the price of commodities. It's regulated by the CFTC. The minimum age, as you mentioned, is 18. Maybe you could have an argument as to why it might, you might want to make it 21. But the point being, the framework is there and it's in place. And it is different from sports betting. And so I think what we have here is actually a good piece of regulation. I was thinking that maybe regulators would go overboard and say

ban prediction markets entirely. They're all bad. It's all gambling. No. Instead what they've decided is they said, hey, a lot of people are betting on sports on these things. That looks a lot like gambling. And it does look a lot different from the stuff that we actually like on this program, which is the financial events contracts. The contracts and the prediction markets which say, what's going

“to happen to interest rates? What's going to happen to inflation? What's going to happen to gas prices?”

To me, that's basically options trading. That's basically futures trading. Yes, it's risky.

And yes, you can make arguments that it's similar to gambling. But it is far in a way a different thing from betting on the outcome of the Super Bowl or the World Cup or trying to figure out who's going to be in the sweet 16. Those are two separate things. So I think this is actually

is they're actually really great for predicting things about the future, better than Wall Street in

“a lot of cases. They're also really helpful for understanding the news. That's why we use that”

data all the time because if we want to understand how did this big event affect what is going to happen in the future, we often look to a market, a platform like Kalshi. And we say, okay, yeah, the probability of interest rates coming down or going up has gone up x, y percent. And that's a useful thing. But you have to start drawing the lines and figuring out what is the category of each different thing. And once you do that, then you can start to reach some semblance of sensible

regulation. But if you keep saying, oh, it's all too blurry. It's all gray zone. You never going

to get anywhere. There's two answers to this. There's the end consumer and then there's, I don't know, the B to B side. We, so Federal Reserve economists have said that Kalshi is better than professional economic indicators of predicting inflation and Fed fund rate decisions. This data has real value to media companies and analysts, like ourselves. Kalshi has a perfect forecast record on federate decisions. Perfect. So far, they're adding 100% on federate predictions. And also, it's not just

macroeconomic data. Kalshi's earnings predictions are as accurate as Wall Street. Now, the question is, all right, on the sports side, we don't care, nor do we talk about what the odds are of, you know,

the Rams winning the NFC playoffs, right? We don't, we don't care that's not the business we're in.

Should it be more difficult for a 21 year old to bet in Las Vegas or bet on a prediction market on a sporting event than it is to go to Vegas or a Native American reservation and bet on sports there. I mean, why are these guys, and maybe they're just being subject to the same things, but it strikes me, I struggle with the line between it, fantasizing people and also recognizing those real potential for harm here. And I imagine that's what the regulators are struggling with.

But when you were in Vegas, you could bet on sports, right? Oh, yeah, for sure. So what's the argument? I'll just strum in this, what's the argument or steel man? It's what's the argument for why

“you should be able to do that on the predictions markets? I think you should, but it should be regulated”

like gambling. I mean, that's, that's basically it. If it's gambling, regulate it like gambling. So,

I mean, I think the real problem for these companies is the, the work around that is beneficial is that if you're regulated, not like gambling and you're regulated like options, which is what the current laws are, then you're not subject to any gambling regulations, which means that you can operate in states in which sports betting is illegal. So that's a problem for a point. So for me, it's just like, okay, the stuff that's gambling regulate that like gambling, you shouldn't be

trading sports events contracts in states in which they've decided that sports gambling is a legal. That shouldn't be happening. But in states where it is legal, that I'm having. Another question on it, and as you're betting on the Green Bay Packers, right? You're betting against someone who thinks they're going to lose and you think they're going to win. Zero-day options. I'm betting Apple stocks going to go up. You're betting it's going to go down. You're riding the contract. I'm buying

“it. Is one more or less gambling than the other? Yeah. I believe that the sports gambling is more”

gambling than the other. I think the zero-day option makes a case. It's pretty close to gambling. But again, if we're drawing lines, which I'd like to do, I think that's a pretty easy line to draw. One is about a financial front. What if the Apple analyst puts on a helmet in a jersey? I don't see the difference. I see zero-day options by that definition of gambling. Then we just throw hands up and say, "Okay, let 'em all have it." We have drawn a line already in

our regulation where we say, "If you go on drawf kings and you bet on the game, that's gambling. If you go on your Robin Hood and you bet on options, that's something else." When I saw zero-day options, and I went on a platform to look at it, to me, it was just it was Vegas with a strong reddit component. And so I don't see much of a difference. Totally agree. The people who are actually the most nervous here, the prediction markets are phenomena.

They're exploding, right? Across a number of dimensions. I think the people in most nervous here are whatever it is, the CFTC, the governing body of options contracts, because where they have gone

a difficult time saying why we should be subject to different regulations and other things

deemed as gambling. What I think we need more of is research on the effect in the impact this is having on people. There's some research saying that gambling, once gambling is legalized in a state, bankruptcy is immediately go up, right? That's a negative. What's happening specifically to young people? What's happening to their mental health? What's happening to their financial well-being? So look, it feels like there needs to be more research across these categories

and a really solid justification for if and how we relate to distinction that warrants different legislation across these categories. I don't think we need to complicate things that much. Just by saying yes, that's gambling. Doesn't mean that you're just saying you're not allowed

“to do it anymore. All it's saying is you should be regulated like gambling now, which means yes,”

you won't be able to operate in this number of states where this thing is illegal. But of course, you go, go, set up camp in Nevada and do the sports betting there. But let's just regulate the things for what they are. One thing is more similar options, trading, one thing is more similar to sports betting. We'll be right back after the break. And if you're enjoying the show, please follow our new PropG Markets YouTube channel starting next week. That is where you will find

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“Hi, I'm Renee Brown. And I'm Adam Grant. And we're here to invite you to the curiosity shop.”

A podcast that's a place for listening, wondering, thinking, feeling and questioning.

It's going to be fun. We rarely agree. But we almost never disagree. And we're always learning.

That's true. You can subscribe to the curiosity shop on YouTube or follow in your favorite podcast app to automatically receive new episodes every Thursday. In 1984, Apple launched maybe the most consequential computer ever. It was not a good computer. Particularly, there was actually a lot wrong with it. But the Macintosh had all of the right ideas about what computers would become. And it kind of changed everything.

This week on version history, our chat show about the best and worst and most interesting products in tech history were telling the story of the Macintosh. And why? Again, despite not being very good, it managed to change everything anyway. That's version history on YouTube and wherever you get podcasts. We're back with prof. Markets. Two major court rulings last week could mark a turning point for social media companies. First, in New Mexico, jury found meta-advaluated state law by failing

to protect its users from child predators. Meta was ordered to pay $375 million in damages.

Later in the week, a Los Angeles jury found meta and YouTube liable in a social media addiction case including that their platforms were intentionally addictive and contributed to a young user's mental health issues. Meta has to pay $4.2 million in damages and YouTube must pay $1.8 million. The trial is the first in a wave of more than 1,600 related cases brought against these social media companies. Many are calling the decision a bell weather saying it could open the door

to a surge of new lawsuits focused on user well-being. Scott, this is basically the first ruling we've seen of its kind against Big Tech, a subject you have been railing against for many,

against Big Tech in both of these trials. What do you make of it? It's not the beginning of the

“end, but it's the end of the beginning. It's the way I would describe it. And that is typically”

with harmful substances or practices that have an externality that really damages the public. It takes, we usually figure it out. It took 30 years of tobacco, took 20 years of the opiates, and if you look at when social went on mobile in 2013, it looks like it's going to take about 20 years. I do think that these companies are now facing juries. And these juries have children who have gone through phones, smartphones with social media, and they've seen firsthand just how damaging

it is, and they feel lied to. When I wrote the 4 in 2017, the argument was over whether these companies were bad or not. It was who was going to be president, Jeff Bezos, or Charleston, Amber. I mean, the affection for these companies, these innovators, and these tech executives, was extraordinary. And social media was helping connect parents of kids with childhood, you know,

“strange childhood diseases. It was reconnecting your friends from call, I mean, it was all like”

rainbows and unicorns. And when I initially started writing the book, it was like, it was a love letter to these companies. And then as I really started looking at data, I'm like, okay, this doesn't sums wrong. This feels, this feels dangerous. And slowly but surely, and over the last nine years, they have weaponized government created unbelievable tactics around to land, office, gas, and leveraging citizens united. And exceptionally start PR people, exceptional

coms people, exceptionally charming and likable executives from Nick Cleg to Charlestonburg to,

you know, I forget his name, Evan, he's super likable. I had a snap, I mean, his name. And the reality is,

our kids started self-harming. And we started not liking each other. And we started believing that the enemy wasn't Russian troops pouring over the board on Ukraine. It was our neighbor with the wrong presidential sign. And we started attacking each other online and then outside actors with who couldn't beat a economically or genetically took advantage of a poor, a shareholder-driven platforms to start planting incendiary content that got us divided. I don't think Americans are actually

divided, but we have people dividing us. And these companies are the agents for it. And now there's this system, enormous economic incentive to create a series set of content, much of which is useful, much of which is benign, but some of it just gets you angry yourself, angry at others. And going back to the last story about why young people feel bad, even though maybe they've made modest gains, they're told every day that they're failing, that they're not hot enough, they're not wealthy enough,

they're not impressive enough. And these firms, what came out in this trial, which was so incredibly disturbing as the new Mexico Attorney General, created an account posing as an 11-year-old girl. And almost instantly, the 11, the account, got bombarded with explicit images from known sexual abusers from kids praying on kids. So let me get this. You can serve me, you can tell when I'm at a Beyoncé concert and serve me an ad for a ride home from that location, or you know when

my kids about to turn, get us learners permit and start serving me ads for auto insurance for a kid in Florida. But you didn't know this, you didn't know this was going on. And what this shows,

the discovery here is going to be so horrific for these companies, because the reality is,

they knew what was going on. But anything that introduced friction to the business model,

“they ignored. And I want to be clear, I think these companies are a net good for society,”

except for Meta. I think Meta's jump the shark is now a net negative. But Big Tech is a net positive for society. The problem is with the word net. And that is, we're net beneficiaries, and pesticides, and fossil fuels. But we still have an EPA and emissions standards. We have no regulation around these companies. And they have fought. They pretend to give a flying fuck about children with child safety features that are impossible to navigate and figure out.

And then, of course, the people who have really paid the price here are low-income households, because I have the resources to try and make my kids, try and keep my kids off-screens. I have the money to pay for after school stuff. I have the time and attention to be at home to ensure they can't go into the room alone with the screen, which is a row we have. When I was growing up, you know, my mom was out of the house before I got up, sometimes didn't get home until after

I was asleep or later, if I had been at home bored with an iPad and, you know, YouTube and Instagram

And then my brain being rewired as I'm going through puberty around a constant need and access

“to dope or right away, whenever I wanted to squeeze it, I think this generation, unfortunately,”

my kids at 15 and 18 had to endure this bullshit. I don't think you're kids. I think we're going to, I think we're figuring it out and I think in three to five years, it wasn't the fines that are the big deal. It's the fact that now the other thousands of lawsuits against these companies have legal precedent to go after them. And last interesting feature that our old colleague Maria Petrov highlighted to me is that the insurance companies meant to ensure these companies against

this type of liability are saying that they're not going to pay, that they're not covered

because they intentionally did this. They knew they were doing it and they intentionally did it.

And if the insurance companies had known, they were intentionally breaking the law, they couldn't ensure them. Now, far beyond for any insurance company to actually, you know, insurance companies are famous for trying to get out of when you actually call on them to pay for it. But this is this is that big tobacco moment. I forget it was 1991. I forget what it was. But this is that moment. So again, I don't think social media is going away. But this is the end of the beginning. This is

“the end of the wild west when these companies could operate with total immunity. So I think this”

is a big moment. I'm excited about it. I've said that before. I've been disappointed. But I think it's, I think this is different this time. And the fact that both these cases came down with the same verdict with an hours of each other also says something. This is a pattern here. And it's going to give a lot of plaintiff's attorneys and a lot of parents newfound mojo. And by the way, the market agrees. And that was the big standout moment for me. The method actually

fell on Thursday, down more than 5% 10 months low. So that's the market telling you. Actually, yes, this does have teeth. This is a big deal. And I just want to go back to a point you made at the beginning there about the fact that this was a jury trial. So both of these trials, were ruled by a jury. And that was, and it was decided in both cases that what Big Tech was doing was illegal. But most of the major Big Tech cases that we've seen have been decided, they've

been bench trials. They've been decided by a judge. So in the FTC versus Meta trial, that was a bench trial. The judge ruled in favour of Meta. We had the DOJ versus Google trial, which was decided on again by a judge, judge, on Meta said that Google actually wasn't monopoly. They were operating this monopoly. But when it came time for the penalties and the remedies, he said actually we're not going to issue any remedies. We're not going to issue a penalty because opening eyes

coming up and coming and it's going to start to eat Google's lunch. And so that would be unfair to Google. And then what do you know? Google starts to crush opening eye with Gemini. So that argument didn't make any sense. But too late, the decision is made. We have the same thing coming up in 2026 in the FTC versus Amazon case, which will also be decided by a judge. So usually these cases haven't been decided by a jury. They've usually been decided by a judge. And I think that is

something that Big Tech really likes. Because I think that they would prefer to not have these issues

adjudicated by the democracy, by the people, by parents, by parents. It's basically the judge's

job to remove all of the emotion out of the equation. This is literally what they get trained to do

“and get really into the minutia of all of the statutory elements. And that's what you have to”

focus on overwhelmingly. But when you open it up to the people, as you say, whose children have gotten addicted, whose children have engaged in self-harm, all of that starts to build up. And it means that eventually you're going to say, "You know what? I'm not going to go lenient on you guys. I'm not going to give it. I'm not just going to play it so easy and roll over so easily here. I'm going to be very, very harsh because the things that you have done to my life, the things that you have

done to our society at large, are egregious and they need to be punished." And that's something that I think these Big Tech companies really don't want to see, which is why I think it is so notable that it was a jury in both cases. I believe one of them, the decision was unanimous across all of them because there is so much pent-up anger and frustration among the American people right now against Big Tech and that actually matters. It actually is important to have a moment of catharsis where you can

actually express, look at all of the wrongs that you have done to us over many, many years. And yes,

and say, "Actually, this isn't okay." So I hope that we will see many more jury trials.

“And I think that what we'll find is that the more jury trials that we have, the more they're going”

to be ruling against Big Tech. Whenever anyone says the time on screens is about bad parenting or good parenting, that's a tell that they don't have children. They get their homework on their screens now. This is how they communicate with their friends and add them alter a colleague at NYU, doesn't get nearly the recognition because he's overshadowed by Jonathan Height and in anyway, it's other other prophets that are more retail horrors that start multiple podcasts. But

he wrote a book called, I was a call that dicted, or relentless. Anyways, he wrote a great book about the addiction of these products. And he said that the really sad thing is if you don't have a collective ban, if you take your kid, if you tell your kid you can't be on snap and you can't be on Instagram, they're more depressed because they're isolated socially. And so unless there's collective bands, unless there's, I mean, for God's sake, these accounts will claim that it's hard and

my favorite is when Mark Zuckerberg claimed to give a flying fuck about a 14 year old first amendment rights. Yeah, I bet he wakes up a night thinking at 14 year old seed free speech. I mean, he literally used that as an excuse that they were worried about their first amendment rights

“of ninth grader. But unless I don't see what we have, I'm a simple one, age gating. I think that's”

coming. I don't think there's got to come. I don't think there's any reason anyone at the age of 18 should ever be on a social media platform. And I get it. Maybe they can learn from you too. Maybe they can learn how to do algebra. It's not worth it. Or you have the cleanest g-rated version and what Jonathan Heights says is just go to China and see what they're serving up in their social media platforms. It's like kids running around and doing dances in front of the flag about

how much they love China and the CCP. And then the other example Jonathan uses is if you go to the wealthiest high schools in Silicon Valley, they literally have no screens. They don't. And so it is, it is nearly impossible to keep your kid off of this stuff. And there have been so many horrific stories about self-harm and kids and that met a new about this stuff. The discovery here is going to be a horror film. When they see the emails and the research, and when we find out

what we knew, you know, what we knew was going on. And I always go back to, I don't think these are

I do think Mark Zuckerberg and Shell Sandberg have made more money while damaging more young people's lives and arguably any people in modern history. But where are the ones that are ultimately cobbled? Because we have to elect people who have the backbone and the domain expertise to regulate these companies. And General Motors would still be pouring mercury into the river if we didn't have regulation. Because if they didn't, they would be to cause a disadvantage to Ford and Stalantis

who continue to pour mercury into the river. So we need to remove section 230 for algorithmically elevated content. We need to educate. We need to break these companies up and we need, and this this fourth leg of the stool, if you will, of the chair has happened, is civil liability. Because these cases, if these cases stopped, if this was it, nothing would change. Because this amount of money is chump change for these guys. This really is an incentive. I also think we need to move

to a civil penalty construct where it's a percentage of market cap. So when Elon Musk has found guilty of market manipulation for saying, I'm, you know, funding secured to take the company

“private, he's fine. I think I was two or three hundred million dollars. That's like you are”

me being fined $8. It's not a disincentive, right? If you have a parking meter in front of your house, the ticket is 25 cents in a cost ten bucks a day, you're going to break the law. My first

boss in Morgan Stanley, Carter Coordner, used to talk about occasionally, you know, you're always

commuting in your car. And a lot of time back then, cars broke down. Cars were not very good. And a car would break down and either traffic would be backed up on the four or five and you'd go by and you'd see a car with a tut-up and steam would be coming out of it. Because cars were shitty back then. I'll say American cars. And his idea was, anytime you break down on the road, your charged 10% of the value of your car. And you watch, you're going to see maintenance standards

go way up. So I think we have to start finding these companies are percentage of the market capitalization of the revenues. Otherwise, the incentive is just to continue to break the law and throw lawyers at the problem until there are so many lawsuits that represent so much capital that they finally have to, you know, they have to change their ways of doing business. But let me finish right started. This is a big moment. The good place to start is just

charged them anything. And I think that is kind of what's striking here. I mean, the penalty

for Meta here is four million dollars. That's literally like a fraction of a percentage of what they

percent on the news. So I think what that is telling you is like this is the beginning of a very

large chain of lawsuits that are coming and it also shows regulators and it shows prosecutors that actually like you can do something if you simply apply a penalty. As opposed to what we saw with Google, where you say yes you did something illegal but we're not going to, we're not going to punish you for it. Final start, I just want to mention here because it blew me away. I learned this from a former Meta employee on a CNN program. He said that one and eight children on Instagram

“have received unwanted sexual advances. And this was I think the point that you made that the”

attorney general made, this is like an unbelievable level of exposure and just, it's hard to put words to it. How bad it's gotten. The fact that we are putting children out there and you've made this analogy before which I think is a very good one. I mean, how would we feel if a bunch of kids were playing around in a playground and then a bunch of old men in some cases just showed up naked and started looking at them and trying to talk to them. That's literally having every single

day on these platforms. It's happening to one in eight children on Instagram today. I don't think that we fully appreciate how bad it's gotten. It's not just that kids are lonely and they're spending too much time on their phones. It's like we're literally exposing them to sexual predators every day and it's now become normalized. What's worse than that? What if you what if the park said, hey, you'll be really popular this park and your friends will be impressed

if you show up in a thong and a bathing suit. Yes. We're going to sexualize you. Oh, and then strange men can speak to you or hey, I'm going to talk to you on the algorithm. Oh, you're not feeling good about yourself. Why aren't you feeling good about yourself? Oh, really? Wow, you're thinking

about self-harm. Well, this is how you do it. Here's what a razor looks like. Do you know

how to cut yourself? Oh, wait. You know that moms pills, here's some images of

“nuisance razors and pills. That's what was sent to a 14-year-old girl who started talking”

about suicidal ideation. They she got an email saying, here's some images on self-harm. We thought you might find it interesting. I'm not suggesting someone at meta. I think it's Pinterest. I said, I want this girl to self-harm. What they did is said, no, we have a business model where when we pick up on certain words, we just automatically send images and we haven't put in any safeguards because that would slow us down and get in the way of our profitability.

So we Jonathan Heights got this perfect. We overprotect our kids offline. All right, my kid, I used to leave my mom's house at 8 a.m. or 9 a.m. on a Saturday morning with a swim bike, and I was at a bar in 35 cents. And I'd get home at like 10 p.m. when maybe she'd start calling the neighbors and saying, if you see Scott telling to come home, gone for 14 hours, you know, rabbit dogs, 14-year-old suit beat me up, break into the school because for some

reason we thought it was cool to break into the school on a Saturday. You know, just all kinds of havoc and whatever. My kid's 10 minutes home, 10 minutes late from school, we call him my six. We're guilty of this. But what what is happening on a screen? And we install all these monitors and everything and then my kid figures out a hack around them. But we vastly underprotect them online because we don't understand these technologies. But the key here is that we now have

juries that are going to meet made up a parent or people who know people who's kids have really struggled here.

“And our biggest regret, I still think our biggest regret is, I mean, I think Trump is a stain on”

the American experience. But my thesis is in 20 years, our biggest regret isn't going to be income inequality or climate change. We're just going to look back and go, how the fuck did we let that happen to our children around social media? I don't think I think the combination of COVID and device addiction and an unfettered social media platform of people who are really of just ignored the Commonwealth for shareholder value. I think these kids, I think we're going to see so much

addiction that can be reverse engineered to setting up a constant at a very critical age when

their brain was being wired, the ability to squeeze at any moment and get dope. I think we have we have literally, we are flushing tens of millions of youth into the into our society that demand constant dope and don't have the skills for focus, attention, investing in long-term relationships or even just having the ability to sit through a moving much less, sit at a desk and get shit done.

Okay, let's take a look at the week ahead. We'll see earnings from Nike. We'll also see consumer confidence on the employment report from March. Scott, do you have any predictions? So I love Nike.

“I think it's one of the great brands. I think it's arguably one of the most impressive”

advertisers in history and they built an incredible direct consumer unit. The stock is now at a 10-year

low. The revenue is actually versus 10 years ago. The revenue was 30 billion and this year revenue will be fiscal 20, 25 revenue will be 46 billion. So despite the fact the top line revenue is around 50%. And this goes to the notion that the market values growth and hates decline and basically the company is struggling under profitability and margin compression. But despite the fact it has

a 50% bigger top line, it's trading at the same levels. It was when it was growing at 30 billion.

Which is speaks to the notion that, you know, you just get an entirely different multiple when you grow. But the thing that I dug in on around is that from 2020 to 2025, they went from 75,000

“people to 78. So they've actually grown their employee base 3%, since 2020. So I think what you're”

going to see here given the basically what it's just an unbelievable staggering fall. In five years, the company is lost almost two thirds of its value and the last year it's lost another 21%. You are going to see an activist come into the stock and you're going to see massive layoffs. And if the massive layoffs don't, you know, unless the massive layoffs come first,

“but this company, there's quite frankly, this company needs to massively ride size. It's lost its”

growth and investors are going to demand that it starts growing EBITDA again and in my estimation, they have not made the hard decisions they need to make around employment. So you're going to see an activist and you're going to see my prediction is you're going to see 10 to 20,000 people laid off from Nike in the next two to three years. And/or an activist show up. So subscribe to our new Profty Markets YouTube channel.

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