The Algebra of Wealth with Scott Galloway 56:49

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Hey everyone, it's Reed. Before we get started, you know, I get the chance to interview some incredible people.

And now I have an opportunity to expand on some of those ideas and some of those conversations on my Substack. It's called The Homefront. I hope you'll check it out. I write two, three times a week. I offer other insights, philosophical, political, tactical, what's going on. Again, that's The Homefront over at Substack. I hope you'll check it out and I hope you'll sign up. And now, on with the show. Welcome back to The Lincoln Project.

I'm your host, Reed Gale. Today, I'm joined by author, professor, and podcast host, Scott Galloway. Scott is a professor of marketing at the NYU Stern School of Business, where he teaches brand strategy and digital marketing. He's also the host of the Prof G Pod and co-host of the Pivot podcast alongside Kara Swisher, who we had on just a few weeks ago.

His new book is The Algebra of Wealth, a simple formula for financial security, and it's available wherever fine books are sold. Today, he's coming to us from New York City. Scott, welcome. It's good to be with you, Reid. All right, so let me ask a very broad question. Your book is good, and it was one of those things where I got a little arrogant for myself at the beginning, like I know this stuff, I know this stuff, I know this stuff. And as I went deeper into it, I was like, oh, there are some things that

are useful to know. But let me ask you this. Why is it that we're not teaching everybody the basic? Like, why is this not a book that every eighth grader is reading?

Well, I think it's a backhanded compliment. My sense is I deal with this with my own kids. My 16-year-old knows how to do calculus and integers, but doesn't understand the interest rate on his credit card. There's just sort of some basic financial fluency that we seem to have missed in high school and even in college. Gosh, I'll even go as far as adults. I know so many people who

that will be the investment banker on a multi-billion dollar transaction and spend more than they make and can't quite seem to do the math around developing a savings muscle. So I would like to see, I was actually involved with a group looking at high school curriculums and we were looking at different things

I think that we should put civics back in high school. We replaced it with computer science. I think that's, you know, you get Mark Zuckerberg when you do that. I also think there should be something resembling a class called adulting where they're just taught basic things. This is what happens when you get an apartment, you know, first, last, you know.

and security. This is what insurance is. This is why some auto insurance premiums are high and some are low. This is what a mortgage is. Just basics because you meet these really impressive young people and they have just a total lack of financial literacy. And in a capitalist society, when you play sports, you just have to have a certain fundamental baseline knowledge to be successful in any sport. And I think you have to have certain financial literacy to be successful in the U.S.,

I'm sure you have studied this far more than I have, but so many Americans, too, you know, they don't have you talked about having enough money to account for the bad thing that's going to happen to you. Right. Whether or not that's losing a job, a car accident, an illness, whatever it is. But, you know, now it's was it most American families don't have more than four or five hundred dollars, you know, saved up in the event of an emergency. And that's catastrophic.

Yeah, there's something like 40% of America is four or 500 bucks away from not having any money. And it's also just incredibly taxing mentally to not have any cushion. It turns every bad situation into a terrible situation. So if your wife gets lung cancer, that's terrible. What's tragic is if it means you're going to be bankrupt as well. So a certain level of financial cushion, I'm not, you know, it's kind of do as I say, not as I do. I didn't have a ton of financial cushion in my twenties. I get that, but you're a little bit more resilient.

But if you're charged with the well-being of other people, it's just bottom line. It's just you have to figure out a way or if possible, and in a full employment economy, I would argue it's possible for most people to put away a little bit of, you know, to have your emergency fund. But this book really isn't about that. This isn't a book for someone who's in debt and needs to cut up their credit cards and pay cash for everything because they don't understand credit. This is for someone who's making a decent living, thinks they're going to make more money,

and wants to be one of the people that ends up financially secure. You know that study where you are kind of the average of your five friends? You end up the same body mass index, the same political views, you live in the same places, you root for the same teams. And oftentimes those people make strikingly similar amounts of money over the course of their lifetime. What's different is that one of them will end up wealthy despite not making much more money than the others. And I wanted to look at the delta between that person and the control group and what were the strategies and behaviors

of the person who doesn't make a ton of money but ends up economically secure. That's really what the book's about. As a aspiring but often failing Stoic, Scott, I was interested to see that Stoicism

philosophy is really at the beginning of the book that this is something that you talk so much about and I always try and think about the idea of you know being more mindful the idea of the difference between a reaction that snap right as soon as in a response which is two or three beats taking things into account but in the context of economic success why is something like stoicism so important I probably should have called it discipline but a lot of it is trying

trying to understand what's important and what you can control. And the way I would summarize stoicism is life isn't about what happens to you, it's about how you respond to what happens to you. And I think developing a sense of control of your emotions and being able to take yourself out of your emotions and really analyze them and realize there's certain things I can control and certain things I can't. And also that no one's as impressed with your stuff as you are.

and I didn't learn this when I was young, be the guy that drives a Hyundai. Don't be the guy that orders a bottle of Grey Goose vodka thinking it's going to be more attractive, make you more attractive to potential mates. You know, try and develop a savings muscle. Understand early that it's relationships and health that really are a ton of reward, that stuff is consistently, people overestimate the amount of value stuff is going to get you. And also know that your spending is in your control. You can, to a certain extent,

to a large extent, especially when you're young, control your spending. And people have a tendency to think that wealth is all about how much money you make, and they kind of put it off into the future. Not recognizing the power of wealth, or really wealth is just as much about how much you save, or specifically your ability to spend less than you make.

My father, between his Royal Navy pension and Social Security, gets $52,000 a year. He spends $48,000. He has $48,000 in expenses and passive income that's greater than his burn without working. He's rich. I have other friends who literally make millions of dollars, and between their ex-wife, their alimony, their house in the Hamptons, their FlexJet card, this perception or this need to kind of create this perception of master of the universe lifestyle, they

They spend it all. They're not rich. So what is it in your control? And take some pride in what's in your control. When you're young, you don't need to spend a lot of money. It's not, I mean, I should say, it depends on the city you live in, but

One summer, the story I tell, I could not go back to college. I could not re-enroll in fall classes if I didn't save $3,300 over the summer between my fraternity bills and house bills and tuition stacking up. And I used to gamify it with the five or six other kids in the fraternity who also didn't have a lot of money like me.

And one summer, the summer of, you know, 86, I spent $77 a week, including rent. I ate nothing but top ramen, bananas, and milk. And it was fun. I think we've all been there. It was fun. And you know what? It's a great exercise to gamify it and develop that savings muscle to know that if you need, you cannot spend a lot of money. And also, between beer and friends when you're young, I still had a nice time. So...

Realize what's in your control and spending is in your control. Let me ask you this. You know, there is a part of this that is, you know, about entrepreneurship too. And I was, I don't know if I was heartened or disappointed in myself. You talk about how you're not a good employee. You don't take orders well. All the other stuff. You talk about working at Morgan Stanley and I've often felt that same way, right? I've only had to work at firms, right? PR firms, that kind of stuff a couple of times. And I'm a terrible employee, Scott.

But there's that entrepreneurial chip that is, you know, you have the Winston Churchill quote. I remember when I first moved to Texas and, you know, as you can imagine back in the day, there was so much boom and bust in the oil industry, not so much anymore. But in Texas, the crime wasn't failing. It was not trying again. I love that. Look, we romanticize entrepreneurship. A lot of kids in my office hours at NYU or on the Prop G pod will say, I got a job at J.P. Morgan, but I'd really like to start a business. And they're

They come to me thinking I'm going to give them the confidence to go for it and start their own business. And I usually say, don't be an idiot. Go to work for J.P. Morgan. The greatest wealth creator in history is the U.S. corporation. And for every one business that succeeds and makes people a lot of money, six go out of business. It's not a humble brag. I'm a really talented person. And when I write in the book was I wasn't cut out for a corporation and people think, well, it's because you're a rebel and you're such a baller and you're just too talented.

No, it wasn't. It's because I was immature. I started at Morgan Stanley. If four or five people went into a conference room, I assumed they were talking about me. I was just, I couldn't handle not knowing what they thought of me. I couldn't handle the asymmetry of information. I was too immature. When someone

I thought was not as talented as me got promoted, it would drive me crazy. And the only thing I know about corporations is they're basically a series of small injustices. But if you have the ability to absorb disappointment at a regular pace and be stoic about it, over time, the arc of your career and your wealth at a corporation, if you have that skill, that maturity, that discipline, that patience,

is up and to the right. My stalemate at Morgan Stanley stayed there for 30 years, ended up being vice chairman. We both ended up economically secure, but I would offer that his life was a lot less stressful than mine. And so we romanticize entrepreneurship and we don't recognize that if you have the skills to play nice with others and be successful and navigate an organization, that's probably the way you should go. And you have access. Most people don't have access to big companies.

So there's a couple of things there. There's one, uh, that you sort of are referencing indirectly, which is grit, right? The ability to go every day and do what you got to do as hard as it could be. I think about that scene, Scott, from, um, all the president's men, right? When, uh,

Robert Redford and Dustin Hoffman are in the elevator. It's like, how did you get here? You know, I've been here since I'm 16. I'm in the mailroom. And, you know, and Bernstein becomes one of the greatest American journalists of all time. But, you know, we also live in a hyper fast forward society, right? Nobody wants to wait. I don't want to say nobody, but it's hard to wait. The entire world tells you you shouldn't have to wait.

Being impatient is a virtue to a certain extent, being really hungry. But what I tell people, and this goes back to a little bit of stoicism, when you have an emotional reaction to something that happens at your work, you need to take a beat. You need to talk to other people. I just know a lot of people who are remiss to admit it now, but they had an emotional reaction to a business issue, left the company, were angry, and five years realized they really screwed up. They should have just endured that injustice and kind of worked through it.

And so wanting more fast is a sign of a successful person. But what you also have to recognize in this part of the book, one of our flaws as a species is that because the majority of the time on our planet, our species hasn't lived past 35.

we have a terrible ability to calibrate time. And that is, we don't recognize how fast time will go. You think, well, if I get promoted only every two years, Jesus Christ, that's not enough. Well, okay, that means in 20 years, you're the CEO. So, and guess what? Those 20 years are going to happen really fast. And so the question is, if the 20 years are going to happen very

regardless, and they're going to happen really fast. Would you like to be a senior executive at a corporation in 20 years or would you like to be somewhere else? It's like when people come to me, read and say, oh, I'm 31. I'm not going to go back to business school. I'd be 33 when I got out. I'm like, you're going to be 33 anyways. Right. Would you rather be 33 with an MBA or without an MBA? Well, and I feel like in some level, Scott, I'm sorry to interrupt. And again, I'm almost 50 that a lot of American adulthood doesn't even start till 30 anyway.

And a lot of people, a couple of people who've read the book said, it's great advice for people in their 20s, but I'm already in my 30s or 40s. It's probably a little bit too late for me to employ the strategy. And I'm like, if you're 35 and you're relatively healthy and you have some money. You got 50 years left. Yeah.

70. They think by the time, I mean, you got 70 years of medical advances. I mean, it's just, so you only, yeah, you're only going to be here for another seven decades, meaning that every hundred dollars you invest, if you can find a way to invest, okay, you're in your thirties, you're going to catch up a little bit, a thousand dollars a month. You're going to have several million dollars by the time your retirement age

So folks act as if they're old when they're in their late 30s. Trust me, when you're my age, you're going to realize just how young that is. I don't remember if it was George Carlin or somebody, but I want to go back to the whole idea of capitalism and how it forces you to want stuff. Buying things you can't afford to impress people you don't like, something like that, right? Right.

And what is it? Is it a human thing? Is it an American thing? Is it a global thing? Look, I drive a 2015 Lexus GX460, right? It's got 175,000 miles on it. Daughter's going to get it when she turns 16, right?

And I live in a very nice town, Scott, and there's plenty of Range Rovers and Rivians and there's one idiot driving a Tesla truck like they could probably afford it. But why is it like let's just use the car like a Range Rover is incredibly expensive in a terrible car. Like, what is it that people say? Like, I have to have this. It comes down to a few basic things.

I spent my entire first bonus check at Morgan Stanley, I think $35,000, which was a shit ton of money for a 23-year-old in 1988, on a brand new BMW 325i, and I hung swim goggles off the rear view mirror, even though I didn't swim. Because the bottom line is, I was in my mating years, I was immature, and I wanted to peacock, and I wanted to impress strange men, and I wanted to be attractive to strange women. I feel like almost every decision I made up until the age of 30 was

quite frankly, was about women. I either wanted to impress my mom or impress strange women I hadn't met yet. And look, that's entirely natural. You're supposed to be peacocking. You're supposed to be dancing around and attracting mates. Sure. Women will spend a ridiculous amount, an irrational amount of money on ergonomically impossible shoes that extend the length of their legs, which supposedly makes them stronger, smarter, and faster, and us want to have sex with them. These are powerful instincts.

So I'm not suggesting you live like a stoic and don't spend money in your 20s. What I'm suggesting is that you at least establish a savings muscle, a hundred bucks a month. Just some people literally never establish a savings muscle that they will spend everything that is within their reach.

And if you're one of those people, and I don't mean to be disparaging, the majority of people are like that. I was like that. I spent all of my current income. Find a way to have money taken out of your check, ideally something that's matched by your employer, or something like the Acorns app that rounds up spending, it adds up fast, and is shot into a brokerage account or a low-cost ETF such that you never have access to it. I mean, you're competing against the drug, the opium-like drug,

of capitalist offers. And the deepest pocketed, most well-resourced firms with godlike technology will figure out a million times a second, psychologically tested offers to get you to upgrade from economy to economy plus to economy comfort to business class because you're worth it. Or when I order my tuna cotto from Joe and the Juice and I get a pop-up saying, would you like to add on flourless chocolate cake from Balthazar Boulangerie? And I'm like, I love flourless cake. Click.

There are so many amazing things to do with money in a capitalist society that to have the discipline not to spend all of it and more, you're really fighting a war. And realize it is very difficult. I empathize with people. But the people who figure out a way to resist those temptations and turn down those offers and drive that old Lexus or don't own a car at all,

they end up in a much better place. And then when you're a little bit older and you will be older, money becomes very important. The trade-off is when you're young and you have money, maybe you get to upgrade to the VIP area at Coachella. Maybe you can buy three outfits from free people instead of two. When you're older and you have money, you get to take care of your kids and your parents. You get to have an absence of stress in your life. You know, money is really nice when you're young. It's profoundly important when you're older.

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I have an older friend who once said that money doesn't necessarily make you happy, but it does help smooth out the edges. But the other thing we've learned, Scott, is that the keys to health and happiness and longevity even is not necessarily finances, although having access to the best doctors and everything else can certainly help, but relationships, community, and all that. So how do you bring those two things together? How do you make sure that...

But you said there's a trade-off, right? Do you want to be hyper successful? Do you want to work all the time? Do you want to do this? Do you want to spend time with your family? You can have it all, but not all at once. - So first off, money does buy happiness. Every study shows the following. Middle income people are happier than lower, higher income happier than medium.

That's the bad news. The good news is that there's diminishing returns. Once you get to a certain level, you do get a little bit happier with more money, but not a lot. So that's a myth that we tell ourselves because a lot of people are so angry about income inequality. Money, look, this book isn't about what should be. It's about what is. And America becomes more like itself every day. America is a loving, generous place if you have money. It's a rapacious, violent place if you don't. And so

I just think you need to plot a strategy and have a plan for financial security. And the earlier you start, the kind of easier and less sacrifice that's required. But don't kid yourself.

Kids in low-income homes have higher resting blood pressure than kids in middle-income homes. Lower-income homes, much more likely to get divorced. I mean, we don't want to have honest conversations around this stuff. When the woman in the relationship starts making more money than the man, the guy becomes three times more likely to use ED drugs. They become twice as likely to get divorced.

You know, we don't like to admit this, but a lot of women still see men as the provider. And when, and not only that, a lot of men perceive themselves as the provider. And when they don't make as much money, they start feeling very insecure themselves.

So economic responsibility and literacy is important for everybody. Something wonderful that's happening. Women are doing really well. There's more single women who own homes than single men. In urban areas, women under the age of 30 have not only caught up at a wage level, they've surpassed men because they're going to college in greater numbers. So they have greater certification and qualifications for high paying jobs. We don't want to do anything that gets in the way of that.

But young men are literally falling off the tracks. And we don't like to have an honest conversation around mating. Women mate socioeconomically, horizontally and up, men horizontally and down. And the problem is the pool of horizontal and up men is shrinking every day. And so there's even social ramifications around how hard it is for young people now to become economically viable. There really is

been over the course of the last four decades, a transfer of wealth from young to old. The average 70-year-old is 72% wealthier than they were 40 years ago. The average

person under the age of 40 is 24% less wealthy. There's been an enormous transfer in prosperity from young to old. And so, you know, I was listening to the latest episode of the Pivot podcast yesterday. You and Kara were talking about the FTC banning non-compete rules. And then I was also watching a clip of you on Morning Joe, I think it was late last week sometime, about

The same spirit of what you're talking about, which is young people have every right to be upset about the world they're facing. So take us a little bit through that about the the transfer, you know, not only the transfer of wealth from young to old, why young people have a right to be upset and also, you know.

We don't have much of a birth rate. Right. I mean, maybe we're close to replacement, but that's not likely to last if more and more people to your point about young men. And we see this, too, in places like China. Right. Certainly Korea is well below replacement right now. So give us a little sense of how you see that in the context, not necessarily of the book, but of economics in America.

So look, I believe that almost everything we do financially, legislatively, economically, it's a transfer of wealth from the young to the old. What are the two biggest tax deductions? Mortgage, interest rate, and capital gains. Who owns stocks and homes? People my age. Who rents and makes their money from earning current income? Young people. If

If you think about what is the largest transfer of wealth in the history of mankind, it happens every year. It's called Social Security, where young people transfer $1.5 trillion to old people. And I'm not suggesting we do away with Social Security, but shouldn't we rename it Senior Security? There are 120 million households in the U.S. If you took the bottom quartile, 30 million households, and you gave them each $50,000, that'd be the same cost.

It's Social Security. And by the way, if you're a senior and you don't have money, give people money. What would that do overall for depression, obesity, domestic violence?

incarceration. We've decided for some reason the transfer of wealth should be based on not if you need it, but whether you have a catheter. We constantly shove money upwards. Why is money more noble than money and have a lower tax rate than money earned on sweat? COVID was the greatest intergenerational theft in history. We flushed $7 trillion in the economy. 85% of it wasn't spent. It was saved. So what happened? It went into the market and it sent stocks skyrocketing. It sent housing prices skyrocketing.

which is great for the incumbents, great for me. I own stocks in a house already. But what if you're a 28-year-old couple looking for a house or you're trying to find your own stocks?

The reason I'm economically secure is in 2008, we bailed out the banks $700 billion, but we didn't bail out the economy. And stocks dropped dramatically. And I was coming into my prime income earning years, and I was able to buy Apple, Amazon, and Netflix for $7, $9, and $12, respectively. And all of them are trading for between $180 and $600 a share.

When you smooth out disruption with flushing money into the economy that, by the way, they're going to have to pay back, it was financed on their credit card, all you're doing is reducing churn and disruption and ceding advantage from young to old. When you bail out the baby boomer owner of a restaurant, you're sequestering a young recent graduate of the Culinary Academy from her opportunity to

Where do these kids find value now? Like what stock is cheap? Where do they buy a house right now? So what we decided with COVID is a million people dying would be bad, but baby boomers getting less wealthy would be tragic. So we've decided to smooth out all churn and disruption, which recalibrates capital from the incumbents to the entrants. They should be furious. 60% of people aged 30 to 34 used to have at least one child. Just in 34 years, it's dropped to 27%.

I, on an inflation-adjusted basis, my people my age at 25 made $85,000. They're making $55,000. Oh, and by the way, housing and tuition have skyrocketed. So the things they need to get ahead, established financial security, have skyrocketed in price. Their salary has gone down. And yet the country's registered enormous prosperity. And they're reminded of their failure every day with social media that speedballs people.

The narrative that you aren't doing well. Oh, wait, you don't have a gorgeous boyfriend, a yacht. You're not flying business class. You're not staying at the Omnigarian Utah. You screwed up. You're a failure. They're shamed every day for the opportunity that they don't have that has been leaked to older people.

And these were all conscious decisions. These are all legislative policies. We're represented by an elected leadership that's the cross between the walking dead and the golden girls. So the 9% increase cost of living adjustment in Social Security that costs $135 billion a year flies through Congress. But the $35 billion extension in the child tax credit that would help young new mothers, that gets stripped out.

Young people are enraged, and they deserve to be for the first time in our country's history, first time a 30-year-old man or woman isn't doing as well as his or her parents were at 30. This turns every problem in our society from a cut to an opportunistic infection. Young people are enraged because they see prosperity everywhere when they look up and they look in certain industries. All they know is they're not sharing it. So no wonder they're pissed off. They have every right to be. So the Super Bowl was in Las Vegas this year.

And I guess my wife told me a story she'd read about there was a guy who rented a hangar and a private jet. And he rented like 10 minute sessions to people to come like stand in line. And they and their friends got to sit on the private jet and pretend like take pictures of themselves and pretend like they had flown to Las Vegas for the Super Bowl. So they're now paying Scott to imagine everything.

Right. A scenario in which they're not likely to have. Now, you note in your book that you bought a jet and that's great for you. Most people aren't going to. But that's the point is it's not enough to say I'm in Vegas. I'm having a good time. You know, I'm going to play some blackjack and get free drinks. Now I'm going to take an Uber, probably 50 or 60 bucks to a hangar and pay this guy 150 bucks for 10 minutes to be on a jet I'm never going to own.

The 25 wealthiest Americans paid an average tax rate of 16%. I'm very open about this. My average tax rate the last 10 years has been 17%. When I sold my company seven years ago, the first 10 million in proceeds were tax-free. Does that make any sense? And what's weird about our tax code, there's actually a myth that rich people don't pay taxes. That's actually not true. The people who get most screwed by our tax code are

What I refer to as the workhorses. And that is someone, you know, a family that's killing it. Dad's a chiropractor. Mom's a baller partner in a law firm. They're making a million bucks a year. In order to make that money and have that kind of opportunity, they usually have to be in a big city in a blue state. And at that level, because it's all current income, they're super earners.

They probably are paying taxes of 50, 52, maybe even 54%. But if you can make the jump to light speed and you can save enough money such that you become a super owner and you're a guy like me that makes their money buying and selling assets, starting companies, selling stock in the company, buying stocks, buying real estate, investing in private companies, your tax rate plummets.

It plummets. You think, well, okay, it goes from 37% to 22.8%. It goes from short-term current income to capital gains. It's more than that. There's all sorts of goodies that you can write off when you're an owner.

You can depreciate commercial real estate 2% or 3% a year, even when it's growing in value. That doesn't make any sense. If you own real estate, you can sell it and roll it into another asset in the same asset class, tax-deferred. You can't do that in any other asset class. So what do we do? When people are earners, every year we tax them between, call it, 20% and 50%. When they're owners, we let their income grow tax-deferred, and then it's a lower tax rate, if at all.

So it's as if when you win the gold medal, we're going to give you the bronze and the silver. Our tax code wants to identify a superclass of super rich

and accelerate them once they get above a certain level. But the workhorses making a really, really good living, they're paying a lot in taxes. Lower and middle-income households, they basically don't pay any federal income tax. Or I should say people in the bottom half and the income ladder pay almost no federal income tax. They pay a little bit more where their taxes have gone up because of consumption taxes, but it's the workhorses that really get screwed. And

And some of those too, yours truly included, pay both sides of Social Security, both sides of everything. When you're self-employed, you got to pay both ends of it. And so I guess my question to you is bringing a lot of that together, how do you increase the workhorse class? So first off, it's not tax rates that are problem, it's the tax code. And that is if you implemented just a flat tax where it was 20%, say, up until

100 grand, 30%, 100 grand to a million. And then let's say over a million dollars, 40%. Kahneman's research also showed once you make above a certain amount of money, you're not getting a lot of happiness. But there were no exceptions. None of this bullshit around you can ride off your jet, do all sorts of trust, pass through limited partnerships. And I want to be clear, I take care of all of them. I take advantage of all of them. I'm not going to disarm unilaterally. If you were able to do that, the highest tax rate, the majority of Americans would see a tax cut.

It's not tax rates. It's the tax code, which has gone from 400 pages to 4,000 because the wealthy want to weaponize the tax code because they can hire very sophisticated tax lawyers to navigate all of this.

Also, corporate taxes are at their lowest since 1939, since the Trump tax cuts. They used to account for 3.5% of GDP. Now they're 1%. They're the lowest they've been in 70 or 80 years. So tax rates have gone way down on the super-rich and corporations. And as a result, the people with money that we have to go after are the workhorses. So our tax code, in my opinion, has been weaponized by the super-rich and corporations.

And also young people are largely perceived not as the future, but as nutrition. You talked about social security. The person who does my analytics or my lead research analyst makes, I don't know, 160, 180 grand a year. They pay 6%. They pay 10, 11 grand social security tax a year, 6%. I make exponentially more than that. And what do I pay? The same amount because it's capped at 6%. Why do we cap it?

I mean, again, that's nothing but insurance. I canceled my health insurance seven years ago and everyone goes, "Bad dad." But here's the thing, I can afford any health hit. So I'm a narcissist. I wanted the gold-plated insurance for my kids and me. I was paying 54 grand a year, seven years. I've saved $378,000 in premiums. That'll buy a lot of healthcare. But here's the thing, I can afford to take those risks.

So again, insurance is another transfer of wealth from the poor to the rich, from the young to the old. And America has become about trying to create a superclass of billionaires as opposed to trying to help the bottom 50% get into the top 50, which is the whole point of America, in my view. So our tax code is another example of

Minority rule, old people voting themselves more money and the super rich and corporations weaponizing the tax code. Let me ask. And this is going to be a naive question, Scott, but I still maybe you can give me the right answer is to your point about.

You've obviously been very successful. You understand the tricks of the tax trade such as it is. And there are people, plenty of people who are much wealthier than you. What is it about this constant need if you have, let's say, a hundred million or a billion or five billion, or you're a multi-trillion dollar company to consistently say like tax cuts, tax cuts, tax cuts. To your point, if you're

I think in the book you mentioned, you know, if you have to pay another dollar in taxes, you know, on a thousand bucks, that's a lot. On a hundred thousand bucks, not that much. On a million bucks, you don't even notice. Like, what's the psychological mechanism in someone who's worth a billion dollars who spends a million dollars a year trying to make sure that they pay less in taxes? I mean, is it, again, I know it's naive, but I don't understand it.

I think when you're as ambitious and as successful as typically very wealthy people are, there's this myth that they're Monty Burns lighting their cigars with dollar bills. They're generally speaking hardworking. They're very smart. In their whole life, they've trained a muscle to create wealth and navigate the tax system. And to sort of ask them to stop is unrealistic. That's just the way they think. It's the way that I think. So when Jeff Bezos, he doesn't go, oh, I'm worth $80 billion. And

And I aggregated that money with the help of the University of Washington and the Seattle Tacoma Airport and the huge investments that the government has made in Seattle, including Boeing. And I probably benefited from some of that. And a bunch of my employees who built my wealth send their kids to public school here. I should really pay my state income tax. He's like, wait, I have an idea. I'll pretend I need to be closer to my father and I'll move to Florida and start selling stock. And he's going to save $10 billion. And

States should compete with each other, but show me someone who moves to Texas or Florida and starts shitposting New York or California. I'm going to show you someone who's sitting on an unrealized capital gain. All of a sudden, they just could no longer handle the politics of name your state. Okay, that means they're about to sell a lot of stock. And I wish they were just more genuine. It's not their fault. That's human nature. No matter what the number is,

You know, I'll use golf. You have your best round ever. You have an 80. Well, I can imagine a 79. You know, it's like in the movie Star Wars when Luke says to Han Solo trying to convince him to rescue Princess Leia, he says...

more money than you'd ever imagine. He's like, well, I don't know. I can imagine a lot. Jeff Bezos is worth $80 billion. He can imagine being worth 180. And he wants to be. And in America, as strange as it sounds, no matter how much money you have, there's sort of, at least from a perception standpoint, a reason to have more. You know, even at $80 billion, coming up with $5 billion to buy the Washington commanders, that's like, well, it'd be easier if I could eat. Maybe I could justify it if I had $100 billion.

And to be wealthy in America is to be loved. It means that people are interested in you. They find you fascinating. You have a larger selection set of mates. You have influence over public policy. It's kind of what it means to be loved. And everybody wants to feel loved. So it becomes a game. It's not their fault. It's our fault. We don't elect people who want to ensure that they pay their fair share. We want to give them

all sorts of goodies. We want to do meetings with them. We want them to love us. So when Kristen Sinema sees a point of leverage and says, nope, I'm not voting for this unless you get rid of the child tax credit and you restore the carried interest tax loophole, private equity partners pay capital gains, lower taxes on current income, on commissions they get. If I sell a copier, I have to pay higher taxes because

But if I buy and sell an asset with other people's capital, I get long-term capital gains deduction because Kristen Sinema is trying to ensure, hoping she got a million dollars from a private equity lobby group, despite the fact there are no private equity firms in Arizona. There are very few. So we have- And she'll be on the border one when she leaves office. 100%. One of my ideas, I think we should pay our representatives and our senators a million dollars a year.

But they have to do garden leave for three to five years. And we continue to pay them after they get out. They have to be on garden leave, though. They can't go to work for industry and they can't. Obviously, they can't trade stocks. It ends up that Speaker Pelosi is more talented than Warren Buffett. Who knew? I mean, there's just it's all about incentives. We need to create an electorate that is really thinking about the Commonwealth as opposed to they it's so hard for them to run. It's all about money. So they end up kind of selling their soul.

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Let me take a step to the left, maybe. And this is about a sort of class that you and I are a part of. And I call them, Scott, the white guys. These are guys, you know, I think, you know, an Elon Musk, the all in podcast people. They're probably the exemplars of this behavior. But I have a lot of friends like this. They're all white, educated, probably grad school. They work in professional industries. They have both.

high income and significant passive income. They live in nice towns. If their kids are in the home, they go to good public schools or private schools. If not, they're going to the University of Michigan. So they have their credentialed and the American dream is working for them, yet they're still pissed off about everything. What is that to you, do you think?

There's this weird vein of kind of tech, neo-libertarian, I want out. I don't get it. I find it very disappointing that the most blessed in our society are the least patriotic. And the notion that these guys have bunkers and go bags and want to go into space instead of trying to figure out a way to make this planet more habitable, I think it's one of the great failures of our nation as a community. You know, one of my solutions, I talk about a bunch of solutions. I

I think we should have mandatory national service. I feel as if these guys, and let's be honest, they're all guys. I feel as if they have, they feel no connection to the country, that they conflate luck with talent. They just don't realize Elon Musk probably wasn't going to start a rocket company in South Africa. I don't think Sam Altman can build what he built in New Zealand, despite spending millions of dollars to build a bunker there, or I think his bunkers in Napa.

And they just, they want out of the system that has been so good to them. Well, and realizing that so much of this has probably started in the bunker at the Pentagon, right? At DARPA or something, right? All of these companies are a thick layer of innovation built on top of the greatest investor in the history, and that's the U.S. government and the investors in the middle class. I don't care what company it is.

whether it's Google, Apple, Amazon, United States Postal Service, Apple, GPS, Google, I mean, DARPA, all of these companies are built on top of multi-hundred billion dollar investments made by public taxpayers, where they come in and they draft off of the enormous investment made by someone else. I'm not saying they're not innovative, but there's going to be a ton of companies that build trillions of dollars in shareholder value based on the CHIPS Act, where we as investors can

consumers or taxpayers are going to invest tens of millions of dollars in ensuring we have the most advanced chips in the world. There will be a ton of companies that come and swoop in and then make hundreds of billions of dollars on top of that investment. What you would hope is that the founders of these companies who recognize immense wealth have some fidelity to the nation such that they would not be critical of it or be constructive criticism or at least want to pay their taxes.

The most patriotic Americans are veterans, the ones who have invested the greatest amount.

So I'm of the mind now where young people should have mandatory national service because I feel as if we need to restore our connective tissue of what it means to be American. I think kids from different sexual orientations, ethnicities, and income groups need to meet with one another. It's very disappointing that we – I don't know if it's because we have lack of common enemy or there's lack of community or COVID. People weren't touching or smelling or feeling each other as much.

But there does seem to be like the United States of individual constituencies. And once I get mine, I want to create an island that doesn't have taxes.

In the case of Peter Thiel, that's literally what he wants to do. Well, that's Peter's idea. Yeah, the seasteading weirdness. But, you know, that's just can I go back just for a second to the bunker thing? Right. And regardless of who the bunker belongs to or where it is, like the idea that these are the same guys that build these bunkers that are also surrounded by large men with guns. And the idea that if like it all went to shit, that like the large men with guns wouldn't just say it's my bunker now. Right. Because at what point does your money matter? Right.

If you're at reading station 11 and the world has come to an end, like it's all a power play, right? It's who's stronger than the other guy.

I just want to be clear. If I was the co-pilot of the Gulf Stream 650 extended range of one of these douchebag billionaires that had his go bag and got on the plane and said, let's head to my bunker in New Zealand, the world's really gone to shit. I say to the pilot, as soon as we get there, let's kill this guy and save our families. They really think their money is going to save them? I mean, that's what I don't understand is like, I mean, Scott, you probably live in a pretty

self-constructed bubble of your own. But I think you've managed to still have a pretty good understanding of the world around you and be part of it to the extent that you can. But there are some bubbles that, you know, are near impermeable, right? I mean, Elon Musk and Jeff Bezos both want to leave the planet, right? Maybe we should let them.

There's very few 34-year-olds who, from the age of 19, were creating this godlike technology, recognized wealth, the GDP of a small Central American nation. I think it's hard to maintain perspective. And one of the great reasons we passed great legislation in the 60s and 70s is our leadership had served in the same uniform. And some of them are very socially minded, but there's also, I wonder if there's something about the male brain. You know, look at Jeff Bezos and his ex-wife. He's in the midst of like

A midlife crisis on steroids. He literally bought the biggest T-top canary yellow Corvette and is crashing it into a hair plugs clinic every day. He is. And by the way, that's his right. And I kind of find it. There's something malicious about it, but he wants to go into space. His wife is just giving money to charities every day.

I was close or I am close with this teen depression or suicidal prevention company called the Jet Foundation that just does a fantastic job working with high schools, helping them identify what is true suicidal ideation and when kids need intervention versus when they're just kind of typical but atypical teen behavior. We got wired 15 million bucks. And I said, we, Jet got wired 15 million bucks. And it was from Mackenzie Scott. And she said, I've been following you. I think you do great work. She didn't want any recognition. She didn't want to be invited to events. She's just shoving her money out. And I think

It's kind of the exact opposite of this tech bro sort of gestalt or zeitgeist. And I'm just disappointed that these guys don't feel more patriotic, that they don't feel a greater sense. There's some Bitcoin weirdo right now talking about trying to a strategy for getting police tech jobs and giving their kids tech jobs and then overnight asking them to be part of a group that marches against current law. I'm like, okay, that's called fascism.

And these are people who have made tens of millions, if not hundreds, if not billions, and they want their own force of people wearing a certain color shirt that overthrows the current government. It's like, what did we do to you other than give you the most remarkable opportunities that have ever been registered by a small group of people in history that would make you hate the system in your common man so much? I just...

I really do find it very disappointed and misanthropic. I think it's very strange. Well, you know, and the flip side of that is this morning as my wife and I were getting our two daughters off to school, I think my 11-year-old said something like, women should really run the world. And her sister said, that's true. Women are smarter. And my wife said, that's true. And I said, all three of you are right. I'd be fine with that.

I would totally be fine with that. And then they go into the idea that girls brains develop in the womb much earlier than men's brains. They got a kick out of that. Right. And I'm like, yeah, fine with me. Right. It's been look, Scott, it's been a great 2000 years for white guys. It's been a great 2000 years.

So there's some nuance there. If you look globally, like take the lens back, there's been no group that's ascended faster than women over the last 30 or 40 years. There's more women globally seeking tertiary educational attainment than men. And when you think about the fact there's some nations where there aren't very many women in college, that's extraordinary.

The number of women elected to parliaments around the world, an electoral body, has doubled in the last 30 years. In the U.S., women have closed the wage gap under the age of 30. It still declines once they have kids, which we need to fix. Women are doing incredibly well. Now, if you look at the U.S., the group that has fallen furthest fastest is young men. And unfortunately, they're paying the price for some of the privilege that I registered, which I don't think is fair. I don't think it's fair to hold a 21-year-old child.

man accountable for the advantage and privilege his father and grandfather had. But you have a group of young men, especially in the United States, that are really struggling. Three times as likely to be addicted, four times as likely to kill themselves, 12 times as likely to be incarcerated. 70% of opiod deaths are men.

There's going to be kind of three female college graduates over the next five years for every two male. You just have the pool of viable, you know, economically and emotionally viable men is getting smaller and smaller every year. So I think this is this leaks into social problems. But I would say that I think the chocolate and peanut butter of a more risk aggressive environment.

male brain with a more thoughtful, measured female brain. And by the way, these are constructs that don't necessarily have to be assigned to people born as one gender or the other. There's relationships where the woman demonstrates fantastic masculinity and the men, the male, more feminine qualities. But generally speaking, the best households or the most productive households are the ones that bring a mix of those attributes. And I would say the same is true of leadership. Women should run the world. No, they shouldn't. But we should have a balance.

We should have men and women. And what we definitely shouldn't have is a bunch of young 30-something tech billionaires who really don't register their blessings. They really don't. They're really, in my opinion, unappreciative. And our society has told them from the age of, you know, since they sold their first app when they were 19,

that they're the new Jesus Christ, the technology and innovators. I call it the idolatry of innovators, that they're going to save us. And every signal they get is that they're above the law,

that they're the new Jesus Christ, that technology is the new religion. I mean, the way these folks act and the level of exoneration from any accountability that would be registered across individuals in any other industry has led them to believe, and I can understand this. If you want to tell a 35-year-old male he's Jesus Christ, he's inclined to believe you. And we tell tech innovators that they're Jesus Christ, that they're quirks.

are just adorable and that their anti-American rhetoric is, is vision. So I think a lot of it is our fault. We suffer from an idolatry of innovators. No. And, and I, you know, I interviewed Michael Lewis last fall about his book about Sam Bankman freed and the underlying reason

Right. And is it is it a replacement for church? Right. Is this a replacement for God for some people? They've got to have something bigger. Right.

than themselves to sort of look upon crypto. I mean, I remember 10 years ago being at some conferences I put on when the crypto people first appeared and they were zealots then. And I just didn't get it.

Oh, there's no doubt about it. As a nation becomes wealthier, its reliance on super being and church attendance goes down. And our superpower as a species is the size of our brain. Our brain is so big, we're expelled from the body early. They call it the fourth trimester. The kid can't walk or feed on its own, which is unlike most animals because our brain is so big. Our brain is big enough to ask really anything.

complicated questions, but it's still not big enough to answer them. So into that void slipped a God. And then as God has sort of left the house and cultures, we still have a need to answer these very complicated questions. So now we have Google. And the closest thing to magic is technology. I don't understand how my phone works. So that same level of mysticism and awe is transferred to this new church called technology. And the new Jesus Christ are Steve Jobs and Elon Musk. And they're just held to

lower standard or a different standard. If you look at the things Elon Musk says, the vitriol, the hate, the bigotry, the weirdness, everything is recast as vision. It's like he's a prophet. He just sees the genius we don't. We don't understand him yet. He's literally like a Jesus figure that whatever he says, there must be wisdom in that. When he spreads homophobic conspiracy theory about the speaker's husband, that's genius. There's something there. That must be

We're waiting for some master insight or plan to unfold. We just don't see it yet. Yeah. And look, I think that's one that, you know, all of the things you're talking about, I think, too, are, you know, I spend most of my time in politics, Scott. So a lot of this, I think, is going to come to a head in its own way in the next six months. But, you know, the other part, too, is that we have.

Really, let's call it since the end of World War II, right? There has been more advancement, wealth creation, freedom, et cetera, et cetera, than there was in the previous 200,000 years combined of human history. So maybe to your point about the brain is like we just haven't cognitively been able to catch up with that either. Well, there's a few things going on, and I think some of it's related or can sort of explain a little bit about what's going on on campuses. One,

There has been, there's massive prosperity and young people aren't sharing it to the same extent that our generation got to share in prosperity. You know, minimum wage is at $7.25. Meanwhile, the NASDAQ's up fivefold in the last, whatever it is, 15 years. And when states like Nebraska are passing minimum wage increases, you know something's wrong. Yeah. So young people are correctly angry. There's something, young people are enraged. There's less of a sense of community. I don't think COVID helped.

People spend more of their time online where they're more likely to be really vile to each other. When people come up to me and recognize me, they could not be more lovely. They could not be nicer. And occasionally someone even comes up and says, oh, by the way, I disagreed with what you said here. And they explain it. And I'm like, it's usually an interesting point. And even if I don't agree, we can have a civil conversation.

About five times a day, I get an email calling me Professor Genocide. And there's something about anonymity and online, and I don't know even whether it's bots or not, but our discourse has become so coarse at the hands of algorithms that elevate rage. We used to think that it was sex that sells. The algorithms have figured out that it's rage. And they have poured rage, and they're dividing us from each other. They're literally tearing at the fabric of society. People feel bad about each other.

There are a third less people speak to their neighbors. 54% of Democrats are worried their kid's going to marry a Republican. When I was out of college and I dated, I don't think I could look back and tell you what the political affiliation was of anyone I dated. We weren't looking for reasons not to like each other and to immediately write each other off. We just weren't doing that. So there's a level of, I feel like we've got to take the temperature down. I think social media has speedballed this coarseness.

And also, I think young people see the disparity, the fact they're not as doing well in the face of unbelievable economic growth and prosperity. And that makes them angry. And all of these movements, whether it's the movement on campus now or Me Too or Black Lives Matter, they all have – I want to be clear. These movements, there's really good – I understand their rage, but we pour fuel on it by this level of coarseness online.

And this lack of economic opportunity, it turns everything from covid to being on a ventilator. Well, listen, on that happy Scott, I know you've got to run. I heard you say the other day you're not on Twitter anymore, but where can we find you and your work online?

ProfGalloway.com, obviously The Pivot and Prof G Podcast. I have a newsletter called No Mercy No Malice. But quite frankly, to resist is futile. I'm everywhere. I'm like AOL in the 90s. If you stick your hand in a cereal box, there's a one in three chance something I do is going to come out. So I'm pretty easy to find.

As always, gang, you can find me still on Twitter and TikTok, as long as both of those things are available, at Reed Galen on threads and Instagram, at Reed underscore Galen USA, and over at Substack, the home front. Scott Galloway, thanks for joining me. Thanks for having me, Reed. And everybody else, we'll see you next time. Thanks again to everyone for listening.

Be sure to follow and subscribe to The Lincoln Project on Apple Podcasts, Spotify, Google, or however you listen. Don't forget to leave a five-star review. To connect with us, follow us on Twitter, at Project Lincoln. And for more information on our movement, to join our mailing list, subscribe to our newsletter, or make a contribution to our efforts, visit lincolnproject.us.

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