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so you can sell more, raise more, and fast-track your business growth. So get going and start growing your business today with a free trial at ConstantContact.com. Constant Contact, helping the small stand tall. Hi, everyone. This is Pivot from New York Magazine and the Vox Media Podcast Network. I'm Kara Swisher. And I'm Scott Galloway. Scott, you know what I did this weekend?
What'd you do? I moved. Oh, how'd it go? It was exhausting. I was up till four in the morning. I gotta tell you, I have so much stuff. I have so much crap. And I have, it's very exhausting. But we're now in. We're now in and it'll be a couple of about seven, eight months before we move back. I never want to move again.
I can't believe you're doing it again. I know. Especially with kids. Are you back in D.C.? Yes, I'm in D.C. temporarily. I'm going to New York this weekend, this week, excuse me. The Livingston Awards are on. I'm a judge. Is this more awards, really? No, these are for young journalists. They're amazing reporting. I know you don't love reporting, but these are great reporters. You know. Oh, let me put words in your mouth so I can shame you. No, I've decided.
I have a bone to pick with you about insulting things like the Washington Post. They do amazing work. But nonetheless, you said they don't matter. These businesses don't matter. The Washington Post? Any of them. They're paramount or anything else. But the Washington Post doesn't matter. No, no, no, no, no, no. Okay. Come on. I said that paramount's economic value, that it's an amusing story, but in terms of real impact, it doesn't mean a whole lot. I think Washington Post, in terms of influence on the world,
dramatically punches above its way. I hope it survives. Yeah. You know? Yeah. And by the way, I just want to point out that I'm recruiting an editor-in-chief, so anyone at the Washington Post who wants out of that dysfunctional fucking nightmare, just send me... He sent me that. I'm serious now. We're hiring an editor-in-chief at... By the way...
We're growing, they're shrinking. We pay well. I don't know if they pay well. And as dysfunctional as we are, we seem strikingly functional compared to the shit that's going on there. But also, Scott as a boss. It is run by a white male, so we have that in common. No, well, your real boss is your longtime partner. That's true. The whole firm is run by women. Yeah. But let me say, I have to, so the Livingston Awards are given to young journalists under 35, and they're really astonishing stories.
The nominees and everyone who won, everyone who applies, it's really heartening every year that I do it. It should be interesting. And then I'm going to Canada to get the Canadian of the Year Award.
I'm sorry, you're getting the Canadian of the Year Award? The Canadian Journalists Federation or Foundation? I can't decide if that's the weakest flex in the world or going to be really fun. I'm going to Toronto. It'll be fun. It'll be fun. They're giving it to me. It's another lifetime achievement. I got one in San Francisco last week, and so now I'm getting my Canadian one. Yeah.
Well, you know how you get 100 drunk Canadian fraternity guys out of your pool. Guys, could you please get out of the pool? Exactly. Yeah. Yeah. We don't think about Canada enough. Yeah. I'm excited. I'm excited to go. I love Toronto, so that's easy. It's a great city. It's a great city, so I'm going to run up there and get there. They have a lot of the same problems we do, actually. Oh, it's a beautiful city. Gorgeous. And then can I tell you one other thing I'm doing this week? There's this really cool movie coming out called War Games. Of course.
And it's all these high level people like Republicans and Democrats who war-gamed out a situation. And they made a documentary of it. And I'm going to see the documentary and then interview the cast. Well, not the cast. It's like senators and defense officials. I'm super weirdly excited for it because it's all about an insurrection. That sounds really cool.
So I'm excited to do that. And it's a movie, right? Is it a movie? It's a doc. Yeah, it's a doc. But they're going to show the doc and then we're going to talk to the participants, which I think will be very timely given Trump's talking about revenge. That's very exciting. Yeah. You know what I discovered this weekend? I discovered an amazing hack. I spent a lot of time with the dogs this weekend.
And my little one, the big one's super friendly, but the little one occasionally snaps. So when someone comes near him, I just say, not friendly, and people avoid us. And people always stop to see Leah because she's a big, beautiful dog. Yeah, she really is. And when I'm in a hurry, I'll just say, not friendly, so I can just keep moving. I've started saying that even when I'm not with the dogs, and it works perfectly. Yeah.
Just anyone gets near me, I'm like, not friendly. Not friendly. You're Larry David. Not friendly. Isn't that great? You have to wear that MAGA hat. You got to wear the MAGA hat like Larry David. Not friendly. Not friendly. Go away. Move along. Move along. That is funny. Larry David would say that.
You've become that. There you go. Not friendly. You've become that guy. So anyway, we've got a lot to get today, including a big win for Sandy Hook families who deserve every win they get, and the proposed Texas Stock Exchange that wants to give New York a run for its money. Plus, our friends of Pivot are journalists and brothers, Wall Street Journal investigative reporter Brody Mullins and Politico contributing writer Luke Mullins.
They've written a new book, The Wolves of K Street, The Secret History of How Big Money Took Over Big Government. But first, more conflict between AI companies and news publishers. What?
Perplexity AI, which some people think is really great, is in some hot water after being called out for not attributing sources. The AI-powered search engine company recently released a new feature, Perplexity Pages, which is essentially a news summary feature. Then a Forbes reporter pointed out similarities between a Perplexity news summary and a Forbes article saying the company had scraped and repurposed
Forbes pointed to several cases of perplexity using exclusive reporting from paywalled sites with only a small footnoted link to sources. In response, the company's CEO said the feature is still new. The company is working to address the issue. He also said the company's CEO said the feature is still new.
He also said everything on the internet is free. He also has said that in the past. And I used to have this problem, but it was more like websites from all kinds of sketchy areas that used to just suck up all things D stuff and spit it out again. But this is them doing it as a business.
So what do you think about this? And this has happened in a different way. This is just faster and more efficient. I'm actually more optimistic that this time that the Washington Post, distinctive of all the dysfunction or other media companies, are going to find an actual revenue source here, that this is another example. I think the more articles that come out like this and the more discovery that they're essentially just repurposing other people's IPs.
is going to give them more power in court and more mojo to say, okay, Anthropic or Lama or OpenAI,
You know, what Adobe did that was really interesting around generative AI for design was they said from the get-go, it's going to be either ours or we're going to have the licenses for it. So when you use Firefly, you don't have to worry. It's all, they own it. They have, they've created a walled ecosystem of things they own or that they have come to a licensing agreement with. Yeah, just like with photos or songs. Yeah. That's right. So,
I think this is actually a good thing for these media companies. The Washington Post is dysfunctional, given that it seems like we want to talk about it. This is Forbes, yeah. Yeah.
Yeah. Well, but I'm just using Washington Post as an example. I mean, Forbes has kind of been left for dead, hasn't it? No, actually, interestingly, the editor in the tech section used to work for me, John Pachkowski, and they do some very strong articles. And he texted me over the weekend because I had always complained of people ripping off our stuff many years ago, both the Internet and other media organizations that wouldn't attribute our stories to us.
that we would break. And I said, welcome to my world. Now you can be annoying. And they were always like, why are you so mad at these people? I'm like, because you guys worked hard and they just ripped it off. But I agree. I didn't have anything. I had no recourse in that case at all whatsoever. Anyway, one of the stories Perplexity allegedly ripped off was about Eric Schmidt. This is the one, the former Google CEO is arming his AI-powered military drone venture with top tech talent. The endeavor named Project Inverse
Eagle has been poaching talent from tech giants like Apple, SpaceX, and Google. Project Eagle has been testing drones in Silicon Valley and Ukraine. After leaving Google, Schmidt serves as the chair of both the Department of Defense's Innovation Board, he was very early to this, and the National Security Commission on AI.
You know, of course, he's probably looking at Anduril and Palantir and saying, give me some of this sweet defense money, I guess. And so these are military drones, which are being heavily used in Ukraine. I can't believe they're testing in Silicon Valley, although I'd like to see that happen. I'd like to see that going on.
Eric. You like the drones for people? Yeah. I think, one, I think Eric is, the few times I've had conversations with Eric or I've seen him speak, I do think he is strikingly intelligent.
Also, if you look at the economy or the innovation that's going to come out of the Ukraine-Russia war, it is drone technology. This is innovation and this is the notion that a country that doesn't have nearly the capital of the "ferocious" kinetic power of Russia can strike back using this cheap and cheerful technology where they have independent AI that's not dependent upon GPS that actually surveys the landscape and can make its own way.
And potentially, supposedly, I think 20 or 30 percent of what is it called? The Black Fleet. Russia's Navy has been taken out. But drones are the new kind of drones are the new, you know, the new front on military technology. There was one there showed a drone attack.
They showed it going through woods with lots of trees, moving through by themselves, autonomously avoiding trees. And it was like, remember Star Wars where they were on those riders through the forest? That's exactly what it looked like. It was crazy. You know, I think there's got to be regulatory things on the use of military drones, especially autonomous military drones. I mean, think of the, I mean, this is cheap and easy to use, so crazy people will...
employ it. So there should be, just like there is with cloning or things like that, even if people violate it, there should be a global decision-making on the application of these things, which I think is not any time coming. So we'll see. Eric is an interesting guy. He's been at this for a while. I covered him since he was way over at Novell and at Google and
Et cetera. He's a funny guy. It's a funny guy. We used to have a ball gag at the, at all things D every time he said something dopey at Google that would cut them into trouble. So we had a picture of him with, with a red ball gag on. I'm sorry. I heard nothing after you said we used to have a ball gag. He would say dumb things sometimes and a lot more than most people. And just some, he likes to talk.
And so we had a ball gag with a picture of him with a ball gag. John Pachkowski made it. Every time he said it, the picture would be Eric and the ball gag. And he said, "Eric today once again needs the ball gag." Anyway, that's neither here nor there. Let's move on. Apple is expected to unveil all things AI at its Worldwide Developers Conference as we tape on Monday. I'm going to be talking to them afterwards.
Apple Intelligence will be available for new versions of iPhones, iPads, and Macs and will be powered by Apple's own technology and tools from OpenAI. Some of the features Apple is expected to announce are AI summarization of articles and web pages, a Siri revamp, thank God, the ability to make custom AI emojis on the fly, AI enhanced photo editing. You know, this is important for Apple, even if they're not
running the AI themselves, which I assume they will do eventually. This is a real good application of AI, and they'll probably do it well in terms of not ripping people off, making it useful, making Siri, whatever. I hope they rename it. They probably hired Scarlett Johansson for this. So I think it's probably a good thing.
I don't know. What do you think? It'll make the iPhones much more useful for sure or any different technology you have. What do you think? Apple is the kind of quintessential case study in the second mouse, and that is people overuse the word innovation. Innovation is actually a really true innovation. Being first, pioneering, doing things at the cutting edge is actually a terrible strategy for shareholder value. And that is when you're out at the frontier, you get misplaced.
mud on your face, arrows in your back. It's too expensive to figure shit out. Apple wasn't the first in MP3. They weren't the first in graphic user interface. They weren't the first in laptops. I mean, smartphones, they were not first. What they do is they wait, they come in, they commercialize it, they make it more friendly, they use their brand. So I'm very excited to see what they do. I hope they do something in healthcare. I hope they, the front end for it will be Siri. I
But I hope they do something in healthcare and I hope they do something around, we talk a lot about generative AI. I think the real opportunity is what I call integrated or integrative AI. That just makes my life easier by saying, "Scott, we see you're watching all these videos on your shoulder hurting,
here are some physical therapists that are also Syria-enabled. Do you want us to send you free times or schedule a point? It's the ultra-assistant is what we're talking about. I mean, like from the movie or anything like that. Of all the companies that can do this,
Apple's already very helpful when I'm walking. It goes, are you walking for exercise? Would you like us to record it? You know, I give them permission, but it's all permission-based, which means they ask me first if they want me to do it, which I like. And often Apple is telling me things like, oh, your car is parked here, Kara, like just so you remember. And I'd like it to talk to me too at the same time. Yeah, I just think, I think the place that AI is going to add the most value is
is around really boring stuff. I just want everyone to go, okay, Scott, we see on Thursdays you like to whatever, do the following things or you're in this city. This is, I mean, there's just so much information they have on that handset and all they have to do to respect your privacy is go,
Can we have access? And we won't sell it to anybody else, but we'll use it. The privacy is so overrated in terms of actual consumer behavior, especially among young people. We exchange privacy for utility at the drop of a hat. And I think with the interface they have with the billion wealthiest people in the world, whether it's travel, whether it's
you know, opportunities, logistics, services, and how friendly the brand is. I think it's one of two things. Make your life easier. Do something about healthcare. Maybe something about media. I don't know. I'm excited to see it. I am too. I'm excited. I'm going to get a briefing from them afterwards because I can't go to the event. I bet you are. Oh, I am. Oh, I am. Are you going to get a briefing like you did on the mix
the mixed reality headset? I used it the other day for watching a movie. It was great. I bet you did. I'm going to wear it on next show. I did. I watch movies on it all the time. You really watch movies on that thing? I do. I like them better. They're very immersive. I have very noisy children. So it's lovely. It's a lovely. You sit there with a headset on watching a movie?
Well, they talk a lot in the morning. Yeah, not in the morning, but they talk a lot. Yes, I do. I watch the headset with the movie at night. Okay, let me get this. The kids are running crazy. Amanda's trying to keep a lid on the household and you're in the corner with that fucking headset on. No, I do it. I do it in the office. All I got to say is you better make more money because number three is coming your way, baby. No, no. Two words, prenup, hopeful, question mark. Yeah, anyway. Apple stock, what's going to happen? Listen, here's what happened.
to it over the last year. It's back up again to 194. It had a real dip in April, end of April or mid-April. Then it went up and up and up. And then it had a little dip because of cautious outlook on the iPhone sales. So where do you see it? You know, the stock is on a momentum now. It's just ran right up over the last, oh, about since May 1st. Let's go down. Since April 22nd, it's been on a run.
So what do you think? It's been an unbelievable performer. It's quadrupled over the last five years. I'm an Apple shareholder. I'm actually thinking about selling it because I think that there's going to be rotation out of some of these high flyers that have done really well. But they have some really big issues. One, they seem a little bit late to some stuff. And also China is a big specter. At some point, we're wondering what's the next thing beyond the iPhone market.
And also, again, see above number one, when 20% of your business and, I don't know, the majority of your supply chain is out of a country where we keep making threats against each other. Which they've been diversifying, which they've been moving to Vietnam and other places. But yeah, here's the deal. I think if this stuff with AI works really well, it's a lock-in. I was using a Windows computer when I was getting, I got a storage space. That's another thing I did this weekend, went to my storage space.
And they were having me fill out the form on a Windows computer, and I hadn't used one in years.
And it was so dumb. I was like, oh my God, I forgot. It was like a bad feeling. I just think if it locks you into Apple and the guy goes, you use Apple, right? And I go, yes, I do. Yes, I do. Well, you should too. Anyway, we'll see what happens. We'll see what happens. I'm really eager to hear and give their examples of what they're going to do and how they're going to introduce it. Because they have been behind, but they have strictures around privacy compared to other companies that they have to stick to because it's a brand attribute.
Anyway, let's go on a quick break. When we come back, Alex Jones gets ready to liquidate his assets. I'd like Alex Jones to liquidate himself. Anyway, we'll speak with friends of Pivot, Brody and Luke Mullins, about how big tech became a huge lobbying force in Washington.
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Scott, we're back with the latest on conspiracy theorist Alex Jones, an all-around terrible person. Jones may finally pay the Sandy Hook families the $1.5 billion in damages he owes them as he moves to liquidate his personal assets. I'm always thinking he's up to something. So the judge is set to rule this week on whether Free Speech Systems, a parent company of Jones' Infowars, will be liquidated.
The Sandy Hook family has won their defamation suits against Jones in 2021, but have not received any money since Jones and his company filed for bankruptcy in 2022. Jones' personal and company financial assets combined are worth between $10 and $12 million. He said on the show that even if free speech systems and inforce are sold, he could still find a way to broadcast. He's going to keep going. I mean, honestly.
You know, he'll not have InfoWars, which will mean he could start something else. I've started a million things. So he's still popular with the conspiracy theorists. And of course, if Trump wins, he's back in gravy again. What do you think about this? I think it's wonderful. I think that when you bring that sort of misery to people, knowing that you're going to create that sort of misery against people who have already incurred the ultimate tragedy of
I love that he's going to be near bankrupt, and I hope they chase him to the four corners of the earth for the rest of his life. And I hope it sets, I hope it set, look, everything comes down to incentives. And there needs to be incentives in place that say, look, if you trade and traffic in people's misery, it's going to cost you a lot.
And he has made a conscious decision to make, not only bring shame on him and his family, but his kids and his entire family is going to struggle because he's going to be forced to liquidate assets. I would imagine there's some very smart people representing the families and investigators, and they're going to make sure that wherever he pops up, whatever assets he manages, it's chapter 7 versus chapter 11, which means he can't restructure assets.
I was even thinking about trying to find, I wonder if the media company is going to be sold for sale. I'd like to see it go to a liberal news outlet. I was even thinking about looking at it. Oh, let's buy it. There you go. We have to buy a media company. Let's buy it. You don't want to do a business with me, do you?
I'm in business with you, Kara. I'm in business with you. I understand, but a real business. Like if we bought InfoWars and made it like real liberal and like, you know, had trans people on all the time, drag queens. First guest, AOC. That's it. Brought to you by Mother Jones. Definitely. Have some kombucha. Today we have Ben and Jerry on as our guests.
Yeah, I think that would be hilarious. I think we should do that. It would be really fun. If I was really rich, I would do shit like that. If I was really rich, I'd fuck with people like him. Sure.
Sure. Why not, right? Enjoy it. Why not? Enjoy it. All right, moving on. Alex Jones, fuck you. You're a mendacious fuck. You are the mendacious of mendacious fucks going. Amazon self-driving unit Zoox is going to start testing robo-taxis in Austin and Miami. The unit has been testing its vehicles in San Francisco, Las Vegas, and Seattle over the last few years. I have ridden in them.
The announcement comes as Zoox is investigated by the National Highway Traffic Safety Administration after two sudden braking accidents led to crashes. Federal authorities also opened a probe into Alphabet's Waymo vehicles last month following reports of unexpected behavior. Can companies get these robot taxis past safety concerns and go mainstream? I think they can. This is part of the process. Zoox, for people who don't know, go both ways. They're like a...
It's like a box. It's like a Dyson. It's like a Dyson. I don't know what else to say. They go forward and backward and you get in and there's compartments and you sit in your compartment. So a couple of people can be picked up by the robo taxi and you don't have to touch anybody. So you just get in and it takes you to your spot. Like Total Recall.
Yes, yes, exactly. But you can put four people in it. I think four or more people in it. It's been around in San Francisco. It's a really, the woman who runs it's really interesting. It's owned by Amazon. You know, I think these things are inevitable. I know that people are like, oh, they don't work. But I just wrote a bunch in San Francisco, the Waymos, and I love them. I get the problems with them, but the problems are people. Like,
I'm sorry. The problems are people usually in these cases. Every now and then it has an issue, but there's so many human accidents happening. I'm still very bullish on these things. They're very expensive getting them out there, but eventually I think everyone will be riding them. What do you think?
It's going to happen. I always thought it was going to happen in long-haul trucking before it happened with taxes. I'm in favor of it. I can't imagine that's a great job. I use something here called Wheelie in London that I absolutely adore. I think they do a fantastic job. Is that autonomous? Oh, no. No. It's actually a company I own. I think it's a Russian company. It's essentially a high-end Uber, and I find they just do a better job. I left my keys there, and the guy...
The guy came, I mean, they're just so good. They don't, I don't know. I find some of the, I find some, there's not a great deal of what I'll call training or professional standards around Uber. And I think these guys do a great job. But I like, I love the idea. For the first time in my life, last couple of years, I haven't owned a car and I absolutely love it. Mm-hmm.
So would you get an away mode? I ride them all the time. I don't know who's driving the subway when I get on that thing. I don't. Who cares? But I get the safety concerns and cities being concerned. And it's appropriate that federal authorities and others look into that, the national highway safety. You know, I think the problem will always be Elon Musk because he always promises and under delivers over promises on these things. And he's been saying full self-driving was around the corner. And I think it's set expectations higher.
far too far, you know, that this is something that'll work out over time in cities. - I used to go every, my friend Orlando Moishan had a home in Montauk and every year I used to go out there for a week and just hang out with him. We'd have the best time. And I remember I was taking a taxi from East Hampton Airport
And this guy had printed out and put in like a pasted tape to the dash, a printed sign that said, $100 surcharge if you vomit in car. And I just sat there going, what can I do for $150? What would you let me do in here for like $200? Yeah.
Anyway, we'll see where these go. I'm very, we're bullish on this eventually. And I think it's probably safe for people over time. I visited Aurora, which is one of the truck startups. They're very expensive to get started. It just is. It's going to be a big investment and eventually someone will benefit from them. But they're testing them in Texas because of these straight roads.
Speaking of Texas, the New York Stock Exchange and Nasdaq may be facing some new competition from Texas. The proposed Texas Stock Exchange, which is backed by BlackRock and Citadel Securities, those guys, has raised approximately $120 million from individuals and large investment firms. The exchange, known as TXSE, plans to register with the SEC later this year, begin facilitating trades next year and launch by 2026.
The TXSE, just flips off the tongue, could be fully electronic and would allow dual listings with companies also on the New York Stock Exchange. Texas Governor Greg Abbott told CNBC the new exchange is for companies whose only agenda is capitalism. Oh, shut the fuck up, Greg Abbott. Anyway, what do you think about this? I like a new stock exchange, but they're going to like, say, we're the not woke stock exchange or some stupid thing.
marketing thing like that. I think it's great. I don't like the politicization of everything that now we're politicizing stock exchanges that they'll try and position NYSE and NASDAQ as blue. The NASDAQ and NYSE do, I think, get out in front of their skis and start getting into social engineering and deciding what the composition of boards should be, which I'm just not sure that's their job.
But they are, I think you need more competition. And Texas, there's no getting around it, has done an amazing job. The economy in Texas now is larger than Russia, Canada, and Italy. It has more Fortune 500 companies now than anyone but California. It's tied with New York. Their value proposition here will be more business friendly, lower filing fees, probably less disclosure requirements.
I feel like I'm curious if you agree with this. I smell Elon Musk here. I would bet he's going to be their first customer and move all of his companies onto this exchange. If you look at these exchanges, now the flip side of having these additional standards is that the average PE of stocks trading on the London or Shanghai exchanges is 13. The average PE of companies trading on the NASDAQ of NYC is 26.
Because that additional, it's like, it's why people get a higher salary coming out of Princeton or NYU or Stanford is the screening. The ability to get into these schools is so great that people assume you're better. It's the same, or more qualified, I should say. It's the same when you manage to get listed on the NASDAQ or the NYSE. People assume that the vetting and the screening means you're a real company and you should trade at IR multiple.
Why dual listings? Will you explain it? I didn't quite understand. If you allow dual listings, what's the difference? Why would you be on one exchange if you can dual list on both? I mean, you might as well, right?
Well, yeah, but on an exchange, you're essentially charging the exchange with pairing shares. And I don't know which shares get allocated to one exchange. I just don't think logistically it makes sense to be trading on multiple exchanges, although some companies do trade an ADR on a foreign exchange. But look, this is another case study. I think competition is good. It'll bring down fees. It'll put pressure on
Texas has done a great job putting pressure on other states and other companies. And I think that's a good thing. I just hate the politicization of it. I don't, I don't know. It's just their electric grid sucks. Remember the energy crisis there? Yeah, but that's a different ball of wax. That's a lack of infrastructure payments or lack of infrastructure investing. No taxes, no. We should have more than two big exchanges. We used to have the OTC in the U.S. So I think it's a cool thing. But my gut is...
Elon Musk, they called him and said, would you move? And he said, I'm down with it. I want the following things. And I don't want you to ever ask me for my financials or ask me what my CEO compensation is or disclosure requirements about X, Y, and Z. They'll position themselves as more business friendly and less woke. They'll say, because, for example, I think it's the NASDAQ requires that you have at least one female board member.
And I think, okay, that makes sense. And I think, well, should the NASDAQ be dictating that? I don't, shouldn't, aren't they?
Aren't investors smart enough to demand that? Why is the NASDAQ in the business of figuring out board composition? And I think there's good arguments on both ends. They'll exploit that and take advantage of it and say, that's not the business we're in. We're an exchange. Yeah. Yeah. I get it. I get it. It'll be interesting to see what happens. And we like competition. At the same time, if you go on and on about woke, you're going to exhaust us with your stupidity. Anyway, you're just a money exchange. So just hush up and just see if you can give good services to companies.
I don't know if people are that annoyed by that one, that rule necessarily. We'll see. We'll see. I think the companies are going to stick with New York and NASDAQ. I don't know. I just feel like. The big ones. Yeah. I don't know. But, you know, this, I would just be shocked if they haven't already said to Elon Musk that
when SpaceX goes public, have you thought about moving Tesla? And he's like, right on. Right on. Yeah, you're right. You're 100%. They're going to come out of the gates. And not only that, the CFO or the treasurer of Texas will start putting pressure on Texas companies to list on the Texas exchange. They'll create some regional, like my team versus their team, red state versus Texas versus New York. You can just see how this is going to shape up. And
At the end of the day- We're bigger in Texas. They're going to do all that bigger. Texas has a ton of great companies. It'll force the NASDAQ and NYC to bring their fees down. On the whole, I like it. I wonder what the oil and gas companies will do. I don't think they care. They just want to make money. Anyway, let's bring in our friends of Pivot. ♪
Brody Mullins is an investigative reporter for The Wall Street Journal. Luke Mullins is a contributing writer for Politico. They are authors of a new book, The Wolves of K Street, the secret history of how big money took over big government. And they also happen to be brothers. How sweet. Brody and Luke, welcome.
Thank you. Thanks for having us. So the book traces the history of lobbying in Washington through several dynasties. Tell us the story because we're focused on tech and media, but we'd love you to sort of give us an overall look at them and the generations of lobbyists from regular people like Paul, people we know of Paul Manafort and Roger Stone, those lovely guys.
and sort of the shifts, and then I'd love to start talking about tech. - Yeah, so we start by looking at-- - Say who you are, say which one you are. - Sorry, this is Brody Mullins, the older brother in the relationship era, which is important. So we look at lobbying over the last 40 or 50 years, and what we found out, which is really remarkable, is that companies right now are dominant in Washington. Big companies have all the power over consumer groups and environmental groups and labor unions, but it wasn't always the case.
That for most of the last century, companies had very little influence in Washington. So we found that sort of remarkable. We sort of dive into how companies got that power, how they wield it and how they bend rules and regulations to favor the wealthy and corporate elites and not the rest of us.
So how? Well, this is Luke here. So we basically start the book in the 1970s, which is this pivotal period where corporations come to power in Washington. And essentially what happened is, you know, corporations were on the defensive for the 60s and the early 70s. And, you know, there was a lot of power in consumer groups, guys like Ralph Nader and public interest groups.
And, you know, there was this sense at that time that corporations really just hadn't invested in Washington. So basically, there's this sort of revolution of, you know, corporate power in Washington where they start investing a lot of money in sort of direct lobbying, start to fund a lot of these ideological think tanks, and then also develop...
then also develop these sort of more novel techniques, which we think of as we call outside influence, which is these sort of newer tactics that, um,
are designed to reach out specifically to voters, really, in order to put pressure on their members of Congress. And these characters who did this was Manafort and Stone or who? We trace four or five lobbies over time who helped tell this story. I mean, we're talking about complicated, deep issues. And so we try to write them as lightly as possible by following some great characters. The first one is Tommy Boggs, who we consider the first mob.
modern lobbyists. Then we go to Paul Manafort and Roger Stone, and then to Tony Podesta and some other folks. So we sort of trace the evolution through the decades. So they become more aggressive. But one of the companies you write about is Google began its lobbying efforts, and they were determined not to repeat the mistakes made by Bill Gates and Microsoft. Now, I was in a meeting with Bill Gates before the monopoly case,
And he was at the Washington Post and he said, what do I need lobbyists for? You know, and he had some guy up in Rockville, I forget what his name was. He became their main lobbyist for years. Jack Krumholtz. Jack Krumholtz. But he's like, I don't really care about Jack. He said this in this meeting.
And I was like, I put my hand up. I was a very young reporter. I said, well, they care about you. And there's a bunch of ex-student body vice presidents with subpoena power. So I think you should be worried about it. But tech wasn't wasn't.
And Microsoft has gotten very good since, obviously. But talk a little bit about the evolution of tech. Yeah, well, you're exactly right. We should have pulled you in as a third byline for this book. Sounds like you know exactly how everything happened. So Microsoft basically, you know, thumbed its nose to Washington. They didn't care about Washington at all.
Bill Gates thought that he was the smartest person in the world and his company knew exactly what they needed to do in the marketplace and didn't care about these bureaucrats in Washington. You know, unfortunately, these bureaucrats in Washington for Microsoft have a lot of power and they filed a series of cases, lawsuits accusing Microsoft being a monopoly. The whole point in our book about Bill Gates and Microsoft
is that they did it the wrong way. They ultimately prevailed in the case, but it took them a decade, billions and billions of dollars of distractions, focusing on Washington and paying for lawyers instead of battling out in the marketplace. When Google came along, they looked at what Microsoft did and said, "Hey, we don't want to repeat that mistake." So unlike thumbing, instead of thumbing their nose at Washington, they embraced Washington. They invested in lobbyists, they invested in campaign donations.
To this day, you know, they've continued to invest in Washington. And so far, you know, they've held off any antitrust activity.
Well, initially they didn't. Initially, Larry and Sergey were like, what the fuck do we need these people for? And there was a real disconnect between the why. I mean, I think it's Susan Molinari was there initially. That was their first big hire. And they really didn't like the Googleplex ran everything. That's and the complaints were on that side. Scott. Sure. Nice to meet you guys. So I'll just put forward a thesis and I want you to respond to it.
My sense is that the greatest ROI any tech company can make is not in human capital or AI, but in lobbying. Because, and this is the thesis, that after looking into this a little bit, what I found is it's not disappointing or surprising that our politicians are whores. What really struck me is what cheap whores they are, that how much you can get for so little money. Your thoughts? Oh.
Yeah, I mean, I think, gosh, you're right on the money there. I mean, especially when you look at something like antitrust, right, which for a lot of these companies is really the only way that they can expand, right? They need to expand through Washington. So we read a lot about Tony Podesta. And one of the things he was doing is during this period where Google was eating, you know, buying up all these companies and we have this sort of antitrust tradition.
tradition, then that was pretty lax to begin with, in terms of waving a lot of these through. But that's a lot of what Tony Podesta was doing was sort of getting up, getting on the hill and sort of framing these mergers, the way that that showing that they would be beneficial to the market, they would they would drive down prices and things along along those lines.
And, you know, that ends up being very influential in terms of Google's growth and how it is essentially able to to accumulate so much power. Now that that is sort of changing now. Right. We're in this this different things are changing at the moment. But for many years. Why did they do that? Because I had a lot back and forth with the Google guys about them when they tried to take over Yahoo search.
if you remember. And I was like, I'm calling every federal regulator to stop you. Like, this is fucking ridiculous. They did pull back from that. But now, as you noted, a federal judge just ruled that the DOJ's antitrust case against Google and its advertising activities will be decided by a judge, not a jury. So what's changed? Because they did nothing. Like, Eric Schmidt was in the Lincoln bedroom every five minutes with Obama and, you know, not together, not
Not to insinuate anything, although not that there's anything wrong with that. But what changed in the shift from your perspective? I think there's been a long shift, long coming shift, mainly in the Republican Party among the American people. I mean, more and more Republicans have changed.
switched, have sort of gotten rid of their views that bigger is better when it comes to corporate mergers and to tech. And Republicans out in the country are turning against big corporations, kind of following Donald Trump's populism. There's more and more bills on Capitol Hill to try to regulate tech or to give more power, more money to the FTC and DOJ to break up big tech. So I think it's coming from the people. I mean, the people are saying these companies are too big, they're too influential, they have too much control over my life. And
It is crazy for Republicans to say that. And therefore, the federal government needs to do something to rein them in. Well, I'm just curious, who do you think if you were to name if you were to give an award for who has best weaponized Washington, created more regulatory capture and who wins the award for best weapon?
lobbying that has done the best job of managing and executing lobbying effort potentially to the benefit or the detriment of the Commonwealth consumers, investors? Who does the best job manipulating Washington?
So I think at this point, the word goes to Google. I mean, the American people in Congress have come after Google for 10, 15 years. The FTC had an antitrust case against Google 15 years ago that failed. I mean, they have really, again, going back to Microsoft, they saw the mistakes that Microsoft made. They invested in Washington. There was a point where almost all the top tech advisors at the
Obama's White House had either worked at Google or went to go work for Google either. So after, so I mean, they really have done a great job in terms of blocking any attacks against the company. So give us two, three, and four.
I mean, you know, ditto for Amazon, Facebook. I mean, they have also, it's the same idea. They have pushed back on attempts to rein in the entire industry. And if you take a list of Joe Biden's top donors or top sources of cash, it's those three companies plus Microsoft. You know, if you look at the top spending lobbyists, lobbying firms in D.C., it's those three plus Microsoft.
Yeah. So, Luke, talk about Amazon is facing an antitrust suit brought by the FTC last fall. The trial is set to get underway in 2026, which is 100 years away. What's it doing now as the run-up to the trial besides Jeff Bezos buying a handsome home in D.C. and throwing parties? What do you think is going to happen with their case?
Well, I assume that they're doing a lot of what what Google did during when they were facing the same issue. And, you know, the idea is, one, you have your own sort of direct lobbyists that are out there talking to members of Congress directly. But a lot of the action these days are on these what's known as sort of what's known as shadow lobbying. Right. And essentially there you have people that aren't necessarily registered lobbyists, but sort of
public relations strategists, grassroots strategists. And basically, you know, what I imagine they're doing, because it's what Google is doing, is trying to reach out to sort of ordinary members, you know, ordinary voters, right? And trying to get them whipped up against, you know, they...
showing that this is some intrusion of federal power into the marketplace. Yeah, and there's more than that. I mean, Luke's exactly right. They've actually built off of, we say that Google learned from Microsoft. Amazon has learned from Google. Amazon has actually hired a bunch of the people who used to work for Google running these outside campaigns. They've hired the people who organize their academic campaigns
opposition research campaign. And we've seen the ads they run. I heard that before, last few months ago, when Schumer's deciding whether to bring those bills up for a vote or not, the companies went out into the States and ran a huge campaign
advertising campaigns basically saying, like, if you vote for this bill, you know, we're going to come out, come after you with everything we have. And the bill never got a vote. No, because Schumer has almost zero backbone when it comes to tech companies. Almost. What's less than zero? He's been terrible, I have to say. I mean, he ran right over Amy Klobuchar, I think. Let me ask you, what happens with companies with the ascendance of right wing companies like Elon's companies and things like that? How much
Lobbying, do they do or is it Twitter or what? Interestingly, Elon Musk doesn't do much in terms of the lobbying game in terms of Washington. They could be making the mistake of Microsoft, by the way. We're saying the other companies have learned from it. I mean, Elon Musk sounds a lot like Gates. He's saying, stay away from me, Washington. I'm bigger than you. I'm smarter than you. I'm faster than you. All those things are true.
Um, but you know, he's ignoring Washington. He has a small team of lobbyists at SpaceX, a small team at a very small team at Twitter. They, as you know, don't have any public relations team in DC and, you know, so far he's winning, but he's left himself exposed. The question to me is, is there a scandal that something happened in China? Is there some bigger issue that could blow up Elon's face? And at that point you want to already have friends. He doesn't have, he doesn't not made the connections personally in Washington. No.
The exception, of course, is that lots of Republicans and members of Congress just love Elon Musk. But those are not personal friendships. Those are just they like Musk because he goes after Biden and Democrats.
So, Mike, when I say my kids, my students will ask me, what are the best industries to go into, assuming you're just an economic animal? I'm like, OK, first and foremost, anything to do with software to anything to do with finance. And if you look at the fact we're spending seven trillion dollars a year on five trillion in receipts and every year our government spending increases faster than GDP, isn't one of the most lucrative jobs in the world to be part of the lobbying industrial complex? Isn't this a great career? And it's easy.
It's easy, you know, come to D.C., put in a couple of years on Capitol Hill, literally a couple, three, four, and go triple your salary. It's not hard. You know, I would absolutely agree. I mean, we've seen that for many years now that a lot of these counties, you know, have been, you know, increasing in wealth. And a lot of that is coming from, again, not just traditional lobbyists, but also this this much larger industry of influence. Yeah, exactly.
Yeah. So last question I have, you wrote in the book, no matter what new obstacles have emerged, K Street has always managed, K Street's the street in Washington where they all had their offices, and I think they're dispersed now, have always managed to invent new ways to exercise its power over Washington. Give us, each of you, one thing they're doing new and fresh now. What's their newest way? The new thing is moving outside of Washington. Lobbyists and the influence peddlers for companies aren't going to members of Congress and asking for favors.
They're going out into the states and trying to gin up support or opposition to bills using actual constituents. Because if 51% of a member of Congress's constituents want a trade bill or don't want tech regulation, the member of Congress is going to follow. So go to the member.
Or go to the voters. Yeah. And one of the ways that they do that is by this technique that's known as intercepts, which is you essentially get someone in a congressional district to run into a member of Congress and have some supposedly organic conversation, you know, run into them at the grocery store or in the parking lot. And you get them to bring up
Whatever issue that they're hired for to say, hey, I'm really upset about this. This is something you should be paying attention to. But again, the whole idea is to get around these members of Congress outside...
you know, in their home districts outside of Washington, where it looks like it's a real groundswell of public support, when in fact, it's just being ginned up by lobbyists. I hate these people. Anyway, Brody and Luke Mullins, again, the book is The Wolves of K Street, The Secret History of How Big Money Took Over Big Government. Thank you. Thanks, guys. Thank you so much. All right. Thank you. All right, Scott, one more quick break. We'll be back for wins and fails.
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Okay, Scott, let's hear some wins and fails. Would you like to go first? Do you want to go first? I'm up to you. You go first. Okay, so my fail is that according to an article in Business Insider, it reported that 11% of men, so 1 in 10 men aged 25 to 54, don't have a job and aren't looking for one. And that's more than triple the percentage recorded in
about 50 years ago, there's some, supposedly there's something like, or it's reported that two to three million able-bodied working age men between the age of 25 and 54 are not even looking for work. And this isn't an economy, I wouldn't even call them discouraged workers because this is an economy that's pretty much at full employment. And these men, men who drop out of the workforce,
are more likely to suffer from opioid addiction. 44% of the men who were out of the workforce said that they had to take pain meds and more than double the portion recorded in employment. And some, whereas when work used to be physically really demanding, work was bad for your health, I think there's a lot of evidence now that work is actually good for your health.
And it's just sort of strange to see an entire cohort of young men who've decided essentially just to drop out. They're kind of sequestering from society. These are men that don't date. They're not taking care of their parents. They've just kind of decided it's like we're evolving to a different species. And I think it's something to do. I wonder if we're becoming as a species or at least a component of our species is becoming asexual, asocial, gay.
and much more prone to conspiracy theory, will die much sooner. Essentially, work and usefulness are key to health, and that we're becoming, you know, just becoming much more prone to conspiracy theory, thinking too much about politics, thinking too much about envy and really ugly. It's just a different wing, a different vestige of power
of our society that's really unhealthy. And I read this and I thought that would just be unthinkable when I was, the only reason, the only excuse you could have when I got out of business school, only one in three of us had jobs, but in a full employment economy to decide not to make money, which is a lot of fun,
when you start making money, to decide just to opt out. It was just very discouraging. Yep, that is. All right. What's your positive thing? You could probably guess this one. My win is the heroic hostage rescue operation in the heart of the Gaza Strip, essentially under tremendous risk. This Israeli operation Saturday involved hundreds of troops and heavy air support,
that freed captives Noah Argamani, Almag Ma'ir, Jan, 21, Andrei Kozlov, 27, and Shlomi Ziv, 40, were in good health. Casualties from the operation, according to Israeli Defense Forces, were less than 100. The Gaza Ministry of Health has announced 274 deaths. But I want to just shout out my win is the heroic IDF operation that
freed these four hostages. Okay. All right. I have some different ones. I think the European elections have been really disturbing for a lot of people in Europe. It's really upset EU's sort of political establishment, which is a shift to the far right. They don't control everything. But as Macron in France called for snap elections because he's
betting that they won't, they think, he thinks they're angry at him, but not letting a far right prime minister head the new French government. But the indications are very clear that a lot of voters have had it with the established political class there and voted with their feet. So I think it's a really, it's something we should pay attention to here in this country. I don't think we're in the same place. They certainly have a more established establishment than we have. I think we have a much more dynamic
political establishment in that regard. So it's really, you know, it's something to pay attention to. And people should, you know, Biden particularly should be paying attention to those trends. And in a positive thing, I would say there's a show on Netflix called Hitman, which is by Richard, I think, Linklater. Wonderful. Glenn Powell, he's a very handsome man, but
he's very delightful in this movie. He looked, to me, he looked like a himbo, essentially, but he's actually, he's been in a couple of
Anybody But You, a bunch of movies. He was in Top Gun. He was the Val Kilmer character in the new Top Gun, essentially against the other guy. Handsome man. He's a handsome man. Anyway, I really liked it. I really enjoyed it. Which one? What's it called? Hitman. Hitman. Oh, yeah. I saw it. It looks really good. Yeah. Yeah. It's that guy. He's dreamy. He's dreamy. He's dreamy.
But I'm not sure I understood your fail. You believe my understanding of what's happening in Europe is there's been a lurch to the far right. And I think you will probably see you will probably see our we risk a certain amount of Islamophobia as people, I think, are going to have a pretty negative reaction to some of the things that have gone on in this country. And they'll they never kind of we can never kind of figure out a middle speed.
We kind of lurch from one extreme to the other. And I think that's happening in Europe. But explain again what you're worried about. I think our country is a little different than Europe. I think they have a real heavy political establishment that have been running things for a long, long time. And so this is an expression of that. I think we've had a much more dynamic, whether you like it or not. Trump, we've had years and years of
all kinds of different things happening in the elections. And here, this is the first time you've seen a shakeup of this group. And especially in Italy, the party there has stuck to power and stuff. So it's just, I think it's just a rightward shift they have to be paying attention to because of all kinds of reasons, including immigration and all kinds of issues. I think we have had a more dynamic, as I said, a more dynamic political environment than they do there. It's much more
It's interesting that Macron called for these snap elections. So we'll see if they gain power. Do they really mean? And he doesn't think they really want a right wing, a far right prime minister. They can have if the right does well here, there can be a president who.
and a prime minister who are very different parties, who are different parties. So that could be interesting. That could be an interesting, so it's kind of a split government. We'll see, we'll see. It's something to pay attention to. All right, we wanna hear from you. Send us your questions about business tech or whatever's on your mind. Go to nymag.com/pivot to submit a question for the show or call 855-51-PIVOT.
On our other pods this week, my interview with former Planned Parenthood President Cecile Richards is out. We're talking about the legal threats to women's health care and how Cecile is using technology to broaden abortion access in red states, just as Donald Trump is meeting with some figures who want a group that wants to completely get rid of abortion. He's meeting with them or he's going in front of them, like completely get rid of abortions. He's really...
He's really working everybody's last nerve on this topic. So we'll see. It was really great. Cecile also has brain cancer and she's been battling it. Just a really wonderful. And she talked about that quite a bit, too. She found out about maybe just late last year. Anyway, Scott, that's the show. We'll be back on Friday with more. Please read us out.
Today's show was produced by Larry Naiman, Zoe Marcus, and Taylor Griffin. Ernie and her tight engineer this episode. Thanks also to Drew Burrows and Neil Severio. Nishat Kuro as Vox Media's executive producer of audio. Make sure you subscribe to the show wherever you listen to podcasts. Thanks for listening to Pivot from New York Magazine and Vox Media. You can subscribe to the magazine at nymag.com slash pod. We'll be back later this week for another breakdown of all things tech and business and Pivot. Have a good rest of the week here.