The following is a transcript of an interview with Kara Swisher and Scott Galloway, co-hosts of the “Pivot” podcast, which aired on “Face the Nation” on Sunday, March 19, 2023.
MARGARET BRENNAN: And we’re back now with the co-hosts of the “Pivot” podcast, Kara Swisher, joining us from San Francisco, and Scott Galloway, joining us this morning from Miami. And in the interest of full disclosure, we’d like to note that Galloway is a marketing professor at NYU, but is also directly or indirectly involved with several companies that have had money in SVB Bank, none of which have faced liquidity problems due to failure, says he us. Scott, that’s where I want to start right here with you. What is the broader impact on America’s ability to continue to innovate after this failure?
SCOTT GALLOWAY: Good to be with you, Margaret. Yes, look, the modern American banking system is a miracle. It takes short-term deposits and converts them into long-term loans so that we can grow the economy. The question is do we have what Marjorie Taylor Greene asked for, which is splitting the US in half. And it’s not between red and blue states, it’s between what I would call Silicon Valley venture capitalists trying to find a constructive solution, and venture capitalists who seem to have a vested interest in weakening the US banking system. dollars. There was a letter that went out to facilitate a transaction signed by several 100 VCs. What’s more interesting is who wasn’t on that list, and it’s people with a deep interest in crypto, who have seen crypto rise by 20 percent as yet another huge uncertainty was injected into the system by this kind of constant catastrophizing. So do we have two Americas in Silicon Valley? And I think legislators and Americans are trying to ask: Should we hold back Americans or agents of chaos?
MARGARET BRENNAN: Who are you thinking about? Who are these agents of chaos?
GALLOWAY: Well, people posing in front of the social media algorithms, saying in all caps that there will be chaos, there will be lines around the banks, some will get their money out, most not big venture capital firms that have invested tens of billions in crypto, so don’t share some kind of collective interest in the health of the banking system and individuals who see America on the way up as a cross between the Hunger Games and capitalism on the way down believe we must be Denmark. So capitalism on the way up and socialism on the way down is neither, it’s cronyism.
MARGARET BRENNAN: Kara, you know, so many startup companies relied on this Silicon Valley lender to get their business up and running and they can’t necessarily go to bigger banks. Is there a domino effect here where we see this huge chunk of our economy crippled?
KARA SWISHER: Well no, there’s money for them, there’s always money for them. They used to say there weren’t enough rat holes to push all the money down in Silicon Valley. So I think they get money. It’s just that this bank was particularly geared towards them, including providing personal mortgages, personal loans, using collateral that was, you know, just the stock or having venture capitalists invest in it. And so they had a harder time with traditional banks and this bank came to them in that way. And it was kind of a Silicon Valley creature, and they had Silicon Valley advisors, and every startup in Silicon Valley was somehow with this bank. And then they spread it to events and other things. And so it is, you know, it’s a bank that’s too niche for one group of people. And then it’s also a group of people who react very quickly, which is why the bank run happened when they realized they couldn’t sell these government bonds.
MARGARET BRENNAN: I want to ask you what’s going to happen here in Washington with this hearing this week, the CEO of TikTok will be called to testify. Kara, CBS has confirmed reports that the Justice Department is investigating that company for spying on US citizens, including US journalists, by searching for their location data. And reportedly some of the people doing this were based in China. The parent company says it is no longer employed. Does this kind of oversight happen at other social media companies?
SWISHER: Well, in a different way. They sell you ads of course, because we don’t have a privacy law – national privacy law in this country. And so it is, you know, whatever these companies want to do, they have a lot of power to do that. Om- I call them information thieves, but they are pro-, that’s for another reason. That is to sell you advertising. In this case, it feels a bit more terrifying, because it’s a state government. Now Tiktok has said these are rogue actors, but the fact that they can do it means they can do it, which means if China wants it, they can do it too. And so that’s the big concern here, not just surveillance, but propaganda. And so if Facebook hands it out or Meta or whatever, they’re doing it for business reasons, not great either. And by the way, any government could get there, and any government could get there. And so we have to be really, really careful about what all these companies get, but we’re particularly concerned about state actors.
MARGARET BRENNAN: It seems that news development is really throwing some sand into the gear of progress with what ByteDance and TikTok suggested as a way around the problem, something they called Project Texas. They don’t want a ban. They don’t want to be forced to be sold. How Scott, will this eventually be resolved?
GALLOWAY: Well, America is waking up to the fact that there is a neural hookup wired into the minds of American youth, who spend more time on TikTok than any other streaming media platform. And we are understandably wary of the CCP, which would be stupid not to put their thumb on the scale of anti-American content and raise the next generation of American civic, non-profit, business, and military leaders, who feeling worse every day. about America. How it is solved is very simple. The CCP hoped we wouldn’t be able to get out of the way, and there’s a lot of evidence that they might be right. But they want to preserve the world’s foremost propaganda tool and hundreds of billions of dollars in shareholder value. And on the eve of the ban, they’ll decide that if they can’t keep both, they’ll hold on to the hundreds of billions of dollars and they’ll agree to a spin.
MARGARET BRENNAN: Kara, what do you see here? I mean, it was great, The Washington Post had massive TikTok ads running here in the local papers. And you know, the Secretary of Commerce was asked about a possible ban. And Gina Raimondo said, quote, ‘the politician in me thinks you’re literally going to lose every voter under 35 forever’, that’s the political element here. How does this play out when it’s on the devices of 200 million Americans?
SWISHER: Well, there’s that — there’s that problem of people using it, and it’s very popular. I think there’s been some progress now by other services, so it’s got a little less traction with teens. But I don’t think there will be huge protests from teenagers. I think the issue you have to think about is what happens when they ban, what happens to the money? Since there are a lot of American investors in this company, let’s be clear. And then there are a lot of US investors who are very interested in TikTok’s downturn. So that’s happening behind the scenes at the same time, but it’s very popular for politicians to use this as an anti-China, which they do. And some, by the way, are twofold. It’s Mark Warner too, just like it’s Josh Hawley. And so, you know, three years ago, four years ago, I wrote a piece where I said I love TikTok, great product, I use it on a burner phone, because I don’t trust the Communist Party. And that’s what it’s about. This is a… this is a propaganda tool. And the question is: what do we do about it? And why are American companies not allowed to enter China? And so it’s very complex. I’m not sure, I’m not totally into the spell with Scott, who’s been calling for a while. I do think there are ways to protect people, but it’s very difficult if it’s not an all-American company or somewhere else. And that’s going to be difficult for this company, right now, given…
MARGARET BRENNAN: I just want to underline what you said, which is that you’ve been saying for years that you don’t feel safe using this device – this on a device that you carry with you. You’re using a phone here that you don’t take anywhere because of the level of risk. I mean, this is in the pockets of millions of Americans, hundreds of millions.
SWISHER: Yes. Yes, I don’t use Facebook either. So that’s me. I don’t trust any of them, but I really don’t trust the Communist Party of China more than I suspect Mark Zuckerberg, so low, low.
MARGARET BRENNAN: Just wow. Quick, Scott, you know, we’re looking at the possible indictment of the 45th President of the United States, which is back on social media platforms, have any measures been taken that would limit the ability to use this as an organizing organization? tools or in a dangerous way, calling for protests?
GALLOWAY: Not that I know of, I think it’s kind of comical on the verge of these kind of hollow debates around First Amendment or speech or pretend these organizations act like it was a really tough decision. It’s pretty simple. I mean, an organization or an individual adds shareholder value to these companies in one of two ways. They create a lot of engagement through involvement or awe, or they spend a lot of money on the platform. And around the time when President Trump was about to get a lot less furious or a lot less pleased, about a few days before Biden’s inauguration, Meta found their spine and kicked him out. And about the time when he’s about to spend another billion or one and a half billion on media. They suddenly decided that he should come back to the platform. But my understanding is that the President-President Trump has called for protests, and the last time he called for protests, we had an uprising. So if they’ve ever looked for an excuse not to put him back on the platforms, but they’ve got it. But at the end of the day, it’s all about what drives shareholder value, not any idea of what binds us together or any allegiance to the Commonwealth.
MARGARET BRENNAN: Well, on that cynical note, we’ll leave it there, Scott. Kara, always good to talk to you. We will be right back.
