The following is a transcript of an interview with Cara Swisher and Scott Galloway, co-hosts of the “Pivot” podcast, which aired Sunday, March 19, 2023 on “Face the Nation.”
MARGARET BRENNAN: And now we’re back with the co-hosts of the ‘Pivot’ podcast, Kara Swisher, who joins us from San Francisco, and Scott Galloway, who joins 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 directly or indirectly involved with several firms that have funds in SVB Bank, the cause of their alleged failure. None of them are facing liquidity problems. Scott, I want to start with you here. What will be the broader impact on America’s ability to continue to innovate in the wake of this failure?
Scott Galloway: Nice to be with you, Margaret. Yes, look, the modern American banking system is a miracle. It takes short-term deposits and turns them into long-term loans so that we can grow the economy. The issue is whether we have what Marjorie Taylor Greene asked for, and that is America splitting in two. And it’s not between red and blue states, it’s between what I would call the venture capitalists in Silicon Valley, who are trying to find a constructive solution, and the venture catastrophists who want to undermine the banking system in America. I have my own personal interest. Dollar There was a letter signed by several 100 VCs trying to facilitate the transaction. What’s more interesting is who wasn’t on the list, and it’s people who are very interested in crypto, who have seen crypto rise by 20%, because once again there is a huge insecurity in the system. Entered, such is the constant destruction. So do we have two Americas in Silicon Valley? And I think the legislators and the Americans are trying to ask, should we support the Americans or the agents of chaos?
Margaret Brennan: What are you thinking about? Who are these troublemakers?
GALLOWAY: Well, people who pose for social media algorithms, and in all caps say there’s going to be chaos, there’s going to be lines around the banks, some people are going to get their money out, most of them. There won’t be big venture capital firms with tens of billions. have invested in crypto, so don’t share—don’t share—a kind of collective interest in the banking system and the health of individuals going up, America as a cross between The Hunger Games and bottom-up capitalism. Let’s see. Should be Denmark. So neither top-down capitalism nor bottom-up socialism is cronyism.
Margaret Brennan: Cara, you know, a lot of startup firms rely on that Silicon Valley lender to get their business and grow their business and not necessarily go to the big banks. Is there a knock-on effect here where we see this large part of our economy crippled?
Kara Swisher: Well, no, there’s money for them, there’s always money for them. They–there–they used to say Silicon Valley didn’t have rat holes to throw all the money down. So I think they will get the money. It’s just that this bank was specifically connected to them, including giving them personal mortgages, personal loans, collateral that you know, just stocks or the fact that venture capitalists invested in them. was And so they had a tough time with conventional banks and this bank served them that way. And it was kind of a Silicon Valley creature, and they had Silicon Valley advisors, and every Silicon Valley startup was in that bank in some way. And then they expand it into events and other things. And so it’s, you know, it’s a bank that’s great for a bunch of people. And then it’s also a group of people that reacts really quickly, which is why there was a bank run when they realized that—they couldn’t sell those Treasury bonds.
MARGARET BRENNAN: I want to ask you what’s going to happen this week with the hearing in Washington, the CEO of TikTik will be called to testify. Cara, CBS has confirmed reports that the Justice Department is seeking location data from the company to spy on American citizens, including American journalists. And some of those allegedly doing so were based in China. The parent company says they are no longer hiring. Does this type of monitoring occur at other social media firms?
Swisher: Well, in a different way. They’re selling you ads, of course, because we don’t have a privacy bill in this country—a national privacy bill. And so, you know, whatever these companies want to do, they have a lot of power to do it. I call them information thieves, but they are there for a different reason. This is to sell you advertising. In this case, it feels a little more scary, because it’s a state government. Now, TikTok has said that these are rogue actors, but the fact that they can do it, right means they can, if China wants to do it, they can. And so the biggest concern here is not just surveillance but propaganda as well. And so when Facebook is taking it down or meta or whatever, they’re doing it for business reasons, not a good one. And by the way, any government can come there and any government can come there. And so we really have to be very careful about what all these companies get but particularly concerned about state actors.
MARGARET BRENNAN: It seems like the development of the news really threw some sand into the gears of progress on what ByteDance and Tik Tok were proposing as an approach to this problem, which they called Project Texas. . They don’t want restrictions. They don’t want to be forced to sell. Scott, how is this going?
GALLOWAY: Well, America is waking up to the fact that there’s a neural jack in the heads of America’s youth, who spend more time on TikTok than on any other streaming media platform. And we’re understandably wary of the CCP, which would be foolish not to put its thumb on the scale of anti-American content and nurture the next generation of American civic, nonprofit, business and military leaders who are worse every day. feel How this is resolved in the US is very straightforward. The CCP was hoping we wouldn’t get out of our way, and there’s a lot of evidence that they may have been right. But they would like to retain the world’s largest propaganda tool and hundreds of billions of dollars in shareholder value. And on the eve of the ban, they’ll decide if they can’t keep both and they’ll hold on to hundreds of billions of dollars and they’ll agree to a spin.
Margaret Brennan: Kara, what do you see here? I mean, it was amazing, the Washington Post had big TikTok ads in local papers here. And you know, the commerce secretary was asked about a possible ban. And Gina Raimondo said, quote, ‘My politician thinks you’re going to lose literally every voter under the age of 35 forever,’ that’s the political element here. How does it work if it’s on the devices of 200 million Americans?
Swisher: Well, it’s—the problem is that people use it, and it’s very popular. I think there’s been some progress through other services now, so it’s a bit less of a catch-all for teenagers. But I don’t think there will be any big protest from teenagers. I think the issue you have to think about is what happens if they ban, what happens to the money? Because there are so many American investors in this company, let’s be clear. And then many American investors are very interested in the fall of TikTok. So it’s going on behind the scenes at the same time, but it’s very popular for politicians to use it as anti-China, which they do. And some, it’s two-way, by the way. It’s also Mark Warner, as is Josh Hawley. And so, you know, three years ago, four years ago, I wrote a piece that I love TikTok is a great product, I’m using it on a burner phone, because I don’t trust the Communist Party. And that’s the problem. It’s a – it’s 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 complicated. I’m not sure, I’m not down with Scott, who’s been calling for a while. I think there are ways to protect people, but it’s very difficult if it’s not exactly an American-owned company or somewhere else. And it’s going to be difficult for this company, now, at this point, given —
MARGARET BRENNAN: I just want to highlight what you’ve said, what you’ve said over the years, that you don’t feel safe using this device—it’s on the device that you carry with you. You use a phone that you don’t take anywhere with you because of the level of risk here. I mean it’s in the pockets of millions of Americans, millions.
Swisher: Yes. Yeah, 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, any more than Mark Zuckerberg guesses, so rarely, rarely.
Margaret Brennan: Just wow. Quickly, Scott, you know, we’re looking at the potential impeachment of the 45th president of the United States, who’s back on the social media platforms, are there any steps that have been taken to use it as an organization. Limit the ability to Instrumentally or dangerously, as he calls for protest?
GALLOWAY: Not that I know of, it was a very difficult decision for me to have this kind of hollow debate around the First Amendment or speech or these organizations. It is very straightforward. I mean, an organization or an individual adds shareholder value to these companies in one or two ways. They create a lot of engagement through engagement or fear, or they spend a lot of money on the platform. And just about when President Trump was about to get a little riled up or a little less content, Metta found his spine and kicked him a few days before Biden’s inauguration. And about the time he’s going to spend another billion or a billion and a half on media. He has suddenly decided that he should return 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 a revolt. So if they want an excuse to never bring it back to the platform, here they are. But at the end of the day, it’s all about what drives shareholder value, not some sense of what binds us or any loyalty to the commonwealth.
MARGARET BRENNAN: Well, on that cynical note, we’ll leave it at that, Scott. Kara, it’s always great talking to you. We’ll be back in a moment.