Transcription
Translator: Nafisa Ahmed
My name is Scott Galloway. I teach at NYU, grateful for your time. I have 44 slides and 720 seconds. Let's light this candle. (Laughter) Okay, for those of you who don't know me, I'm actually a global television store. True story. I've had four TV series in the last three years. Two were canceled before they even launched. And two were canceled within six weeks. To put it concisely. To spice it up, it's like giving the economy a kick in the backside. Bloomberg. The most trusted name in finance news. Not for long. Andrew Yang: I'll do anything for the country. Oh my god, brother, you're at zero in two stages. (Video ends) SG: Face for podcasting. Today's first insight. I want to be the first person to welcome you to the last TED. (Laughter) Okay. Anyway, it's clear – what is this called? Why are we here. "Brave and Bright?" It's clear that Christ is a frustrated soap opera producer. (Laughter) Basically, we have a telenovela here. Where, after a night of unbridled passion, Bill Gates and Malcolm give birth to their bastard love child, Simon Sinek. (Laughter) Ok, I'll start with a question. Do we love our children? Sounds like an illegal question, right? I'm going to try to convince you. Basically, as we move forward in generations, we're seeing that the last two generations, people are earning less money as adjusted for inflation. Furthermore, the cost of buying a home, the cost of education, these are continuously increasing. Economic power, progress, inversely with age. To put it another way, the younger we are. We are taking away progress and prosperity from our youth. The social contract is no longer in place and for the first time in US history, a 30-year-old is not doing better than their parents. This breakdown is the fundamental contract we have with any society. And it breeds shame and anger. (Applause) Those over 55 feel good about America. But less than 1 in 5 people under 34 feel much better about America. This creates a conflagration. Holy wars, society ultimately turns into opportunistic contagion. Because generally speaking, young people have enough envy, they are bored and they are angry that they do not enjoy the same luxury and prosperity that our generation was provided. The proxy for this will be that we value youth labor at low wages. And we intentionally keep it very low. If it kept pace with productivity, the value of a share would be $23. And we intentionally keep it very low. Out of reach. The cost of mid-tier housing has skyrocketed compared to average income. As a result, pre-pandemic, the average mortgage payment was $1,100. Now it's $2,300 due to rising interest rates and average housing prices going from $290,000 to $420,000. By the way, the most expensive homes in the world based on this metric, Vancouver is number 3. Why? Because 60% of the cost of building a home goes to permits. Guess the reason, the wealthy have captured the government so that it becomes difficult for newcomers to acquire wealth, thereby increasing their net worth. I'm going to talk about this transfer. (Applause) This has become a massive wealth transfer where people over 70 controlled 19% of household income, versus people under 40 controlled 12%. Their wealth has been halved. Not by accident, it's intentional. This is me in 1987 at UCLA. I know your first thought is I haven't changed at all. (Laughter) Mia Silverio is also here, she's the analyst, she put all the slides together. Anyway, Mia is 26. I calculated, just by her presence in the audience, the average age of this conference has decreased by 11 days. (Laughter) When I applied to UCLA, the acceptance rate was 76%. Today it's 9%. I got a 2.23 GPA from UCLA. Didn't learn anything except how to make bongs out of household items. And the world's best public school, Berkeley, decided to take me with a 2.27 GPA. And this is higher education. Higher education is about talking to exceptional kids and giving them the opportunity to be exceptional. (Applause) And every year it's getting more expensive. Higher education, housing, and affordability. Not only is higher education incredibly expensive, it's inaccessible. My colleagues and I are indulging in luxury, and I'll get back to that, we've adopted the ultimate strategy. Highly educated. My colleagues and I wake up every day and ask ourselves the same question when we look in the mirror. How can I increase my compensation and decrease my accountability? (Laughter) And we've found the ultimate strategy. It's called the LVMH strategy. We artificially suppress supply, to create desire and scarcity. So that we can increase tuition faster than inflation. And the elderly and the wealthy are doing the same thing with housing. Suddenly when you own a home, you become very concerned about traffic, and you make sure no one gets new housing permits. And here's a memo from my colleague on higher education: We are public servants, not Chanel bag carriers. (Applause) Harvard is the prime example. They've increased their endowment over the last 40 years and decided to expand their class by up to 4% for freshmen. Universities that don't increase their freshman class and have endowments of over a billion dollars will lose their tax-free status because they are no longer in higher education, they are offering a hedge fund class. (Cheers and applause) My first recommendation: Biden should take some of the $750 billion and give a third to the public who were able to go to college, since the other two-thirds did not go to college, and give our 500 best public institutions $1 billion each, by size, in exchange for three conditions. First, they will reduce tuition by 2% per year using technology and scale. Expand enrollments by up to 6% per year and increase the number of vocational certificates and nontraditional 4-year degrees by 20%. Where does this lead us? In just ten years, ten years, it doubles the freshman seats and halves the cost. This is not radical. This is what colleges were like in the 80s and 90s. Another wealth transfer. Look what happened to the wage system. Oh, they've increased? Not more than corporate profits. There's a healthy tension between capital and labor. But for the last 40 years, capital has been kicking labor severely. You're thinking about the state of wages? Right? They've gone up. If you compare them to the S&P, they barely register. It's a great time to own assets. If your goal is to get appreciation and income so you can acquire wealth, it has become harder. In my class of 300 children, becoming a billionaire has never been easier, becoming a millionaire has never been harder. However, in our higher education system, we haven't identified the 1% of the public who have unusually wealthy or rich parents and can be turned into super-class billionaires. Giving the bottom 90% the opportunity to be in the top 10. (Applause) Do you know who doesn't need me or higher education? That top 10%. The main goal of higher education is to give you truly exceptional things. Those raised by single immigrant mothers are quite exceptional. The transfer was intentional. As teams, corporations, and the ultra-rich continue to accumulate more wealth, we've decided, "If they win gold, they'll be given silver and copper and their taxes will be reduced." This transfer is intentional. It's not by accident, and it works. Poverty among seniors is much lower and that's something to celebrate. Meanwhile, child poverty has increased. A controversial subject. I'll talk about social security. Expanding child tax credits will cost $11 billion. But that gets crushed under the infrastructure bill. But an additional $135 billion for social security flies to Congress in one year. And every year we transfer $1.4 trillion from a cohort that is doing increasingly worse to the wealthiest cohort in the history of the planet. I'm not against social security, it should be there when needed, not when you have a catheter. 80% of you, 80% have absolutely no reason to take social security. It's bankrupting our nation. And we've fallen under this myth that it's a great social program. No, it's not. It's a massive transfer of wealth from young to old. (Applause) How is this happening? Because our representatives are indeed, representatives. Older people vote. Washington has become a cross between "The Land of the Dead" and "The Golden Girls." (Laughter) Frankly, it's ridiculous. And if I sound ageist -- (Applause) then I am ageist. And you know who else is ageist? Biology. (Laughter) When the speaker Pelosi had her first child, understand, two-thirds of the family didn't have a color television and Castro had just declared martial law. But she's supposed to understand the challenges of a 17-year-old girl who is 5'9", 95 pounds, getting extreme advice on dieting from Facebook? She's supposed to understand the challenges faced by 27-year-old single mothers? Anyway, young and dreamy. (Laughter) Young and dreamy. (Applause) The great intergenerational theft has occurred under the patronage of a virus. I know, let's use the biggest health crisis of the century to actually accelerate the transfer. This is Nasdaq from 2008 to 2012. We let markets crash. In fact, you need disruption, you need breakdown because it recalibrates benefits and wealth from the established to the newcomers. It's a natural part of the cycle. But wait, lately, no, a million deaths would be bad. But it would be tragic if we let Nasdaq go down and people like me lost wealth. So we pump the economy, which again has increased the massive transfer of wealth. The best two years of my life? COVID – more time with my kids and Netflix, and my stock value exploded. And who paid for my prosperity? Not me. Future generations will have to deal with an unprecedented level of debt. Why am I here and why am I enjoying this prosperity? Because in 2008, we bailed out the banks, but we didn't rescue the economy. We let the market crash. So when I was entering my prime earning years, I was able to buy these stocks at these prices. Now those stocks have reached this level. Where will a young person find disruption? When you bail out a baby boomer restaurant owner, you're just taking away their opportunity from a 26-year-old to go to culinary academy. We need disruption. (Laughter) I'm exactly like this slide. No context or relevance. (Laughter and cheers) We're attacking young people economically, but let's also attack their emotions and mental well-being. Let's take advantage of our species' flaws, with medieval institutions, paleolithic instincts, and god-like technology. I think Mark Zuckerberg has done more damage to the young people of our nation than any person in history by making money. Oh, but wait, it could be worse. We've allowed the adversary to add a neural jack, allowing a generation of citizens, military, and business leaders who hate America to be built. How can we be so foolish? (Laughter) The graphs are all going up to the right. And what are these? What's the first one? Oh, it's the suicide rate, which has exploded, especially among girls. My colleague Jonathan Haidt mentions this. It's really reached its peak since social media arrived. What's next? Depression among teenagers. Next, sexual inactivity among men and women. My parents' biggest fear was that I would get into too much trouble. My biggest fear, honestly, is that my children won't get into enough trouble. To every young person watching this program, my advice is to go out, have more drinks, and make a series of bad decisions that might stick. (Laughter and applause) Next graph, deaths by gun. You are more likely to be shot in the United States than by the police if you are a newborn. Next graph, obesity, has increased significantly. Anyway, the food industry wants to addict you to bad, fatty foods so they can transfer you to the diabetes industry. We should not romanticize obesity. You are not finding your truth. You are finding diabetes. (Laughter and applause) The number of overdose deaths has increased. Deaths of despair. When I was in high school, it was drunk driving, now kids are killing themselves. Young people no longer want to have children. The number of able-bodied people aged 30 to 34 deciding to have at least one child. That has halved. Now it's less than a third. 27%. As a result, people over 60 in the United States are quite happy. People under 30, not so much. Among the lowest in the free world. What can we do? There is no mistake in the United States that cannot be corrected by its right. We have solved the hard problems. There are programs to solve all these problems, they cost a lot of money, that's the hard part. And we've solved it. In just five minutes on an earnings call, we can add a quarter of a trillion dollars to the economy. We've solved the hard part, wealth. We have the money, but we don't do it. This is the per capita cost of childcare in the United States compared to other countries. This is housing permits. Things are possible. We increase the minimum wage to $25 an hour, it will go into the economy. The wonderful thing about low and middle-income families is that they spend all their money. We need to re-establish our progressive tax structure. Implement an alternative minimum tax on corporations and wealthy individuals. We need to refund the IRS. We need to reform social security. It should depend on your needs, not your age. We need a negative income tax. My friend Andrew Yang ruined a great idea and misbranded it. Instead of calling it UBI, he should have gotten Republican support by calling it a negative income tax. (Laughter) We need to remove the tax exemption on capital gains. When did we decide that money earned through capital is more noble than money earned through labor? Shouldn't it be reversed? (Applause) We need to remove the 230 protections for all algorithmically surfaced content. We need identity verification because we first have a correction. Break up Big Tech. Our monopolies are imposing increasing costs on every small business and parent because, look above, our representatives don't understand these technologies. We need age-gated social media. There is absolutely no reason for anyone under 16 to have social media. (Applause) We need universal pre-K. We need to reinstate the expanded child tax credit. We need term limits, look above, Andrew Yang. We need income-based affirmative action. No visible signs of affirmative action mean anything. You'd rather be poor in the US today as a gay or non-white person. And that's a sign of prosperity. And we need to redefine who we give opportunities to. Affirmative action, of which I am a beneficiary – I received grants, I received unfair advantages – affirmative action is a wonderful thing, and it should be based on color: it should be based on green. How much money you have or don't have. Expand college enrollment in vocational programs. Mental health, ban phones in schools, invest in third places, Big Brothers and Sisters programs. We need service. We need to tell the people of the United States and Canada that we live in the best country in the world, and we need to remind them of that every day. By introducing them to other great Americans, so they can feel a bond of connection. We can do this. We have the wealth. The question is, do we have the will? This is my last slide. It's an emotionally manipulative slide to make you like me more. (Laughter) But it has a message. It's a whole shooting match. Ask anyone here who has children, without children. You have your work world, you have your friends' world, you have your children's world. If something happens here, your whole world will shrink. (Applause) Before I finish, I'm presenting some questions. First, if you acknowledge that our children are the most important thing in our lives, everything we do here is meaningful, but for us, the well-being and prosperity of our children is paramount. If you acknowledge that they are in a worse state than previous generations. If you believe that there is a possibility that the illusion of complexity has done nothing but provide a cloud cover for an incredible transfer of goodwill, well-being, and prosperity. And if you truly believe we can solve these problems and we have the wealth, then I present to you, I think, I hope the question has more truth to it than 17 minutes and 24 seconds ago. And that is the real question. Do we love our children? My name is Scott Galloway. I teach at NYU, grateful for your time. (Cheers and applause) Thank you. (Applause) (Applause)