Below 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 now we’re back with the co-hosts of the “Pivot” podcast, Kara Swisher, who joined us from San Francisco, and Scott Galloway, who joined us this morning from Miami. And in the interest of full disclosure, we’d like to note that Galloway is a professor of marketing at NYU, but is also involved directly or indirectly with several companies that have SVB funds, none of which have liquidity issues because of the failure he told us about. Scott, with that I want to start with you here. What is the broader impact of America’s ability to continue to innovate in the wake of this failure?
Scott Galloway: Nice to be with you, Margaret. Yes, there is- 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 issue is, do we have what Marjorie Taylor Greene asked for, and that is to divide the United States into two parts. And it’s not between the red and blue states, it’s between what I would call the Silicon Valley venture capitalists, who are trying to find a constructive solution, and the venture capitalists who seem to have a vested interest in weakening the banking system in the United States dollar. There was — there was a letter sent out to try to facilitate a transaction signed by several 100 capital companies. What’s more interesting is who’s not on that list, people who have a lot of interest in cryptocurrency, it’s people who have seen cryptocurrency go up 20 percent, where there’s a lot of insecurity injected into the system again, that kind of disaster persistent. So do we have two Americas in Silicon Valley? And I think lawmakers and Americans are trying to ask, should we support the Americans or the agents of chaos?
Margaret Brennan: Who are you thinking of? Who are these agents of chaos?
Galway: Well the people coming up with ideas to get social media algorithms going and in all caps saying chaos will ensue there will be lines around the banks some will get their money out mostly it won’t be the big venture capital firms that have tens of billions invested in Cryptocurrencies, so don’t share — don’t share any kind of collective interest in the health of the banking system and individuals who on the way up see America as a cross between the Hunger Games and capitalism on the way down we think we should be Denmark. So capitalism on the way up and socialism on the way down isn’t it, it’s nepotism.
Margaret Brennan: Kara, you know, a lot of startups have relied on this Silicon Valley bank to get their business up and running and they can’t necessarily go to bigger banks. Is there a spillover effect here where we see this huge part of our economy disrupted?
Kara Swisher: Well, no, there’s money for them, there’s always money for them. There they were — they were saying there weren’t enough rat holes to drive all the money in Silicon Valley down. So I think they will get the money. This bank has been particularly accommodating to them, including giving them personal mortgages, personal loans, using collateral that was, you know, just equity or the fact that venture capitalists invested in it. And so they had a more difficult time with traditional banks and this bank catered to them that way. And it was kind of a Silicon Valley creature, and they had advisors from Silicon Valley, and every startup in Silicon Valley was in that bank in some way. Then they post it to events and other things. And so it’s, you know, a very convenient bank for one group of people. And then a group of people reacted really very quickly, and that’s why the bank run happened when they realized that — they couldn’t sell these Treasuries.
Margaret Brennan: I want to ask you what’s going to happen here in Washington during the hearing this week the CEO of TikTok will be called to testify. Kara, CBS has confirmed reports that the Department of Justice is investigating that company for spying on US citizens, including US journalists, by trawling through their location data. Some of the people who did this were reportedly based in China. The parent company says they are no longer in business. Does this kind of monitoring 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 bill — a national privacy bill in this country. And so, you know, whatever these companies want to do, they have a lot of power to do. To– I call them information thieves, but they’re for– and for a different reason. This is to sell ads to you. In this case, it looks even more frightening, in that it’s a state-run government. Now, Tiktok said they are rogue actors, but the fact that they can do it, right means they can do it, and that means if China wants to do it, they can do it. And that’s the big concern here, not just surveillance, but publicity. And so when Facebook takes it out or Meta or whatever, they’re doing it for business reasons, and it’s not cool either. And by the way, the government can come there and any government can come there. And so we have to be very careful about what you get — all of these companies but we’re particularly concerned about government agencies.
Margaret Brennan: News development seems to be really throwing some sand into the gears of progress in what ByteDance and TikTok have proposed as a way around this problem, which they’ve called Project Texas. They don’t want to be banned. They don’t want to be forced to sell. How, Scott, does this end up being resolved?
Galloway: Well, America is waking up to the fact that there is a nerve socket plugged into the heads of America’s youth, who spend more time on TikTok than on any other media platform. And we are understandably wary of the Chinese Communist Party, which would be foolish not to put its thumb on the scope of anti-American content and raise the next generation of American civilian, nonprofit, corporate, and military leaders, who feel progressively worse every day. About America. How it is resolved is very clear. The CCP hoped we wouldn’t be able to get out of our way, and there is plenty of evidence that they may have been right. But they want to keep the world’s premier advertising tool and hundreds of billions of dollars in shareholder value. And on the eve of the ban, they’ll decide if they can’t hold on to both, they’ll hold on to hundreds of billions of dollars and agree to spin.
Margaret Brennan: Kara, what do you see here? I mean, it was amazing, The Washington Post had huge ads that TikTok put here in the local papers. As you know, the Minister of Commerce was asked about a possible ban. And Gina Raimondo said, quoting, “The politician in me believes you’re going to lose literally every voter under the age of thirty-five forever,” that’s the political element here. How does this happen if it’s on the devices of 200 million Americans?
Swisher: Well, there’s — there’s the problem of people using it, and it’s very popular. I think there are some advances that other services have now, so it’s less of a hold on teens. But I don’t think there will be some giant protests by teenagers. I think the issue you have to think about is what happens if they block, what happens to the money? Since there are a lot of American investors in this company, let’s be clear. Then there are a lot of US investors who are very interested in the decline of TikTok. This is happening behind the scenes at the same time, but it is very common for politicians to use this as anti-Chinese, which they do. And some are, bipartisan, by the way. It’s also Mark Warner, even if it’s Josh Hawley. And so, you know, three years ago, four years ago, I wrote an article saying, I love TikTok, great product, I’m using it on a burner phone, because I don’t trust the Communist Party. And this is the case. This is a propaganda tool. The question is what are we going to do about it? Why are US companies not allowed to enter China? And so it’s very complicated. I’m not sure, I don’t take bans with Scott, who’s been calling out for a while. I think there are ways to protect people, but it’s very difficult if you’re not a wholly owned company in the US or somewhere else. And that’s going to be difficult for this company, right now, at this point, given —
Margaret Brennan: I just want to stress what you said, which you’ve said for years that you don’t feel safe using this device — this device that you carry around with you. You’re using a phone that you don’t take anywhere with you because of the level of risk here. I mean this is in the pockets of millions of Americans, hundreds of millions.
Swisher: Yes. Yes, I don’t use Facebook either. So this is me. I don’t trust any of them, but I really don’t trust the CCP, more than I think Mark Zuckerberg, very low bar, low bar.
Margaret Brennan: Wow. Quickly, Scott, you know, we’re looking at the potential indictment of the 45th President of the United States, that’s back on social media platforms, were there any measures in place that would limit the ability to use this as an organization tool or seriously as calls for protests ?
Galloway: Not that I know, I find it kind of borderline comic this kind of empty discussion about the First Amendment or rhetoric or pretending that these organizations are pretending to be a really tough decision. It’s simple and straightforward. I mean, an organization or an individual adds shareholder value to these companies in one or two ways. They create a lot of buzz through engagement or awe, or they spend a lot of money on the platform. And just at a time when President Trump was about to become less grumpy or have a lot less content, a few days before Biden’s inauguration Meta found his workhorse and fired him. And about when he’s about to spend a billion or a billion and a half on media. They had suddenly decided that he should return to the podium. But my understanding is that the President — President Trump called for protests, and the last time he called for protests, we had an insurrection. So if they ever wanted an excuse not to bring it back to the platforms, but they do have it. But at the end of the day, it’s all about what drives shareholder value, not any sense of what connects us or any devotion to the Commonwealth.
Margaret Brennan: Well, on that sarcastic note, we’ll leave it there, Scott. Kara, it’s always good to talk to you. we will come back.