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Transcript: Chris Cuomo and Scott Galloway on the “Resist and Unsubscribe” Movement
Chris Cuomo:
I want to bring in NYU professor, famed podcaster and thinker, my friend Scott Galloway. Now, he sees economic anxiety and says he knows how to force change on this and a lot of other issues of government overreach. The plan is called Resist and Unsubscribe, and he is here to explain. Thank you very much. Appreciate seeing you, as always, brother. What is your take on what we’re seeing economically and how it looms coming into the midterms?
Scott Galloway:
Always good to see you, Chris. So I think it’s—and you summarize it perfectly—it’s kind of a tale of two economies. It’s never been better to be an owner. It feels as if we’ve sort of leveraged arbitrage: the bottom 90 percent of households, who own 10 percent of the stocks, serve as nutrition, if you will, to serve some monopolies who do in fact have monopoly power and extract monopoly rents.
Even their ability to hire is advantaged because they can offer equity and their proximity to the president. And then, finally, if you think about the tariffs, who has been able to skirt the tariffs? These big tech platforms really aren’t impacted by the tariffs. They’re able to get a sweetheart deal to avoid tariffs, such as Apple, or a company like Alphabet that really isn’t subject to tariffs.
So you have a situation where it’s much more difficult for others to hire; they don’t have access to cheap capital and they’re not as impacted by the tariffs. In addition, these companies have outperformed the market to such an extent that a lot of institutional fund managers have just sort of thrown in the towel and said, “Let’s just go all in on these companies,” further increasing this divide. NVIDIA, now one company, is worth more than the entire German stock market, and you could probably throw in Spain as well.
Your graph was right: as a percentage of GDP, salaries have never been lower and corporate profits have never been higher. So we have kind of optimized our economy for the top 10 percent of corporations and individuals. So if you own a home and you own stocks, it’s champagne and cocaine. But if you’re a little bit younger, looking to buy a house, or you’re not in a position to own things, things look pretty bleak.
Chris Cuomo:
So your plan is basically: tighten up your pockets. Money talks, and the markets are very sensitive for this administration. That will get Trump to listen—the contraction in that spending and the message behind it. But the problem is, as you know, most of the spending is done by the top. So how do you get the top to want to engage in something when, as you said, there’s champagne and cocaine?
Scott Galloway:
Well, so, first off, I’m making an assumption that there are citizens who are bothered by what you described as government overreach. I won’t go into making the arguments; you either believe there’s an issue and the president isn’t listening, or you don’t. So for the audience that does think there has been some violation, or they’re not comfortable with how the administration acquits itself here, the question is: how do you push back?
My observation here, Chris—and I’m generally curious to get your opinion—is that the protests are powerful, but they’re more cinematic right now than effective as it relates to actually getting Trump to move. Trump does not listen to Congress. He doesn’t appear to be listening to the courts. What he does listen to is the following: if you look at the times when he has really checked back, immediately responded, and pulled back, it’s been when one of two things has happened: the bond market yields have spiked or the S&P has gone down. This is when he backed off of his plans to annex Greenland. It’s when he’s backed off of tariffs. So it appears that the voice he listens to, quite frankly, is the markets.
Now, how do you have the greatest impact on the markets with the lowest tax on consumer behavior? I would argue that the string to be pulled is around these companies that trade at 10, 20, sometimes 50, or even 80 times revenues. For example, if you were to say, “Stop your subscription to ChatGPT,” that is 20 dollars a month, or 240 dollars a year. Its most recent financing values it at approximately 40 times revenues. So that 240 dollars times 40—that’s almost ten thousand dollars in market capitalization.
Kroger’s trades at 0.3. So you can either give up groceries for a year and have the same impact on the markets, or you could give up your ChatGPT subscription at 20 bucks a month. In other words, the way you really impact the market—where 40 percent of the S&P is based on the value of these firms, which are largely subscription-based—would be to stop spending money on subscriptions across these big tech platforms.
If you’re going to fight with someone, you not only want to hit them in the soft tissue, but you want to find out how you hit them hardest and incur the most damage with the least energy expended. For me, the answers all flow to the same place, and that is to cancel subscriptions across big tech, AI, and streaming platforms.
Chris Cuomo:
But you said it; the key in the beginning is you got to get the people who have that disposable income, who are spending on really whatever they want, as opposed to the things that they desperately need. And those folks—it’s not like, “Oh yeah, I’ll hold back.” I mean, some people are using credit cards to pay for medical debt. But it’s those people who have a conscience, you’re saying, and the big earners in that top prong of the K-shaped economy, that they’ll be involved. What do you think the chance is?
Scott Galloway:
Well, so far it looks like we’re getting real traction. But, granted, I see all the screenshots of people who know me and are sending them to me. But keep in mind, Kellogg did a study, and it’s actually not economic damage that moves firms. For example, using Disney—Disney actually didn’t lose a meaningful number of subscribers. Who moves these markets is a guy like Chris Cuomo who starts reporting on these firms. They take a reputational hit; their employees are upset, their vendors are upset, and they begin to worry about the markets reacting.
What you said was very powerful at the beginning: when you have 10 percent of households now responsible for 50 percent of the consumer spending, and our economy is 70 percent driven by consumer spending, we have a very fragile economy. We are used to 17 years of “up and to the right” with the S&P. Those wealthy 10 percent of households can conceivably reduce their spend by 30 or 50 percent if the markets go down. Middle-class households can’t reduce; they’re spending as much because they have necessities.
So what we have accidentally done is created a much more fragile economy that’s based on the whims of the market. Essentially, the top 10 percent ramp up or ramp down their spend based on their confidence, and their confidence comes from their stock portfolio.
Chris Cuomo:
Yeah, I’ll tell you something. I was playing with your idea today and was saying: what would happen if the top 10 percent of earners in the United States didn’t buy a car for the next 3 years? Which is really not that big of a deal—people used to keep them 7 or 8 years before leasing. It’s amazing how quickly it reverberates, although that’s not the exact industry you want to target.
Well, look, one of the reasons that I’m such a big—and, I would say, a fairly early adopter as a “Gallowayian”—is because I believe that you are applying philosophy, the study of principle, and history to what we’re seeing in our politics. I think it’s so necessary right now. It’s great to see you out there and getting reach, and I always love having you wherever I am. So thank you for doing it.
Scott Galloway:
Thank you. Thanks for having me on, Chris.
Chris Cuomo:
Brother, always. Ask and it will be done.