This is the future liberals want. Photo: Ziga Plahutar/Getty Images/iStockphoto
If President Biden’s massive and hugely ambitious infrastructure plan passes, it will touch every corner of the economy. On the latest episode of the Pivot podcast, Kara Swisher and Scott Galloway discuss how, beyond sprucing up some of the country’s moribund public spaces, it would help a wide swath of Americans who have often been given short shrift by government policy in recent years.
Twice weekly, Scott Galloway and Kara Swisher host Pivot, a New York Magazine podcast about business, technology, and politics.
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Kara Swisher: This week, President Biden detailed his $2 trillion infrastructure plan. How many zeros is that? That’s bigger than the entire federal government budget. He calls it a once-in-a-generation investment, the largest since World War II, since we built the highway system and since the Space Race. It will require 15 years of higher taxes on corporations, raising their rates from 21 percent to 28 percent. He’s giving $50 billion to boost the domestic chip industry, a big boost to electric cars. He promises faster internet and better transit, with electric charging stations — a different energy future.
The second part of the plan invests in human infrastructure: aid to the poor, paid leave, help with child care. The plan also includes the Right to Organize Act to counter right-to-work laws. There’s also train stuff that Amtrak wants. This is long overdue. And let me just say, I did an interview with Mariana Mazzucato, who talked about the idea of government doing these important moon shots in areas like climate change or infrastructure. This is big.
Scott Galloway: I think this is wonderful. We are the apex species. The business model of our species responsible for our success is capitalism, and the ballast and the success of capitalism is a robust middle class. And slowly but surely, Kara, slowly but surely, we have increased social-security taxes and payroll taxes and individual income taxes and we have reduced corporate income taxes to the point where only $1 in $12 versus $1 in $2 of receipts from the government come from corporate taxes versus individual income taxes. So, essentially, what we’ve said is, “Corporations, you pay less, and individuals, you pay more.” And we continued one of the most dangerous trends in our society, where we’ve decided we don’t like people, but we love corporations. And what happens?
When the Trump Tax Cuts went through in 2017, I was on a board of a media company and a board of a retailer, both multibillion-dollar companies, and all of a sudden in a board meeting, we’re like, “Oh my gosh, what’s this earnings and cash flow surprise? It’s advantageous tax cuts.” And what did we do with that money? Did we hire more people? Did we invest in factories? No, we used it for share buybacks or cash on our balance sheet, which does what? It juices the stock price. And by the way, who owns 90 percent of stocks by dollar volume? The top one percent. So all we have done with increasing the tax liabilities of individuals as a percentage of our government — and by the way, as a percentage of total tax receipts, individual taxes have not gone up — we’ve just funded it with taxes on your daughter from when she’s old enough to be a taxpayer — we’ve racked up massive debt. We have said, “We want the top one percent or shareholders to work less and spend more time with their families, such that the middle-class and future generations can spend less time with their families.” It is criminal what’s gone on here.
Swisher: This is the kind of big thinking, the big LBJ, Great Society, FDR thinking — I like it. He went for broke. Interestingly, Alexandria Ocasio-Cortez was talking about the things they need even more, but this was as much as the Biden administration said it was going to be, which it never is.
Galloway: It’ll get clipped back. He’s starting big.
Swisher: It’ll get clipped back, but he didn’t back down first. People were, I think, surprised by the breadth of this. Go for it. And what was really interesting was how it’s going to be paid for. I think there’s nobody against taxing corporations, even though they lobby us. But I think it’s a great thing for him. It puts money in lots of really interesting places. It has an innovative element, $50 billion to boost the domestic chip industry, cars, better trains, human infrastructure, the idea of paid leave, and help with child care. We should have full child care. That’s set in stone. That should be something we should do, but whatever, we hate children and women in this country, in a lot of ways.
Galloway: Yeah. So, again, infrastructure, what is infrastructure? Infrastructure is an investment in the middle class, because when the J train is only running every two hours instead of every 15 minutes from Brooklyn into the city, who gets hurt? The assistant or the secretary. The executive gets to take an Uber or has a driver. So infrastructure is an investment in the middle class. It’s also an investment in brand-building. I remember the first time I went to China, I flew into the new Hong Kong Airport, and then I went to the Shanghai Airport and I’m like, “Jesus, these people take themselves very seriously.” And then I fly into JFK and I think, Jesus Christ, are there chickens and goats running around here?
Swisher: It’s true.
Galloway: You go, “Okay, what happened?”
Swisher: Oh my God, you’re right.
Galloway: What happened to us and the infrastructure?
Swisher: Same thing with train stations. They’re making a big deal about this new New York one. I’m like, “Penn Station has been a pit my entire life,” and now that they have a train station that reaches basic levels with Europe, they’re going, “Yay!” Basic — not even as nice as Europe’s ones, still. Truly pathetic.
Galloway: Penn Station is supposedly one of the great architectural crimes in history. Supposedly, it was beautiful and then they tore it down to make this just disgusting architectural eyesore.
Swisher: It’s not even charming in its grossness. Some things that are old and broken down are charming.
Galloway: Are you talking about me again? Are you talking about me again? Do you know I do CrossFit? I do CrossFit.
Swisher: Penn Station is the worst place on Earth.
Galloway: Yeah.
Swisher: I’m surprised I’m not dead, having been in there 900 times. Anyway, sorry. Keep going. I had a little side train rant there.
Galloway: Yeah, anyone who’s been to Europe loves trains, even though they make no economic sense whatsoever. But look, infrastructure is an investment in the country and it’s an investment in the middle class, because the people who really need roads and public transportation are the middle class.
Swisher: And internet access.
Galloway: And oh my gosh, broadband. I think a bridge too far here is they’re now claiming that social programs that feel very UBI-like are infrastructure investments.
But I love this, and the swing back to protecting and loving Americans as opposed to American corporations is long overdue.
Pivot is produced by Rebecca Sananes.
This transcript has been edited for length and clarity.
NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.
Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.
In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.
The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.
And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
