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.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
