Today's number: 175. That's how many days the OpenAI Sora app lasted — 25 days fewer than Quibi. Ed, what did AI say after crossing the road?
I have no idea, Ed. That's not that funny. Hold on. How does AI identify? How does AI present?
That's not bad. That's not bad. All right, you tell the joke now.
I do three days. Three days a week.
You do a joke? Oh, wait. That's right. I've watched the show. Those are jokes. Yeah, those are jokes. I thought those were clever British Princeton twists of phrase, indubitably.
My jokes are good. My jokes, and they've gotten better. That's because I spent hours late at night trying to figure out what to say. Have you guys heard about the new AI robot that can take off all your clothes and then give you a whole new outfit?
I've seen it change people.
Thought it was going dirty, but it didn't.
Yeah. No, it was good. Clean. I think I like the if-then. I think that's good. It's a good nerdy joke. It's a dad joke. It's like kind of slightly maybe politically incorrect, but not really. It's perfect. It's exactly what we need. Well, you know, male AI units, their reputation for when they have sex, they just nut and bolt.
So, it's interesting you mentioned that joke because that is the joke that got you cancelled from Bloomberg.
They got me cancelled. They got me cancelled from Bloomberg Television. Tell the story, Ed. Tell the story.
Your favorite is waving her hand.
Everyone's heard the story.
Yeah, that was — I'll give the ver — I'll give the five-second summary. That was the joke that Scott told when we were producing a show for Bloomberg. Bloomberg heard it, didn't like it, cancelled the show. End of story.
That's right. We are who we are. What's going on with you, Ed?
Um, let's see. I'm in New York. I'm doing a panel tonight with Chris Evans, who you may know as Captain America, which I'm pretty excited about. He has this new organization and they're going to have me in to talk about affordability issues for young people. So, I'm going to meet Captain America tonight. I'm very excited.
I'm not sure, but I think I peed next to him at the Oscar party. I'm serious. Ask him. I complimented him on his jacket. I think that was Chris Evans. Handsome guy, movie star.
Handsome, very tall. I mean, exactly. Yeah.
So, in all seriousness, I think we peed next to each other at the Oscar at the party. Well, that will be my opening line. You peed next to my boss.
Say the guy who complimented your coat in the men's room, which is a little strange. Um, I generally try not to initiate a lot of banter in the men's room. Uh, but say that's my colleague and my co-host.
I will let him know and I'll let you know how he responds.
Your job is to bring this panel back to me.
Yeah. So, how are you doing? What's going on with you?
I just did a wonderful podcast. I love Dan Harris from 10% Happier. He gave me therapy. He's like so comforting. He's like human Xanax. I just feel my blood pressure just comes down. He interviewed me about my book and, yeah, it was — yeah, what else did I do? I had lunch with someone who's doing a financing and so I advised her. That was rewarding, you know, like to give back.
Well, we have a lot to get into here, but before we do it, I am excited to announce that starting next week, all of our Prof Markets YouTube content will go to its own Prof Markets YouTube channel. So, if you watch on YouTube, we're spinning off from the Prof G Pod channel. We're going to have our own channel. So, if you want to go subscribe to that channel, please click the link in the description. And you will get all of our episodes on that channel starting next Monday. So, please do it. Very important that we really smash it coming out of the gates here. Otherwise, I don't know, Scott's going to fire me or something bad's going to happen to us. He's going to fire Claire.
You have any exciting thoughts on our new YouTube channel?
To be honest, I didn't know we had a new YouTube channel, but no, it's going to be great.
Yeah, we're spinning out. So, the whole point is — I always like to bring this back to business. You want to have diversity of revenue streams. You want to have enterprise value. You want to have multiple assets. And one of the ways you have multiple assets, or the ways of creating different distinction between your products, is we put them initially on the mothership on our RSS feed of Prof G, which gets them from A to call it G fast because it gets people to show up to the YouTube channel and the RSS feed, they automatically get the stuff downloaded or they get it sent to them. And then once something has its own momentum and its own identity, we spin it out and try and create it as a distinct asset. And that's what we're doing here. Now Prof Markets has a big enough following such that it should have its own enterprise value, its own branding, its own YouTube channel.
That's right. It's very exciting. Really exciting stuff. Okay. Well, I'm going to move us along to our show here. Today we're discussing Trump's economic problem, prediction markets legislation, and the results of the Meta Google social media trial. So, let's start with our first story. The US economy might look strong on the surface, but that strength isn't translating to how consumers actually feel. There are only so many ways people actually experience the economy. And in most of those areas, the trend is moving in the wrong direction. Just to name a few, people are struggling to buy homes. Mortgage demand fell 10% last week and refinancing dropped 15%. People are struggling to find jobs. Jerome Powell said the job creation in the private sector was, quote, effectively zero. And just 28% of workers say now is a good time to find a quality job, down from 70% in mid-2022. And even everyday costs are rising. As we've discussed, gas prices have jumped 30% since the start of the Iran war.
So Scott, I think this is quite an important point here, especially when it comes to Trump and his approval ratings and the polling that we're seeing, which is, as we will get to, it's sort of tanking right now. But it seems that there are two different ways that you can kind of — there are two categories of economic data. There's the economic data that technically matters to economists and to analysts. Things like GDP growth, things like stock market growth. And both of those things are pretty good. GDP grew more than 2% last year. S&P rose around 15% last year. And these are things that the administration is really talking about. They're also talking about these investments that they're getting from other nations. It's not actually clear if that's really happening, but those are the kinds of things that the administration likes to brag about right now, the kind of macro stuff. But on the other hand, you've got this real problem, which is that all the ways in which regular Americans and voters actually experience the economy — through their job, through their housing, through the price of groceries, the price of gas, etc. — all of those signals are flashing bright red and it is getting quite dark to the point where we are seeing real issues in terms of polling. It's going to have ramifications probably in the midterms, perhaps in the next election cycle too. What do you make of what's happening here in the economy, specifically the economic touch points that consumers and voters are actually experiencing?
The way I would describe it is how William Gibson described the future. And that is, prosperity is here, it's just not evenly distributed. And that is, the top 1% now owns 32% of total US wealth. And that's roughly equal to the bottom 90% combined. So the top 1% versus the bottom 90%. And my favorite stat that I keep talking about is the Gini coefficient. When it's at zero, it means everybody has the same amount. When it's at one, it means one person owns everything. And when France was at 0.83, they started separating people from their heads, and we're at 0.85. So GDP growth, yeah, it's strong. There's prosperity. We've had what is still historic gains in the stock market. I still think we're only about four or five percent off of highs, which means it's incredible. But the top 1% since 2016 have captured 33% of the total wealth gains and the bottom 50% have only captured 6%. So they aren't even beating inflation. And essentially the top 1% have gained more than 100 times more wealth than the median household. And the top 0.1% gain nearly a thousand times more than the bottom 20%. And the problem is the bottom 99.9% are reminded 210 times a day via notifications on their phone that they're not in the 0.1%. And look how amazing the life is for the 0.1%.
And also, I think there's just a disparity in life now in a capitalist society. And that is, when I was a kid growing up, my dad's boss had a — you know, he had a Cadillac and we had a Gran Torino. We had a three-bedroom house, he had a five-bedroom house, but it was in the same neighborhood. We were all members of the same country club and they used to golf together, went to the same schools. Now if you're in the 0.1%, you live on a different planet. You're not subject to health care debt because you can afford it and you have a private concierge that maybe comes to your house. You have your own security. You probably have a doorman and live in an area that is overpoliced or that has security cameras everywhere. You're not subject to the fears around teachers not getting paid enough and the eroding quality of our public education system because your kids are in private school. There really is a substate of America that is the most prosperous country offering the most unbelievable services in history. And essentially the bottom 99% — I would even describe the bottom 99% as nutrition for the 1%. So the top 10 US billionaires gained $700 billion in a single year last year. And effectively what we have is that in 1989 the top 1% used to have 23% of wealth globally. Now it's 31% and it's even more skewed in the US. And even when we talk about not even about assets but income, the top 1% income is up 162% since 1980. It's only up 36%.
Now, so it leads to a notion, a very real notion that the system is rigged. And what the incumbents will claim is that it's network effects and our most talented. No, these are decisions that we have consciously made through legislation. Mortgage tax interest rate deduction, capital gains favored treatment are all conscious decisions we have voted through or that have been voted through by a passive minority ruled by special interest groups who get one or two senators to block legislation. And money has — here's a stat: 300 people, 300 billionaires are now responsible for 20% of all political giving. And not only that, that doesn't even tell the story because that 20% has way more influence because a PAC representing, you know, unions or service workers, they have to give their money to certain people who are focused on certain issues, whereas billionaires can be much more flexible with their money and give it strategically on a specific issue for a specific vote coming up. So what we've lost is that lawmakers used to take very seriously the following truth, or punctured — they'd never bought the myth that the far right or the right will tell you, and that is that the middle class is a self-healing organism and if you just let the market run, the middle class will be fine. No. When the market is left to its own devices, a middle class goes away. It is the greatest innovation in history but it requires constant investment. And let me use the R word. It requires constant redistribution. And wealthy people and corporations have gotten in the way of that wealth redistribution. And we are actually moving back to the general law of the jungle, the way the majorities of societies have been through the majority of time, and that is more and more capital and opportunity aggregates to the top 1% and then at some point the bottom 99% see above 0.83 Gini coefficient, rise up and get very, very angry.
