Scott Galloway believes there is method in Trump's "MAGA-nomics" -- from a tariff war to tax cuts for the rich. Galloway is an NYU professor, author and podcast host. He joins the show to break down what Trump's policies mean for the American economy.
Originally aired on March 12, 2025
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Major support for Amanpour and Company is provided by Jim Attwood and Leslie Williams, Candace King Weir, the Sylvia A. and Simon B. Poyta Programming Endowment to Fight Antisemitism, the Leila and Mickey Straus Family Charitable Trust, Mark J. Blechner, the Filomen M. D’Agostino Foundation, Seton J. Melvin, the Peter G. Peterson and Joan Ganz Cooney Fund, Charles Rosenblum, Koo and Patricia Yuen, Barbara Hope Zuckerberg, and Jeffrey Katz and Beth Rogers.
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Amanpour and Company features wide-ranging, in-depth conversations with global thought leaders and cultural influencers on the issues and trends impacting the world each day, from politics, business and technology to arts, science and sports. Christiane Amanpour leads the conversation on global and domestic news from London with contributions by prominent journalists Walter Isaacson, Michel Martin, Alicia Menendez and Hari Sreenivasan from the Tisch WNET Studios at Lincoln Center in New York City.
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Originally aired on March 12, 2025
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Major support for Amanpour and Company is provided by Jim Attwood and Leslie Williams, Candace King Weir, the Sylvia A. and Simon B. Poyta Programming Endowment to Fight Antisemitism, the Leila and Mickey Straus Family Charitable Trust, Mark J. Blechner, the Filomen M. D’Agostino Foundation, Seton J. Melvin, the Peter G. Peterson and Joan Ganz Cooney Fund, Charles Rosenblum, Koo and Patricia Yuen, Barbara Hope Zuckerberg, and Jeffrey Katz and Beth Rogers.
Subscribe to the Amanpour and Company channel here: https://bit.ly/2EMIkTJ
Subscribe to our daily newsletter to find out who's on each night: http://www.pbs.org/wnet/amanpour-and-company/newsletter/
For more from Amanpour and Company, including full episodes, click here: https://to.pbs.org/2NBFpjf
This program is made possible by viewers like you. Please support your local PBS station: http://www.pbs.org/donate
Like Amanpour and Company on Facebook: https://bit.ly/2HNx3EF
Follow Amanpour and Company on Twitter: https://bit.ly/2HLpjTI
Follow Amanpour and Company on Instagram: https://bit.ly/3SaTUhk
Watch Amanpour and Company weekdays on PBS (check local listings).
Amanpour and Company features wide-ranging, in-depth conversations with global thought leaders and cultural influencers on the issues and trends impacting the world each day, from politics, business and technology to arts, science and sports. Christiane Amanpour leads the conversation on global and domestic news from London with contributions by prominent journalists Walter Isaacson, Michel Martin, Alicia Menendez and Hari Sreenivasan from the Tisch WNET Studios at Lincoln Center in New York City.
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NewsTranscript
00:00Now, from a tariff war, as we discussed earlier in the program, to tax cuts for the rich,
00:05is there method in Trump's MAGA-nomics?
00:08Our next guest thinks so, and he's calling it his, quote, weapon of mass distraction.
00:14NYU professor, entrepreneur, and podcast host Scott Galloway joins Hari Sreenivasan to break
00:20down what Trump's head-spinning, constantly shifting economic policies mean for the state
00:26of American finances.
00:28Christian, thanks.
00:30Scott Galloway, thanks for being back with us.
00:33Last time you and I spoke, we were talking about your book, Adrift, and at that time
00:37you said, America as a country isn't lost, but rather adrift and unmoored.
00:43And I wonder, since that time, has your assessment changed?
00:47Well, you could argue that it's found direction.
00:50And unfortunately, I think the direction is more a direction around a change towards
00:58a quarter of each party, Democrats are just as guilty of this as Republicans, are in favor
01:04of an autocrat, as long as that autocrat shares their views.
01:09And I think that's sort of come to fruition here.
01:11I think the superseding of our checks and balances of different branches of government,
01:20such that one political party that is in control can sort of bypass the traditional
01:24constitutional measures or safeguards, reflects that America has become, if you will, more
01:33open or accepting to the notion of an autocracy.
01:36I think we are pretty much in a full kind of, call it maybe most generously, autocracy
01:42light and much of America voted for this.
01:46Do you think that, say, for example, what's happening in the stock market is a reflection
01:51of people's dissatisfaction with this direction that you're talking about?
01:55I mean, I think the S&Ps had one of its worst weeks ever.
02:00All the gains that we had since the election have practically been wiped out.
02:04I wouldn't say it's dissatisfaction because that implies that they're upset about it.
02:07The market is pretty unemotional and is focused on increasing earnings and people will buy
02:14stocks regardless.
02:16Sentiment sort of takes a backseat to financial considerations.
02:20I think what's happening in the market is, first off, you have to acknowledge that even
02:24with these drawdowns, the market is still substantially up from where it was just six
02:29months ago.
02:30It has come back from pre-election.
02:32The Trump bump has been wiped out.
02:35I think what you're seeing, quite frankly, is a couple of things.
02:38The market just may have gotten, quite frankly, overvalued.
02:41I think the thing that kind of triggered the sell-off, if you will, is what appears to
02:44be irrational, non-economic decisions around tariffs, where we're basically ripping up
02:50these 80-year-long alliances with trusted economic partners that engage in mutually
02:56beneficial trade.
02:58These are not only a bad idea in the specific agreements we're ripping up, but America is
03:07losing a very important brand association for economic relationships or geopolitical
03:13negotiations, and that is one of consistency.
03:15There was an estimate by the Yale Budget Lab that these tariffs are going to cost the
03:18average household somewhere between $1,600 and $2,000 every year.
03:23It's also estimated to reduce our GDP as much as $110 billion a year.
03:29One of the lines of thinking that I hear from members of the administration is, look, if
03:35these short-term hits can get us better leverage to try to negotiate longer-term prosperity
03:42for America, this will have been worth it.
03:45Does that make sense?
03:47Well, to be fair, tariffs aren't all bad.
03:50Sometimes you need tariffs as a hammer to restore symmetry to an asymmetric trade relationship.
03:56Biden maintained the initial Trump tariffs.
03:59I think some of Trump's initial instincts around the asymmetry of the trading relationship
04:03between China and the U.S. were accurate.
04:06What this is, though, is just plain non-economic.
04:08I was a graduate student instructor in macro and microeconomics in graduate school, and
04:11we used to talk about tariffs, I imagine, the same way that professors in medical school
04:16talk about leeches.
04:17Can you believe they were stupid enough to actually think this would work?
04:22The notion that we're putting ourselves in a position to negotiate some big, beautiful
04:25deal, I don't think it's going to work because Trump tore up the Iran deal and now appears
04:32to want it again.
04:33The tariffs are off and on.
04:34I just don't think we're seen now as a reliable partner that can be counted on with the economic
04:40livelihood of your country.
04:42Think about Canada.
04:44We're not even able to give Canada a good reason for why he's doing this.
04:48Kind of the stated reason from the administration for what is tariffs that will hurt our economy
04:53and dramatically hurt the Canadian economy is that the unchecked transfer of fentanyl
05:00across the Canadian border.
05:02You could take the amount of fentanyl that's come across the US-Canadian border and put
05:05it in a backpack.
05:06Estimates are that it's less than 1%.
05:09And to alienate your closest allies, think about Canada, Ari.
05:14It's the largest undefended border in the world.
05:17What does that tell you about our relationship to this point with Canada?
05:21They joined us in World War I.
05:23They were in World War II before us training allied pilots.
05:26They were side by side with us in Kosovo in our fights against the Taliban.
05:30Amazing economic prosperity.
05:32We have NBA and NHL teams in America and in Canada, respectively.
05:37And I love that question, Ari, that was presented by a Holocaust survivor around evaluating
05:42who are your real friends.
05:44And that is, it comes down to one question for her, would they hide me?
05:48And that's a really puncturing, kind of rattling question to evaluate your friends by.
05:53But by that standard, Canada is one of our best friends.
05:57In the Iran hostage crisis, they hid American diplomats and under great personal risk,
06:05ensured their safe escape from Iran.
06:09And they stayed behind.
06:10And had they been caught, there was a good chance they would have been hanged from cranes.
06:15So Canada has hid us.
06:18They are real friends.
06:19And for us to recklessly, irrationally, and inexplicably try to hurt them in exchange
06:25for what might be some big, beautiful deal, the damage here to unwind and repair will
06:33take the better part of the 80 years it took to make these amazing, prosperous relationships
06:37that, quite frankly, the administration, in my view, is irrationally taken for granted.
06:42NICK SCHIFRIN So how does the world deal with this kind of uncertainty?
06:47ARI GENSLER So the VIX, which measures volatility,
06:50as evidenced by trading and options, has spiked.
06:53And the Atlanta Fed has a metric.
06:56We're trying to project what GDP growth might look like in the coming year.
07:01In the last 45 days, it's gone from a projected growth of GDP of 4%, which is really robust
07:06growth, to negative 2.8.
07:08The economy is contracting faster than it has since the COVID lockdown.
07:14Obviously, the markets are chilled.
07:16I think the silver lining here, I always like to ask myself, what could go right?
07:21Because over the medium and the long term, the majority of the metrics in the world do
07:24get better.
07:25And it's easy for someone like me to try and sound smarter than they are by always being
07:29negative.
07:29So I think it's an important question to say, what could go right?
07:32And I think the silver lining here is that Europe is, in fact, becoming a union because
07:36they realize they can no longer count on the military economic umbrella or the geopolitical
07:42consistency of America.
07:44America spends about $800 billion, NATO and all EU nations spend about $430 billion on
07:48the military.
07:49And quite frankly, they have gotten, I would call, lazy and expectant around the military
07:54umbrella being provided by the U.S.
07:55They now are convinced they can no longer count on the U.S. to be pro-democracy and
08:01make what are rational decisions and honor this kind of post-World War II order.
08:04They realize they can no longer count on or expect the military umbrella of the U.S.
08:10They will dramatically increase their spending on military, which I think will have
08:14stimulative and spillover effects.
08:16I think the silver lining here is that Europe is going to begin to command the space it
08:20occupies.
08:21Keep in mind, the total GDP of European nations is $19 trillion.
08:25The GDP of Russia is $2 trillion.
08:28So there's no reason why Europe, if it gets its act together, shouldn't be able to push
08:33back and be a credible opposing threat to an economy that is, again, smaller than the
08:38size of Canada, Russia.
08:40You've been pointedly critical of Elon Musk in the past several months and really even
08:45a couple of years.
08:46But in light of the Department of Government Efficiency, I think there is a consensus
08:53that people on both sides of the aisle are interested in making government function
08:58better, making it more responsive and efficient.
09:02But what have you seen over the past couple of months that give you pause on whether this
09:07is going to have longer-term effects and perhaps unintended consequences?
09:12Well, every administration from Clinton-Gore has had some sort of task force to try and
09:18root out inefficiency, fraud, and waste.
09:22So far, if DOJ is an audit of the U.S.
09:25government, then the U.S.
09:26government has been issued a clean bill of health because this wall of receipts is
09:30surprisingly scant.
09:32The first one said they were claiming they were saving $8 billion.
09:35It ended up to be $8 million of spending that had already been spent.
09:39And then numbers two, three, and four on the list of DOJ receipts that have since been
09:44taken down were just blatantly false.
09:46The Wall Street Journal reports that so far DOJ has found $2.6 billion in cost savings.
09:52You could 6X the savings from DOJ to date by cutting off all subsidies to Tesla, which
09:59has cost taxpayers $15 billion.
10:02But I think it's more mendacious than that, Ari.
10:04I mean, yeah, we all like the idea of cutting waste.
10:07But I believe it's a misdirect, and that is while we're all kind of have our hair on fire
10:11and looking over here at DOJ, $2.6 billion, the indignance, the emotional upset of firing
10:19good people doing good work, or just the general incompetence of laying off air traffic
10:23controllers, or firing people overseeing our nuclear stockpile and then trying to hire
10:27them back.
10:28I believe for the most part, it's a strategic weapon of mass distraction to get you to look
10:32over here as the Trump administration is planning to increase our deficit by $800
10:38billion a year with tax cuts to the wealthy.
10:42All of this is a misdirect.
10:44It's sad.
10:46It's unfortunate.
10:46It's incompetent.
10:48These savings are illusory, right?
10:51But at the end of the day, I think it's a purposeful distraction from the tax cuts they
10:55are trying to put forward at the expense of future generations.
10:59Do you think that Elon is getting a net positive benefit from this?
11:04Because on the one hand, he has gained incredible proximity to power, and in fact, power for
11:11his $250 million contribution to the campaign.
11:15On the other hand, the value from Tesla shares have been evaporating because he seems to
11:21have alienated a huge chunk of the people that used to buy his cars.
11:26I think the political calculus here was miscalculated on his part.
11:30We were talking about Nike off mic.
11:31When Nike embraced Colin Kaepernick, which was a political position, they had done the
11:36math, and that is two-thirds of their revenue comes from people outside of the US or people
11:40under the age of 30, none of whom thought the US had it right on race relations.
11:44They purposely tickled the censors or cemented their progressive ideology among a customer
11:49base that they knew would appreciate that.
11:52Musk has made exactly the wrong calculation, and that is three-quarters of Republicans
11:57would never consider buying an EV anyway.
11:59His largest market is California, and sales are down 11%.
12:02In Europe, sales are off 75% in Germany, and between 20% and 30% in other big EU markets.
12:11Essentially, Tesla has shed a third of its value in the last month.
12:14It's given back all of its gain since the Trump election.
12:18What is really going to hurt his pocketbook is that it has now
12:22jumped the lab and is now starting to infect SpaceX, specifically Starlink,
12:27who is seeing contracts being canceled by people ranging from Canada to Poland saying,
12:34we can't count on you for something as important as communications
12:38and battlefield communications technology, so they're reconsidering their Starlink contract.
12:43I would argue the political calculus here from Mr. Musk was wildly inaccurate,
12:49and he is seeing a lot of his wealth evaporate because the negative associations of Musk
12:56are starting to infect not only the Tesla brand, but also the SpaceX brand.
13:02I think it was an irrational decision from a purely economic standpoint.
13:06Here we were at the inauguration, and we saw lined up next to the president,
13:12literally the who's who of technology and billionaires standing next to him.
13:18I wonder, is this just business as usual, or is this different than what the Carnegie's
13:25or the Rockefellers might have done 100 years ago? Is it just the optics that are different now,
13:30or is there something more structurally more destructive?
13:34It's a fair question, because I think a lot of people on the right would maybe fairly say,
13:38look, we may be more transparent and brazen about it, but it's nothing that lobbyists and lawyers
13:42in the media have been doing for the left. They've just done it more quietly and elegantly.
13:46When the most powerful or wealthy tech executives in the world are all willing to be intimidated
13:50into donating to inaugural campaign, which they didn't do in 2020, despite publicly stating their
13:55politics more in line with Biden than Trump, when they're willing to be paraded around for the
14:00benefit of the Trump administration, you have what I call a domino of cowardice.
14:05That is, they text my pivot co-hosts that they hate themselves and that they hate showing up in
14:12the inauguration, and then they show up. Then that gives Linda Yaccarino, the CEO of X, the
14:20confidence to demand that an ad agency advertise on their platform or they risk having their merger
14:25blocked by her buddy who has proximity to the president. What we don't want to acknowledge in
14:32America is that rights and democracy are now a function of how much money you have full stop.
14:41The wealthy technocrats and the 0.1% feel as if, and quite frankly, it may be true,
14:47that they are protected by the law, but not bound by it. Whereas the rest of the 99% are bound by
14:53the law, but not protected by it. I wonder, getting back to those CEOs for a second,
14:58I wonder if they now will always have a shield that says, hey, listen, I'm just doing what's
15:03right for my shareholders. This is my fiduciary responsibility. I give a million dollars
15:08to the campaign or to the inauguration. You know what? It could help our stock down the line. Or
15:15if I don't give the million dollars, it could certainly hurt my stock down the line. As CEO,
15:22that's who I'm supposed to be loyal to. I think that's a fair argument, Hari.
15:29But what I would ask is they don't ever use the term stakeholders again. Remember all this BS
15:33over the last 10 years where they start talking about stakeholders? Well, all right, the country,
15:38democracy, poor people, people who aren't politically connected, people who don't have
15:42stock options in Apple, the 99% that only own 10% of stocks, are you supposed to also be
15:48representing them? Are you supposed to have some fidelity to the values, the rule of law,
15:53democracy, checks and balances that help get you so rich in the first place? Because let me list
15:58all of the CEOs who have filled this leadership void and have said, I am more concerned about
16:04the long-term health of America and what it means for private and public companies, and I'm not
16:09going to engage in this kleptocracy. I'm not going to be an agent. So here are some of the CEOs
16:15who have filled this leadership void. Okay, list over. At some point,
16:23these people, many of whom talk about running for president, many of whom claim to be great
16:28Americans, many of whom constantly voice their gratitude for what is the best experiment and
16:34the best platform in the world for establishing economic security and rights. At some point,
16:39you'd like to think they're going to show some fidelity to the democracy and principles and rule
16:43of law and checks and balances that played a huge role in their wealth. But instead,
16:49they default to this, quite frankly, cold comfort of, well, I'm a fiduciary for shareholders.
16:55Let's be honest, just kiss his ass, give him a million bucks and stay out of the crosshairs.
17:00Yeah, it's probably good in the short term. The question is, at what point
17:03does someone stand up and say, okay, I'm representing the bottom 99%, I'm representing
17:09democracy and I'm representing what America is supposed to stand for and paying it forward based
17:15on the incredible rule of law, democracy, fair competition that got me here in the first place.
17:21So I think the domino of cowardice here in the private sector is not only shocking,
17:26it's just very disappointing. Author and professor and podcast host of
17:32both Prof G and Pivot Scott Galloway, thanks so much for your time.
17:35Thank you, Harg. Always good to see you.