Professor Scott Galloway explains what’s happening to the U.S. economy: “America isn’t working”

There are fears that another bubble is forming in the US economy with the rise of AI and the circular investments of big tech. The interdependent network of these companies is leading to a lack of competition, innovation and money being reinjected into the wider US economy and resulting in wealth accumulating in the top point one percent.

Scott Galloway and Ed Elson, hosts of the Prof G Markets podcast, spoke with former Assistant Attorney General for the Antitrust Division of the US Department of Justice, Jonathan Kanter, to talk about the evolving landscape of AI technology and why it is more crucial than ever to have antitrust enforcement. Galloway concluded after the chat that given the current state of affairs, “America isn’t working.”

Wealth distribute conditions in the US are eroding the middle class

“The purpose of an economy is to create a middle class, that’s the whole point,” in Galloway’s opinion. He says in order to build a robust middle class there must be incentives and part of that is having exceptionally wealthy people, including billionaires. “There is nothing wrong with that,” he said.

However, when they accumulated “so much political power and can engage in regulatory capture” that 26 families now control fifty percent of the wealth in the nation, “it’s not a growth agenda it’s a transfer of wealth from lower and middle income homes to the top point one percent,” Professor G reflected.

“That erodes the middle class, it erodes faith in America, and for the first time in the history of America a thirty-year-old isn’t doing as well as his or her parents were at thirty,” Galloway explained. “Which to me means America isn’t working,” he added.

Redistribution is needed to save the middle class

He said that in the United States “we have no excuse” for this deteriorating situation. The US is a land of prosperity in terms of wealth creation but “we have made a conscious decision not to distribute it equally,” Professor G said.

“We have all these arguments, false arguments around left versus right, but it’s not, it’s top versus bottom,” he explained. “It’s also the fact that our taxes would not need to go up if everybody paid them.”

Professor G pointed out that the only place that Trump doesn’t want to use AI is at the Internal Revenue Service, “because there is so much incentive now to skirt tax laws.” Every year between six and seven hundred billion dollars go uncollected.

“And the unfortunate thing is that America puts up with it because Americans are so optimistic that they believe there is a decent chance that they or their kids at some point will be in that point one percent,” Galloway commented.

He went on to point out that the middle class has only existed for a brief time in history “because of a constant redistribution of capital and opportunity back to the households who are less fortunate, and we’ve given up on that in America, or we’re slowly giving up on it.”

However, Professor G says that “there are common sense solutions for all of this,” but that “the illusion of complexity gets in the way of everything.” This leads to us as Americans make ridiculous “excuses for why the rich should get richer and richer and richer,” and why voters elected a strongman.

Reinspiring America’s youth to create “upward spiral”

If there was “the political will” to put those common sense solutions into practice and redistribute wealth, Galloway said that people like his co-host would have money in their pockets, be able to find a partner, which they could provide for, and have kids.

This would lead to a situation where “you can feel good about America and you decide to serve and you decide to run office and we reinspire this upward spiral,” Professor G concluded.

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