Marketing Professor Galloway Gets It Half Right

(c) by Mark Dempsey

Here's NYU Marketing Professor Scott Galloway's TED talk about how the US is destroying young people's futures. His big question: "Do we love our kids?" ... is transparently manipulative marketing, even if he's a little self-deprecating about it.

On the plus side, the video has some interesting statistics, especially about the direction of the country in general, but it's based on an understanding that is pretty shallow overall. His talk has some rather glaring omissions, too, but let's look at that after the video...

First, remember this is a marketing professor. One needs to go no further than politics to understand the limitations of marketing.

"The Republican party needs better marketing" one member of Sacramento's Republican Central Committee declared. I'd say the Democrats would agree that marketing was of paramount importance too. So...Team Blue agrees with Team Red about some pretty fundamental stuff, and, as I'll demonstrate, relies on marketing to conceal the rot underneath public policy decisions both made and avoided.

Does marketing work? It's effective enough that people praise the Obama years as "scandal-free"--especially compared to the bad, bad Trump years. Yet to believe that "scandal-free" comment, one has to overlook the marketing-omitted fact that Obama didn't prosecute the war crimes of Bush 43, and even promoted the people who authorized torture.

The huge subprime mortgage economic scandal Obama inherited resulted in 8 - 10 million foreclosures thanks to fraudulent behavior from Wall Street, but none of the criminals went to jail. Obama's Justice Department was positively supine before its Wall Street masters. I'd suggest that without Obama's malfeasance, Donald Trump is inconceivable...unless you want to believe the marketing.

One of the biggest (marketing-concealed) scandals is how much Obama embraced the Republican agenda. "Obamacare" was first proposed by Richard Nixon, codified by the right-wing Heritage Foundation, and prototyped by Mitt Romney in Massachusetts before Obama, who had but didn't use the votes to implement the "public option," made it his signature legislation. But marketing concealed its shortcomings and permitted the continuing awfulness of US healthcare while persuading lots of folks Obama was just an innocent, scandal-free president.

So..."If it weren't for lies there wouldn't be any politics." said Will Rogers. Amen, brother Will.

Marketing itself is often deceptive. It's smoke and mirrors, bullshit and manipulation...it's the lipstick on the pig. That might be unethical enough in and of itself, but the bigger problem is that the marketers start to believe their own bullshit. 

Professor Galloway tears up toward the end of his talk. He's either a terrific actor, or very sincere. Yet he's also obviously misguided in several ways that align perfectly with the anti-government, anti-humanity movements he decries.

One example: He touts term limits as a solution to bad governance. We've tried that in California. The result is a revolving door of politicians running for a variety of offices. They are termed out as soon as they learn one job and must move on to the next. Who's really in charge? Unelected staff who actually know the job. Term limits haven't improved anything, and they were originally passed as a way to get rid of a person of color (Willie Brown) too smart to be defeated otherwise. It is both non-working and (bonus!) racist. It solves nothing.

Marketing! Gotta love it!

Another example: Professor Galloway wants to means test Social Security. This is a bad idea for several reasons. First, means-tested safety net programs are easier to reduce or terminate. Means-tested welfare used to be AFDC (Aid for Dependent Children). Thanks to Bill Clinton and Newt Gingrich welfare is now TANF (Temporary Aid for Needy Families). Of those needing public assistance, 76% got AFDC, but only 26% get TANF. That's right, the "party of the poor" marketing for Democrats is just deception.

Incidentally, studies say better welfare cuts crime. But that's not convincing to public policy makers who guide their decisions by marketing. Between 1982 and 2017 US population grew by 42%, while police spending grew 187%. It would be cheaper and more effective crime prevention to have generous welfare, but according to Galloway that's not worth a mention. Here, the marketing is in the omissions.

And speaking of crime and marketing, Hollywood's "copaganda" has convinced the public that policing solves and prevents crime. All those police procedurals get their man. Perry Mason solves the most intricate murders, etc. The truth: in California, police clear an average of 15% of crimes. Less than half of murders (40%) are solved. Police suck at crime solving. 

Yet the US incarcerates at five times the world average. Seven times more than Canada and France, per-capita, yet Canadian and French crime rates are actually lower than US crime. One difference between the US and those other two countries that might matter: The US has more than a half million medical bankruptcies a year, and the single-payer countries have none. Again, no mention of this from our marketing professor.

Galloway also believes that Social Security is robbing a younger generation to pay its benefits. This is a common misconception, but again, completely untrue despite the marketing to the contrary.

For the monopoly creator of dollars--government--to need dollars from the public to fund its programs, dollars would have to grow on billionaires. That's obviously not so. Federal fiscal policy is not "tax & spend," that's just marketing. Ask yourself where taxpayers would get the dollars to pay the taxes if the government didn't spend them first.

So the actual sequence of federal fiscal events is "spend first, then retrieve some dollars in taxes." The initial spending occurs without any tax revenue. Beardsley Ruml, chairman of the New York Federal Reserve, wrote about this in 1945: Taxes for Revenue Are Obsolete (pdf). Taxes do not provision federal programs, they create the demand for dollars which are otherwise useless pieces of paper.

And what do we call the dollars that are spent, but not retrieved in taxes--you know, the ones in your wallet? Answer #1: The dollar financial assets of the population. Answer #2: National debt. Both answers describe the same thing. This is analogous to your bank account. It's your asset, but to the bank, it's a liability, a debt. It's the money the bank owes you. This isn't exotic economics, it's double-entry bookkeeping.

And yes, you can march down to the bank and demand it reduce its debt just because you hate the word "debt," but it would do that by reducing the size of your account. Not very sensible. Most of the "deficit scolds" have cutting social safety nets as their real agenda, however, marketing conceals it. Cutting those safety nets when, according to the Federal Reserve, 40% of the population can't handle a $400 emergency, and 65% of seniors have only Social Security to fund their retirement is a recipe for even more people becoming poorer.

Incidentally, both Team Blue and Team Red agree that national debt should diminish. Team Blue wants to raise taxes, while Team Red wants to cut spending. All the marketing is directed toward that debate. Here's what Noam Chomsky says:"The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow very lively debate within that spectrum — even encourage the more critical and dissident views. That gives people the sense that there’s free thinking going on, while all the time the presuppositions of the system are being reinforced by the limits put on the range of the debate."

These rather obvious facts about savings and debt mean no one is being "deprived" by a higher tax burden to pay for Social Security. Even if you doubted that taxes for revenue are obsolete, just lifting the ceiling on income taxable for FICA would fully fund even more generous benefits.

Correctly describing federal fiscal policy demonstrates that national debt is simply a reflection of private savings. All the "ain't it awful" talk about how youth is deprived, or debt is a "burden" is just marketing bullshit.

Finally, another cause for complaint from Galloway is half-baked. He's correct in citing the massive increase in tuition (and financialization of elite institutions' endowments), but he omits a critical fact: Since 1972, federal support for higher education has diminished 55%. States have cut higher education even more--Oklahoma reports a 37% cut in just the last decade. Gosh! I wonder why tuition is so high, and student debt is second only to mortgage debt in the US economy. Graduating educated people as debt peons is a mechanism of control. Thanks marketing!

As Brandolini's law states...it takes orders of magnitude more energy to debunk the bullshit than to create it in the first place. (Heavens to Betsy! Just look at all these words!) Meanwhile, there is a name for Galloway and his like: "useful idiots."