And, what does Graham’s death mean for a Republican Party already navigating serious uncertainty around Mitch McConnell? Scott and Jessica discuss McConnell’s mysterious health situation — which led his office to release a “proof of life” photograph on Sunday of the Senator and his wife in a hospital.

Democrats meanwhile have their own Senate crisis. Graham Platner has now formally submitted his paperwork to withdraw from the Maine race following sexual assault allegations. The Maine Democratic Party will hold a convention on July 25th to select his replacement. Will Platner’s base get behind the process? And, will whoe…

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Politics moves fast. And it reminds us of an important point: it’s easy for BIG stories to disappear overnight.

Which brings us to Maine.

Over the weekend, the state Democratic Party detailed its process for selecting a new U.S. Senate nominee: 601 delegates including state committee members and delegates appointed by each county party will come together on July 25 to conduct multiple rounds of voting until a candidate gets a majority.

Our congratulations to the Maine Democrats for putting together such a transparent process under these circumstances. Whoever the new candidate is, they’ve got time to win this thing in November. Godspeed!

That’s also the last time we’re mentioning Maine in this column.

Because while we were melting down over this, a lot happened that matters for November. Yes, there was room to talk about Trump: his plane snafu and his on-again-off-again war in Iran dominated headlines too. But we’re talking about the other issues: new reporting on Republican cuts to healthcare. The bipartisan housing bill that Trump won’t sign. And even in the world of elections, some great news for Democrats that came and went without the fanfare it deserved.

We get why folks are anxious about finally defeating Susan Collins. But let’s not miss the forest for the pine trees.

1. Republicans’ cuts to healthcare are already hurting families

You remember the GOP’s healthcare plan: slash $1 trillion in healthcare funding – the “biggest rollback in federal support for health coverage ever” – but hide it in provisions of the “Big, Beautiful Bill” that don’t kick in until 2027 so you can stay in power after the midterms.

Brutal but brilliant, right?

Well, it’s not really working out that way.

We saw headline after headline this week about how Republican cuts to healthcare are already being felt by patients and doctors:

• New CMS data showed Obamacare enrollment is plummeting in states like Arizona, Ohio, and Michigan, part of a national drop of 13%, or 3 million people, since last year.

• A KFF analysis revealed that ACA premiums could increase as much as one-third over the next two years. That’s coming after premium tax credits expired last year, leading to a 58% average increase in premiums and deductibles of about $1,000 more per person.

• Reuters reported on rural health clinics that are already shutting down before the cuts kick in, including in battleground Iowa, and pointed to a recent poll showing healthcare was the cost voters most wanted Congress to address.

This is not acceptable. It is outrageous. But don’t take our word for it – that’s what Nancy Pelosi wrote in USA Today this week. She pointed out that these Republican cuts will see 16 million Americans lose their health insurance by 2034, and that while people suffer, Trump is focused on tax breaks and Iran. She sees what the rest of us must: that this is a top, maybe even the top, midterm issue.

2. Trump refused to sign an important housing bill

Housing affordability keeps defining elections: 80% of voters said they were concerned about housing costs in the 2024 election; it was the centerpiece of Mayor Mamdani’s win in New York City last year; it even became a top issue in New Jersey and Virginia.

Trump was literally elected on promises to “make America affordable again” and “get the prices down.”

That brings us to June, when Congress approved the 21st Century Road to Housing Act by a 358-32 vote. The AP called it the “broadest federal effort in decades” to address housing affordability: it aims to lower the cost of housing by reducing regulations, streamlining environmental reviews, speeding up construction and reducing the influence of corporate landlords.

Is it a silver bullet for housing costs? Absolutely not. But it’s a huge step in the right direction, and one the president could’ve taken credit for – had he not thrown a tantrum over it. First he canceled a ceremony for it, then, this week, he said he’d refuse to sign it altogether, in “PROTEST” over his stalled voting bill.

(The bill will become law anyway, because under the Constitution, bills that pass both houses of Congress become law without a presidential signature or veto within 10 days).

It is an extraordinary own-goal: a president refusing to sign a landmark housing affordability bill that more than 200 Republicans in Congress sent his way. Dems have a pretty obvious argument to make: the President is more interested in meddling with elections than he is with getting you into a home.

3. Democrats are breaking fundraising records

Healthcare and housing should be top of mind for Democrats this November. But even if you just want to talk about winning the race… team blue had a good week on that front too!

Two of our most important Senate candidates smashed through fundraising records:

• In Alaska, a must-win flip for a Democratic majority, former Rep. Mary Peltola raised $7 million. Her campaign called it a record second-quarter haul for any Senate candidate in the state.

• In Texas, state Rep. James Talarico has a record of his own: a whopping $30 million, the most any U.S. Senate candidate has raised in the second quarter of an election year, and more than triple Ken Paxton’s sum.

Both these candidates have recent polling news to celebrate too: Peltola is within the margin-of-error in the NYT/Siena poll in Alaska (45% to Sullivan’s 47%) and, from the same pollster, Talarico is dead even with Paxton in Texas (47%-47%).

Good news at the national level too, as the Senate Majority PAC, aligned with Sen. Chuck Schumer, had its best-ever second quarter at $147 million. As the New York Times reported this week, Dems are still playing catch up with the GOP, but the party is far along that road.

These races are winnable. The House and Senate are winnable.

But in order to get that victory, we need to stay focused on what matters. $1 trillion in Republican healthcare cuts. A president who cares more about holding onto power than he does about housing or inflation. And yes, even when it comes to elections, we have to remember we’re playing to win in nearly ten states, including Alaska and Texas, where our candidates are crushing it.

Good luck to our Democratic friends up north. We’ll talk again later.

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18%

of Gen Zers (and 10% of all Americans) have an ongoing personal friendship with an AI chatbot.

1. SpaceX joined the Nasdaq 100 and got nearly unanimous “buy” ratings — but still fell 12%

2. Crypto has lost half its value since October and most of its “cool” factor

3. First-time homebuyers hit a record low, while prices hit a record high

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Who Decides What SpaceX Is Worth?

SpaceX officially joined the Nasdaq 100 last week. It qualified under new fast-track listing rules, which reduced the required trading history from at least three months to just 15 days and eliminated the minimum public float requirement. Prior to the rule change Nasdaq 100 stocks had to have a minimum float of 10%.

The stock also received a torrent of new ratings from Wall Street analysts. Of the 32 analysts covering SpaceX, only one published a “sell” rating — and it came from CFRA Research, an independent financial intelligence firm with no investment banking, asset management, or trading arms.

Financial analysts typically set price targets that estimate a stock’s future value and write notes to their clients explaining their reasoning. The price targets for SpaceX were notably optimistic.

Raymond James’ Brian Gesuale projected that SpaceX would be worth $800 per share over the next 12 to 18 months. SpaceX stock would have to increase more than 400% for that to happen, and its market capitalization would hit $10.5 trillion, equivalent to one-third of US GDP. That would make SpaceX worth more than the stock markets of the U.K., France, and Germany, combined.

Research has found evidence that analysts bias stock recommendations upward, especially if the bank they work for is affiliated with the stock they are analyzing. This was particularly rampant during the dot-com bubble. One notable example: Just two months before Enron went under, 16 of the 17 sell-side analysts covering the stock rated it “buy” or “strong buy.” Many of them were from banks that did business with Enron.

Investor protections were put in place after the bubble burst, and it is now illegal for investment banking divisions to influence bank analysts. However, studies have shown that even after these reforms, affiliated analysts (i.e., those covering companies that also do business with their investment banking divisions) are still reluctant to issue pessimistic recommendations.

Optimism bias in the analyst community runs deep. Even controlling for accuracy, more-optimistic analysts are more likely to move up to top brokerages, and more optimistic analysts are more likely to be called on in company earnings calls.

Today, of all the 84 holdings in the Global X Artificial Intelligence & Technology ETF, only 2% of them have a net “sell” recommendation.

The analysts whose banks took SpaceX public were, on the whole, more optimistic than the group of unaffiliated analysts. One hundred percent of the affiliated analysts issued “buy” recommendations. Of the 17 analysts whose banks did not take SpaceX public, only 65% did.

Despite the optimistic ratings, SpaceX shares fell 12% last week and are down 36% from their peak.

Morgan Stanley’s price target is $300 — that’s double where the stock is now. They also write that their bull case is $600 and their bear case is $75. They’re telling us: It could fall 50%, but it could also rise 300%. So they’re basically not telling us anything.

What we learned from the dot-com bubble is that there’s a structural conflict of interest embedded in equity research. If you assign a company a “sell” rating, then it’s unlikely that the company will be interested in working with you to underwrite their IPO, through which you would receive your 1%. So, Elon is naturally going to choose the investment banks that are nice to him.

The SEC tried to fight this with regulation in 2003 that aimed to separate the research arm of investment banks from the banking divisions responsible for getting those underwriting fees. Seven months ago, that rule was terminated by the SEC.

After that happened, former SEC Chair Arthur Levitt wrote an article in The Wall Street Journal titled “The SEC May Make Wall Street Analysts Corrupt Again.” He warned about the dangers of getting rid of this regulation.

I don’t think the analysts have as much power as they used to have. Back in the ’90s, these analysts were all over CNBC all day long. But it’s not the same today, because there are so many other sources of information.

To a certain extent, I view these targets as embarrassing. Wouldn’t it be embarrassing like in a couple years’ time, you’re at parties and people ask you, you’re the guy who said SpaceX at $300?

For those who aren’t familiar with these ratios, no company trades at 100x sales. It just doesn’t happen, and the companies that do trade at very high price-to-sales ratios are software companies where sales basically convert straight into profits — there aren’t a lot of fixed costs. In SpaceX’s case, it has massive costs: the rockets, the Nvidia GPUs, etc. It’s not just losing money, it’s losing a shocking amount of money.

And do you really want to pay 100x? You have to wait a hundred years to get your money back. It’s not really growing much either: It’s growth rate is close to 15%. SpaceX is presenting itself as an AI company, but it only has a 3.5% market share, so it’s really just hype.

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The Great Brotation

The crypto market has now erased more than half of its value in the past eight months, and bitcoin ETFs have seen $8 billion in outflows in the past eight weeks. Meanwhile, AI has become the new frontier. It’s the technology people are most excited about, and it has captured the same sense of disruption and possibility that crypto once represented.

Crypto has lost its cool, and there’s academic work backing this up. A recent paper by David Krause, an associate professor of finance at Marquette University, pins the turning point on a specific date: January 2024, when the first bitcoin ETF launched. Krause’s thesis is that the moment Wall Street made crypto easy and mainstream, it stopped being cool.

As a proxy for public interest, he measured how often people Googled crypto terms and how often they visited the related Wikipedia pages. After the bitcoin ETF launched, he found that Google searches through June 2026 for dogecoin dropped 63%, searches for “cryptocurrency” dropped 47%, and Wikipedia visits to both pages fell 76% and 56%, respectively.

Crypto’s only selling point is that the line is going up and people want to buy it because they know someone who bought it for $1 and now it’s worth $60,000. So it’s really just a trend-based asset, something you talk about at parties.

But now, when you say you own bitcoin, you’re not really doing something exciting anymore. When the SEC chair is a crypto bro, and Commerce Secretary Howard Lutnick is a crypto bro, and all of Epstein Island was involved ... it’s no longer anti-establishment. The claims of use cases have evaporated as well.

If you want to be exciting, you’re probably telling people that you’re making bets on prediction markets.

Home Prices Aren’t Meant to Just Go Up

The U.S. housing market is showing new signs of strain. Last month, the median price of a home in the U.S. hit a record high at $408,838, and in April, the National Association of Realtors reported that the share of first-time homebuyers dropped to 21%, the lowest proportion since NAR began tracking the data in 1981.

This is part of a broader trend: Homeownership is increasingly out of reach for the average American. In fact, 75% of homes currently on the market are unaffordable for the typical household.

For young people, the housing market looks especially bleak. Between 2019 and 2024, the inflation-adjusted median home value rose 30%, while the inflation-adjusted median household income for those under 40 rose 9%.

Americans still want to buy homes. Fifty-six percent of Americans say owning a home represents the American Dream, and nearly two-thirds of Americans who don’t currently own a house would like to buy one within the next five years. Unaffordability is making that goal harder — and putting off other life milestones. Nearly 1 in 5 aspiring homeowners are putting off marriage or having children until they own a home, and 17% are delaying career changes or getting a pet.

Homeownership is a hallmark of American culture, but it’s also seen as a savvy financial decision. Ninety-three percent of Americans believe that buying a home is “definitely” or “probably” a better investment than buying stocks. That’s not necessarily the case.

Moody’s compared two people earning $150,000 a year: a homeowner who bought a $500,000 house (20% down, 6.25% mortgage) and a renter paying $2,500 a month with 3% annual increases who invested the difference at a 10% return. After 30 years, assuming average annual rent and home appreciation increases, the renter came out ahead with a net worth of $2.8 million versus the owner’s $1.6 million. The analysis did not take taxes into account.

If you look at the long history of housing prices, there’s no reason to think they should go up. But it’s become an investment class. If you speak to your grandparents, they’ll never talk about the concept of real estate investing. They bought a home that they needed to live in.

So how did we get in this situation? Governments have incentivized people to buy homes, so they want prices to go up or at least stay steady. You see politicians saying, we want affordable housing for young people, but they don’t want to damage the home values of retirees who are relying on it, because young people don’t vote as much as older people. And, well, you get one or the other.

Also, if you’re buying an asset at an all-time high and it seems really unaffordable to a regular person like you, it might mean that that’s not a great investment.

I understand the emotional urge to own the place you live, but an emotional urge is different from an investment decision. If you look at the long-term return on housing versus the stock market, housing grossly underperforms the stock market.

This conversation has an interesting parallel to the crypto phenomenon: The incentive that was keeping the price of crypto up was because people just fundamentally believed that it would keep going up. I think there is the fundamental belief among Americans and current non-homeowners that the price will go up. And if you believe that, then there’s more incentive to go out and buy a home as opposed to investing in anything else.

The only reason you should assume that your house is going to be more valuable five years from now than it is today is: if you invest in renovation and make it nicer or if you believe that the specific locale that you have bought your house in is going to become a hot neighborhood and everyone’s going to want to live there.

We’re going to uncover that some very funky stuff has been happening with these price targets for SpaceX.

1. Young San Franciscans hate AI

2. Analysts’ stock recommendations are colored by their cultural biases

3. The deceptive rise of the short king

Patrick Boyle is a professor at King’s College London and a portfolio manager with more than 20 years of experience at hedge funds, investment banks and private wealth management firms. He’s also the author of several books on finance and hosts the podcast, Patrick Boyle On Finance.

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ChatGTP says, “If I were ranking TED Talks since 2020,” they’d come out like this:

1. Scott Galloway – How the U.S. is destroying young people’s future

2. Sam Altman – AI interview

3. Bill Gates – Covid response

4. Adam Grant – leadership/work

5. Elon Musk – TED interview

More illuminating than the list is my pathetic need for affirmation. It’s a hole I can’t seem to fill ... but I digress.

This post was originally published April 19, 2024. Editorial note: After years of legal limbo, the Biden student loan relief plan is officially dead. Since this piece was published, 20 states have enacted laws restricting social media use for minors.

This week I spoke at TED2024, the iconic program’s 40th anniversary event. I joined RuPaul, Kesha, and two different astrophysicists on the stage in Vancouver. I was given 15 minutes, and took 17, to riffle through 47 slides articulating what I believe is the greatest challenge facing the U.S. It’s not inequality, climate change, or war in the Middle East, but an issue that threads these threats together: America’s war on the young. A war of mutually assured destruction.

A decent proxy for the success of a society is how it treats children. Not how individuals parent, but the success of the structures, incentives, and leadership charged with preventing a tragedy of the commons. In sum, can we answer a simple question: Do we love our children? In 2024 America, the rejoinder is disheartening.

Breach of Contract

We’ve broken the social contract that binds America: Work hard, play by the rules, and you’ll be better off than your parents were. For the first time in our nation’s history, this is no longer true. Today’s 25-year-olds make less than their parents and grandparents did at the same age, yet they carry student debt loads unimaginable to earlier generations. Neither the minimum nor median wage has kept pace with inflation or productivity gains, while housing costs have outpaced them. The statistics on children’s and young adults’ well-being are staggering.

None of this is lost on young people, and the shattering of the social contract has left them feeling rage and shame. Half of Americans older than 55 say they are “extremely proud” to be American; that number drops to 18% among 18- to 34-year-olds. This weakens the country’s immunity system, allowing minor cuts to U.S. society to bring on deadly opportunistic infections. Just as when someone in your life blows up at you, it is about the issue at hand … and it isn’t. American youth’s warranted concern about social justice issues, despite remarkable progress on all these issues, turns seamlessly into rage.

Hoarders

We don’t lack the resources to level up young people and present the opportunities afforded my generation. But the cohorts who benefited most from the extraordinary postwar economic boom of the 20th century have pulled the ladder up behind them. In 1989 adults under 40 held 12% of the country’s household wealth, while those over 70 held 19%. Today those under 40 command just 7% of household wealth, while those over 70 control 30%.

Higher education is the most effective means of closing the generation gap. But the incumbents have artificially constrained access, sequestering opportunity largely to wealthy households, peppered with a few freakishly remarkable kids from the lower 90% to smear vaseline over the caste(ing) of higher ed. Elite schools tout their financial aid, emphasizing that students with median household incomes pay little or no tuition, but it’s a head fake. Being more generous with a select few low-income students only wallpapers over exclusivity, when the goal should be to eliminate it. We have simply reshuffled the elites.

Harvard’s undergraduate class size has been static at 1,600 for almost half a century, while its endowment has grown nearly 500% — after inflation. When your asset base is up sixfold but you purposefully do not increase production, you are no longer a public servant but a Chanel bag. Single-digit admissions rates are the ultimate vanity metric, something deans and donors brag about at cocktail parties, when they should be a mark of shame. As I’ve proposed before, we should offer higher ed a grand bargain: Redirect the money earmarked for bailing out the one-third of America that has attended college to increasing freshman seats and reducing costs. The Biden administration’s proposed student loan bailouts shrink the tumor, but don’t address the underlying cancer — declining affordability and accessibility.

Capital vs. Sweat

We have elevated capital over sweat (i.e., labor). The public is numb to this mythology, benefitting the incumbents who’ve created it. Back in 2008, when the market crashed, young(ish) people like me, coming into our prime income-earning years, were able to buy growth stocks at low valuations. The foundation of my economic security was buying Amazon at $7 ($179 today) and Apple at $7 ($167 today) and Netflix at $12 ($611 today). Ever since, however, we’ve inflated asset prices by pumping them full of steroids and stimulus using low corporate tax rates and bailouts that are financed on the backs of young people. “Keep me rich, on your credit card,” said every American over the age of 50 to citizens younger than them. In sum: Real median income from labor is up 40% since 1974, while the S&P 500 is up 4,000%.

We’ve protected the wealth created by ownership at the expense of income earned by labor through the tax code, which favors gains from investments. Gains from stock sales are taxed at lower capital gains rates. Real estate holdings can appreciate tax free, and, once sold, the gains can be rolled into another investment. Again, a series of transfers of wealth from earners (youth) to owners (seniors).

Representative?

And what taxes are collected are increasingly redistributed to the generation who needs them least. In 1985 the federal government spent three times more per capita on seniors than it did on kids. By 2019 that ratio had risen to eight times. We’ve cut senior poverty from 17% in the 1970s to 9% today, which is admirable. But child poverty has risen over that same period, from 16% to 19%.

The “demo” in democratic is failing us, as seniors vote seniors into office who then vote themselves more money. With neither age limits nor term limits, and incumbent reelection rates over 90%, congressional seats have become lifetime appointments. Nancy Pelosi may be the sharpest 83-year-old in Congress, but her time has passed: She has a daughter who was born during the Johnson administration, when less than one-third of homes had a color TV. Does our leadership really relate to the challenges facing a 15-year-old girl being sent messages on extreme dieting by Meta, or the budding addiction crisis among young men on phone-based gambling apps? We need churn to recalibrate and transfer wealth, but it’s been dampened with retardants that cost trillions. D.C. has become a cross between The Walking Dead and The Golden Girls — its denizens see the living (young) as nutrition, vs. the future.

Minotaurs

To appease King Minos of Crete, ancient Athens sacrificed seven young men and seven young women to the Minotaur he kept under his palace. Then Theseus slew the Minotaur. Today in America, we’re offering an entire generation to the Minotaurs of Big Tech, and our Theseus, Congress, can only stand by and make speeches. Teen depression and self-harm, bullying, loneliness, and obesity have shot up since social media began haunting them 24/7. Since 2017, Congress has held 40 hearings on children and social media and passed nothing to address the problem. Democrats and Republicans have introduced legislation, including to age-gate social and to reform Section 230 (which immunizes internet platforms from most litigation), but nothing gets done. At the last dramatic reading of what ails us, Senator Dick Durbin admitted to failure: “The tech industry alone is not to blame for the situation we’re in. Those of us in Congress need to look in the mirror.” We need to make tech platforms liable for the harms they cause; we should eliminate Section 230’s liability shield for algorithmically elevated content — freedom of speech isn’t free.

Buck Stops

The U.S. is the 10th-happiest country in the world for people over 60, and the 62nd-happiest for people under 30. Young people are economically disadvantaged, threatened by climate change, and voiceless thanks to our dysfunctional politics. And they’ve been manipulated from childhood by a toxic cocktail of paleolithic instincts, medieval institutions, and godlike technology. We have broken the social contract, and younger generations aren’t going to fulfill their end of it. In 1993, 60% of 30- to 34-year-olds had at least one child. Today that number is 27%. Young people aren’t meeting or mating, and the consequences will be dire. Young people’s labor powers the economy, and their taxes pay for the services consumed by old people. Without robust youth employment, Social Security will go bankrupt, debt service will consume the federal budget, and the commonwealth will collapse. We’ve created a future so unappealing, youth is opting out.

Fixable

The incumbents will throw their arms up like an 8-year-old who refuses to take responsibility. The plea of complexity is an illusion — every problem we have levied on young people can be addressed. We have the hard part figured out: how to grow the economy at a sustained rate to pay for programs that might turn things around. Here are just a few programs and fixes we could try.

I had my first child at 42, and it changed my life. I became more responsible, focused, concerned about the future, and empathetic. In sum, I became a better American. Children make us better. We care for our kids, but do we love children? Somewhere along the way, we lost the script as a society. If we have the resources to address these issues — and we do: Nvidia added a quarter of a trillion to the economy in 5 minutes post-earnings — but continue to look the other way, then we have to ask: Is America worth investing in? And do we really love our children?

Life is so rich,

P.S.

For those in the back: Work from home, not AI, is killing entry-level jobs. Prof G+ paid subscribers can watch our latest deep dive here. For access to these deep dives and other exclusive content, upgrade here.

Plus, why Americans feel less patriotic as the country turns 250 — and how an 18-month-old podcast built a media business worth hundreds of millions.

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Sebastian Mallaby is a prominent journalist, author, Pulitzer Prize finalist, and senior fellow at the Council on Foreign Relations. His latest book is The Infinity Machine: Demis Hassabis, DeepMind, and the Quest for Superintelligence.

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Plus, they debate OpenAI vs. Anthropic and what Mark Zuckerberg’s obsession with the next big thing reveals about the future of tech.

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They start with Graham Platner, who is bowing out of the Maine Senate race following a sexual assault allegation after a scandal-ridden campaign. In his exit video, Platner blamed the Democratic political establishment for taking the nomination away from him. How does the Democratic Party move forward in Maine to field a new candidate?

The U.S. and Iran have renewed aggression, trading strikes for a second consecutive night, with Trump declaring the three-week-old ceasefire officially “over.” Jessica and Biran break down what this means for the administration’s foreign policy, and how recent reactions to spiking oil prices reveal some Republican Party hypocrisies.

Then, they discuss the resurgence of ICE operations, which led to the fatal shooting of Lorenzo Salgado Araujo, a Mexican national with four…

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They start with Graham Platner, who is bowing out of the Maine Senate race following a sexual assault allegation after a scandal-ridden campaign. In his exit video, Platner blamed the Democratic political establishment for taking the nomination away from him. How does the Democratic Party move forward in Maine to field a new candidate?

The U.S. and Iran have renewed aggression, trading strikes for a second consecutive night, with Trump declaring the three-week-old ceasefire officially “over.” Jessica and Biran break down what this means for the administration’s foreign policy, and how recent reactions to spiking oil prices reveal some Republican Party hypocrisies.

Then, they discuss the resurgence of ICE operations, which led to the fatal shooting of Lorenzo Salgado Araujo, a Mexican national with four young U.S. citizen children. Does …

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Brian Katulis is a Senior Fellow at the Middle East Institute. Casey Mock is the Senior Policy Director for the Anxious Generation Movement.

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At the NATO Summit in Turkey, Trump called European allies “hopeless,” seemed to confuse Zelensky with Putin, and made eyebrow-raising remarks about Japan. He did, however, announce that the U.S. will allow Ukraine to manufacture the Patriot air defense system domestically — a significant development in the ongoing Russia-Ukraine war.

Back home, the clock is ticking on the Maine Senate race. Bernie Sanders has now personally called Graham Platner urging him to step aside following sexual assault allegations, and Democratic pressure is intensifying. They talk about who could replace him, and what the Texas race is looking like.

Several Republican leaders say they spoke with the hospitalized Kentucky senator Mitch McConnell yesterday, and Governor Andy Beshear has sent a formal letter to McConnell’s office requesting a health update.

Plus: The Justice Department has sent letters to election officials in all 50 states and D.C. threatening prosecution for failing to purge non-citizens from voter rolls. And the Trump administration has also been quietly rolling back gun violence prevention programs across the CDC, DHS, and DOJ.

Finally, the preliminary hearing in the Charlie Kirk murder case is underway in Utah, with prosecutors claiming a mountain of evidence against alleged assassin Tyler Robinson and seeking the death penalty.

Get your ticket for our live show at 92NY: https://www.92ny.org/event/scott-galloway-and-jessica-tarlov

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Plus, you can now call or text Scott a question at our new Office Hours hotline: ‪(201) 472-3656‬.

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Steve Feldstein is a senior fellow at the Carnegie Endowment for International Peace. Zed Francis is the CIO & Co-Founder at Convexitas. Ara Kharazian is the Lead Economist at Ramp.

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The deception was widespread. The Journal reviewed more than 1,100 promotional videos — roughly 70% of them containing simulated trades — that racked up 140 million views. Many depicted wildly profitable trades that, in reality, would have lost money. The creators were paid $2,000 to $3,000 a month and instructed not to disclose the sponsorship.

Outrage followed. Polymarket announced a “comprehensive audit” of its promotional content. Two senators demanded a federal investigation. A consumer watchdog group filed a lawsuit. The consensus: Paying college kids to fake gambling winnings for an audience of other college kids must be illegal.

Is it, though? This ordeal begs a question that seems to have gone unanswered: What is actually illegal for an influencer to do online?

The Rules

As it turns out, there are plenty of laws governing creator advertisements.

Under Section 5 of the Federal Trade Commission Act, deceptive advertising is illegal. If an influencer is paid to promote something, the FTC’s Endorsement Guides require them to disclose that relationship clearly and conspicuously.

It’s also illegal to mislead your audience for financial gain. Faking your results is illegal. Making product claims without evidence is illegal. As of 2024, the FTC’s fake reviews rule makes phony testimonials punishable by roughly $52,000 per violation. And if you’re promoting a security, the SEC requires you to disclose exactly what you were paid — a rule Kim Kardashian learned about via a $1.26 million settlement over a single Instagram post promoting a cryptocurrency.

It doesn’t stop there. Promote a nicotine product? The U.S. Food and Drug Administration (FDA) requires an addiction warning covering 20% of your post. Promote a prescription drug without risk information? You’ve misbranded it. Make content for kids? The Children’s Online Privacy Protection Rule applies — meaning targeted advertising to children under 13 is effectively off the table. Get paid to promote a sportsbook? You’ll likely need a license. All 50 states have additional deceptive-marketing laws. On paper, the influencer is one of the most-regulated workers in America.

So yes, the Polymarket campaign was definitely illegal. However, there’s a reason that Polymarket and most content creators don’t abide by these laws: They’re barely being enforced.

Nothing Wrong

A study published last year in Marketing Science analyzed more than 100 million brand-related posts on Twitter across 268 brands. It found that as much as 96% of sponsored posts were not disclosed. Another study assessed millions of posts on YouTube and Pinterest and found that disclosures were made only 10% and 7% of the time, respectively.

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Against a violation rate like that, the FTC’s enforcement record is pitiful: It has never obtained a monetary penalty from an individual influencer over a disclosure violation. The agency’s most aggressive action against individual creators in 2017 ended in a settlement with no fine, no refunds, and no admission of wrongdoing.

The one regulator that does actively enforce is the SEC — that’s where Kardashian’s $1.26 million went, along with a dozen or so other celebrity settlements. But the SEC has jurisdiction only when the product being advertised is a security, which accounts for a negligible portion of total ad spend online. Add up every fine the SEC has ever collected from an influencer and you get just $4 million — a majority stemming from the undisclosed promotion of cryptocurrencies (which is no longer regulated by the SEC). That’s as much as Kardashian makes from two Instagram posts.

Outside of these disclosure and securities law violations, it’s well documented that fraudulent activity represents a significant portion of online advertising. Reuters uncovered that Meta’s own internal documents projected that roughly 10% of its 2024 revenue — some $16 billion — came from scam and banned-goods advertising. (Although Meta disputes the figure.) That equates to Meta users seeing 15 billion “scam ads” per day.

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New Normal

The problem with this lack of enforcement is that it comes at a time when the internet advertising industry is ascendant. U.S. influencer marketing spend hit $10.5 billion in 2025, growing 15% year over year, faster than digital ad spend as a whole. It has more than doubled since 2021. And internet advertising as a whole now accounts for more ad dollars than all other mediums, combined.

For Gen Z, influencer advertisements have become a driving force in consumer behavior. Three-quarters of Gen Z say they’re more likely to buy from a brand simply because it partners with an influencer they like. A GoDaddy survey found Gen Z trusts an influencer’s product post over an ad from the business itself — despite the fact that there’s seemingly no verifiable way to tell if an influencer has been paid to make an endorsement.

Payola

The frustrating part is that we’ve solved this problem before. In the 1950s, record labels were paying radio DJs to play their songs. Congress noticed, held hearings, and in 1960 made the practice, called payola, a federal crime punishable by up to a year in prison or a fine of up to $10,000 for every undisclosed play. As recently as 2007, the FCC fined Clear Channel, CBS Radio, Entercom, and Citadel $12.5 million in a single payola sweep.

Those laws are still on the books. Take money to hype a song on the radio without saying so, and you’ve committed a federal crime. Do the same thing on TikTok — for a song, a supplement, a betting app — and you’ve got an influencer campaign.

What Comes Next?

In many ways, this Polymarket story isn’t a scandal but rather a reflection of modern advertising rules — and our decision not to enforce them. Polymarket correctly observed that, in practice, there are no influencer marketing rules. They only got caught because of their large (and already controversial) public profile.

That has to change, because the stakes are compounding. Influencer marketing is no longer a corner of the ad industry. It’s becoming the default way products, stocks, and prediction market platforms reach young Americans.

What comes next will be even more deceitful. Generative AI will collapse the cost of running this kind of campaign to zero. Nearly one-third of all video ads are now created using AI. The internet will soon be populated with fake influencers endorsing real products, and real influencers endorsing fake products. Without a real change at the FTC, there will be no consequences — except those borne by exploited consumers.

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On Thursday at noon ET Jessica Tarlov will be back on Substack live with Brian Tyler Cohen, political commentator and bestselling author, to talk about his new book The Day After. They’ll discuss why Republicans are better at wielding power and why “back to normal” can’t be the progressive pitch in a post-Trump era.

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This Wednesday at noon ET – and every Wednesday at noon ET, so put it in your calendar – my Raging Moderates co-host Jessica Tarlov and Aaron Parnas go live with Raging Perspective. Expect politics, news, and two people with a lot to rage about.

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If you missed my Predictions mid-year check-in, it’s not too late. I graded my own homework on the data center bubble, big tech, and the Anthropic vs. OpenAI arms race. I also got into why the fast food industry is getting wrecked by GLP-1s, which, spoiler alert, I called months ago.

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Don’t Bet on It

In this week’s Extra Credit, Prof G Media research analyst Dan Chiolan looks at the Polymarkets influencer marketing scandal. Spoiler alert: It’s worse than you think.

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Jessica Tarlov is joined by ’s Sam Stein, and they start in Maine, where Democratic Senate candidate Graham Platner has announced he is taking time to reflect after a rape allegation went public. They discuss the logistics of possibly replacing the scandal-ridden Platner on the ballot — and mention a few possible candidates — while also asking the important question: how could the party vetting process have failed so miserably?

Plus: what is the condition of former Senate Majority Leader Mitch McConnell, who has been hospitalized for weeks, with minimal information? Will there be a special election for his seat — and will the recently-primaried Kentuckyan Thomas Massie take an interest? And in Michigan, Mallory McMorrow has dropped out of the Senate race, leaving moderate Haley Stevens — backed by Chuck Schumer…

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