ved up, but i'm working on it now. i will do whatever i need to do. plan your financial life with prudential. bring your challenges. good morning, it is 8:00 a.m. at facebook headquarters in menlo park, california, 11:00 a.m. on wall street and "squawk alley" is live >> we have no idea how many people lost their privacy over this i think the management of facebook right now is committing

malpractice. they're just as addicted to the likes from wall street and from their audiences as the audience are to the likes they get from sharing things that make them angry or afraid. good tuesday morning i am jon fortt, morgan brennan and wilfred frost. carl is on assignment. also with us the entire hour, elevation partners co-founder, early facebook investor roger mcnamee out with a new book today, "zucked," waking up to the facebook catastrophe on the early days of the social network, the extension threat to society. wow. that's a provocative title what is that referring to?

>> you know, you get to decide my wife came up with the name, since it is kind of a new word, people can decide whatever it means to them. >> in your book among other things, roger, you say, quote, facebook remains a threat to democracy and that it continues to prioritize its business model over civic responsibility. i'll also note facebook's official statement to us on your book, they say take criticism seriously over the past two years, we fundamentally change how we operate to better protect the safety and security of people using facebook. the reality is roger mcnamee hasn't been involved in facebook for a decade, which you don't dispute. >> no, i don't to me it is completely irrelevant there was a time i was closely involved, ever since i am an observer, professional analyst, i saw things in the press that concerned me, saw things in the product that concerned me. i went to them privately, tried to make them aware of my concerns

i spent three months trying to persuade them this was really serious and they politely but firmly declined to participate i decided it was too serious to let alone so i became an activist. >> you're also a shareholder. >> are you a shareholder activist you haven't sold any stock. >> i sold stock in years past. since i got involved in this part, writing a book and all, no the reason is simple i didn't want anybody to think i was trying to tank stock by my activism my notion is i did well from the stock. i'm going to hold it while i'm an activist so there's no confusion what my goals are. >> focus on the time line. 15 years old today, facebook when did you first start getting involved with mark zuckerberg as an adviser and when did you realize something was awry, a decade ago >> recently. facebook was started in 2004 in 201606 i got a call saying m

boss has a serious issue, he needs somebody that's not conflicted, been around a long time, would you take a meeting the key thing, the company was tiny, 9 million in revenue before that point, but it was already obvious it was special i was convinced that they had broken the code on social networking they had authenticated identity and real privacy controls and i thought with that, they could get to 100 million active users and that would make them as successful as google was at that time, which would have been in my world a huge hit. i said of course, i'd love to meet him before we started the conversation, i said mark, we haven't met. you need some context. i said i will bet if it hasn't already happened, microsoft or yahoo will offer a billion for the company. and everybody you know will tell you to take it >> you outline this scene in great detail early in the book and zuckerberg's response. we'll get to more later in the

show you're going to be with us all hour turning to alphabet, they reported earnings shares dropping after results, despite a beat on earnings and revenue, due to declining advertising prices and rising costs, josh lipton spoke to the alphabet ceo on the niumbers last night. he joins us with more on the conversation and the quarter >> reporter: another quarter of solid top line growth but one big question investors have for alphabet now, how much the company is spending. google's capital expenditures soared 80% to nearly $7 billion more than what wall street expected the company's operating margin was 21%, down from 24% where is all of the money going. the cfo saying we remain focused on investing long term the primary driver continues to be technical infrastructure to

support growth costs moved higher on hiring alphabet had 100,000 employees by end of the year importantly, she said that she expects capex growth rate to moderate significantly i asked her about competition from amazon's ad business which we know is growing strongly, she said site revenue has grown 22% year over year, reflecting strength across the board. our view is whenever a new inventory is created, that attracts consumer interest and advertising against that inventory creates positive roi she's suggesting her business isn't threatened because the total online ad market continues expanding. despite all of the spending, not much new disclosure about the cloud or youtube where some investors we know are still holding out hope that the company will one daybreak out that business. guys, back to you. >> thank you, josh

roger, these companies, google, facebook, spending a lot of money. that caught investors' attention. part of the reason alphabet stock was lower. what's that going to do, how is it going to shake out on the market, given they have such leads already on things like ai. >> i look at both companies. the key point is they're the best advertising platforms that exist anywhere in the world, the largest audience, the best targeting. when ruth says that amazon coming into the market doesn't threaten them, i buy that. the threat is to all of the other forms of advertising that are out there. when they look at the increased spending, it depends where it goes a lot of facebook spending is going to try to eliminate the perception they don't care about harm being done. >> just the perception. >> just the perception i don't think you fix the harm without changing the business model. >> do they think they can change that -- >> they may think that, but we've seen them make a lot of changes but threats remain and

continue a lot has to do with, you think of last week alone, the situation of them bypassing the app store, trying to sneak the research product into the marketplace. google did the same thing. they were targeting minors among others with really invasive surveillance that's all driven by the business model. >> they say more than 80% adults. >> whatever. doesn't make a difference. it wasn't appropriate for anybody. that kind of surveillance shouldn't be part of your business model and both companies did it google, they're making a lot of investments in the future, not all of it equally attractive i look at ai and say they have to figure out a way to get rid of bias. if you feed things that are bias to train ai, they are inherited. we have seen it in things that read resumes, having gender and racial bias, seen it in things for real estate, for mortgages they're going to have to invest

more to get that to work. >> it is a slippery slope, gray area when it comes to self policing on the site, what you deem is right and wrong. the other piece of this, you talk about if in your book, it applies to facebook and google, is the fact they're dominant in terms of online advertising. we hear it from venture capitalists and ceos are startups and consumer facing companies. the fact that if you want your brand and dollars out to consumers that buy your products, you need to go through these two companies and the bar is very high it elicits debate again about things like monopolies >> the problem we have from a regulatory point of view, it only counts as monopoly if consumer prices go up. historically, people have forgotten facebook and google aren't actually free, they're a barter once the regulators start to look at data as currency, you'll be able to pierce the line relative to the consumer price part, then we can go after harm

to suppliers in the media business, advertisers with the stuff they do there, and competitors where clearly they blocked everybody. >> there's clearly been a change in perception when it comes to the media, when it comes to politicians towards this aspect, yes, it is free in monetary terms but not in data. has the consumer shifted to that level? they're still using platforms, still content to get a great service for what is free >> it is really hard the products become habits, then they become addictions they actually deliver a lot of value. the problem isn't social media or the internet, the problem is the incentives of the business model. what i tell people is this, and the book is filled with this, is that they depend on our attention. that model only works if we pay attention to it. what we want to do is redirect our attention in ways that give us more power. >> quickly on the google

difference clearly in the book you outline both as having crossed the line let's say in your view when did you realize that facebook had done that and had google started doing that long before >> google has been doing what google has been doing for a long time the harm has been not apparent at google until recently facebook, my recollection was january of 2016 related to the democratic primary, then i saw a thing about black lives matter in march, brexit then in the uk, i then thought maybe facebook gives inflammatory messages advantage over neutral ones. then you have housing and urban development talk about facebook tools, allowing people in real estate to violate fair housing act with discrimination. and that is when i reached out to mark and sheryl saying something is wrong with the algorithms that's letting bad actors harm innocent people.

i assumed facebook was the victim i am reaching out to people i thought were my friends saying hey, there's a real problem here for whatever reason over the three months i spent talking with them privately they chose not to prioritize the issue. >> and google had been doing something similar before >> not in the electoral context. what google is doing is massive surveillance and creation of products if you think about it, android has been so bad on privacy so the privacy thing google was doing from beginning of time. >> to put the facebook part in context, you connected mark zuckerberg to sheryl sandberg in the first place which you also detail in the book more on all of this, of course, later in the show. >> we have a full hour still to come we are talking washington's impact on silicon valley, how tech ceos are dealing with threat of regulation and trade wars tomorrow, tune into power lunch. former fed chair janet yellen

sits down with steve liesman that's 2:30 p.m. eastern tomorrow metianme, dow up 150 points right now. we're back in a moment this is decision tech. it's screening technology that helps you find a stock based on what's trending or an investing goal. it's real-time insights and information, in your own customized view of the market. it's smarter trading technology, for smarter trading decisions.

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welcome back to "squawk alley. an increased focus on privacy and data misuse by big tech firms and concerns over chinese ip theft kept tech in the forefront of the white house trade policy and congress's agenda

calls for tech regulation could ramp up the next few years joining us, chairman glen hubbard and investor roger mcnamee. good morning to you, glen. thanks for joining us. clearly we look at the rhetoric from politicians, there is consensus to do something towards the big tech companies when it comes to regulation. do you think it is likely to materialize in the next couple of years >> i think there are a lot of cross currents some is let's break up the tech companies, i'm not sure that's a good idea. but i think focusing on data is important. it becomes a competitive weapon, and it is at the core of the privacy issue. giving more property right to data to individuals is the key >> do you think politicians have the expertise and resolve to get this done before the 2020 election or not? >> they surely don't we've seen from the hearings that many political leaders aren't that knowledgeable, but it is the time to do some good

work on figuring out how to get at the privacy issues and the legitimate anti-trust issues it is highly technical so voters may not be so focused on it, but i think the idea of tech companies as a problem voters are focused on >> roger, i ask this question a lot, going to ask it of you again today. is the jeannie out of the bottle in terms of consumer data. i think of my daughter, no pictures, no anything on facebook or social media sites, but if you put her name in, there's lots of information about her to be found on the internet. >> morgan, that's precisely the current problem but not the future problem when people say roger, my data is out there, i can't get it back that's demonstrably true they say hey, i have done nothing wrong, i have nothing to worry about. that's also demonstrably true. but the risk we face is that companies are building detailed portraits of each and every one of us, including people not in their system and using it to

effect behavior of whole populations. why? because in doing so they can cause more revenue and earnings for themselves if you look at what's going on with smart devices, alexa power and google powered devices, they're putting surveillance in new places, the kitchen, living room, bedroom. they're listening all the time they're creating new applications based on that, designed to anticipate your desires, market to your desires. all i can tell you is we have a different problem. we don't yet have a good vocabulary for it. all i would say to people is don't look backwards, look forwards beware of iot and ai >> glen, about that, does a property right to data really solve the problem? in one way my data, my individual data is of limited value. knowing how my data connects to my family's data, people i went to college with and demographically similar, that's where the big money is, and i

have no influence over that. it is the platforms that put those social graphs together >> that's true, but what you do solve with the property right is competitive problem. currently, the platforms have a lot of market power. it is hard to compete when they own the data having you own the data gives you more of a right. it helps with the competitive problem and a little bit the privacy problem. >> glen, what is your advice then to regulators that would sort this out in terms of what is a readily available piece of action that would take a big step toward solving issues there? >> i think first try to understand the issues better, and second, there are a number of economists and technologists working how you would price data this will take time. i think it is definitely doable. >> thank you very much for joining us a quick final question do you think some politicians fear rebuke from the platforms in media giants in the same way you would argue 20, 30 years ago

the barons were? >> i do. i think we hit a tipping point san francisco bay area where a lot of constituents live, there are a lot of brave members of congress who are asking the right questions and the point is this doesn't have to be confrontational. this could be something we do cooperatively that google and facebook are not choosing to be cooperative. >> all right much more from you, roger, straight ahead as we head to break, look at the best performing stocks in the dow in today's session here they are. lomol, apple, dow dupont a t re "squawk alley" still ahead. we'll build right back arch. yep, td ameritrade's got that. free access to every platform. yeah, that too. i don't want any trade minimums. yeah, i totally agree, they don't have any of those. i want to know what i'm paying upfront. yes, absolutely. do you just say yes to everything? hm. well i say no to kale.

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welcome back to laeltz general motors rolling out the heavy duty silverado this morning. phil lebeau is live in flint,

michigan with a special guest. >> mark royce, and behind us, star of the day, next generation silverado heavy duty 35,500 pounds is the towing capacity it keeps going higher. >> it is 52% higher than in the past, past models. we're excited about that two new power trains, 6.6 liter gas engine, 460 foot pounds of torque, and new duramax, with a brand new ten speed allison transmission, it is a great truck. >> there's no doubt you're in the midst of an arms race with ford and ram when it comes to heavy duty models, these trucks last so long, some have them as long as 10, 12 years is it tough to convince people it is worth it to come in and

trade up for something more capable here >> i'm not sure it is tough but people use these to earn a living, a lot of people, and a lot of people use this to tow things that they really love and enjoy from a recreational standpoint, so there's fuel efficiency that comes with that capability, there's longevity and design the trucks look beautiful and everybody wants to have a reflection of themselves in the auto industry. 12 years is a long time for the construction and contractors but they have to renew fleets on operating cost and fuel economy basis too. >> let's talk about the broader market there's a report out that inventory appears to be growing at some dealerships around the country for the industry overall. are you worried about that in terms of january sales were tepid, not bad, but tepid. >> we were talking about this. this time of year that's

relatively typical i will also say the weather piece of this, don't forget when it is negative 20 wind chill, it is tough for people to go out and shop vehicles, so there's been some weather effect on that as well i would think, so it is all that together. this time of year it is not untypical to see that. >> you're in the midst as a company telling 2200 white collar workers in southeastern michigan and around the country that they'll be laid off and closing six plants this year or idling six plants. some analysts believe you have too much capacity. are you confident that you do not have to announce any more plant closings this year >> we have nothing left to announce on that this plant here today, we're going to add a thousand new jobs into this plant and the first thousand of those jobs will go to the people that are in some of the unallocated plans we announced and then a lot of empathy around right sizing the

work force we're paying attention to our people, being fair with them and giving them opportunities for other jobs and a great economy, and this is the time to get this right for the future so that we fill our plants with the right product, fill it with the right work force and move on and get it >> confident you have the size right? >> i do. >> mark royce, on a day they roll out the new next generation silverado hd guys, back to you. >> phil, thank you very much for that european markets closing in a few minutes. seema mody has today's action. >> the european markets are up, despite disappointing data couple big movers, pandora staging the best day of trade after unveiling next steps in the turnaround plan, and then bp, up 5% in london after beating earnings expectations on strong oil and gas output. that helped energy become the biggest or best performing sector in europe today

let's talk currency. a pound falling to a two week low after weak pmi report, pointed to slowing growth in the uk sector. prime minister may set to travel to brussels thursday. lastly, european nations recognizing opposition chief as leader of venezuela, calling on him to hold elections. separately russia that backs maduro is encouraging both parties to begin dialogue. remember, russia has vested interest in venezuela with two oil fields in the country. guys, back to you. >> thank you, seema. sue herera has a news update >> good morning, jon and everybody. president trump to deliver his state of the union of the union address tonight. white house counselor kellyanne conway says he will talk about his achievements over the last year as well as the work ahead >> he's also going to be visionary and call for some really bold actions in the future which require cooperation

from republicans and democrats and he's going to make that challenge to all of us, but especially those of us with a vote in congress pope francis receiving a surprise gift when a little girl crawled under the barrier and ran up to him at abu dhabi stadium and handed him a piece of paper she dodged past security, was greeted by the pontiff who bent down to speak to her before he moved onto celebrate mass. tens of thousands of new england patriots fans cheering on the super bowl winning team in boston. the parade kicking off at the heinz convention center before it will end at city hall as we know, the patriots won the sixth super by defeating the los angeles rams 13-3 on sunday. you are up to date that's the news update this hour, back downtown to you guys. morgan, i'll send it back to you. >> looks like an orderly parade. >> so far. when we return, a deeper dive into roger's new book "zucked" and facebook's response a lot more "squawk alley" still

ahead. all of the major averages are higher now stay with us california phones offers free specialized phones... like cordless phones,

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and accessoriesphones for your mobile phone. like this device to increase volume on your cell phone. - ( phone ringing ) - get details on this state program call or visit we are back with roger mcnamee who is out with his new book today, "zucked," waking up to the facebook catastrophe.

roger, you write facebook's ai knows more about users than they can imagine. all that data in one place would be a target for bad actors, even if it were well protected, but facebook's business model is to give the opportunity to exploit the data to just about anyone willing to pay for the privilege. facebook would dispute that. in a blog post yesterday, facebook said our tactics include to mitigate the problem blocking intermittent fake accounts, finding and removing bad actors, limiting the spread of false news and information, bringing unprecedented transparency to political advertising. we improved the machine learning capabilities which allows us to be more effective finding and removing violating behavior. our expert investigators manually detect more sophisticated networks roger, you say that their very business model and tactics are bad for democracy because of how they are manipulating users.

>> user attention. >> and then user behavior. >> theadvertiser then manipulates the behavior >> right by what principle could regulation change that you look at advertising now, they've got competition, google, amazon is rising, et cetera. does there need to be a new doctrine to achieve what you think needs to be done >> possibly for some aspects of the problem. relative to the competition issue, i don't think it is just about facebook, i think the issues that we saw at facebook are just as present at google, particularly in youtube. and youtube in terms of the harm it does to children, in terms of the impact of disinformation in election context is a severe problem. so i think you can use antitrust collectively against people with big data to try to go after that but i would dispute a whole bunch of conclusions you might draw from facebook's statement

they're sitting there saying they made improvements i do not for one moment dispute that you're coming from zero base they're nowhere near 100 i will give you an example election transparency, last week there was a story about p propublica facebook shutt them down, won't let them do the analysis and another thing relative to privacy and disinformation, you see people like snopes that stopped working with facebook because it is impossible you've seen the machine learning and ai relative to hate speech only gets 38% of hate speech that's been taken off the system and elsewhere, while they're in the high 90s for things, when you have billions of posts per week, you have to be 99 to keep it from being a big problem. i don't dispute one thing they

say. what i conclude is we still have a gigantic problem maybe they've gone 1% of the way they need to do. i understand them taking the position, that's what i would do if i was in their shoes, but i would like to see them work more. >> the blog post, ten pages going into detail. they have been forward facing in terms of coming out, doing interviews, making statements along the way. to me, it seems like it is one big grand experiment, right? >> absolutely. >> the era of social media, the era of the new information age, and you've had some companies that have chosen certain business models like facebook and google and some companies have gone a different route. who is doing it right right now? >> morgan, you're completely correct. it is like an evolutionary experiment but without a control group. we did it on the world simultaneously i don't think any tech company is perfect today but there are several companies really making an effort to do it differently we have seen a lot from apple

recently, particularly on privacy, and there are issues at apple, even on privacy. >> yep. >> certainly there are issues relative to the manufacturing strategy and some of the issues in china i think this is a little like the story of the two guys in the woods when the bear shows up one guy puts on sneakers, other guy says what are you doing, he says hey, i don't need to outrun the bear, i just need to outrun you. i like all of the people making an effort and i give apple huge credit i give sales force.com credit, their ceo has been outspoken on health issues of internet platform ibm is attempting to be better with artificial intelligence i really applaud that. what i want to see is the rest of the industry stepping up. i think microsoft has been sadly quiet on a lot of the issues, and it is not because they're a bad company, it is because for whatever reason they don't think it is appropriate to criticize i'm going i'm sorry, pretty soon

you have to make a choice here >> when you give examples of some big tech ceos doing the right thing in your eyes, why is mark zuckerberg not doing the right thing in your eyes is it because he cares more about money than doing the moral thing and is aware he is doing that or is he not aware himself that he is acting in the wrong way as you concluded. >> wilfred, for apple and sales force, it is easier. their business model is not advertising based. they're selling products to customers. so if you will, incentives of their model make it easier to be complaint. apple, most problems are around the product being made in china. for mark, i feel sorry for him if you look at facebook's business strategy or google's, on their own terms these are magnificent business models, perfectly executed the problem is that there are

costs to society, they have never been forced to pay they're no different than we saw in the chemical industry the chemical industry we decided in the '60s and '70s and '80s, you have to pay the cost of spills, super fund sites if we start to force internet platforms to pay full costs of damage they do, that's going to sober them up quickly. to the question on regulation, that's the way i would focus on it you guys have to pay the cost, forget regulation, but you're going to have to pay the cost. >> do you think mark zuckerberg doesn't realize that exists or does he realize and doesn't care >> there's a third choice, wilfred, that he's been taught since before he started the company that we live in a libertarian society with a laissez faire regulatory environment. the paypal mafia were brilliant as identifying social media as the next big thing, but brought a libertarian philosophy that

said entrepreneurs aren't responsible for damage of their inventions, which made disruption for its own sake a big business in silicon valley and i just think there haven't been other voices. the board of directors hasn't done its job to say wait a minute, there has to be a line here you have to stop somewhere so i don't personalize it. i look at this and i understand why it was hard for them to see in 2016. to me the challenge is how come now that we know and there's evidence, where are the voices >> there's no oil soaked bird in this spill when you have an oil spill, it is clear whose tanker spilled, there's a bird in this case there's damage but it is arguable who caused the damage >> look at me and mark united nations says 9,000 confirmed dead, 42,000 missing and presumed dead in what they called a classic ethnic cleansing, attributable, enabled

by the facebook platform that's your oil soaked bird. and it may be it is on the far side of asia the reason we're not paying attention to the oil soaked bird. >> we're going to keep this conversation and debate going on facebook as the hour continues meantime, the president is expected to drive home importance of the usmca and tariffs in the state of the union. but how is the administration's trade policy faired so far through his term kayla tausche has more >> reporter: trade is one of five major policy buckets they say they expect the president to touch on last year he called for new and fairer deals to replace the u.s. outdated trade deals he'll talk specifically about a couple of those. the first is the new nafta he will call for congress to approve the u.s., mexico, canada trade agreement, it is unpopular

on both sides of the aisle he will talk about china and update the country on the u.s./china relationship after being briefed today by a team on the potential deal with china and progress made behind the scenes then the tariff question this is the president's weapon of choice. since this time last year, the u.s. slapped duties on washing machines, solar panels, steel and aluminum, half of chinese exports to the united states, and automobiles from other countries could be next. and the president wants more power on tariffs he is going to call for unilateral tariff power with the single stroke of a pen that's currently the focus of one bill that his allies put forth. there are other republican critics that have put forth another bill that would return tariff power to congress so it is clear the president thinks the tariffs he put in place so far have not worked

they have been too blunt an instrument and he wants something surgical to get at the trade deficits he wants to close. i am told one overriding principle of that trade strategy is he doesn't want more revenge on the heartland and swing states going into the 2020 election campaign. he wants a cleaner playing field but doesn't want it to come at the expense of his 2020 election win. guys >> thank you very much for that. kayla tausche in washington. more "squawk alley" is ahead. s&p 500 is up 0.4% we're back in a couple of minutes.

i am scott walker. here's what's coming up. aaron brown is back first time since making a big move. where she's investing now and why as we look at the state of the market and investor david tepper turning up the heat on brent saunders leslie picker with new reporting and what could happen next and the call of the day takes on cloud play what separates winners from losers jon fortt, see you in a few. >> we'll be watching that. thanks, scott. when we return, the buying opportunities in the faang group. "squawk alley" after a quick eak. the latest innovation from xfinity

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welcome back faang stocks continue to bounce. down 10% or more from their recent 52-week high. apple and facebook with the most ground to recover there. good morning to you both google shares are down

what's your take away from earnings in. >> googit's almost impossible fa investor to predict marginal possibility. that's how much they turn into cash flow from the revenue growth if you look at the numbers over a ten-year period, the conversion of revenues to profitabilities in the company was probably at the low end. maybe the 95th percentile of observations i think you have to bet on emotio emotions the conference call was very emotional. the cfo has the stockholm syndrome when she got the job, investors thought there would be disclosure almost every question that was asked weren't answered there were more questions than answers after the call

we're here in new york city and google is still investing in facilities and people they have massive number of employees down in chelsea already and i think they will double that. the odds are very very high they will regress to the mean it's amazing the advertising works. i see no reason why that's not going to stop. that eventually is going to convert into profits the stocks reasonably priced >> we've been having a digger

debate about big cat tech and especially about facebook with roger joining us stock is up 19% over the past week does it go higher from here. i guess the bigger question around this existential debate, do they care the business model is coming with issues and plagued by scandals? >> i just got back from africa i was in some pretty remote areas. you look at these places and they have two things in the most remote area. they have a satellite dish and cellular communication facebook is the new york times, the wall street journal. it's the whole bag of tricks you can't look at facebook as a u.s. company it's a global entity >> is that dangerous s if this is the one source of

information, that information better be good >> i think the opportunity will overwhelm the problem. most of the time in business it does i was skeptical about facebook in the quarter because i thought the costs were going to be enormous the cost turned out to be reasonable and the revenue growth it's facebook, google and now amazon i'm kicking myself i didn't buy it in the fourth quarter i thought there would be too much cost. that is a sure way to have the stock go down. >> wise words.

roger, while we still have you, here is my concern all the issues that you outlined, completely valid every one of these companies facebook, google, amazon, there are calls to break them up or dramatically change their business practices i'm not sure there's a legal justification based on the way the law is set up to do that >> i think the whole thing is complicated. i didn't set out tootd something easy i set out to start a conversation with the hope that the people who used the products and be policy makers would get together and figure out what the right answer is. i think you're right we're in new territory the business model in facebook, the business model in google, we have never seen this before. we've never seen that kind of mega surveillance. we never seen the manipulation of attention and of people's lives. we may need new things

it may take a while to get that right. i believe there's real hope. i'm very hopeful and provide a lot of insight to people how to take care of their kids and what they need to do to get policy makers to do the right thing. there's no quick fix there's no quick fix >> very simply put i want to see policy makers. first of all, i believe there's a rapid increase in understanding in congress. nancy pelosi, the democrats from the bay area are very strong

they understand something has to be done. they have an obligation to do it users just take away your attention. spread your time out don't put so much into facebook and google >> you say in the book you didn't think the trump victory or brexit would happen if not for facebook's existence why? is that because they got people to change their lies or boosted turn out of certain groups of people >> i think it's more fundamental than that. i think the country was polarized but social media over the last 15 years has increased the level of polarization. making people angry and fearful is business model. i think it's that simple we have to investigate the role outside the u.s. i think we will get the answer to that. those are not the dispositive

points it's the polarization is what really allowed brexit and the 2016 election to happen. >> it's a good read. that's it for squawk alley let's send it over to the judge for half thank you. the state of market is -- the president gets set to lay out his vision for the months ahead. our traders do the same today only with your money in mind it's 12:00 noon. this is the halftime report. >> on the day of the state of the union, our focus is the state of the market. invest