Meet Jack Welch, celebrated wrecker of real jobs and leading light of Wall Street wankers. Please share this episode with your friends and start a conversation.
For an entertaining deep dive into the theme of season five (Phalse Prophets), read the definitive peer-reviewed taxonomic analysis from our very own Jason Bradford, PhD.
Sources/Links/Notes:
Meet Jack Welch, celebrated wrecker of real jobs and leading light of Wall Street wankers. Please share this episode with your friends and start a conversation.
For an entertaining deep dive into the theme of season five (Phalse Prophets), read the definitive peer-reviewed taxonomic analysis from our very own Jason Bradford, PhD.
Sources/Links/Notes:
Asher Miller
I'm Asher Miller.
Rob Dietz
I'm Rob Dietz.
Jason Bradford
And I'm Jason Bradford. Welcome to Crazy Town where Charlie Sheen is director of the community theater.
Melody Allison
Hi, This is Crazy Town producer Melody Allison. Thanks for listening. Here in season five, we're exploring Phalse Prophets and the dangerous messages they're so intent on spreading. If you like what you're hearing, please let some friends know about this episode, or the podcast in general. Now on to the show.
Rob Dietz
Hey, Jason and Asher we're kicking things off today with one of my favorite topics. You've probably already guessed it: movies.
Jason Bradford
Of course!
Asher Miller
Shocking.
Rob Dietz
And particularly even a favorite sub-favorite, if that's a word.
Jason Bradford
Genre
Rob Dietz
Is villains. Movie villains. Really the best character.
Asher Miller
Because you've always wanted to be one.
Rob Dietz
Of course. I twirl my moustache.
Asher Miller
That's why you have that.
Rob Dietz
Yeah. So tell me. I want to know who are your favorite movie villains of all time?
Jason Bradford
Oh my god. This is tough. There's a few that come to mind. There's the James Bond guy that bleeds from his eyes and there's that guy from "No Country for Old Men."
Rob Dietz
Anton Chigurh. He's a good one. One of my favorites.
Asher Miller
Dumbo.
Jason Bradford
No, no, no. I got it. Okay, okay. It's the guy that decapitated pregnant Gwyneth Paltrow and then displayed his head to Brad Pitt. In "Seven."
Rob Dietz
I think he doesn't have a name.
Asher Miller
John Doe.
Rob Dietz
John Doe, right,
Jason Bradford
I think he was played by Kenneth Spacey.
Rob Dietz
Kenneth Spacey?
Jason Bradford
What's his name? Kevin. Kevin Spacey. I got it though. I'm picking that guy. That guy was bad.
Rob Dietz
That's a pretty good villain -- that's for sure.
Jason Bradford
Okay. Thank you. You can't top that.
Rob Dietz
What do you got, Asher?
Asher Miller
I'm gonna go with one that's probably a lot more common but still just like, you know, just great. Hans Gruber.
Rob Dietz
Oh, that is a good one. Who is that? Die Hard. Come on. Come on.
Jason Bradford
I don't even remember.
Rob Dietz
Die Hard?
Asher Miller
What?
Jason Bradford
I remember Die Hard. But it was . . .
Asher Miller
He was so good.
Jason Bradford
Mel Gibson and uh . . Oh yeah.
Rob Dietz
It's Alan Rickman, too. He's sort of elevated the role of the villain.
Asher Miller
Yeah he gave him character.
Rob Dietz
I would far rather meet Hans Gruber than John Doe.
Asher Miller
No shit. Fair enough.
Rob Dietz
Well, I gotta give you guys the one villain to rule them all. And I'm not talking Voldemort because we already dealt with Harry Potter last episode.
Jason Bradford
Sauron is good.
Rob Dietz
Yeah, that's true. I guess that's the true one ruler to rule that, whatever. Yeah, no, the one I'm talking about is Brad Wesley. You guys remember him, right?
Asher Miller
No.
Jason Bradford
No.
Rob Dietz
Of course you don't. So Brad Wesley was the bad guy in the movie, "Road House" featuring Patrick Swayze.
Asher Miller
He went right to the grand . . .
Jason Bradford
I'm thinking Hannibal Lecter or something like that.
Rob Dietz
Yeah, no. Hannibal Lecter, the Joker, Norman Bates, you know, your classics. No, Brad Wesley. So he was played by this guy, Ben Gazzara. And he also played Jackie Treehorn in The Big Lebowski.
Jason Bradford
Why?
Rob Dietz
Yeah, that's a great, great character. He's a good bad guy character. So I think Brad Wesley tops it as one of the best bad guys of all time, because he basically runs this entire town. He's like this evil corporate titan and he's taken over. And there's this scene, it always stuck with me, where he's driving this red convertible Ford Mustang down the road, and he's actually singing the song, "Shaboom Shaboom" to the radio. And he's like, swerving his car back and forth across the lane, just driving how he wants because, "I own the whole damn town. I'm going to do what I want." And Patrick Swayze is just coming up the other direction, driving like a normal human being. And he has to like swerve off the road and get the hell out of the way because Brad Wesley is taking the whole road. It was just such a good scene to lay out this guy's character. Okay, so why do I go through this whole story? Well, our Phalse Prophet today, he's been in the news again lately, even though he's already passed away. But Malcolm Gladwell -
Asher Miller
Jesus.
Rob Dietz
No, Malcolm Gladwell wrote an article about this guy at the end of 2022. And he ended the article talking about how our prophet was driving back to his home, and I'm just going to quote the article. He says, "Off he drove. When he got to the left turn out of the golf club he did something odd. Instead of keeping to the right side of the road as other American drivers do, he decided to drive in the middle of the road with his Jeep Cherokee straddling the yellow line. Needless to say the driver's coming toward us - We're freaking out. One after another, they all pulled off to the right under the grassy edge of the street, giving him full clearance to continue driving down the middle of the road. He didn't seem to notice."
Jason Bradford
So he did this while Malcolm Gladwell was in the vehicle with him?
Rob Dietz
I don't think it was Malcolm. I think he's reporting on somebody else. But yeah, like somebody was in the car with him.
Asher Miller
So he's basically pulling a Brad Wesley.
Rob Dietz
Yeah. Our Phalse Prophet is actually Brad Wesley.
Asher Miller
These are actual Phalse Prophets.
Rob Dietz
Yes. Our real one is Jack Welch.
Asher Miller
Oh, the Welch's grape juice guy.
Jason Bradford
Yeah, I love that stuff.
Asher Miller
I didn't realize that he was so evil.
Rob Dietz
If only that's who it was.
Asher Miller
Oh, it's not him.
Rob Dietz
No, Jack Welch, sort of the prototype CEO. There's a writer named David Gelles who wrote This book called, "The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America?and How to Undo His Legacy."
Asher Miller
You're like, you're tipping our hand here with that title.
Rob Dietz
Well, come on. We already know he's a Phalse Prophet. No, yeah. David Gelles has done a lot of our work for us.
Asher Miller
Thank you, David.
Rob Dietz
I really want to - Yeah, I mean, we always have to attribute Elana, our star researcher, but she talked a lot about his book.
Jason Bradford
So what follows is a book report.
Asher Miller
Which is what we should actually - Let's set the stage a little bit, right? Before we talk about why we're talking about Jack Welch, let's just learn a little bit about him. He was born in the midst of the Great Depression, 1935. His father was a train conductor. His mother was a homemaker. He grew up in Massachusetts, about 20 miles outside of Boston, you know. So we have to do the rest of this show with a Bostonian accent.
Jason Bradford
Oh, I can't do it.
Rob Dietz
Not even going to try. If somehow Bill Simmons ever caught us, he would be railing on us.
Asher Miller
Most interesting thing I guess I would say about him sort of in his childhood is you know, he had this close relationship with his mother, who was very influential. He actually said later in life that she was the most influential person in his life, and that he learned everything he did about leadership from her. When he was a kid, she really tried to ingrain in him the value of competition. So she would take his like allowance money, and they would have to play poker.
Rob Dietz
That's great training to become a business man.
Asher Miller
It's a real foreshadowing for what we're gonna get into later. So he then eventually went off to college, got a PhD in chemical engineering. So you know, he got a real education, had some real, you know, applicable skills in the world.
Jason Bradford
Right. Well then he takes that education in chemical engineering and he applies it at one of the most prestigious and largest corporations in America, General Electric. He got his first job in 1960 there in plastics.
Rob Dietz
Wow, another reason to love this guy. Yeah. He's responsible for all those dead sea turtles out there.
Asher Miller
Was he the guy in "The Graduate" that went up to him and he's like, "I got one word for you: Plastic."
Jason Bradford
That was Jack Welsh. Yeah, very few people know this. Anyway, the plant was in Pittsfield, Massachusetts, and a starting salary of $10,500 which maybe in 1960 ain't too bad. But by 1968, he was heading GE's entire plastics division. Apparently, he was like a super, you know, kind of, ultra confident kind of cocky guy. And at his 1973 performance review said he would become CEO one day. And of course, he was right.
Asher Miller
Yeah. Now, I think we should also set a little context for GE, just so folks -
Rob Dietz
They bring good things to life, right?
Asher Miller
Yeah. Brain worms. Brain worms. And they're not even sponsoring this.
Jason Bradford
We'll have to ask for some money later.
Rob Dietz
I know. I'm just trying to set us up for the future.
Asher Miller
If you give, you're more likely to get in return.
Jason Bradford
Thank you.
Asher Miller
That's how influencers do this. I'm sure GE is gonna just cut us a check.
Rob Dietz
Yeah, they're gonna be like, "Thanks for bringing up that 1978 slogan that we had that nobody cares about."
Asher Miller
It wasn't that long ago. Anyways, so GE, I mean, you know, this goes back to Edison, right? Original member of the Dow Jones Industrial, was an enormous manufacturing giant innovated you know, a lot, not just in lighting, but in all kinds of technologies. Total blue chip company. So when he's talking about becoming the CEO of this company, this is not like you guys getting to run the local you know, Subway sandwich shop. Which I know was always your dream, Jason.
Jason Bradford
Well, I want one those like soft serve frozen yogurt places, myself.
Rob Dietz
Nice. I just hope someday somebody lets me run anything. Well in another mustache twirling moment, when Jack Welch actually became the CEO, his predecessor invited him into his office and he said, "Jack, I give you the Queen Mary. This is designed not to sink." And this is what Welch said back to him. He said, "I don't want the Queen Mary. I plan to blow up the Queen Mary. I want speedboats."
Jason Bradford
That poor outgoing CEO is like, "What the hell?"
Asher Miller
And then he played the theme song of Miami Vice as he walked out.
Jason Bradford
Okay, so he gets the steering rudder of the speedboats at GE
Asher Miller
That's a great segway. I'm sorry. I try. I'm doing my best. That was good, Jason. Nice. Rudder? On a speedboat?
Jason Bradford
I'm mean . . . He's got . . .
Rob Dietz
He's holding the tiller. He's weighed the main sail, or whatever.
Asher Miller
Exactly.
Jason Bradford
Something like that.
Rob Dietz
Avast ye scurvy dogs. Okay. All right. Go on, please. Let's not pile on -
Jason Bradford
I don't know if I want to. Alright. Okay, I'm gonna buck up here. In the two decades that Welch led General Electric, he grew it's, what they call market capitalization, which is I guess, you know, you add up all your stock values kind of thing, from 14 billion to more than 400 billion. And so, in some parts of that period it was the most valuable company on Earth. Right at the top, kind of up and down with Microsoft at the time. And the Wall Street crowd, they just marveled at this dude because every quarter, you know, as a corporate, you're reporting your quarterly report, your earnings. And he just always seemed to hit the numbers, quarter after quarter.
Asher Miller
Even in recessions.
Jason Bradford
It didn't matter. You could rely on Jack.
Rob Dietz
Well, that's what made him a star in the media too. Fortune Magazine dubbed him the manager of the century. Not of the year, not of the week. He's not employee of the week. He's manager of the century. The article that they wrote about him, they said, "He made himself far and away the most influential manager of his generation. Most widely admired, studied and imitated CEO of his time." They're just fawning all over the guy. And they talk about his total economic impact being impossible to calculate because it's got to be a staggering multiple of GE's performance.
Jason Bradford
I'm just imagining if you're one of these corporate guys that has to get on airplanes in the 80s and fly around for meetings. As you're as you're in the airport, you're constantly going through bookstores and magazine rack things, and there's probably a Jack Welch cover picture on books like every week, or something in this period, right?
Asher Miller
Like magazines, probably.
Jason Bradford
Yeah, I think that's right. Like magazines and books, or whatever. This must be just insane how much Welch mania there is.
Asher Miller
Yeah. So he was what, CEO for like 20 years? After his retirement, he became sort of like a business management guru. He wrote autobiographies and two bestselling management advice books with his wife. One of them was called, "Winning."
Rob Dietz
Co-author, Charlie Sheen.
Asher Miller
And then, "Winning: the Answers."
Rob Dietz
Wow.
Asher Miller
Yeah. Winning.
Rob Dietz
I almost titled my book that and I know Richard Heinberg, almost titled his last book that.
Asher Miller
I had to differentiate. So I went with, "Losing." In 2009, he launched the Jack Welch Management Institute MBA program. So you can actually go to his school and get an MBA. And then he actually died recently, in 2020.
Jason Bradford
So he's I think he’s the only Phalse Prophet that we're covering that is actually dead. But he's recently dead. And he's very influential still.
Asher Miller
And he's alive still in my mind.
Jason Bradford
Yeah, of course.
Rob Dietz
Well, it's really interesting because, you know, we talked about how everybody was fawning all over him. He's been kind of back in the news or the press lately because of a reassessment. You know, David Gelles' book, Malcolm Gladwell's article, there's a lot of recent post mortem articles to reassess. And, you know, it's why it's almost easy for us to dig up some of this info. But let's turn then to why everybody's looking at them. And it's really his idea around running the company solely to maximize shareholder value. And of course, while you do that, you've got to line your own pockets with some of that value. So, David Gelles in his book, "The Man Who Broke Capitalism," which we highly recommend, he kind of sets the stage. He says, "For the 50 years before Welch took over, corporations, workers, and the government enjoyed a harmonious equilibrium. Most companies paid decent wages, employees put in their time, just about everyone paid their taxes." Get this: "regulations were accepted as necessary safeguards. And the government invested in things like education and infrastructure.” Well, that all began to change.
Jason Bradford
Yeah, definitely. And part of what the change stemmed from was ideas from academia that were promoted out of the Chicago School economist Crazy Town Hall of shamer, Milton Friedman.
Rob Dietz
You're bringing up one of my favorite people.
Asher Miller
We did a whole episode, we talked about Milton Friedman in our episode about neoliberalism.
Jason Bradford
Yes, exactly. So he's definitely in the neoliberal mold. And basically, the idea of these guys was to reimagine the purpose of corporations and their roles in society as basically, you know, forget all this, you shouldn't care about the broader community so much, you know, your employees. It's basically this narrow, narrow focus to maximize profits for shareholders at any cost. So the idea was, markets needed to be freer, get rid of the government interference, and basically, these ideas were fomenting in these kind of right wing academic circles for quite a while.
Rob Dietz
Yeah. And the think tanks, too, that came up.
Jason Bradford
The think tanks too.
Asher Miller
It was all part of that Powell memo, kind of strategy, right? They're trying to influence academia.
Jason Bradford
They're upset about the EPA being formed and all these other regulatory agencies.
Asher Miller
That was that was when everything went to shit.
Jason Bradford
You know, we want that right. We want that river in Cleveland to keep burning. That was interesting.
Rob Dietz
I know. How are you supposed to read at night without a big bonfire?
Asher Miller
You could cut your electricity bills.
Jason Bradford
Who knows bald eagles?
Asher Miller
You don't need light bulbs when the river is on fire.
Jason Bradford
So essentially, think of Jack Welsh as the guy that took all this seriously and put these theories into practice. And of course, this parallels the Reagan era. So you have Reagan coming in to office after Carter in 1980. Jack taking over as CEO, and then all this sort of economic theory pushing this movement. It's like a beautiful synergy. It is.
Asher Miller
It was beautiful. It was morning in America, you know.
Rob Dietz
So beautiful.
Asher Miller
Yeah. And I think the point was Reagan was this is part of the strain of of the Powell memo and that neoliberal playbook is changing regulations, change laws, change the structures and the rules that corporations have to play by. I think it's important, though, to understand again, just understand how radical of a shift in a sense this is. Which is not to paint like the rosiest picture of corporations before Jack Welch came around, right. Like, there might have been some kind of equilibrium as you talked about, Rob, but I'm sure it was not an easy one.
Rob Dietz
Well, and let's not forget that that was probably almost entirely for white employees. There was serious structural problems.
Asher Miller
Yeah, and enforcement of regulation. It was forced upon businesses. But think about what GE was like before this. I mean, there was this huge, enormous company, manufacturing giant, building things for power plants, light bulbs, electric motors, X-ray machines, turbines, medical scans. I mean, just a whole range of products that they made. And I think one of the key things here is the way that they treated their employees before - Remember, GE was around for a long time before Jack Welch took over. I mean, go back to 1922 and the CEO of the company at that time stated, and I quote here, "That GE practiced what he proudly called welfare capitalism." Pretty amazing to think about, right? That concept. "Using the corporation's vast resources to take exceptional care of its employees. Providing a profit sharing plan, health benefits, higher wages, and more, all in an effort to boost morale and inspire workers." And that philosophy, it persisted for decades. In their 1953 annual report, they touted how much the company paid in taxes. So the opposite of what we know now.
Rob Dietz
Tax is a cost to be minimized, right?
Asher Miller
Yeah. And I mean, just the values are so so profoundly different. That was the landscape, you know, when Jack Welch said, "Fuck Queen Mary, I'm getting on a speedboat.
Jason Bradford
It's the idea that these are corporations that are not just for their owners in the strict sense. There are the shareholders, but the broader society has - There's a stake that everyone has in his company, and we're going to try to treat people a little bit more fairly and -
Asher Miller
And again, it wasn't perfect. It wasn't perfect, no.
Rob Dietz
Well, to get to the perfect, let's talk about Welch's arrival and his quote, "improvements." Now at this point, we can say that he's twirled his mustache into braids, I think, or something.
Asher Miller
How long is this?
Jason Bradford
Geez. Did he have a mustache?
Rob Dietz
I have no idea. I don't think so.
Jason Bradford
I think he was kind of balding.
Asher Miller
His figurative, metaphorical mustache.
Jason Bradford
I like his mustache.
Rob Dietz
It's a metaphorical mustache. So, his three improvement strategies for running GE are probably anything. Downsizing, that's strategy number one. Strategy number two is deal making. And strategy number three is financialization. So let's start with this first one, downsizing. because we're gonna have to break this down. Basically. Welch viewed. kind of like we just said about taxes, he viewed labor, his people, as a cost, not as an asset. And so the idea is, get rid of as many as you can. And he had four tactics for getting rid of those pesky human resource costs.
Asher Miller
Well, let's start with the kind of the most obvious, which is just laying off a massive amount of people. When he came on as CEO, he took an axe to middle management. It's kind of interesting to think about this a little bit. We've talked about bullshit jobs before. We've talked about it, I think, Jason, you talked about primary, secondary, tertiary economies. We've talked about sort of the management class.
Jason Bradford
Yeah, scientific management.
Asher Miller
The professional managerial class.
Rob Dietz
Let's not forget, in the pandemic, we learned what really were the crucial jobs. Probably not these.
Asher Miller
So at first blush, it's kind of like, oh, okay, you got rid of middle management. How necessary is middle management? But so, he shut down entire departments at the headquarters. You were just a headcount. Significantly by more than half in the case of staff at headquarters. By the end of 1982, 35,000 employees have been fired. Now, most of those were blue collar workers. So he may have started with middle management, and he quickly spread out from there. That was almost 9% of the workforce. And then another 37,000 were let go the following year. And this came at a time where their profits were stable. They had healthy earnings of $1.5 billion, their income was up 7%. So it wasn't just like, "Oh my God. We're in financial trouble."
Rob Dietz
So I just picture Jack Welch coming in and you know, I'm sure he's going to dinner and having lavish stuff, but his whole time in the office, he's just running people in, "Fired. You're fired." He's probably asking other people to the firing. Can you go fire the seventh floor?
Asher Miller
Yeah, I mean, that's a lot of people that go through. So you probably had to, you know . . .
Jason Bradford
it's amazing. Like they're massively unstable. And it's like you saying, I don't want the Queen Mary, I want a speedboat. I'm gonna sink the Queen Mary. This is what he meant. Take him for his word, man. He did it. Well, here's the other technique. This is fantastic. It's called vitality curve. And the other term was rank and yank. And basically, the managers are those who are left. The few managers left were ranking their employees annually and the bottom 10% were basically let go. And Welch defended this.
Asher Miller
It's like the Hunger Games.
Jason Bradford
Yeah, exactly.
Rob Dietz
Or there's like some kind of, "Stand on this carpet, please." And then they just pull it out from under them or what?
Jason Bradford
And he says quote, "Some think it's cruel or brutal to remove the bottom 10% of our people. It isn't. It's just the opposite. What I think is brutal and false kindness is keeping people around who aren't going to grow and prosper. There's no cruelly like waiting and telling people late in their careers that they don't belong, just when their job options are limited and they're putting their children through college or paying off big mortgages.
Asher Miller
Much better to do it when they just have children. Brand new, you know.
Rob Dietz
So kind of Jack.
Asher Miller
So nice of him.
Jason Bradford
I mean, I've had people that I've worked with that I'm just going, Are you kidding me? Like, there's no way they should be here
Rob Dietz
Are you talking about me right now?
Jason Bradford
I'm looking at you but I don't mean you. I mean, I get that. I get kind of what he's saying. It's like, if someone's not fit for the job, you just gotta get them out of there, of course. But of course, I think how this can be abused, right. It's like the managers are ranking everybody and I don't know. That can be pretty personal.
Asher Miller
And the employees know that they're being ranked. So it's like -
Rob Dietz
Who's the biggest suck up.
Asher Miller
Right. Yeah. What does that incentivize?
Jason Bradford
Yeah, not good.
Rob Dietz
Yeah. Well, I'm going to run through his other two tactics for yanking people out of the building: Outsourcing and offshoring. So you know, outsourcing is sending it off to some contractor, right?
Asher Miller
Well, that's why I was saying. He outsourced the job of firing all these people.
Rob Dietz
Yeah, he probably had to bring on a big staff to fire everyone.
Asher Miller
And then he fired them. Yeah.
Rob Dietz
And then, of course, offshoring, you know, he sent tons of jobs to the countries that had workforces that didn't expect the same pay rate as Americans. So a lot of GE jobs went to Mexico, Brazil, and India. 20,000 of the jobs went overseas. A funny note is in his autobiography, he just called this practice, globalization.
Asher Miller
It's a nice innocuous term for that All this downsizing by the way earned him a nickname. Neutron Jack. And that's because a neutron bomb kills people while leaving buildings intact.
Jason Bradford
I remember having nightmares about Reagan and the neutron bomb when I was a kid.
Asher Miller
Yeah. Little did you know it was Jack Welch
Rob Dietz
It would have been just like you are an employee at GE.
Asher Miller
Okay, so that's downsizing. You said that was the first one. What's the second one, again?
Rob Dietz
The second one is dealmaking.
Asher Miller
Okay, so dealmaking. So this is basically mergers and acquisitions, right? He transformed the company from a manufacturing business primarily, with a proud history of building all kinds of things into sort of This hodgepodge of a bunch of unrelated businesses. GE made almost 1,000 acquisitions during his tenure there in 20 years.
Jason Bradford
Wow. That's one a week or so.
Asher Miller
That's fucking insane.
Jason Bradford
Once a week you're doing an acquisition.
Rob Dietz
Have you ever bought 1,000 of anything? Like rolls of toilet paper?
Jason Bradford
In my life? Yeah.
Rob Dietz
I mean, how complicated is it to buy another business?
Jason Bradford
It's ridiculous.
Asher Miller
Yeah, I don't know. Apparently, for them, they did it. Maybe they didn't do a lot of due diligence. I don't know. They spent $130 billion buying companies when he was CEO
Rob Dietz
I wouldn't think that this would be a fun thing. But it would be interesting to look at, what were those 1,000 companies and how different were they?
Asher Miller
Yeah. How? Like a true hodgepodge.
Jason Bradford
Well, I mean, this basically was the leading edge of what went into being called the merger and acquisition boom. And it ends up of course concentrating corporations in many industries into fewer and fewer companies. So it creates less competition. This is interesting because it's sort of a no-no in the sense of fairness and competition.
Rob Dietz
It's like playing the game Monopoly. There's one winner in the end.
Jason Bradford
Right. So this is driving more towards that. But it worked in terms of like creating shareholder value. And so all these other companies then I think looked at that and said, "Well, we better copycat."
Rob Dietz
Well, let me give you the third strategy for increasing shareholder value that to me, is kind of the most nefarious. And that's financialization. This is where GE basically started doing loans and interest in financial wheeling and dealing rather than making and selling stuff. So when Welch started as the CEO of GE, they had this arm, it wasn't called it at the time, but it became known as GE Capital, right. And it was pretty small. But he recognized this as some kind of cash-generating super wing of the company. And it grew from 11 billion and assets to 370 billion by the time he retired. Kind of against his playbook of downsizing the staff of GE Capital, went from 7,000 employees to 89,000. And I know we're throwing around a lot in numbers, but 89,000 employees.
Jason Bradford
Just doing financial stuff. And this is from a company that used to actually make real things. And suddenly, they're laying off people that actually build something, and they just have people -
Rob Dietz
Moving money around. Yeah, it was thought of as almost an unregulated bank that offers loans and insurance products and credit cards. Like why is GE issuing credit cards?
Asher Miller
Well, the other thing that they did is they used, you know, GE Capital. That's sort of like this whole thing, this financialization, to move around dollars to help them meet or beat earnings targets. And that's part of what helped them, you talked earlier, Jason about how like 80 quarters in a row, they hit their targets. So they kind of did some manipulation, you know, using these financial mechanisms to do that. And their least dubious, if not illegal, they they had this like financial army that was put to the task of closing quarters the way that they said they would, right. Which if you think about it, it kind of makes sense, because you know, you're able to quickly move things if you think, "Oh, we're not gonna hit our target. We could basically use this cash to be able to do that." They got in trouble in 2009 with the U.S. Securities and Exchange Commission. They had to settle on the case. I'm sure it was pitons in terms of whatever fines that they had to pay for.
Rob Dietz
But they probably met that quarter's earnings, you know, just fine. Even after they had to pay out.
Asher Miller
So, I agree. I think I agree with you, Rob. I mean, the downsizing probably had the most dramatic impact on lives on some level, right. But financialization in a sense is like the most I don't know, devious or, you know, profoundly impactful.
Rob Dietz
You know, we talked about, there's a legitimate role for finance. If you have a money economy, you need people who understand it and can move things and whatever, grease the wheels of trade, I guess, if you want to put a metaphor to it. But it's a cost. I mean, we're talking about labor as a cost. But to me, the financial wheelings and dealings is a cost to be minimized. And yet, during this period, and in this company, and in a lot of companies that emulated it, it became the goal. Like that M&A boom, you're talking about Jason, people wanted to be the M&A guy on that desk at the investment bank. And it's like, we should be minimizing these people. And instead, it was like a glamour job with -
Asher Miller
But at least they all went to jail. It's like a parasite economy. It has all those banks who are basically managing those M&A deals. They're getting fees. I mean, we saw this, by the way. We saw this in 2009, you know, what was happening with, you know, all these companies that went into the shitter. The banks were like making money selling all these messed up instruments. And then they were making money on mergers and acquisitions when the market went to shit, you know. The same thing was happening with the fracking industry. Oh, yeah. Now, again, we have to keep in mind, what was the ultimate goal here? Maximizing shareholder value, right. That's like the big, you know, it was part of that shift that Milton Friedman helped put into place, and Jack Welch kind of operationalized. And one of the things I want to talk about is one of the the ways of doing this, of providing that benefit to shareholders that I think is so fucking evil and has become really ubiquitous, is this whole idea of a stock buyback? So the company is buying back its own stock. It means that there are fewer shares outstanding, which means that the value of the stock goes up. And he really drove this. He orchestrated the largest stock buyback in history in the early 1980s, after the Reagan administration did away with a rules that prohibited that from happening, right. And some work was done to sort of look at what would happen if the money that had been spent on buybacks and dividends over the last 45 years since - So keep in mind, and I think we'll talk later about some examples of how these have been put into practice, but it's become a really common practice. And somebody did some number crunching on this - If the money that has been spent on buybacks and dividends over the last 45 years have been put towards wages, full time American workers would be making $102,000 annually, on average. Double what they're making today.
Jason Bradford
It's just ridiculous, isn't it?
Asher Miller
Just think about that.
Rob Dietz
And you didn't even really talk about who benefits from these buybacks. It's not just that the stock price goes up. But who owns the stock? Of course the CEO and the top executives. It's always part of their compensation.
Asher Miller
I mean it's a big part of their compensation packages, right. So they're personally incentivized to do this. It's not just like they're benevolently thinking, you know, our fiduciary responsibilities to our shareholders. It's like, "winning!"
Rob Dietz
I'm having Asher moment. I'm about to start bleeding out of various orifices.
Jason Bradford
You talked about the supervillain, right. So first, you think, well how could some corporate CEO be a supervillain? How can he compare to the people we talked about? You know, the Voldemort's and the . . .
Rob Dietz
Brad Wesleys, Jackie Treehorns.
Jason Bradford
Yeah, all of that. And you think about it. . . So my supervillain the one I talked about, the "Seven" guy, John, Doe. He like kills seven people. Whoop de do. If you think about what mayhem this guy created, how many lives were like destroyed based upon this, and you were to do like some sort of epidemiological study, I bet there's just a massive body count through like alcoholism and drug overdoses and failed relationships. . .
Asher Miller
We're gonna talk about this. What are some of the implications.
Rob Dietz
That's why he's manager of the century.
Asher Miller
Well, what kind of species is he, Jason?
Jason Bradford
Okay, so let's get to the heart of this episode.
Asher Miller
The important part.
Jason Bradford
We'll review the taxonomy of the Phalse Prophets.
Rob Dietz
Frickin' biologists, man.
Jason Bradford
I want to say that when you're doing taxonomic work, what you're doing is you're circumscribing species. And you have to have a species concept. And you're applying that to the individuals you see in a population to come up with maybe sort of a clustering as a cohesive unit. But I must say that every once in a while there is what you might call a sport, you know.
Rob Dietz
A sport? You mean like baseball?
Jason Bradford
With an off type individual. You know? That doesn't exactly fit your criteria for that species. But you still might put them there because if you don't have a lot of other examples of individuals like that, you can't necessarily say it's independent. Because there are just outlandish individuals in a species.
Rob Dietz
This is like a weird branch in the evolutionary tree then.
Jason Bradford
It's just like someone who's far off on the end of some sort of distribution curve. You wouldn't necessarily call them a new species, but they're -
Rob Dietz
It's like those weird marsupials in Australia. Kangaroos, koalas. . .
Jason Bradford
No, they're a - Is this a real species?
Rob Dietz
I don't know what I'm talking about. You go ahead. Go ahead, PhD biologist.
Jason Bradford
Okay, so I go through my key to the species. And, you know, he's obviously someone who is working within the system, and wants the system to keep performing. I'm talking about the larger socioeconomic system. So he's not trying to blow it up or thinks it's gonna collapse. So that's a key distinction between him and some of our species who actually want it all to go down, or are waiting for it to collapse. He's holding it together. He wants it to persist.
Rob Dietz
But he sort of wants to blow it up in the speedboats, right? Oh, here he comes.
Jason Bradford
Well, that's why I'm saying he's this off type. I put him in the species Man Schiller. Basically, yes. Which is some high status professional, well paid to gaslight you into believing the shitcakes you're seeing everywhere are actually made of chocolate. I understand what you're gonna get at -
Asher Miller
Yeah. What's tricky about this is I think it's not giving him enough credit. Because he's not just carrying water, right? This is the dude that made the bucket that the water's being carrying. I mean, he's like, yes, you can say he's trying to maintain the system. He's operating within the system. But he's changing the structures of the system. He's really you know, accelerated a lot of the shit that we're -
Jason Bradford
And these species, it's an evolving community and population, you see.
Rob Dietz
So is that his other nickname besides Neutron Jack, the carrier of the original shit bucket.
Asher Miller
The inventor of it. Can we call it Man Schiller Extreme or Extraordinare or something. It's just, calling him a Man Schiller, he's not just. . .
Jason Bradford
Yeah. It makes you a little uncomfortable, I understand. But again, he doesn't want system break down sensu lato.
Rob Dietz
What the - What does that mean? What do you keep saying this sensu lato? It that a coffe?
Asher Miller
I was gonna say. Is this like a really sensual latte?
Jason Bradford
This is a pretentious way for me to express how scientific and academic I am.
Rob Dietz
Yeah, throw some Latin in there.
Jason Bradford
Yeah, okay. But basically, it means in the broad sense, he wants the system to hold together, while in this narrow sense of what he's doing the corporate culture and standards he's breaking. So that's why I apply him to the Man Schiller species even though he does have this outlandish behavior. Okay? And the key is that Man Schillers are in denial of the big threats we think about. They deny existential threats like climate change. Sure. I mean, climate, you know, he was on the record before he died basically saying climate change is not a concern. What are we worried about here? This is like a joke.
Asher Miller
Yeah, we're gonna wreck everything that he built if we start worrying about climate.
Jason Bradford
Now look, my taxonomic concepts are hypotheses based upon the observation of the data I have at the time, and they can always change. Okay? I'm not precious with these. I just don't want to take anymore -
Asher Miller
I just think that we have to acknowledge that the offspring of this particular being, pretty profound, right?
Jason Bradford
Okay. Yes. And that's evolution buddies.
Rob Dietz
I think we have to stop arguing over what species this guy is and move on to the implications of his . . .
Asher Miller
So fair enough. This is what I was trying to get at.
Jason Bradford
I love debates about this stuff though, okay. This is great.
Asher Miller
Of course you do.
Rob Dietz
We'll arrange a conference next year to go over this taxonomic key.
Asher Miller
I'd love to see you try to do a presentation at some like biology conference, presenting your typology of Phalse Prophets. People would be like, "What the fuck is this guy doing here?"
Jason Bradford
Maybe just a poster session.
Rob Dietz
That's great. You'll be joining the Yes Men if you're able to pull that off.
Asher Miller
So okay, you said Rob, let's talk about the implications. And this is where I think I was kind of bristling at. Jack Welch was like Typhoid Mary for capitalism run amok, you know. Patient zero or something.
Rob Dietz
Contagious as hell.
Asher Miller
Seriously. I mean, his fingerprints are on so much of modern corporate capitalism, right. And I think all we have to do just sort of look at some statistics, some general trends that we've seen in that time. And of course, it's unfair to say it's all causal back to Jack, but I think a lot of shit comes back to Jack. He'd probably love the pat on the back for that, actually. Right? So just a little taste of this, right?
Rob Dietz
Yeah. Can we go through it? Can we read some too? I want to be involved.
Asher Miller
Of couse. So let me start first. Let's talk about jobs, right. So in 1981, American manufacturing jobs peaked at about 20 million people. That was about a quarter of full-time jobs. Today there are about half of that number of manufacturing jobs. And keep in mind, the U.S. population grew by 100 million people in that time period.
Rob Dietz
I want to commend you for using people in that statement, you know. Like seriously, a Jack Welch would view them as like resources, costs -
Asher Miller
Grist for the mill.
Rob Dietz
Labor, or . . Okay, my turn. In 1980, the total value of U.S. corporate deals, mergers, and acquisitions, was a few 10s of billions of dollars. That total skyrocketed to 1.5 trillion by the time he retired in 2000.
Asher Miller
What's it now? 1.8 quadrillion?
Rob Dietz
It's a number larger than the number of atoms in the universe. Sorry, we can't report it.
Asher Miller
Yeah, seriously. I can't even imagine how much it's grown in the 20 years since. Okay, here's another one, right? Back in 1980, companies spent less than $50 billion on buybacks and dividends. By 2000, that number was 350 billion. 20 years since that point, it's now jumped to 985 billion. Almost a trillion fucking dollar a year on buybacks and dividends.
Rob Dietz
How are the rich getting richer? I can't figure it out.
Asher Miller
I don't know!
Jason Bradford
Well, in 1980, this is hard to look at, the average CEO pay at the top American companies was $1.85 million.
Asher Miller
Oh, poor guys. I mean . . . How did they afford to have four houses?
Jason Bradford
Things have improved since that time. CEOs made less than 50 times the annual worker's salary.
Asher Miller
I mean, they could almost breathe the same air.
Jason Bradford
It's embarassing. I know. Well, by 2021, so this is a story of progress.
Asher Miller
This is.
Jason Bradford
Steven Pinker would love this story. The average CEO pay was $27.8 million.
Asher Miller
Nice.
Jason Bradford
Which is 399x as much as the annual worker. That's more like it.
Asher Miller
Nice. I like the trends.
Jason Bradford
Now we are talking. These are trends.
Asher Miller
These are great trends.
Rob Dietz
I wonder if they compete with each other. They're like, well, my workforce, I'm 528x. You're only 399x.
Asher Miller
No, but Pinker would say relative status doesn't matter to people. It's just their absolute wealth that matters.
Rob Dietz
Yeah. Okay. Well, broader implication, sort of spreading this out, Oxfam just came out with a report that the richest 1% grabbed nearly two-thirds of all the new wealth created since 2020. That's $42 trillion. And it's almost twice as much money as the bottom 99% of the world's population. And that's even compared, during the past decade, you thought this was sick, the richest 1% got half of all the new wealth. But now they're getting two-thirds because these things like stock buybacks are just putting all of the new value that's generated into their pockets.
Asher Miller
I think another thing to point out is sort of the model of management and business practices, right. So Welch instituted financialization, these other mechanisms to try to maximize profits. A lot of it was basically heartless, soulless, whatever, he might have painted it as, "Like, we're doing them a favor firing him now instead of later when they're older." You know, people like Jeff Bezos have taken some of these tactics to an even further degree, if you think about it, right. So like, Welch's downsizing companies in terms of their labor force. Bezos is downsizing entire sectors of the economy. He's like, booksellers? We don't need no stinking booksellers. Let's get rid of those guys. Like just absolutely gutting, under selling entire sectors of the economy, riding them out, basically having fewer profits in the near term, which is a little different than what Jack Welch was trying to do, in order to corner a market. It's that sort of ruthless practice mentality. And then sort of fetishizing it or whatever, or looking at it and saying - Because, you know, people like Jeff Bezos have been rewarded. The guy was the richest guy in the world for a little while. Poor guy got passed up recently. Yeah, it's a well known fact that Jack Welch was also hugely influential on Montgomery Burns, the head power plant in Springfield. One of us should have one of us should have picked him as a villain.
Rob Dietz
Well look, another implication, you know, we laugh about Bezos and Montgomery Burns, but the rise of the CEO as a celebrity is also something that you can tie to Welch's, kind of the ground zero. Again, I want to go back to David Gelles' book and he really just laid it out. "Welch elevated the role of the chief executive from that of a people manager to something closer to a pop star. You know, chasing the limelight, mastering the art of self promotion. Business Press adored him. He's on magazine covers, business schools treated Welch like an Oracle, turning his strategies into case studies and curricula. Welch was the personification of American Alpha Male capitalism, a pinstriped conquistador." I love the way Gelles writes. "A pinstriped conquistador with the spoils to prove it."
Asher Miller
And the mustache.
Rob Dietz
I mean, unbelievable. This remind you have anybody, Jason?
Jason Bradford
Well, my favorite student of Jack Welch, and my favorite TV show is "The Apprentice." And so -
Rob Dietz
We're no longer friends.
Jason Bradford
But you just think about that. Think about "The Apprentice." Go watch a clip if you can stomach it. And that's kind of what Trump modeled obviously, with that kind of ruthless attitude. "You're fired" kind of thing.
Asher Miller
You're fired. I guess you call it downsizing or whatever, like getting rid of the 10%. But also, you know, the guy wrote a book called, "The Art of the Deal," right? It's all dealmaking. And that became, in some ways, it became what we're looking for in our elected leaders. I mean, isn't that part of why people were drawn to Trump? They thought, let's bring a business guy in. You see that a lot in people running for office who are successful business people. It's like, "Well, I ran the company so I can run this government."
Jason Bradford
Yeah. I mean, it is super sad that if you think of the line between Reaganomics, Jack Welch, the Chicago School of Economics and their theories, and then all the stats we just went through of the gutting of the manufacturing, the fact that the middle class, working class wage laborers, are making a smaller and smaller share leading to this vast inequality. And then someone who personifies that in reality TV shows, the disgruntled masses then elect that guy president, it's just astonishing. Like we are literally putting on a pedestal, the highest office in the land, the same, you know, sociopathic, narcissistic jerks that lead to the problems everyone's frustrated with.
Rob Dietz
Yeah, to me, that's a huge "Aha," right? It's like, he set the stage. Like we're gonna worship this guy. We're gonna call manager of the frickin' century because what? He was able to fire a bunch of people and make a ton of money. And we just by that he's some guru genius to follow.
Asher Miller
But I also just want to point out another kind of real world sort of example of this in practice for a second. Which is, think about the stock buyback thing. You know, we've had this situation with with rail workers in this country, who basically threatened to go on strike and then they were, in a sense, forced to make a deal by the government with the rail companies. And what they were fighting for was not wages. What they're fighting for was just to even have a fucking day off of work once a month, you know. If there were sick, right? And I don't mean like in addition to the weekends. I mean like one day a month, weekends included, right? And that became a huge battle. Now, how does that relate? Well, these companies have cut back. They downsized and downsized. They replaced, you know, human beings with as much mechanization as they possibly could. They cut all their expenses down to the quick so they can maximize their profits, and do stock buybacks to reward their shareholders.
Jason Bradford
And now they don't have breathing room.
Asher Miller
And now they're all breathing room. So they have to get these people to go to work. They don't want them calling in sick. This is in the middle of COVID, all this shit going on, right? And so like, not only are these people, these poor people that do these jobs, being treated unbelievably badly, but we've created in a sector of the economy, that the rest of the economy depends on his vulnerability. Like the railroads are the lifeblood in a sense of moving goods across the county.
Jason Bradford
Yeah. I mean, you can move financial you know, assets, quote unquote, assets, electronically through the banking systems wire. It's nothing to do that.
Rob Dietz
You can move rail cargo through online services, right?
Jason Bradford
Well, that's the thing. You've got the banking industry and these financial people getting paid. And the CEO is getting paid hundreds of times more than the people actually moving real stuff around, which is maddening.
Asher Miller
And the risk of all this stuff is that those things will not be moving anymore. So like, maybe you don't care so much, or it feels abstract to you that that people are getting laid off. Do you know what I mean? Or stock buybacks, or whatever? No, these are the real world implications of these things. Not only are people suffering in these jobs, but the very lifeblood of our economy, and talk about with globalization as well. It's like, we are now really at risk. And then we turn to these very same people to solve these existential threats.
Rob Dietz
So that's what, to me, is the most maddening. It's like, these guys are driving us right over that cliff. And we're like, "Yay, keep going. I want to follow you."
Asher Miller
Right. Because our metrics for what success is are all financial. So these guys are winners.
Jason Bradford
We've been rewarding these people for decades.
Asher Miller
Winning!
Jason Bradford
Yeah. And so we need to reward people who have systemic understanding, who are empathetic, and they're not these these Welchian villains, basically.
Rob Dietz
I like that adjective, Welchian. Well, I think that leads us into our next section. Jason, why don't you remind our listeners of our insufferability index.
Jason Bradford
Okay, so, we're gonna basically score folks on a 0 to 10. Imagine, you know, Voldemort would be 10 and Harry of Harry Potter would be a 0 or 1. Very low, right. And so we're scoring based upon their intentions. Are they malevolent, power hungry, selfish people? That would be a high score 3. On personality, are they a narcissist, a complete jerk? Or are they nice person? Ideas - Are they completely wacko or you know, do they think systemically, do they have an ecological mindset and understanding of the world? So anyway, that's what we're going to do now that we've summarized Jack Welch's life in this podcast.
Rob Dietz
Alright, yeah. Let's do this. But let me give you guys a few notes before you . . .
Asher Miller
Okay.
Jason Bradford
You trying to influence us?
Rob Dietz
No. I have no - This is all just facts. I'm not trying to influence you. I'm just going to tell you some things. We already said that he wrote a book called Winning," and a sequel called, "Winning the Answers."
Jason Bradford
Yep. Excellent. Excellent.
Rob Dietz
Coming out of retirement in 2009 he started the Jack Welch Management Institute to train the next generation of Jack Welch's. In explaining why his name was in the title he said, this is a quote from him: "It's mine. I can design the faculty. I can select the Dean. I can control the product." His favorite term for firing someone was "shot." As in shoot them, or they ought to be shot.
Asher Miller
Nice.
Rob Dietz
On work life balance, and maybe this goes back to the rail workers, he said, "Your boss's top priority is competitiveness. Of course he wants you to be happy but only in as much as it helps the company win. In fact, if he's doing his job right, he's making your job so exciting that your personal life becomes a less compelling draw."
Asher Miller
You forget even who your wife or husband is.
Rob Dietz
You don't need to look after the kids. Who cares? Your job is -
Asher Miller
See look, you're trying to skew the -
Rob Dietz
I am not. Stop accusing me
Asher Miller
Clearly you gotta . . .
Jason Bradford
You don't like this guy.
Rob Dietz
Okay, I'll go first. Yeah, he get's a -4.
Jason Bradford
No, no.
Asher Miller
No, the scoring. The higher the points, the worse.
Rob Dietz
Oh my God. I screwed it up. Okay, he gets the same score as his last bonus when he left GE.
Asher Miller
Oh, so like 150 million?
Rob Dietz
Yeah. Whatever it is.
Asher Miller
Um, I'm gonna put him pretty fucking high too. Because there's some stuff about him personally that doesn't sound that great on top of just his awful impact on society as a whole. I'm gonna say an 8, probably.
Jason Bradford
I think that's pretty - I mean, he's definitely power hungry, selfish. He's got a three there. Personality, he's a complete narcissistic asshole. He gets a three. He's not as wackadoodle as our last one. Sure, that's true. Yeah, yeah.
Rob Dietz
You know, I have to actually say, in researching him, some of the things he says and writes are pretty damn logical. I mean, they lead to bad outcomes often good often. You're kind of like, "Oh, yeah, I'm with you."
Jason Bradford
So I mean, maybe he's only a one or a two on that. But you've influenced . . . I'll with with a 2, so I'm up to 8.
Rob Dietz
You’re gonna give him a style point, aren't ya?
Jason Bradford
Yeah, 9.
Asher Miller
9? Okay. It's the mustache that set him over, right?
Rob Dietz
I like to fractionate so I think I'm gonna go with 8.5.
Jason Bradford
Okay, he's high up there. This is the highest so far because at the end of the season, of course, we're gonna have to -
Asher Miller
We're gonna rank and yank.
Rob Dietz
Jack Welch is out of here.
Asher Miller
I think he saved himself.
Melody Allison
Other podcasts ask for a lot of stuff. Buy their merch, join their Patreon, donate your left kidney. No, we're just asking you to share the show. If you're like me and you find it funny and thought provoking, then please tell three friends, hit that share button, and get some other people joining us in Crazy Town.
George Costanza
Every decision I've ever made in my entire life has been wrong. My life is the complete opposite of everything I want it to be. If every instinct you have is wrong, then the opposite would have to be right.
Jason Bradford
Alright, do the opposite for God's sakes, please. You know, the first thing that comes to mind is why are we worshipping folks like this? Stop the culture of worshipping these folks that think they're so great that they get to earn hundreds of times what a normal human being earns.
Asher Miller
Thousands.
Jason Bradford
There's nobody that that shouldn't be paid that much. And if they're rationalizing or justifying this, you've got to worry about them. And so calling people like that managers of the century, you know. . . We need more people like David Gelles and his book to be skeptical of folks like this and dig into, why all the hype really?
Asher Miller
And we're gonna get to people like that. Some of them later on in this season.
Rob Dietz
Yeah. Well, and I heard a cool story from a friend of mine. He was working at Hewlett Packard when they were going through a downsizing. I guess they were having some some serious issues, problems, whatever, and they needed to cut costs. And he said instead of a Welchian nightmare of, we're just going to cut 10% of you or whatever. Basically all the staff met and went through some process and agreed we'll all take a pay cut in order t have a shared sacrifice, which we talk about often in this show. Shared sacrifice, yeah. That's the way to get through.
Asher Miller
They did that? They actually did it in a corporate situation? That's pretty impressive.
Rob Dietz
Well, and it kind of harkens back a little bit to what you were saying, Asher, and how GE used to operate. You know, it's kind of like, let's take care of our employees. Let's have a community. I know there are limits to this. I don't want to sound utopian, but if you're ever involved or in a decision making place, there are other ways than just sharpening the old axe and chopping out some part of the company or the organization.
Asher Miller
And it seems to be something that's being talked about a lot because of the pandemic. Yeah, got a couple more quick ones. One is beware of size, right? I mean, I think that so many of these mergers and acquisitions lead these companies to be monopolies and enormous, you know. Too big to fail in many cases, and we have very little control. They have a tremendous amount of control and influence. So shrinking down the size of businesses. And then the other is, instead of outsourcing and offshoring, you know, so much of manufacturing and elements of our economy, relocalizing those, bringing those home. Obviously, This is something that we are PCI have been championing for decades now. Yeah, I think people understand, you know, the risks associated with it. So, you know, we've worked with our friend Michael Shuman in the past. He's done a lot of work and still doing a lot of work around helping local communities actually do either economic models to look at how they can restrengthen the local economies, or other strategies that they can implement, including around food system stuff. And there's a group called the Institute for Local Self Reliance, which also does a lot of great work around strengthening local economies as well.
Rob Dietz
Yeah, and we also talked about how Welch's practices lead to this huge difference between pay. If you're already at the top, you're the CEO, or you're rich versus kind of the rest of us. And if you want to delve into fixing our troubles with inequality, then you got to check in with our friend Chuck Collins. We had him on this program and he goes through a lot of ideas for how to adjust things economically. He works at a place called the Institute for Policy Studies. Really recommend you check out his inspiring work.
Jason Bradford
Oh yeah.
Asher Miller
Yeah inequality.org, which is the site that his program runs. Let's talk about this stock buyback thing, right. So we talked about how that was deregulated. That was made possible again during the Reagan administration. There was a provision that was included in the Inflation Reduction Act that Congress passed recently. It imposed a 1% excise tax on stock buybacks, which I think does not go nearly far enough. So one of the things we could all do is contact our Representative in Senate and in the House and let them know that we feel like this is a really important thing. And again, maybe make the case and give the example of what I was talking about with the rail companies, the real world implications of putting stock buybacks first. We also saw that actually, we didn't talk about this, but we saw that with the, do you guys remember the crisis that happened with formula, baby formula? There was shortages of those. Well, part of the reason that that happened is the company that was behind that actually did stock buybacks rather than repairing the equipment that led to this problem in the first place. So we've got real world fucking implications of this stuff, and I think you can point that out to your elected representatives.
Jason Bradford
Yeah. Okay. And there are other ways of looking at businesses. If you're in a business, you know, look into things like the B Corporations, or they're called Benefit Corporations. There are developments in what's called the perpetual purpose trusts for ownership of businesses. And these are various legal frameworks, basically, being developed that allow business decisions to include other than financial interests for setting the purpose and goals.
Rob Dietz
Yeah. Well, and if that fails, financialize the shit out of yourself and maybe downsize.
Asher Miller
Downsize your own body so you don't have to eat as much.
Rob Dietz
Make some deals.
Asher Miller
I mean Kurzweil has some suggestions for how to do that, you know, so I think it's a good strategy.
Melody Allison
That's our show. Thanks for listening. If you like what you heard, and you want others to consider these issues, then please share Crazy Town with your friends, hit that share button in your podcast app, or just tell them face to face. Maybe you can start some much needed conversations and do some things together to get us out of Crazy Town. Thanks again for listening and sharing.
Jason Bradford
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