Speaker 1: Peter Franklin had been running a successful woodworking business on Lanai, Hawaii,
Speaker 1: when Larry Ellison, one of the richest people on the planet,
Speaker 1: but nearly the entire island for about three hundred million dollars.
Speaker 1: This was back in There are feelings of both angst
Speaker 1: and excitement as Lenite residents prepared to welcome new billionaire
Speaker 1: owner Larry Ellison. Larry Ellison loves to go shopping for
Speaker 1: big things seton bought a Hawaiian island recently. In his
Speaker 1: first interview since buying three months ago, Larry Ellison shows
Speaker 1: he's as ambitious as he is rich. The news meant
Speaker 1: that Peter had a new landlord, and at first things
Speaker 1: went relatively well. For one, he had a new spending client.
Speaker 1: Ellison's people asked Peter to make some furniture and hired
Speaker 1: his shop, Lanai Woodworkers, for one of his first projects
Speaker 1: on the island, building a Nobu, you know, the Japanese
Speaker 1: restaurant known for its celebrity sightings. Here's Peter remembering one
Speaker 1: of the earlier projects he did for Ellison. Mr. Ellison
Speaker 1: was starting to spend more time here and the story
Speaker 1: was he didn't like rectangular square tables. He didn't like corners,
Speaker 1: and so they wanted this massive round table and they're
Speaker 1: like so many other jobs. We did it, We got
Speaker 1: it done. It was a nice table. Massively. The Nobu
Speaker 1: job was finished six months after Ellison bought the island.
Speaker 1: Chris Andrews, one of Peter's employees, remembers meeting Ellison for
Speaker 1: the first time during its opening in late December of
Speaker 1: that year. We're down there for the soft opening. At
Speaker 1: one point I had to go to the rest of us,
Speaker 1: so I pushed my chair back and bumped into someone.
Speaker 1: All I apologize, is so sorry, And I turned around.
Speaker 1: Here's a scrubby looking guy. Couldn't he believe use their
Speaker 1: flannel shirt head shape? He said, Oh, I'm Ellison And
Speaker 1: I said, oh, Mr Ellison, Well we did these walls
Speaker 1: were lynn I would workers. We did your hostess stand.
Speaker 1: He shakes my hand and says, we're going to do
Speaker 1: great work together. January one. We had a distinction of
Speaker 1: being the first company that he killed, the first company
Speaker 1: he kills, but not the last, and it would be
Speaker 1: a slow death. Ellison's management company, Palama Nai, which means
Speaker 1: to cherish Lenai, first came to Peter with an ultimatum,
Speaker 1: either he could sell his business to Polama or vacate
Speaker 1: the building. When Mr Ellison bought the island, they came
Speaker 1: to me and said, listen, we owned this building, we
Speaker 1: want to use the building. You can work for us,
Speaker 1: or you can go do something else. For Peter, the
Speaker 1: choice was simple, keep doing what he'd been doing for years.
Speaker 1: He sold the business and worked for Ellison for another
Speaker 1: six years. Then not of nowhere again, Ellison's company decided
Speaker 1: to shut down Lanai Woodworkers entirely. Masamoto called me into
Speaker 1: his office and, as a surprise to me, called me
Speaker 1: into his office and uh, well, me was closing a woodshop.
Speaker 1: Kurt Matsumoto is the president of Ellison's management company. After that,
Speaker 1: I asked her if we could buy any the equipment,
Speaker 1: and he told me no. He recommended I leave the island,
Speaker 1: and I was kind of shattered by that, kind of
Speaker 1: made up my mind. Well, I guess I'm not leaving.
Speaker 1: The problem for Peter is he might not have a
Speaker 1: choice in the matter. Ellison also owns the apartment where
Speaker 1: he lives, and there's a stipulation in the billionaires residential
Speaker 1: leases that if you work for one of the landlords
Speaker 1: companies and are fired. That's grounds to terminate your lease.
Speaker 1: In other words, Ellison could kick him out of his
Speaker 1: apartment at any time. So you're holding your bronake. It
Speaker 1: easily say, well, listen you, you don't work for us anymore.
Speaker 1: You have the vacate. And so it goes on an
Speaker 1: island owned by a man who's so rich that if
Speaker 1: he wanted to, he could afford to buy Lennai three
Speaker 1: hundred times over. Jobless claims coming in, I mean really
Speaker 1: jumping from the week before, pretty brutal. Three point to
Speaker 1: a million records six point six million Americans filed for
Speaker 1: unemployment lost week. Indian booking reminable, the worst impacted by
Speaker 1: the pandemic. Well, now to the billionaire boom. According to
Speaker 1: Bloomberg's supriocht charters are up over three hundred and a
Speaker 1: billionaire was created every twenty six hours during this condetic
Speaker 1: Larry Ellison loves to go shopping for big things. You
Speaker 1: bought a Hawaiian island recently. No one not waiting in
Speaker 1: line for a COVID test with the public roads. It
Speaker 1: is time for a wealth tax and America welcome back
Speaker 1: to the paycheck I'm Rebecca Greenfield. The growth and wealth
Speaker 1: inequality around the world in recent decades has been driven
Speaker 1: by explosive wealth creation at the very top. Before the pandemic,
Speaker 1: billionaire wealth was booming. The top twenty richest people in
Speaker 1: the world held as much wealth as half of humanity,
Speaker 1: that's almost four billion people. Then during the pandemic that
Speaker 1: gap got much wider. Here's a bile Aghmed, a strategist
Speaker 1: from ox MAM International. This pandemic, we're witnessing the biggest
Speaker 1: increase in billionaire wealth since records began. In fact, billionaire
Speaker 1: wealth has increased more during the pandemic than it has
Speaker 1: in the fourteen years combined, and a billionaire was created
Speaker 1: every twenty six hours a year into the pandemic. It
Speaker 1: only took ten billionaires to get all the wealth held
Speaker 1: by half of humanity. Wealth isn't inherently bad, and a
Speaker 1: lot of people argue that billionaires have benefited society by innovating,
Speaker 1: creating jaw new companies, and they were in part incentivized
Speaker 1: to do that by the prospect of getting very wealthy.
Speaker 1: Many of them also use their money to give back
Speaker 1: in ways that better the world, by, for example, funding
Speaker 1: research that creates things like vaccines. But money is power,
Speaker 1: and increasingly one group of people is accumulating so much
Speaker 1: wealth that in some ways, it can bend the world
Speaker 1: to its whims at the expense of others. One such
Speaker 1: billionaire is Larry Ellison. According to Bloomberg's Billionaires Index, which
Speaker 1: tracks billionaire wealth, he's worth around ninety billion dollars depending
Speaker 1: on the day. That's nearly double what he had before
Speaker 1: the pandemic. Ellison made his money as the co founder
Speaker 1: of Oracle, a software company. He's part of a new
Speaker 1: generation of scions, wealthier and more powerful due to a
Speaker 1: soaring stock market that has primarily benefited American technology giants.
Speaker 1: They have an unfathomable amount of wealth to most people,
Speaker 1: even probably themselves. Ellison may be best known for how
Speaker 1: he spends his money, mansions, yachts, a tennis tournament, and
Speaker 1: buying of the island of Lenai, the two Four Seasons
Speaker 1: resorts there, around a third of its housing stock, and
Speaker 1: practically all the commercial properties. Plenty of wealthy people own
Speaker 1: private islands, but Lanai stands out. It's home to around
Speaker 1: three thousand people, many whose families have lived there for generations. Overnight,
Speaker 1: when he first bought it back in Most of those
Speaker 1: people got a new boss, or a new landlord, or both.
Speaker 1: Now they have a new neighbor. Like many office workers
Speaker 1: stuck in their homes during lockdowns, Ellison relocated to one
Speaker 1: of his many properties on Lanai. With the billionaire's attention
Speaker 1: focused on the island now more than ever, residents are anxious.
Speaker 1: None of them wants to become the next Lanaii woodworkers.
Speaker 1: Sophia Alexander, a reporter on Bloomberg's Wealth Team, went to
Speaker 1: Hawaii to see how things are playing out. There's a
Speaker 1: reason people conjure images of Hawaii's sandy beaches, sunny blue skies,
Speaker 1: and rolling green mountains when they think of paradise. Lanai
Speaker 1: is no different. Approaching the island on the ferry from
Speaker 1: Maui's Lahinah Harbor, It's hills look buttery soft. The Pacific
Speaker 1: water that surrounds it is a deep blue, so clear.
Speaker 1: In some parts you can see the ocean floor and
Speaker 1: a ring of clouds hovering around the islands. Mountain Peak
Speaker 1: is called Mount a Lay because it looks like the
Speaker 1: island is wearing a lay the Polynesian flower garland. It's
Speaker 1: idyllic so it's easy to see why someone would want
Speaker 1: to buy a Hawaiian island if they could. We know
Speaker 1: that you've made tons of headlines recently ying in island
Speaker 1: in Hawaii, Lenna, buying tons of homes. How many homes
Speaker 1: do you own right now? Um, well, let's see homes
Speaker 1: that I live in? Or why do you buy the
Speaker 1: home if you don't live in? Well, for example, I
Speaker 1: bought a home in Newport, Rhode Island, which I'm converting
Speaker 1: into a nineteenth century European art museum. Larry Ellison didn't
Speaker 1: respond to my emails asking to talk to him for
Speaker 1: this story, and his management company didn't make any of
Speaker 1: its executives available to me. We did find this one
Speaker 1: interview he did on CNBC back in two thousand twelve.
Speaker 1: Back then, he said he wanted to make Lenai a
Speaker 1: sustainable paradise and help local start small businesses. He also
Speaker 1: goes on and on about his plans for his own
Speaker 1: art museums and his desire as a kid to be
Speaker 1: a pilot, which is why he now has his own
Speaker 1: planes to fly. But Lenny isn't just a mansion or
Speaker 1: a jet. It's a community and one small decision from
Speaker 1: Ellison can change everything. It's like a real life version
Speaker 1: of SIMS, the World Building video game. Now a decade
Speaker 1: has passed and Ellison and his company have changed a lot.
Speaker 1: On the Nai Lanai woodworkers closed, so did the family
Speaker 1: owned pokey shop and the car rental business and more
Speaker 1: recently the cafe down the street. Most day. They were
Speaker 1: given no explanation for their demise in and of itself.
Speaker 1: When they buy this business or take over this business
Speaker 1: doesn't seem much but in totality that that is a
Speaker 1: concern from an economic standpoint, and just from the I
Speaker 1: think from the perception residents have of what they're doing
Speaker 1: on much control they have. Was it a metaphorm looking
Speaker 1: at is throwing a crab, you know, part of cold
Speaker 1: water and turning on the stole and you know, realize
Speaker 1: that they're being boiled to death. That's Bochema, a retired
Speaker 1: social worker who grew up on the island and is
Speaker 1: one of the most vocal members of the community. We're
Speaker 1: in Dole Park, the quasi town square of Nay City,
Speaker 1: which got its name from James Dole, who bought the
Speaker 1: island in one years ago. Dole decided to turn the
Speaker 1: island into the world's largest pineapple plantation. So yeah, I
Speaker 1: mean the Pineapple dictated how life went, you know here
Speaker 1: in our community. And the old Pineapple, I mean they
Speaker 1: basically took care of everything. They ran the barge to
Speaker 1: and from Oahu. You kind of ran the clinic, they
Speaker 1: ran the hospital. I mean, you know, they ran everything.
Speaker 1: So they had a lot of control over what happened
Speaker 1: in town. Butch grew up on the island during plantation days,
Speaker 1: when everything was regulated by the company. Whistles marched the
Speaker 1: start of our work day and whistles marked the a
Speaker 1: p m. Curfew. The control over seemingly every aspect of
Speaker 1: life and the dependence on the company for family's well
Speaker 1: being created what locals still referred to as a plantation mentality.
Speaker 1: What's this in the plantation? Is this idea that if
Speaker 1: you work for the plantation, you don't speak out against them,
Speaker 1: and that holds true no matter what to this day.
Speaker 1: That's Solomon pele Halla Halla, a seventh generation Lenian who
Speaker 1: goes by Saul. He also grew up during the plantation days.
Speaker 1: My parents then, we're both the workers of the pineapple plantation.
Speaker 1: My mother was a pineapple picker and my father became
Speaker 1: a heavy equipment operator and a truck driver irrigating the
Speaker 1: pineapple fields. First all, there was one instance in particular
Speaker 1: that crystallized the wealth gap between the Nays residents and
Speaker 1: Lenie owners, a divide that's only grown bigger With Ellison.
Speaker 1: I took a part time job. In the evening, I
Speaker 1: did bartending as our part time, you know, And on
Speaker 1: one day a group of people came in to have lunch,
Speaker 1: and they are unusual group of people because the women
Speaker 1: had Mike strolls on and I was serving their drinks.
Speaker 1: So they were ordering martiniz for lunch. And then when
Speaker 1: they were getting ready to leave after their lunch, they
Speaker 1: were walking out with their martini glasses and as a bartender,
Speaker 1: I'd just said I better go and retrieve the glasses.
Speaker 1: So I started to walk out of the hotel and
Speaker 1: then the manager saw me, and then she stopped me
Speaker 1: and she says, where are you going? And said, I'm
Speaker 1: going to go and get the martini glasses from those
Speaker 1: people that are leaving, And then she's stopped and she says, no,
Speaker 1: let them go. And I said, why they're taking our
Speaker 1: glasses and she says, these are the board of directors
Speaker 1: for the Doll company. Yeah, that helped me to realize
Speaker 1: that this plantation was supporting the people that we're having
Speaker 1: martini lunches. And so I asked her, I said, so
Speaker 1: they're leaving right now, Are they going to go in
Speaker 1: into the pineapple fields to thank my mother and my
Speaker 1: father for what they do to give them their flaunting wealth?
Speaker 1: And she says, I don't think so, And then I
Speaker 1: was crushed at that moment. Doll closed its plantation after
Speaker 1: its parent company was bought by a billionaire named David Murdoch.
Speaker 1: Murdoch is what locals now call a poor billionaire. He
Speaker 1: was only worth a couple of billion dollars compared to
Speaker 1: Ellison's roughly nine billion dollar fortune. People told me they
Speaker 1: remember Murdoch routinely complaining about how much money he was
Speaker 1: losing from the island. Ultimately, when he could no longer
Speaker 1: afford to keep it running, he sold it to Ellison.
Speaker 1: But Murdoch's impact on the island was enormous. He's the
Speaker 1: one who built the two hotels and oversaw the transition
Speaker 1: from pineapples to tourism. The change wasn't easy, and he
Speaker 1: tangled with many of Lenais residents during his reign, often
Speaker 1: getting into screaming matches with locals. But unlike Ellison, people
Speaker 1: here told me the island's previous owner was at least
Speaker 1: willing to talk to them face to face. For me,
Speaker 1: that is a relationship, and that is one that allows
Speaker 1: us to interact whether we agree or disagree. I've had
Speaker 1: that relationship with with Murdoch because when he was wrong,
Speaker 1: when he had no idea about it, I wouldn't hesitate
Speaker 1: to him, and he would always tell me, you know,
Speaker 1: you're a thorn in my side, you know, And I
Speaker 1: took that as a compliment. Now with Ellison, it's a
Speaker 1: completely different story. Solve remembers approaching the president of Ellison's
Speaker 1: company to ask for a meeting with the new owner.
Speaker 1: I say, Kurt, I would like to request a meeting
Speaker 1: with Ellison in person. Kurt's response to me, and I'll
Speaker 1: never forget this, He says, I don't mean to be disrespectful,
Speaker 1: but that is not Ellison's style. Those are the exact
Speaker 1: words they've been ingrained in me from that very moment.
Speaker 1: And my response to Kurt was, first of all, that
Speaker 1: is disrespectful, But beyond that, I still have an expectation
Speaker 1: that we need to sit down and meet, you know,
Speaker 1: and so I make my requests. So I've been waiting
Speaker 1: now for ten years to have a conversation, just to
Speaker 1: get to meet this person who somehow this mystic and
Speaker 1: this mover and shaker in a community of which we
Speaker 1: don't get to see you or no, and my requests
Speaker 1: have never been acknowledged or responded to. I also to
Speaker 1: speak with Kurt Matsumoto, the president of Ellison's management company,
Speaker 1: but he didn't respond to my emails. A spokesperson for
Speaker 1: Poulama did suggest I talked to Diane Presa, who acts
Speaker 1: as a liaison between the company and the community. She
Speaker 1: didn't seem to want to talk much about Ellison's plans,
Speaker 1: but she was the only person from Ellison's company who
Speaker 1: agreed to be interviewed. So I had to ask, do
Speaker 1: you feel like you have a broad sense of what
Speaker 1: the plans Polama has for the community? Are? You know?
Speaker 1: Things change at Puloma all the time. So I hate
Speaker 1: to say something and then it doesn't happen, you know,
Speaker 1: I guess like long term plans, you know, um I
Speaker 1: would say no, while the uncertainty is scary for people
Speaker 1: like Saul and Butch, who have lived on l Nay
Speaker 1: for decades. There's more at stake for the younger generation
Speaker 1: that worries about its future here on the island. Take
Speaker 1: Michelle Fuji, a thirty eight year old high school math
Speaker 1: teacher who grew up here and is raising her two
Speaker 1: kids here. She loves lenai An enthusiastically offered to drive
Speaker 1: me around to show me her favorite parts of the island.
Speaker 1: Like pretty much everyone else here, her speedometer rarely topped,
Speaker 1: and it seems like she waved at every passing car
Speaker 1: and person. Let's see if Auntie wants to ride because
Speaker 1: she's walking to the rain. Sorry, that's Auntie. You like
Speaker 1: when ride it is raining? You sure? Okay, you go
Speaker 1: girl with your exercise. Everyone seems to know everyone here.
Speaker 1: People refer to their elders as aunties and uncles. I
Speaker 1: routinely saw people hugging. A stranger even invited me to
Speaker 1: his kid's birthday party on the beach. Ellison is not
Speaker 1: part of any of that, and it doesn't go unnoticed.
Speaker 1: I think a big difference between Murdoch and Allison is
Speaker 1: is just the connection to the community. Like I and
Speaker 1: and I maybe it's like, you know how there's like
Speaker 1: the five love languages and what is your best like
Speaker 1: love language UM, And so maybe Murdoch was like words
Speaker 1: of affirmation or service, you know, where he would actually
Speaker 1: come out UM or quality time and spend time with
Speaker 1: the community members, like people knew him by like first name,
Speaker 1: and you know, whenever he would come home, like sure
Speaker 1: there's still that plantation boss mentality and everybody bowed down
Speaker 1: and you know, praise you. But at the same time,
Speaker 1: it's like people knew who he was. When you've seen
Speaker 1: his face, you would recognize him and he would greet you.
Speaker 1: Ellison is a little bit different. I've never met him.
Speaker 1: Without any insight from Ellison, that leaves Michelle to fill
Speaker 1: in the blanks about how his company's plans will affect
Speaker 1: her life. I don't think that I'm fully Like if
Speaker 1: I had to put my money on whether or not
Speaker 1: Poulama is solely in it for the best interest of
Speaker 1: our community, I would not put my whole fortune on it,
Speaker 1: you know what I mean. Since the pandemic started, more
Speaker 1: rich people seem to be moving to the island. Michelle
Speaker 1: is worried about the community becoming more divided economically. One
Speaker 1: of my biggest fears is that the people of this
Speaker 1: community will sort of be the ones that would be
Speaker 1: caring for the elite rich that can't afford to actually
Speaker 1: live here one day, and that's our sole purpose. Like
Speaker 1: as an educator, you would think that we would want
Speaker 1: our students to graduate and aspire to be more than
Speaker 1: just somebody's servant. Michelle and her fiance have three kids
Speaker 1: between the two of them and are excited about getting married,
Speaker 1: but she says it's getting impossible to find housing, especially
Speaker 1: after Ellison moved to the island and the pace of
Speaker 1: his construction projects have picked up. All those projects need
Speaker 1: people to build them, which means more construction workers living
Speaker 1: on the island taking up the already limited housing options.
Speaker 1: There's no houses. Really, isn't any homes that we could
Speaker 1: affordably rent, you know, Like I think now, if we
Speaker 1: were to try and find the house that was being
Speaker 1: rented by some local family, we would be paying like
Speaker 1: two dollars a month, because that's what construction workers would pay,
Speaker 1: or that's what you know, the market would allow for.
Speaker 1: To alleviate the housing crunch, Ellison is building more homes
Speaker 1: on the island. The plan initially had units for sale,
Speaker 1: but something changed and now they're all only for rent.
Speaker 1: At first, Michelle was against the project because of the
Speaker 1: change and the fact that the units will all be
Speaker 1: fully furnished, making it feel like they're for outsiders moving
Speaker 1: to the island temporarily. But with her wedding coming up,
Speaker 1: she's desperate for options. That where my sway changed, you know,
Speaker 1: Like then it's like, okay, well, if we're thinking about
Speaker 1: the future as a married couple and we're not able
Speaker 1: to live together unless we you know, I don't want
Speaker 1: to say sell out because it's not really selling out
Speaker 1: because we're not really selling anything, but it definitely changed
Speaker 1: my perspective of things versus it just being like, you know,
Speaker 1: we gotta think about ways that we're going to merge
Speaker 1: our family, and that right now would be a solution.
Speaker 1: Younger families like Michelle's have been moving off the island recently.
Speaker 1: Michelle said she worries that if she did leave and
Speaker 1: gave up her housing and her job, then there'd be
Speaker 1: no way for her or her kids to return because
Speaker 1: everything is becoming so expensive and there are so few
Speaker 1: employment opportunities outside of working for the billionaire around the world.
Speaker 1: As the rich get richer and decided to move into
Speaker 1: your neighborhood, changing it to fit their tastes. People often
Speaker 1: throw around the word gentrification, but on the night it
Speaker 1: goes beyond that, because it ultimately comes down to the
Speaker 1: tastes of one person who increasingly dictates who and what
Speaker 1: is allowed on his island. And in this version of gentrification,
Speaker 1: you're not pushed further from the city center. You're pushed
Speaker 1: into the ocean, and who knows if you can come back.
Speaker 1: When I first started reporting on this season of The Paycheck,
Speaker 1: an economist named Gabriel Zuckman told me something that's stuck
Speaker 1: with me. He said, if you think about it, extreme
Speaker 1: wealth inequality is inefficient. To someone like Larry Ellison, an
Speaker 1: extra billion dollars doesn't change his life that much, but
Speaker 1: that amount of money for the thousands of people on
Speaker 1: the island, it would drastically change their lives. When you
Speaker 1: own a hundred billion dollars, it's just useless. It's not
Speaker 1: changing their lifestyle. It has no meaning. And whereas an
Speaker 1: extrat billion, you know that that could be I don't know,
Speaker 1: paid in taxes spent on education and healthcare, on infrastructure
Speaker 1: that that is valuable. Next week on the Paycheck. We
Speaker 1: had to a place where the government's decisions about how
Speaker 1: to manage the pandemic had unintended consequences for women. I mean,
Speaker 1: as public had professionals. We must do better. We have
Speaker 1: to educate people. We had to educate communities, We had
Speaker 1: to educate po data. It will be a mainting if
Speaker 1: we can help them to work together with the physicians,
Speaker 1: for them to learn more and to be working together.
Speaker 1: Thanks for listening to The Paycheck. If you like our show,
Speaker 1: please head on over to Apple Podcasts or ever you
Speaker 1: listen to podcasts and rate a review and subscribe. This
Speaker 1: episode was hosted by me Rebecca Greenfield and reported by
Speaker 1: Sophie Alexander. It was edited by Shelley Banjo with help
Speaker 1: from Francesca Levi, Janet Paskin Rocksheeta Soluja, and me. We
Speaker 1: also had editing help from Daniel Balby, Kristin B. Brown, Gildaa, Carly,
Speaker 1: Nicole Flato, Melissa McDonald, and Kai Schultz. This episode was
Speaker 1: produced by Gildaa, Carly and sound engineered by Matt kim Our.
Speaker 1: Original music is by Leo Sidron. Special thanks to Magnus Hendrickson,
Speaker 1: Mckinnonda Keeper, Margaret Sutherland, Stacy Wong, and Aisha Diello. Francesca
Speaker 1: Levy is Bloomberg's head of podcasts. See you next week.