1 00:00:03,560 --> 00:00:13,320 Speaker 1: What's syphilitic? My eighteen seventies sailors, I'm Robert Evans hosted 2 00:00:13,320 --> 00:00:16,320 Speaker 1: Behind the Bastards. That introduction had really nothing to do 3 00:00:16,360 --> 00:00:18,880 Speaker 1: with the topic today. But I mean, sailors in the 4 00:00:18,920 --> 00:00:21,480 Speaker 1: eighteen seventies had a hell of a lot of syphilis. 5 00:00:21,480 --> 00:00:24,800 Speaker 1: You can't argue that that's just that's just fact, that's 6 00:00:24,800 --> 00:00:28,040 Speaker 1: just science. Here with me to talk about syphilis a 7 00:00:28,080 --> 00:00:31,760 Speaker 1: little bit more is my once and current and probably 8 00:00:31,840 --> 00:00:37,159 Speaker 1: future boss Jack O'Brien. Actually it ends after after this, 9 00:00:37,560 --> 00:00:44,360 Speaker 1: after that one more time over swan song. Yeah, yeah, No, 10 00:00:45,000 --> 00:00:47,800 Speaker 1: pleasure to be here, Pleasure to just be on a 11 00:00:47,880 --> 00:00:52,280 Speaker 1: zoom with both of you, Robert and Sophie. It's good. 12 00:00:52,360 --> 00:00:56,400 Speaker 1: What is more the American way than syphilis? You know? 13 00:00:56,800 --> 00:00:59,240 Speaker 1: It is, it is. It is the most American disease, 14 00:00:59,440 --> 00:01:02,040 Speaker 1: and I think one we ought to bring back. Let's 15 00:01:02,040 --> 00:01:05,679 Speaker 1: bring back everybody slowly losing their minds as worms eat 16 00:01:05,720 --> 00:01:08,720 Speaker 1: their brains. It's good for you. It brought us. There's 17 00:01:08,720 --> 00:01:11,160 Speaker 1: a bunch of art we got because of syphilis. You know, what, 18 00:01:11,360 --> 00:01:13,160 Speaker 1: what are we what are we losing now that we've 19 00:01:13,200 --> 00:01:16,040 Speaker 1: cured it? A lot? Is my contention, We're losing a 20 00:01:16,040 --> 00:01:19,560 Speaker 1: lot and possibly a Hitler too. Yeah, we might be 21 00:01:19,600 --> 00:01:22,520 Speaker 1: losing exactly, we're losing a Hitler or two and maybe, 22 00:01:22,640 --> 00:01:26,479 Speaker 1: uh well, okay, probably has nothing to do with what 23 00:01:26,520 --> 00:01:32,400 Speaker 1: we're talking. It really doesn't. It really doesn't, Um, Jack 24 00:01:33,480 --> 00:01:37,959 Speaker 1: O'Brien attack Jacktoberfest. This is every time I do this. 25 00:01:38,080 --> 00:01:41,280 Speaker 1: I'm continuing a series of jokes that are our colleague 26 00:01:41,319 --> 00:01:47,720 Speaker 1: Dan O'Brien did when I was like seventeen. It's funny 27 00:01:47,760 --> 00:01:51,360 Speaker 1: the things that stick with you, Um, Jack, how do 28 00:01:51,400 --> 00:01:54,480 Speaker 1: you funny? The things that stick with you? Like that 29 00:01:54,880 --> 00:02:01,240 Speaker 1: being a thing that everybody says to me. Also, people 30 00:02:01,280 --> 00:02:04,760 Speaker 1: thinking that I am a fictional character created by Daniel O'Brien, 31 00:02:05,600 --> 00:02:08,040 Speaker 1: aren't you. I did think that right up until you 32 00:02:08,160 --> 00:02:12,600 Speaker 1: called me about the internship when I was I just 33 00:02:13,000 --> 00:02:15,760 Speaker 1: I'm just somebody who saw a branding opportunity and reached 34 00:02:15,760 --> 00:02:18,040 Speaker 1: out to Daniel and said, Hey, I want to occupy 35 00:02:18,960 --> 00:02:22,160 Speaker 1: this character of Jack O'Brien that you invented. We should 36 00:02:22,160 --> 00:02:25,320 Speaker 1: really be nicer to Jack. He employed both of us. 37 00:02:25,320 --> 00:02:30,240 Speaker 1: He's employed me virtually my entire adult life. Jack saved 38 00:02:30,320 --> 00:02:33,840 Speaker 1: me from the tech world. He saved me from very 39 00:02:34,040 --> 00:02:40,320 Speaker 1: lucky and a teacher. Well, you're still still teaching people stuff. 40 00:02:40,360 --> 00:02:43,080 Speaker 1: I would feel more bad about that, but I feel 41 00:02:43,080 --> 00:02:45,240 Speaker 1: like you do a good job teaching people stuff, so 42 00:02:45,280 --> 00:02:48,920 Speaker 1: I appreciate that. Well, Jack, how do you feel about AMI? 43 00:02:49,520 --> 00:02:52,200 Speaker 1: I mean, I don't know a ton about it, and 44 00:02:52,320 --> 00:02:55,679 Speaker 1: that's good. I know it as a like door to 45 00:02:55,760 --> 00:03:00,480 Speaker 1: door sales thing, and I know it as sort of 46 00:03:00,520 --> 00:03:06,360 Speaker 1: the uh grandmother of multi level marketing that which has 47 00:03:06,440 --> 00:03:12,080 Speaker 1: turned into a massive thing. Now, yeah, yeah, that's that's 48 00:03:12,120 --> 00:03:14,880 Speaker 1: the basics, And the most important thing to know about Amway, Jack, 49 00:03:14,960 --> 00:03:17,440 Speaker 1: is that it is not legally a pyramid scheme, as 50 00:03:17,480 --> 00:03:23,720 Speaker 1: in never legally not a pyramid scheme. And the fact 51 00:03:23,720 --> 00:03:26,560 Speaker 1: that we have to say it's legally not a pyramid 52 00:03:26,639 --> 00:03:29,120 Speaker 1: scheme does say all that you should know about the 53 00:03:29,200 --> 00:03:31,359 Speaker 1: kind of business Away is as and it's the kind 54 00:03:31,360 --> 00:03:34,720 Speaker 1: of business where you have to specifically note that legally 55 00:03:35,080 --> 00:03:38,760 Speaker 1: it's not a pyramid scheme. A lot of lawyers. They 56 00:03:38,800 --> 00:03:40,560 Speaker 1: have a lot of lawyers and a lot of money. 57 00:03:41,440 --> 00:03:43,880 Speaker 1: If there's like a mathematical equation you can do based 58 00:03:43,920 --> 00:03:46,880 Speaker 1: on like the the amount of money you have and 59 00:03:46,880 --> 00:03:50,320 Speaker 1: then how much of that money you spend on lawyers 60 00:03:50,440 --> 00:03:56,240 Speaker 1: that just like attack people on your on your behalf. Um. Yeah, uh, 61 00:03:56,440 --> 00:04:00,720 Speaker 1: and so it is. It is not legally a pyramid scheme. Um. 62 00:04:00,720 --> 00:04:04,160 Speaker 1: But the Consumer Awareness Institute has calculated that Amway's loss 63 00:04:04,280 --> 00:04:09,240 Speaker 1: rates for distributors exceed ninety nine point nine percent, which 64 00:04:09,280 --> 00:04:11,880 Speaker 1: means virtually all of the people who are kind of 65 00:04:11,960 --> 00:04:14,480 Speaker 1: sort of employees of a way, of course, legally they're 66 00:04:14,480 --> 00:04:18,599 Speaker 1: not employees. They're independent, you know, distributors, um make zero 67 00:04:18,640 --> 00:04:21,400 Speaker 1: money or lose money. And and nearly all of the 68 00:04:21,440 --> 00:04:25,240 Speaker 1: profits that am Way makes come from its distributors and 69 00:04:25,279 --> 00:04:27,560 Speaker 1: are funneled up to a tiny group of people at 70 00:04:27,600 --> 00:04:30,479 Speaker 1: the top, while the vast majority of people at the 71 00:04:30,520 --> 00:04:34,200 Speaker 1: bottom make nothing. You can visualize the shape of that 72 00:04:34,279 --> 00:04:42,200 Speaker 1: arrangement in your head. But it's legally not a pyramid scheme. Yeah. Yeah, 73 00:04:42,320 --> 00:04:45,440 Speaker 1: Now the ninety nine point nine is not not great. 74 00:04:45,720 --> 00:04:48,760 Speaker 1: It would be a really different podcasting industry if well, 75 00:04:48,800 --> 00:04:50,560 Speaker 1: I guess that is like if you look at podcasting 76 00:04:50,600 --> 00:04:54,320 Speaker 1: as a whole. But that's not you know, a company. Um, 77 00:04:54,360 --> 00:04:57,200 Speaker 1: I'm just saying most podcasts are are are like my 78 00:04:57,200 --> 00:05:00,520 Speaker 1: favorite ever tell you about my favorite podcast? Jack? What's that? 79 00:05:00,880 --> 00:05:03,160 Speaker 1: Oh my god? I came across this before I ever 80 00:05:03,160 --> 00:05:06,359 Speaker 1: gotten to podcasting. But when people started talking about it 81 00:05:06,360 --> 00:05:10,000 Speaker 1: as a thing, I think around and I fell in 82 00:05:10,040 --> 00:05:12,920 Speaker 1: love with it because it was the most tasteless, tactless 83 00:05:12,960 --> 00:05:15,080 Speaker 1: thing I have ever encountered in my life. It was 84 00:05:15,120 --> 00:05:19,560 Speaker 1: a vaping podcast by like four four kind of chetty 85 00:05:19,640 --> 00:05:22,359 Speaker 1: dudes in South Carolina, and the name they picked for 86 00:05:22,400 --> 00:05:29,800 Speaker 1: their podcast was the Serial Vapists. Yeah, they shaped it 87 00:05:29,880 --> 00:05:33,080 Speaker 1: did um and the content was exactly what you'd expect 88 00:05:33,120 --> 00:05:35,120 Speaker 1: it was. It was horrible, but it was very funny. 89 00:05:35,120 --> 00:05:37,360 Speaker 1: I don't think they am fairly certain. They never made 90 00:05:37,440 --> 00:05:39,440 Speaker 1: Joe Rogan bucks off of that show, but it was 91 00:05:39,560 --> 00:05:41,920 Speaker 1: very funny to me. I was really hoping you were 92 00:05:41,920 --> 00:05:44,160 Speaker 1: going to name drop one of your own podcasts that's 93 00:05:44,200 --> 00:05:47,960 Speaker 1: your favorite. Were you were that that guy? No, no, no, 94 00:05:48,320 --> 00:05:51,240 Speaker 1: I don't listen to podcast Sophie, I just make them um. 95 00:05:51,279 --> 00:05:53,960 Speaker 1: I've actually never time to listen in my life. Exactly 96 00:05:54,080 --> 00:05:58,120 Speaker 1: tubiously making that Cassy making them um um. It's like 97 00:05:58,200 --> 00:06:00,760 Speaker 1: Dan Acroyds never seen one of his own movies. You 98 00:06:00,960 --> 00:06:04,600 Speaker 1: know that that can't be possible. Dan was the only 99 00:06:04,640 --> 00:06:09,600 Speaker 1: man who hasn't watched Ghostbusters. Probably watched that one, you'd 100 00:06:09,600 --> 00:06:11,400 Speaker 1: have to think. But he claims he doesn't watch his 101 00:06:11,440 --> 00:06:15,000 Speaker 1: own movies. Yeah, I mean that would be did you 102 00:06:16,080 --> 00:06:20,960 Speaker 1: did you just when you were discovering, uh, the Cereal vapists? 103 00:06:21,120 --> 00:06:28,000 Speaker 1: Did you just put is there like some cereal? It 104 00:06:28,040 --> 00:06:30,719 Speaker 1: was like really cereal and it was whenever whatever. Years 105 00:06:30,760 --> 00:06:32,840 Speaker 1: the first serial came out, So I was looking for 106 00:06:32,960 --> 00:06:35,360 Speaker 1: Cereal and I saw underneath it like and I had 107 00:06:35,400 --> 00:06:38,760 Speaker 1: to listen, um and it was amazing. Like one of 108 00:06:38,800 --> 00:06:40,760 Speaker 1: the episodes, the first like twenty minutes, was just a 109 00:06:40,800 --> 00:06:43,000 Speaker 1: guy talking about taking a ship at a vape store 110 00:06:43,120 --> 00:06:45,599 Speaker 1: and the fact that they were cool with the fact 111 00:06:45,640 --> 00:06:47,640 Speaker 1: that he took a giant ship in their bathroom. Like 112 00:06:48,040 --> 00:06:51,640 Speaker 1: it was an incredible moment in content history. If someone 113 00:06:51,680 --> 00:06:55,360 Speaker 1: can find their old episodes by all means do um. 114 00:06:55,400 --> 00:06:58,960 Speaker 1: It was amazing, So Jack, The first important thing to 115 00:06:59,000 --> 00:07:01,239 Speaker 1: know about Amay is that it's legally not a pyramid scheme. 116 00:07:01,320 --> 00:07:03,800 Speaker 1: The second most important thing to know about am Way 117 00:07:03,839 --> 00:07:06,200 Speaker 1: is the history of pyramid schemes, because once you learn 118 00:07:06,279 --> 00:07:09,440 Speaker 1: the history of pyramid schemes, why am Way isn't legally 119 00:07:09,520 --> 00:07:12,760 Speaker 1: one makes somewhat more sense. Now if you go into 120 00:07:12,760 --> 00:07:14,840 Speaker 1: this line of research, if you google for first ever 121 00:07:14,880 --> 00:07:17,760 Speaker 1: pyramid scheme, you will generally be directed towards the tale 122 00:07:17,800 --> 00:07:20,440 Speaker 1: of Charles Ponzi, who we've discussed a couple of times 123 00:07:20,440 --> 00:07:22,800 Speaker 1: on the show. In brief, he was an immigrant from 124 00:07:22,840 --> 00:07:26,680 Speaker 1: that perfidious peninsula, Italy who in nineteen nineteen hatched a 125 00:07:26,760 --> 00:07:31,520 Speaker 1: scheme involving what we're called international Postal Reply cupons. These 126 00:07:31,520 --> 00:07:35,680 Speaker 1: were essentially stamps that had been created for small international transactions, 127 00:07:35,720 --> 00:07:38,200 Speaker 1: and they were redeemable at post offices in the United 128 00:07:38,240 --> 00:07:41,280 Speaker 1: States for real stamps, which obviously have a cash value. 129 00:07:41,720 --> 00:07:45,400 Speaker 1: Ponzi got one of these international Postal Reply coupons from 130 00:07:45,400 --> 00:07:47,760 Speaker 1: a friend in Italy while he was in Boston, and 131 00:07:47,800 --> 00:07:49,880 Speaker 1: he realized that the coupon he had gotten had been 132 00:07:49,920 --> 00:07:52,960 Speaker 1: purchased in Spain because they were cheapest there um and 133 00:07:53,080 --> 00:07:55,840 Speaker 1: because of basically, to make a long story short, because 134 00:07:55,840 --> 00:07:57,520 Speaker 1: of how much stamps were worth in the US, and 135 00:07:57,520 --> 00:07:59,600 Speaker 1: how cheap these things were to get in Spain, you 136 00:07:59,600 --> 00:08:02,440 Speaker 1: could make a profit just buying these in Spain and 137 00:08:02,520 --> 00:08:04,680 Speaker 1: redeeming them for stamps. It was kind of a loophole 138 00:08:04,680 --> 00:08:07,840 Speaker 1: in the system. So Ponds he hatches this that that 139 00:08:07,960 --> 00:08:12,560 Speaker 1: sounds like basically the most honest way that somebody could 140 00:08:12,560 --> 00:08:15,360 Speaker 1: make a living today. At like a hedge fund or 141 00:08:15,680 --> 00:08:19,520 Speaker 1: like that just sounds like it's every financial job in existence. Well, 142 00:08:19,800 --> 00:08:22,560 Speaker 1: this is not what he actually does, um, but this 143 00:08:22,640 --> 00:08:25,000 Speaker 1: is how he justifed. Like So, his initial plan was 144 00:08:25,040 --> 00:08:27,000 Speaker 1: to do this at a huge scale, like getting a 145 00:08:27,000 --> 00:08:29,600 Speaker 1: bunch of basically giving getting people to give him money 146 00:08:29,840 --> 00:08:32,880 Speaker 1: to use to buy these international coupons that he would 147 00:08:32,880 --> 00:08:35,000 Speaker 1: then redeem for stamps which he would sell for cash 148 00:08:35,080 --> 00:08:37,840 Speaker 1: and then just redistribute the profits. That was the idea 149 00:08:37,960 --> 00:08:41,120 Speaker 1: on paper cover story. Yes, so he founds a company, 150 00:08:41,600 --> 00:08:44,480 Speaker 1: the Security and Exchange Company, which was not He wasn't 151 00:08:44,480 --> 00:08:46,320 Speaker 1: trying to do a thing with the SEC. The SEC 152 00:08:46,440 --> 00:08:48,360 Speaker 1: did not exist at this point, so he just came 153 00:08:48,440 --> 00:08:50,520 Speaker 1: up with the same name they did, which think of 154 00:08:50,559 --> 00:08:52,959 Speaker 1: that what you will. Um. So he comes up with 155 00:08:53,000 --> 00:08:56,880 Speaker 1: the SEC to facilitate this scheme, and he promises a 156 00:08:57,559 --> 00:09:00,360 Speaker 1: return to investors in ninety days, which is obviously bullshit. 157 00:09:00,400 --> 00:09:03,880 Speaker 1: Any what time someone tells you unless it's drugs. If 158 00:09:03,920 --> 00:09:06,040 Speaker 1: someone's telling you that they're gonna if they're gonna do 159 00:09:06,080 --> 00:09:08,400 Speaker 1: that with your drug money, that might be real, but 160 00:09:08,480 --> 00:09:11,680 Speaker 1: you know it's it's drugs. So um. It did well 161 00:09:11,720 --> 00:09:14,160 Speaker 1: for a few months, but Ponzi never really went through 162 00:09:14,280 --> 00:09:16,719 Speaker 1: like he got a bunch of investments, but he never 163 00:09:16,800 --> 00:09:19,959 Speaker 1: did the international cupon thing. Instead, he just lived the 164 00:09:20,040 --> 00:09:23,520 Speaker 1: high life for months, uh and would repay early investors 165 00:09:23,559 --> 00:09:26,960 Speaker 1: with money from new investors, which is obviously an unstable 166 00:09:27,040 --> 00:09:30,040 Speaker 1: situation that can't last forever. And eventually the Boston Post 167 00:09:30,080 --> 00:09:31,880 Speaker 1: found out what he was up to. They wrote a 168 00:09:31,920 --> 00:09:33,679 Speaker 1: bunch of expose a s on it, and the District 169 00:09:33,760 --> 00:09:36,160 Speaker 1: Attorney of Boston got all aggro about the whole thing. 170 00:09:36,640 --> 00:09:39,160 Speaker 1: In the end, Pond Ponzi was arrested and his name 171 00:09:39,200 --> 00:09:42,200 Speaker 1: went on to adore and countless other similar schemes. So 172 00:09:42,240 --> 00:09:44,440 Speaker 1: that's where we get the Ponzi scheme from you like 173 00:09:44,480 --> 00:09:47,400 Speaker 1: Bernie made Off did that and kind of over time, 174 00:09:47,640 --> 00:09:50,480 Speaker 1: the term pyramid scheme became the catch all term to 175 00:09:50,520 --> 00:09:52,600 Speaker 1: refer to a wide variety of cons that were all 176 00:09:52,640 --> 00:09:55,840 Speaker 1: descended from Ponzi scheme. So Ponzi generally seen as like 177 00:09:55,880 --> 00:09:59,760 Speaker 1: the first pyramid scheme, um but all. It's also worth 178 00:09:59,800 --> 00:10:02,440 Speaker 1: note that he wasn't the first pyramid scheme as a 179 00:10:02,440 --> 00:10:04,240 Speaker 1: matter of fact, if you want to look at the 180 00:10:04,240 --> 00:10:07,920 Speaker 1: real originator and maybe the person Ponzi was copying, um 181 00:10:07,960 --> 00:10:09,760 Speaker 1: as best we can tell, it was a woman named 182 00:10:09,800 --> 00:10:12,520 Speaker 1: Sarah How in Boston in eighteen seventy nine. So the 183 00:10:12,559 --> 00:10:17,160 Speaker 1: first pyramid scheme properly may have been the invention of 184 00:10:16,920 --> 00:10:19,240 Speaker 1: a of a lady in Boston in the eighteen seventies. 185 00:10:19,280 --> 00:10:22,080 Speaker 1: She just very rarely gets the credit for this um. 186 00:10:22,120 --> 00:10:25,240 Speaker 1: But but we're all about, you know, giving credit to 187 00:10:25,240 --> 00:10:27,280 Speaker 1: the women grifters, So I'm gonna talk about Sarah How 188 00:10:27,400 --> 00:10:29,920 Speaker 1: for a little bit. She created a con called the 189 00:10:30,000 --> 00:10:34,439 Speaker 1: Ladies Deposit Company, and the Ladies Deposit Company was ostensibly 190 00:10:34,559 --> 00:10:38,040 Speaker 1: a bank run by women, women and exclusively for women. 191 00:10:38,520 --> 00:10:41,440 Speaker 1: In the eighteen seventies, women weren't allowed to have bank 192 00:10:41,480 --> 00:10:44,480 Speaker 1: account open bank accounts on their own, Like if you 193 00:10:44,559 --> 00:10:46,200 Speaker 1: had a bank account as a one was because like 194 00:10:46,280 --> 00:10:49,000 Speaker 1: your husband or your dad had opened one for you, 195 00:10:49,080 --> 00:10:51,040 Speaker 1: and like they were would would have like a co 196 00:10:51,760 --> 00:10:53,720 Speaker 1: you know whatever on it. Um. So it was a 197 00:10:53,760 --> 00:10:56,240 Speaker 1: fairly huge deal that Sarah was creating a bank that 198 00:10:56,320 --> 00:10:59,920 Speaker 1: was like four women and specifically, Sarah's bank only accepted 199 00:11:00,000 --> 00:11:03,559 Speaker 1: deposits from women who were what she called unprotected i e. 200 00:11:03,760 --> 00:11:06,040 Speaker 1: They did not have a male guardian in charge of 201 00:11:06,080 --> 00:11:08,880 Speaker 1: their finances. So this was like a big deal, but 202 00:11:08,920 --> 00:11:11,800 Speaker 1: of course it was. It was a giant scam, right um. 203 00:11:11,880 --> 00:11:14,720 Speaker 1: So Sarah promised that an exchange for investments from these 204 00:11:14,800 --> 00:11:18,080 Speaker 1: unprotected women, she would give them an eight percent interest 205 00:11:18,679 --> 00:11:21,440 Speaker 1: on their like eight percent return on any money they invested. 206 00:11:21,480 --> 00:11:23,760 Speaker 1: So if you deposited a hundred dollars at the end 207 00:11:23,800 --> 00:11:25,800 Speaker 1: of the year, you'd have a hundred nineties six bucks 208 00:11:25,800 --> 00:11:28,280 Speaker 1: in your account. Um. And she was also giving out 209 00:11:28,280 --> 00:11:30,600 Speaker 1: the first three months of interest in advance to women 210 00:11:30,600 --> 00:11:33,920 Speaker 1: who started accounts with her. So even the day that 211 00:11:33,960 --> 00:11:37,360 Speaker 1: would sound like a scheme, right um, And it was 212 00:11:37,400 --> 00:11:40,880 Speaker 1: definitely a scheme back then. Um. So people at the 213 00:11:40,920 --> 00:11:42,920 Speaker 1: time asked how this could work, how the bank could 214 00:11:42,920 --> 00:11:46,480 Speaker 1: possibly profit doing this, and Shara Sarah ashared them it's 215 00:11:46,480 --> 00:11:48,760 Speaker 1: because it was not a for profit endeavor. She claimed 216 00:11:48,800 --> 00:11:52,280 Speaker 1: that her bank was funded by Quaker philanthropists, um, which 217 00:11:52,320 --> 00:11:54,439 Speaker 1: was a lie. Um. But it was a very successful 218 00:11:54,480 --> 00:11:57,240 Speaker 1: con And you can see why she picked this population 219 00:11:57,280 --> 00:11:59,760 Speaker 1: to con The fact that these women are unprotected means 220 00:11:59,760 --> 00:12:01,760 Speaker 1: like were they going to go to right, like they 221 00:12:01,760 --> 00:12:05,400 Speaker 1: don't have like they don't Presumably these are like kind 222 00:12:05,400 --> 00:12:08,080 Speaker 1: of these poor women, right if you're an independent woman, 223 00:12:08,120 --> 00:12:10,520 Speaker 1: you don't have like a man, either a father or 224 00:12:10,520 --> 00:12:13,520 Speaker 1: a husband. You're kind of in the least protected segment 225 00:12:13,559 --> 00:12:15,880 Speaker 1: of society. So she's going after these people in part 226 00:12:15,960 --> 00:12:18,319 Speaker 1: because she she figures they're not going to be able 227 00:12:18,360 --> 00:12:22,600 Speaker 1: to do anything right. Um. And the con is very 228 00:12:22,640 --> 00:12:24,920 Speaker 1: successful because there was a huge need for a bank 229 00:12:24,960 --> 00:12:27,240 Speaker 1: that would actually serve these women. And in short order, 230 00:12:27,320 --> 00:12:30,080 Speaker 1: Sarah gathered between two hundred and fifty thousand and five 231 00:12:30,160 --> 00:12:34,040 Speaker 1: hundred thousand dollars in eighteen seventies money from close to 232 00:12:34,080 --> 00:12:38,480 Speaker 1: a thousand people. Um a local paper. Yeah, she made 233 00:12:38,520 --> 00:12:40,440 Speaker 1: a lot of money off of that. That was millions 234 00:12:40,440 --> 00:12:44,719 Speaker 1: and modern dollars. Was just the first one to get caught. Basically, No, 235 00:12:44,840 --> 00:12:46,880 Speaker 1: she gets caught before him. But she's a woman, so 236 00:12:47,000 --> 00:12:48,760 Speaker 1: they're not going to name it a Sarah scheme. You 237 00:12:48,800 --> 00:12:53,520 Speaker 1: know that literally does seem to be like why um 238 00:12:53,559 --> 00:12:56,280 Speaker 1: so a local Also, I mean Ponzi scheme was larger, 239 00:12:56,320 --> 00:12:58,640 Speaker 1: but Sarah scheme was not small. This is not a 240 00:12:58,679 --> 00:13:01,320 Speaker 1: low level con. You know, you're making a quarter of 241 00:13:01,320 --> 00:13:03,760 Speaker 1: a million dollars or more in the eighteen seventies, you 242 00:13:03,800 --> 00:13:07,280 Speaker 1: have you have pulled off a good scheme. Um, as 243 00:13:07,320 --> 00:13:11,000 Speaker 1: with Ponzi, A local paper exposed this as a scam. 244 00:13:11,280 --> 00:13:13,160 Speaker 1: Sarah had been a fortune teller in the past, so 245 00:13:13,240 --> 00:13:15,120 Speaker 1: that was a big part of like the reporting on 246 00:13:15,120 --> 00:13:17,200 Speaker 1: her that like, this is not a banker, This is 247 00:13:17,240 --> 00:13:22,040 Speaker 1: like a person who you know, told fortunes and stuff. Um, 248 00:13:22,200 --> 00:13:24,880 Speaker 1: I picked all my financial advisors, is making sure that 249 00:13:24,920 --> 00:13:27,520 Speaker 1: they have a background and fortune telling. You could argue 250 00:13:27,559 --> 00:13:31,599 Speaker 1: that that's what any stockbroker is. I mean, yeah, I 251 00:13:31,760 --> 00:13:34,000 Speaker 1: just don't want to admit it. But yeah, there is 252 00:13:34,040 --> 00:13:36,720 Speaker 1: that fun article about how there's that hamster that has 253 00:13:36,840 --> 00:13:42,679 Speaker 1: outperformed the vast majority of humans in the crypto industry, um, 254 00:13:42,720 --> 00:13:45,480 Speaker 1: which I I do love. Um. They even made acute 255 00:13:45,520 --> 00:13:49,000 Speaker 1: little desk um. So yeah, and the the articles also 256 00:13:49,080 --> 00:13:52,240 Speaker 1: exposed that, in addition to having a background that maybe 257 00:13:52,440 --> 00:13:55,360 Speaker 1: was not the most credible basis for a someone who 258 00:13:55,360 --> 00:13:59,040 Speaker 1: founded a bank, she had uh you know, essentially created 259 00:13:59,440 --> 00:14:02,120 Speaker 1: I mean, she didn't create a Ponzi scream. She created 260 00:14:02,120 --> 00:14:04,400 Speaker 1: a house scheme, and Pondsi created a house scheme. But 261 00:14:04,480 --> 00:14:06,000 Speaker 1: I'm going to quote from a write up on long 262 00:14:06,080 --> 00:14:09,240 Speaker 1: Reads here, when a new depositor arrived, how would use 263 00:14:09,280 --> 00:14:11,319 Speaker 1: their money to pay out older clients. So the whole 264 00:14:11,360 --> 00:14:14,240 Speaker 1: scheme required a constant influx of new depositors to pay 265 00:14:14,240 --> 00:14:16,920 Speaker 1: out the old ones. Like every other Ponzi fraudster, House 266 00:14:16,960 --> 00:14:19,240 Speaker 1: Bank would have eventually run out of new money. The 267 00:14:19,320 --> 00:14:22,320 Speaker 1: run of stories in the Boston Daily Advertiser instilled enough 268 00:14:22,360 --> 00:14:24,480 Speaker 1: fear in the banks investors that they began to withdraw 269 00:14:24,520 --> 00:14:26,880 Speaker 1: their money, and eventually there was a run on House Bank. 270 00:14:27,240 --> 00:14:29,200 Speaker 1: It took two weeks in five days from the first 271 00:14:29,240 --> 00:14:32,360 Speaker 1: story published in the Advertiser uncovering house fraud before she 272 00:14:32,440 --> 00:14:35,680 Speaker 1: was arrested. The press extended her victims a modicum of sympathy, 273 00:14:35,720 --> 00:14:38,160 Speaker 1: describing their plights will also reminding the reader that they 274 00:14:38,200 --> 00:14:40,760 Speaker 1: deserved their pain for trusting a woman with their money. 275 00:14:41,200 --> 00:14:43,200 Speaker 1: I put every dollar I had into the bank, and 276 00:14:43,240 --> 00:14:45,440 Speaker 1: if I lose it, I am a beggar. One depositor 277 00:14:45,520 --> 00:14:47,800 Speaker 1: told the Boston Globe at the time. I wanted the 278 00:14:47,840 --> 00:14:49,920 Speaker 1: interest so badly that I placed a mortgage on my 279 00:14:49,960 --> 00:14:52,920 Speaker 1: furniture to secure the principle to deposit. Oh I wish 280 00:14:52,960 --> 00:14:55,200 Speaker 1: I hadn't now, for I shall have my goods sold 281 00:14:55,280 --> 00:15:01,160 Speaker 1: from under my head, said another. Those characters were made 282 00:15:01,200 --> 00:15:06,760 Speaker 1: up by writing that story because they yeah, yeah uh. 283 00:15:07,280 --> 00:15:13,200 Speaker 1: Also to a woman, I'm a journalist. Also, isn't it 284 00:15:13,280 --> 00:15:16,560 Speaker 1: true that women couldn't women couldn't have credit cards until 285 00:15:16,560 --> 00:15:21,000 Speaker 1: like the nineteen seventies, Like yeah, it's like a very 286 00:15:21,200 --> 00:15:26,200 Speaker 1: uh DP entrenched sort of myth about women. Yeah, it's 287 00:15:26,360 --> 00:15:28,840 Speaker 1: um it's it's like there's a lot of fund up 288 00:15:28,840 --> 00:15:31,600 Speaker 1: stuff about like what women were and weren't allowed to, 289 00:15:31,880 --> 00:15:34,600 Speaker 1: uh to do financially, but in the eighteen seventy it 290 00:15:34,640 --> 00:15:37,800 Speaker 1: was basically nothing. So she was going after the most 291 00:15:37,840 --> 00:15:40,520 Speaker 1: desperate people. Um. And it says a lot about society 292 00:15:40,520 --> 00:15:42,160 Speaker 1: that they were just like, well they trusted a woman 293 00:15:42,200 --> 00:15:44,480 Speaker 1: with that money, you know, even though like well they 294 00:15:44,480 --> 00:15:47,120 Speaker 1: weren't allowed to trust a man with their money, like 295 00:15:47,160 --> 00:15:51,200 Speaker 1: they legally couldn't. What were they supposed to do? Um? Right? 296 00:15:51,560 --> 00:15:53,760 Speaker 1: I mean that's also probably why I got picked up. 297 00:15:53,760 --> 00:15:55,640 Speaker 1: And like we still know the story is because it 298 00:15:55,760 --> 00:16:01,160 Speaker 1: like goes to prove a thing that every buddy, all 299 00:16:01,560 --> 00:16:05,600 Speaker 1: the white men in existence wanted to believe. So yeah, 300 00:16:05,720 --> 00:16:08,680 Speaker 1: it's funny, um and by which I mean it's sucked up. 301 00:16:08,720 --> 00:16:11,800 Speaker 1: So and I guess I mean it should be a 302 00:16:11,800 --> 00:16:14,520 Speaker 1: house scheme, we should call them house schemes and fairness, 303 00:16:14,560 --> 00:16:17,120 Speaker 1: but also a Ponzi scheme. Is just a great name. 304 00:16:17,480 --> 00:16:21,200 Speaker 1: Ponzi did have a better name objectively, for for calling 305 00:16:21,200 --> 00:16:24,320 Speaker 1: a scheme. Um, it's funny, it's Italian. We all know 306 00:16:24,360 --> 00:16:27,360 Speaker 1: the Italian scampie trusted. You know, it's just good. So 307 00:16:27,640 --> 00:16:29,760 Speaker 1: Sarah how and Charles Ponzi were the first of what 308 00:16:29,800 --> 00:16:33,760 Speaker 1: would become an American institution. Confidence games of one sort 309 00:16:33,800 --> 00:16:37,000 Speaker 1: or another have existed probably as long as economies have existed. 310 00:16:37,240 --> 00:16:39,720 Speaker 1: One could argue that most states and corporations are just 311 00:16:39,800 --> 00:16:42,240 Speaker 1: confidence games on a very grand scale, but I'm not 312 00:16:42,280 --> 00:16:45,600 Speaker 1: gonna get into that right now. What made the schemes 313 00:16:45,640 --> 00:16:48,600 Speaker 1: that how in Ponzi started different was the fact that 314 00:16:48,640 --> 00:16:54,360 Speaker 1: they were built to masquerade within the facade of reputable institutions, banks, 315 00:16:54,400 --> 00:16:58,760 Speaker 1: and other like financial investment companies. By the late eighteen hundreds, 316 00:16:58,800 --> 00:17:02,320 Speaker 1: capitalism was a very solid concept for most Americans, and 317 00:17:02,520 --> 00:17:06,040 Speaker 1: inequality was soaring. People were enticed by a scam that 318 00:17:06,119 --> 00:17:09,120 Speaker 1: seemed to offer them away out of wage slavery by 319 00:17:09,160 --> 00:17:11,440 Speaker 1: doing what looked on the surface to be the same 320 00:17:11,480 --> 00:17:13,720 Speaker 1: thing that all of the rich people around them were doing. Right, 321 00:17:13,960 --> 00:17:16,920 Speaker 1: They weren't promising anything like new and fantastic. They were saying, hey, 322 00:17:17,000 --> 00:17:18,879 Speaker 1: you know all those bankers are rich because of interest. 323 00:17:18,960 --> 00:17:20,840 Speaker 1: Here's a way you can get interested, you can get 324 00:17:20,880 --> 00:17:23,080 Speaker 1: out and like move up into the middle class and whatnot. 325 00:17:23,160 --> 00:17:26,159 Speaker 1: Right not, this is a you know, fanciful scheme. This 326 00:17:26,240 --> 00:17:29,360 Speaker 1: is an investment in its investment that unlike the other 327 00:17:29,440 --> 00:17:31,399 Speaker 1: investments that you know, the rich people are in, Like, 328 00:17:31,440 --> 00:17:33,600 Speaker 1: I'm letting you win on this, right. We talked about 329 00:17:33,640 --> 00:17:36,320 Speaker 1: this a little bit with a nessarist scheme. Um. It's 330 00:17:36,320 --> 00:17:39,200 Speaker 1: a big part of just saying like, hey, this, if 331 00:17:39,240 --> 00:17:41,720 Speaker 1: you frame your scheme as we're giving regular people a 332 00:17:41,840 --> 00:17:44,200 Speaker 1: chance to do the stuff rich people do all the time, 333 00:17:44,560 --> 00:17:48,280 Speaker 1: that's the best kind of financial scheme because you're building 334 00:17:48,280 --> 00:17:50,840 Speaker 1: it on a basis, well, people know there's some way 335 00:17:50,880 --> 00:17:53,320 Speaker 1: to make money with interest. People know some people get 336 00:17:53,400 --> 00:17:55,880 Speaker 1: rich off of investments. Why couldn't it be me this 337 00:17:55,920 --> 00:17:59,400 Speaker 1: one time? Haven't I worked hard enough? You know? Um? 338 00:17:59,560 --> 00:18:01,679 Speaker 1: And then kids of Bernie made off. He did it 339 00:18:01,760 --> 00:18:06,720 Speaker 1: to the people who were the financial inst which is like, 340 00:18:06,920 --> 00:18:09,320 Speaker 1: wait a second, nobody knows what how any of this 341 00:18:09,359 --> 00:18:11,760 Speaker 1: ship works. And that's why we're you're never going to 342 00:18:11,840 --> 00:18:14,000 Speaker 1: hear about made off on behind the bastards because I 343 00:18:14,040 --> 00:18:19,200 Speaker 1: don't have a problem with ye oh of course, Yeah, yeah, 344 00:18:19,720 --> 00:18:21,840 Speaker 1: avenging angel. I mean, I'm sure he did a lot 345 00:18:21,840 --> 00:18:24,560 Speaker 1: of but like, I don't give a shit. Um, his 346 00:18:24,720 --> 00:18:29,240 Speaker 1: victims were people like whatever. Um. So in Sarah's day, 347 00:18:29,240 --> 00:18:32,199 Speaker 1: for impoverished single women. Um, it's like the thing that 348 00:18:32,480 --> 00:18:34,879 Speaker 1: she was promising this downtrond group of people was like, 349 00:18:35,119 --> 00:18:37,280 Speaker 1: you know that rich people have number one, have bank 350 00:18:37,320 --> 00:18:40,080 Speaker 1: accounts and make interest. I'm going to give you that opportunity. 351 00:18:40,080 --> 00:18:41,639 Speaker 1: So it didn't see these were people weren't making a 352 00:18:41,680 --> 00:18:44,040 Speaker 1: dumb decision. They thought they were getting a chance to 353 00:18:44,040 --> 00:18:46,199 Speaker 1: do the thing that the people who have money have 354 00:18:46,280 --> 00:18:50,119 Speaker 1: been doing forever. In Ponzi's day, investments like the stock 355 00:18:50,160 --> 00:18:51,920 Speaker 1: market was starting to get to be a huge deal 356 00:18:52,000 --> 00:18:54,159 Speaker 1: and and he made people feel like, well now you 357 00:18:54,200 --> 00:18:57,280 Speaker 1: can get in, get in on that thing. Um. Both 358 00:18:57,320 --> 00:19:00,600 Speaker 1: schemes work because most of the targeted people sign tutaneously 359 00:19:00,720 --> 00:19:03,760 Speaker 1: misunderstood the real thing the scams were pretending to be, 360 00:19:04,119 --> 00:19:07,520 Speaker 1: but also knew enough about that real thing to know 361 00:19:07,640 --> 00:19:10,960 Speaker 1: that something like what the scammer was promising was how 362 00:19:11,000 --> 00:19:13,920 Speaker 1: all of the rich people they knew had gotten that way. Um. 363 00:19:14,160 --> 00:19:17,480 Speaker 1: So that's why these things work. Now, the exact origins 364 00:19:17,480 --> 00:19:20,200 Speaker 1: of the term pyramid scheme are unclear, but the term 365 00:19:20,320 --> 00:19:22,720 Speaker 1: certainly seems to have come into widespread use during the 366 00:19:22,720 --> 00:19:26,600 Speaker 1: early nineteen seventies thanks to a scam cosmetics company named 367 00:19:26,640 --> 00:19:31,760 Speaker 1: Holiday Magic Um, which if if you listen to the 368 00:19:31,760 --> 00:19:34,239 Speaker 1: podcast The Dream, which is a very good podcast, they 369 00:19:34,280 --> 00:19:35,800 Speaker 1: go into a lot of detail about this. I'm just 370 00:19:35,800 --> 00:19:38,880 Speaker 1: gonna give you the cliffs notes. So Holiday Magic had 371 00:19:38,920 --> 00:19:41,800 Speaker 1: started in the mid nineteen sixties the project of a 372 00:19:41,840 --> 00:19:45,439 Speaker 1: man named William Penn Patrick, and he old Billy was 373 00:19:45,480 --> 00:19:47,840 Speaker 1: a real character. He had he had had a bunch 374 00:19:47,840 --> 00:19:50,240 Speaker 1: of failed businesses. He apparently came upon he was like 375 00:19:50,320 --> 00:19:53,959 Speaker 1: walking past and smelled like or like solid like cosmetics, 376 00:19:53,960 --> 00:19:56,680 Speaker 1: stacked up in some guy's garage and bought the business 377 00:19:56,720 --> 00:20:00,520 Speaker 1: off of him. It was very like sketchy story. Um. 378 00:20:01,200 --> 00:20:04,160 Speaker 1: William Penn Patrick is a fascinating guy. He unsuccessfully ran 379 00:20:04,200 --> 00:20:08,879 Speaker 1: against Ronald Reagan from the right as governor of California. Um. 380 00:20:08,880 --> 00:20:11,480 Speaker 1: He was a one time vice presidential nominee of a 381 00:20:11,560 --> 00:20:16,439 Speaker 1: party called the California Theocratic Party, which just seems like 382 00:20:16,560 --> 00:20:19,080 Speaker 1: it's straight up fascism. And of course he was a 383 00:20:19,119 --> 00:20:23,919 Speaker 1: member of the John Birch Society. So yeah, you know 384 00:20:24,040 --> 00:20:27,040 Speaker 1: this guy. Right, everybody's got a picture of William Penn 385 00:20:27,119 --> 00:20:31,360 Speaker 1: Patrick in their hair in their head. Now, Holiday Magic 386 00:20:31,840 --> 00:20:35,199 Speaker 1: sounds like a like a name you would give to 387 00:20:35,320 --> 00:20:43,879 Speaker 1: actual snake oil, like that you would run that, you yeah, 388 00:20:43,880 --> 00:20:46,720 Speaker 1: Whereas like we're I feel like we're learning the importance 389 00:20:46,760 --> 00:20:50,560 Speaker 1: of names because like with Ponzi and uh am Way, 390 00:20:50,840 --> 00:20:55,399 Speaker 1: sounds like you know that they build fucking trucks or something. 391 00:20:55,560 --> 00:21:01,560 Speaker 1: You know, like it's like yeah, yeah exactly, or or 392 00:21:01,600 --> 00:21:04,840 Speaker 1: at the very least like a place to buy sturdy 393 00:21:04,920 --> 00:21:10,520 Speaker 1: groceries or something like that. You know. Um So, Holiday 394 00:21:10,600 --> 00:21:13,440 Speaker 1: Magic was a multi level marketing company. It was not 395 00:21:13,520 --> 00:21:16,760 Speaker 1: the first. In fact, by the time William Pennpatrick started it, 396 00:21:16,840 --> 00:21:19,080 Speaker 1: there was Avon, am Way, Mary Kay, a bunch of 397 00:21:19,080 --> 00:21:22,359 Speaker 1: other MLMs existed. We'll talk about what maybe the first 398 00:21:22,480 --> 00:21:26,080 Speaker 1: was in a little bit, but Holiday Magic was probably 399 00:21:26,119 --> 00:21:28,880 Speaker 1: was within the first generation of such companies, and it 400 00:21:28,920 --> 00:21:33,120 Speaker 1: was by far the scammiest. The basic idea behind Holiday 401 00:21:33,119 --> 00:21:36,040 Speaker 1: Magic was that women would become distributors and buy makeup 402 00:21:36,119 --> 00:21:38,200 Speaker 1: kits that they could then throw parties where they did 403 00:21:38,200 --> 00:21:40,120 Speaker 1: the makeup for their friends and they would sell them 404 00:21:40,119 --> 00:21:44,080 Speaker 1: makeup via this. The makeup was terrible and it was 405 00:21:44,119 --> 00:21:46,840 Speaker 1: so heavily marked up that you know, number one, it 406 00:21:46,840 --> 00:21:49,200 Speaker 1: was very much impossible for distributors to make money off 407 00:21:49,200 --> 00:21:51,760 Speaker 1: of it. And number two, William Pennpatrick made a shipload 408 00:21:51,760 --> 00:21:53,280 Speaker 1: of money off it. He was a very short order, 409 00:21:53,320 --> 00:21:56,080 Speaker 1: making like six million dollars a month um. He had 410 00:21:56,160 --> 00:21:59,240 Speaker 1: quite a few mottos for his distributors. One was tell 411 00:21:59,320 --> 00:22:02,160 Speaker 1: recruits that going to be happier, healthier, wealthier and receive 412 00:22:02,240 --> 00:22:04,600 Speaker 1: what they went out of life with the Holiday Magic Program. 413 00:22:04,640 --> 00:22:07,080 Speaker 1: Any person who fails in the Holiday Magic Program must 414 00:22:07,080 --> 00:22:10,480 Speaker 1: fall into one of the following categories lazy, stupid, greedy, 415 00:22:10,680 --> 00:22:18,159 Speaker 1: or dead. Yeah he's the best. Also is he a 416 00:22:18,160 --> 00:22:24,879 Speaker 1: time traveler from the nineteen twenties? Who? Okack? You know that? Okay, okay, 417 00:22:25,560 --> 00:22:28,440 Speaker 1: this is happening in the seventies though right the voice, Yeah, 418 00:22:28,480 --> 00:22:30,159 Speaker 1: this is happening in the seventies. I mean, that's the 419 00:22:30,240 --> 00:22:32,320 Speaker 1: voice that I pitched behind the bastards to you. One 420 00:22:32,400 --> 00:22:34,720 Speaker 1: we're gonna talk about like Jack, We're gonna talk about Saddam. 421 00:22:34,760 --> 00:22:37,640 Speaker 1: Who's saying it was because you were doing it all 422 00:22:37,760 --> 00:22:40,520 Speaker 1: with while doing a soft shoe and like taking your 423 00:22:40,520 --> 00:22:43,600 Speaker 1: hat top hat on and off, juggling a little Yeah, 424 00:22:46,800 --> 00:22:53,719 Speaker 1: that's the guy. So his personal motto was those who 425 00:22:53,800 --> 00:22:56,080 Speaker 1: condemn wealth are those who have none and see no 426 00:22:56,240 --> 00:22:59,919 Speaker 1: chance of getting it. Uh So again you see the 427 00:23:00,040 --> 00:23:02,520 Speaker 1: eye that he is. Um. Now, as I said, there 428 00:23:02,520 --> 00:23:04,320 Speaker 1: were other m l m s out there at the time. 429 00:23:04,520 --> 00:23:07,399 Speaker 1: What made William Pennpatrick special, and you really have to 430 00:23:07,400 --> 00:23:10,280 Speaker 1: say all three names, is that he was very astutely 431 00:23:10,440 --> 00:23:13,199 Speaker 1: married the kind of American dream style grift of the 432 00:23:13,280 --> 00:23:17,160 Speaker 1: pyramid scheme with cultic influence techniques. So he was kind 433 00:23:17,160 --> 00:23:19,439 Speaker 1: of the first to like, I'm not just gonna have 434 00:23:19,800 --> 00:23:21,840 Speaker 1: a money grift to get money out of people. I'm 435 00:23:21,840 --> 00:23:24,000 Speaker 1: gonna keep them there by kind of making my grift 436 00:23:24,040 --> 00:23:26,960 Speaker 1: into a cult. Right, because if you're just taking people's 437 00:23:26,960 --> 00:23:29,400 Speaker 1: money in a scam, eventually they'll figure it out and leave. 438 00:23:29,600 --> 00:23:31,679 Speaker 1: If you get them to like believe that they're getting 439 00:23:31,880 --> 00:23:36,040 Speaker 1: them getting scammed is like makes them morally superior, like 440 00:23:36,280 --> 00:23:38,679 Speaker 1: keys them in spiritually to something as part of some 441 00:23:38,760 --> 00:23:41,719 Speaker 1: sort of sacred you know thing, then you can keep 442 00:23:41,800 --> 00:23:45,960 Speaker 1: them forever. Right, Like that's the Church of scientology, you know. Um, 443 00:23:46,000 --> 00:23:48,720 Speaker 1: that's the way to to really make a grift last. 444 00:23:48,800 --> 00:23:51,440 Speaker 1: And William Penn Patrick is kind of the first MLM 445 00:23:51,520 --> 00:23:54,160 Speaker 1: dude to get it right. Well sort of, he went 446 00:23:54,200 --> 00:23:56,919 Speaker 1: a little far. I was gonna say that Holiday Magic 447 00:23:57,040 --> 00:24:00,160 Speaker 1: is too stupid a name for a cult, and then 448 00:24:00,200 --> 00:24:07,960 Speaker 1: you immediately disproved that by saying scientology. Uh, well of, 449 00:24:08,800 --> 00:24:11,560 Speaker 1: and you know the cult. He had another organization that 450 00:24:11,640 --> 00:24:13,520 Speaker 1: was the cult, and this was called It was a 451 00:24:13,560 --> 00:24:16,879 Speaker 1: series of course is called Leadership Dynamics, which were build 452 00:24:17,000 --> 00:24:20,040 Speaker 1: is like a training conference for Holiday Magic and other 453 00:24:20,160 --> 00:24:23,600 Speaker 1: MLM distributors. So like on paper, leadership Dynamics is of 454 00:24:23,680 --> 00:24:25,359 Speaker 1: course that you take in order to learn how to 455 00:24:25,440 --> 00:24:29,439 Speaker 1: run your own business selling MLM products. The reality of 456 00:24:29,480 --> 00:24:32,200 Speaker 1: the program is that people would pay like a thousand 457 00:24:32,200 --> 00:24:35,000 Speaker 1: dollars and again seventies money to hang out in a 458 00:24:35,040 --> 00:24:38,199 Speaker 1: horrible hotel getting locked in coffins and mentally abused. Like 459 00:24:38,240 --> 00:24:40,680 Speaker 1: it was all these like weird power games and ship 460 00:24:40,800 --> 00:24:44,600 Speaker 1: like quasi torture of people. Um. It involved a lot 461 00:24:44,680 --> 00:24:47,000 Speaker 1: of we've talked about sinning on and Chuck de Eric. 462 00:24:47,000 --> 00:24:48,920 Speaker 1: It involved a lot of the game where like you'll 463 00:24:49,000 --> 00:24:51,240 Speaker 1: sit around in a circle and everyone in the group 464 00:24:51,280 --> 00:24:54,080 Speaker 1: will harass one person for a period of time and 465 00:24:54,119 --> 00:24:56,040 Speaker 1: insult them. Like it was a lot of like fucked 466 00:24:56,080 --> 00:25:00,520 Speaker 1: up cult ship, you know, yeah, yeah, next Sea Vibes. 467 00:25:00,520 --> 00:25:03,240 Speaker 1: Everything that came after Nexium is very much descended from 468 00:25:03,240 --> 00:25:07,080 Speaker 1: this cult, from this cult pyramid scheme too. Now again, 469 00:25:07,440 --> 00:25:09,720 Speaker 1: if you want to learn a lot more detail about this, 470 00:25:09,720 --> 00:25:12,359 Speaker 1: because I'm really breathing over a lot, the podcast The 471 00:25:12,480 --> 00:25:15,119 Speaker 1: Dream has done an excellent series of episodes on this. 472 00:25:15,560 --> 00:25:17,800 Speaker 1: For our purposes, what you need to know is that 473 00:25:17,920 --> 00:25:20,280 Speaker 1: Chuck's Dream fell apart as a result of the fact 474 00:25:20,320 --> 00:25:23,639 Speaker 1: that he was just promising way too much and it 475 00:25:23,720 --> 00:25:26,240 Speaker 1: wasn't really a product he was selling. He was just 476 00:25:26,280 --> 00:25:29,280 Speaker 1: getting money straight from distributors to sell the product, and 477 00:25:29,359 --> 00:25:31,680 Speaker 1: like that's that. That was too much of a scam. 478 00:25:31,960 --> 00:25:35,080 Speaker 1: Holiday Magic generated enough complaints that it kept coming up 479 00:25:35,080 --> 00:25:38,120 Speaker 1: in the House of Representatives, and eventually the FTC took 480 00:25:38,160 --> 00:25:40,679 Speaker 1: him to task for being a pyramid scheme. And I'm 481 00:25:40,720 --> 00:25:43,440 Speaker 1: going to quote from the excellent book Cultish by Amanda 482 00:25:43,560 --> 00:25:47,720 Speaker 1: Montel here. Patrick's behavior was unhinged from all angles, But 483 00:25:47,760 --> 00:25:50,200 Speaker 1: when the FTC brought him to court, their most compelling 484 00:25:50,280 --> 00:25:52,560 Speaker 1: argument against him, and what eventually allowed them to shut 485 00:25:52,600 --> 00:25:55,960 Speaker 1: down Holiday Magic, was their points about his speech. Ultimately, 486 00:25:56,000 --> 00:25:59,159 Speaker 1: the court ruled that Patrick's deceptive, hyperbole, loaded buzzwords, and 487 00:25:59,200 --> 00:26:01,959 Speaker 1: gas lighting to guysed as inspiration were what defined him 488 00:26:01,960 --> 00:26:04,800 Speaker 1: as a pyramid schemer. This makes sense because in every 489 00:26:04,800 --> 00:26:07,200 Speaker 1: corner of life, business, and otherwise, when you can tell 490 00:26:07,240 --> 00:26:09,800 Speaker 1: deep down that something is ethically wrong but are having 491 00:26:09,880 --> 00:26:12,920 Speaker 1: trouble pinpointing why, language is a good place to look 492 00:26:12,960 --> 00:26:15,880 Speaker 1: for evidence. This is where the FTC turned to squash 493 00:26:15,920 --> 00:26:18,560 Speaker 1: Holiday Magic, and over the next few years, it's attorneys 494 00:26:18,600 --> 00:26:22,080 Speaker 1: sited the same kind of outlinedish, fraudulent messaging as they 495 00:26:22,119 --> 00:26:25,440 Speaker 1: prosecuted a litany of mL ms, including the biggest one 496 00:26:25,440 --> 00:26:30,119 Speaker 1: they went after, am Way. Now am Way, as we 497 00:26:30,160 --> 00:26:32,800 Speaker 1: started the podcast by stating, is legally not a pyramid 498 00:26:32,840 --> 00:26:36,320 Speaker 1: scheme um And to explain why the FDC blasted William 499 00:26:36,320 --> 00:26:38,959 Speaker 1: Pinnpatrick Scam scam to hell, but did not do that 500 00:26:39,000 --> 00:26:40,960 Speaker 1: to am Way, we have to talk a little bit 501 00:26:40,960 --> 00:26:43,760 Speaker 1: about the men who founded am Way. We're gonna be 502 00:26:44,000 --> 00:26:46,119 Speaker 1: veering back and forward in time here so they can 503 00:26:46,119 --> 00:26:49,960 Speaker 1: we cut in some of Cody's time machine noises here. Okay, well, 504 00:26:50,520 --> 00:26:54,160 Speaker 1: did you say no, No, it's horrible. Let me try. 505 00:26:56,600 --> 00:26:59,080 Speaker 1: Oh right, right, Okay, I know what you're talking like. 506 00:27:00,160 --> 00:27:03,879 Speaker 1: I think he'd be proud, Um, I feel smiling up, 507 00:27:04,160 --> 00:27:07,439 Speaker 1: smiling upon me from heaven. By the way, so you know, 508 00:27:07,520 --> 00:27:09,840 Speaker 1: I host the show The Daily Zy, So I'm not 509 00:27:09,920 --> 00:27:12,439 Speaker 1: just putting that in there as a plug. But we haven't. 510 00:27:13,320 --> 00:27:17,160 Speaker 1: We have been covering Um co host with Miles Gray, 511 00:27:17,200 --> 00:27:19,679 Speaker 1: former guest on the show. We've been covering a lot 512 00:27:19,720 --> 00:27:23,840 Speaker 1: of Amazon lately. And they also have coffins and like 513 00:27:23,960 --> 00:27:26,800 Speaker 1: scream at each other until they start weeping at work, 514 00:27:27,119 --> 00:27:30,080 Speaker 1: Like did you know about the about them? We're doing 515 00:27:30,119 --> 00:27:35,120 Speaker 1: this the holiday Magic scheme Amazon Amazon booths, which are 516 00:27:35,200 --> 00:27:39,960 Speaker 1: just these like booths I haven't heard and like they 517 00:27:40,080 --> 00:27:45,320 Speaker 1: are like you're good, you aren't worth it. It's basically 518 00:27:45,320 --> 00:27:47,359 Speaker 1: like a place you can a coffin you can cry 519 00:27:47,400 --> 00:27:51,320 Speaker 1: in for like fifteen minutes. That's God as hell, Jack, Yes, 520 00:27:51,600 --> 00:27:56,000 Speaker 1: I love it. I love to see a company respecting tradition. 521 00:27:56,160 --> 00:27:59,880 Speaker 1: You know exactly what it's all about. To me, embraced tradition, 522 00:28:00,480 --> 00:28:04,720 Speaker 1: reject modernity. Put your employees and coffins and scream at them. 523 00:28:05,160 --> 00:28:07,320 Speaker 1: Speaking of that, Jack, do you know who else puts 524 00:28:07,320 --> 00:28:09,840 Speaker 1: their employees and coffins and screams at them. I mean 525 00:28:10,000 --> 00:28:12,199 Speaker 1: it's going to be like an accidental Amazon at like 526 00:28:12,320 --> 00:28:15,680 Speaker 1: there's a decent JA that's a non zero. What happened 527 00:28:15,880 --> 00:28:20,119 Speaker 1: might be Chevron, you know, I really hope not. I 528 00:28:20,160 --> 00:28:22,960 Speaker 1: don't know. Look, I think one of the great things 529 00:28:23,000 --> 00:28:25,360 Speaker 1: about this country is that we all have a sacred 530 00:28:25,440 --> 00:28:29,080 Speaker 1: right to force our employees into coffins and scream at them. 531 00:28:29,640 --> 00:28:32,439 Speaker 1: It's the American way. It's the American way. It's the 532 00:28:32,520 --> 00:28:38,240 Speaker 1: am way. Yeah, that's what comes from right, Yes, yeah, well, yes, 533 00:28:38,240 --> 00:28:40,360 Speaker 1: the dead actually does. We'll be talking about that briefly, 534 00:28:40,440 --> 00:28:58,000 Speaker 1: but first products, Ah, we are bad. I don't know, Jack, 535 00:28:58,040 --> 00:29:02,160 Speaker 1: I don't know. It's my connection slower and split out. 536 00:29:03,080 --> 00:29:06,960 Speaker 1: We've been casting too many pods lately. I'm I'm I'm 537 00:29:07,040 --> 00:29:11,680 Speaker 1: overwhelmed by the amount of content of it. No, I 538 00:29:11,720 --> 00:29:13,560 Speaker 1: get it, man, I'm right there with you. We just 539 00:29:13,600 --> 00:29:17,480 Speaker 1: recorded our thousandth episode of Daily's Guys Jesus clost on 540 00:29:17,560 --> 00:29:22,800 Speaker 1: a cracker. But we realized that because somebody wrote it 541 00:29:22,800 --> 00:29:27,000 Speaker 1: into an a k Otherwise, Yeah, you never. I have 542 00:29:27,040 --> 00:29:29,280 Speaker 1: no idea how any podcasts I've done other than far 543 00:29:29,320 --> 00:29:34,440 Speaker 1: too many. Uh. But you know the nice thing about this, Jack, 544 00:29:34,480 --> 00:29:37,959 Speaker 1: is when we're both dead teenagers a hundred years from now, 545 00:29:38,000 --> 00:29:40,920 Speaker 1: we'll be able to make us say literally anything. There's 546 00:29:40,960 --> 00:29:46,440 Speaker 1: there's plenty of our voices. Yeah, we can finally immortality Jack. Yes, 547 00:29:46,600 --> 00:29:48,640 Speaker 1: and then my kids will finally be able to hear 548 00:29:48,680 --> 00:29:53,240 Speaker 1: me speak to them because uh yeah, yeah, you're famously 549 00:29:53,280 --> 00:29:56,760 Speaker 1: have never never speak around your children. Um, I only 550 00:29:56,760 --> 00:30:00,640 Speaker 1: speak cling on to my children. You're doing like a 551 00:30:00,680 --> 00:30:04,320 Speaker 1: Star Trek version of the experiment that one PopEd it. 552 00:30:06,200 --> 00:30:09,880 Speaker 1: There's actually a psychologist who did did a klingon thing 553 00:30:09,960 --> 00:30:12,480 Speaker 1: to his children. Don't only spoke cling on around them. 554 00:30:12,520 --> 00:30:17,760 Speaker 1: That's that's this hard, this beautiful mix of like kind 555 00:30:17,800 --> 00:30:20,520 Speaker 1: of abusive and also kind of mad. Like it's a 556 00:30:20,560 --> 00:30:26,800 Speaker 1: really unique area. Um okay. So am Way got its 557 00:30:26,920 --> 00:30:29,920 Speaker 1: start thanks to a company called neutral Light, which was 558 00:30:30,000 --> 00:30:33,120 Speaker 1: a dietary supplement business founded in nineteen thirty four. And 559 00:30:33,160 --> 00:30:35,960 Speaker 1: I think from the name Neutralite, you know it's a scam. 560 00:30:36,080 --> 00:30:40,160 Speaker 1: Um yeah, yeah, Now the founder was an American businessman 561 00:30:40,360 --> 00:30:44,720 Speaker 1: named Carl F. Rainberg, who, as far as I can tell, yeah, 562 00:30:44,800 --> 00:30:46,400 Speaker 1: I don't know the degree to which this guy was 563 00:30:46,440 --> 00:30:50,200 Speaker 1: a total con artist. Neutralite definitely sounds like a scam. 564 00:30:50,200 --> 00:30:53,960 Speaker 1: By some accounts, it maybe the first MLM company, but 565 00:30:54,080 --> 00:30:57,479 Speaker 1: also I think it was m l m's were not 566 00:30:57,680 --> 00:31:00,320 Speaker 1: quite as much of a of a bald faced at 567 00:31:00,320 --> 00:31:02,200 Speaker 1: that point because it was really just like a modification 568 00:31:02,240 --> 00:31:04,080 Speaker 1: of door to door salesman. Right. That was a big 569 00:31:04,080 --> 00:31:06,240 Speaker 1: thing at the time. The fact that the idea that 570 00:31:06,280 --> 00:31:08,160 Speaker 1: like someone would buy products and then go to door 571 00:31:08,200 --> 00:31:11,480 Speaker 1: to door selling them was like not weird, um like 572 00:31:11,560 --> 00:31:15,880 Speaker 1: it is now. Um So, I don't know. Rainboard had 573 00:31:15,880 --> 00:31:18,480 Speaker 1: been working for the steel industry as well as Colgate 574 00:31:18,560 --> 00:31:21,400 Speaker 1: and China when the Chinese Civil War forced him to flee, 575 00:31:21,720 --> 00:31:24,400 Speaker 1: and he claimed that seeing so much poverty and starvation 576 00:31:24,440 --> 00:31:26,440 Speaker 1: convinced him of the value of vitamins, and so he 577 00:31:26,480 --> 00:31:30,600 Speaker 1: got into the dietary supplement business next again. Neutralite maybe 578 00:31:30,680 --> 00:31:34,280 Speaker 1: the first MLM company. It's unclear to me how scammy 579 00:31:34,320 --> 00:31:38,840 Speaker 1: it was. Um. He sold his products wholesale to distributors 580 00:31:38,840 --> 00:31:42,160 Speaker 1: who eventually formed their own companies to sell it. Uh. 581 00:31:42,160 --> 00:31:44,680 Speaker 1: And two of the people who became independent distributors of 582 00:31:44,720 --> 00:31:49,120 Speaker 1: Neutralite where j Van Andel and Richard divorce They got 583 00:31:49,120 --> 00:31:51,719 Speaker 1: involved in nineteen forty nine. Yeah, we all know that 584 00:31:51,800 --> 00:31:59,600 Speaker 1: last name, yep. For the first men. Oh yeah, there's 585 00:31:59,600 --> 00:32:02,120 Speaker 1: a big old divorced. I feel like we need like 586 00:32:02,160 --> 00:32:07,200 Speaker 1: a horrifying sound effect. Yeah, let's uh hear no, not 587 00:32:07,480 --> 00:32:11,320 Speaker 1: that one. That's the good that's that's the Divos sound 588 00:32:11,800 --> 00:32:15,840 Speaker 1: was appropriate. So they become independent distributors in nineteen forty nine. 589 00:32:15,920 --> 00:32:18,160 Speaker 1: And there is not a tremendous amount that I found 590 00:32:18,160 --> 00:32:20,840 Speaker 1: of reputable information about these men's early lives. They both 591 00:32:20,880 --> 00:32:24,400 Speaker 1: did kind of write memoiry books, but there again mainly 592 00:32:24,440 --> 00:32:28,400 Speaker 1: existed to sell you on amways, so not the best sources. 593 00:32:30,080 --> 00:32:33,400 Speaker 1: Jay was born on June third, nineteen thirty four, which 594 00:32:33,400 --> 00:32:35,320 Speaker 1: is the same year that neutral It was founded. He 595 00:32:35,400 --> 00:32:39,280 Speaker 1: was the grandchild of Dutch immigrants um His parents were 596 00:32:39,360 --> 00:32:43,320 Speaker 1: extremely religious and members of the Christian Reformed Church. He 597 00:32:43,400 --> 00:32:46,320 Speaker 1: attended a Christian high school, and when World War Two 598 00:32:46,320 --> 00:32:49,480 Speaker 1: broke out, he joined the Air Force and trained bomber crews. 599 00:32:49,520 --> 00:32:51,880 Speaker 1: After the war, he became a door to door salesman, 600 00:32:51,920 --> 00:32:55,360 Speaker 1: where he met his wife. Jay had met Richard Divos 601 00:32:55,400 --> 00:32:57,200 Speaker 1: back in high school. They both went to the same 602 00:32:57,280 --> 00:33:01,240 Speaker 1: Christian academy. Now Richard DeVos will call old Dickie D. 603 00:33:02,120 --> 00:33:06,360 Speaker 1: Was born on March fourth, nineteen in Grand Rapids, Michigan. 604 00:33:06,680 --> 00:33:08,840 Speaker 1: He was a true child of the twenties, by which 605 00:33:08,840 --> 00:33:10,920 Speaker 1: I mean his mother was named Ethel and his father 606 00:33:11,080 --> 00:33:15,200 Speaker 1: was Simon Cornelius, which I know it's a name you 607 00:33:15,320 --> 00:33:18,760 Speaker 1: just have to punch. So his family, I think we're 608 00:33:18,800 --> 00:33:20,840 Speaker 1: fairly He would later say that like they had hard 609 00:33:20,840 --> 00:33:23,360 Speaker 1: times during the depressions, that was difficult for them. I'm 610 00:33:23,360 --> 00:33:25,560 Speaker 1: sure it was tighter than other times where they also 611 00:33:25,600 --> 00:33:27,840 Speaker 1: paid to go to a private school. I don't think 612 00:33:27,840 --> 00:33:30,000 Speaker 1: it was like like my grandpa had to leave the 613 00:33:30,040 --> 00:33:32,480 Speaker 1: family when he was seventeen because they didn't have enough food. 614 00:33:32,480 --> 00:33:34,480 Speaker 1: I don't think they were that kind of poor. But 615 00:33:34,920 --> 00:33:36,440 Speaker 1: he makes a lot out of how poor they were 616 00:33:36,480 --> 00:33:39,560 Speaker 1: there in depression. I don't know. I wasn't there. Um, 617 00:33:39,840 --> 00:33:42,160 Speaker 1: his family and Jays seemed to have been, you know, 618 00:33:42,640 --> 00:33:44,680 Speaker 1: more comfortable than most in this period of time. Again, 619 00:33:44,720 --> 00:33:46,640 Speaker 1: they're able to send their kids to a private school. 620 00:33:46,920 --> 00:33:48,960 Speaker 1: There is fairly little about the early lives of either 621 00:33:49,000 --> 00:33:51,960 Speaker 1: men and sources that are particularly trustworthy. When he was 622 00:33:52,160 --> 00:33:55,200 Speaker 1: eighty eight, Rich wrote a memoir where he described his 623 00:33:55,280 --> 00:33:58,080 Speaker 1: grandfather as a huckster um, but he meant that in 624 00:33:58,080 --> 00:34:01,160 Speaker 1: a positive sense and from a it up in Politico here. 625 00:34:01,720 --> 00:34:03,960 Speaker 1: Grand pod Decker had been an immigrant from the Netherlands, 626 00:34:04,040 --> 00:34:06,640 Speaker 1: Dutch in origin, like the word huckster itself. During the 627 00:34:06,680 --> 00:34:09,600 Speaker 1: Great Depression, he sold freshly farmed vegetables door to door 628 00:34:09,640 --> 00:34:12,720 Speaker 1: in Grand Rapids, Michigan. Rich Divos used to tag along, 629 00:34:12,920 --> 00:34:15,239 Speaker 1: noting the way the old man's neighborly demeanor and good 630 00:34:15,280 --> 00:34:17,799 Speaker 1: humor gave him an instant rapport with customers. At the 631 00:34:17,880 --> 00:34:19,799 Speaker 1: end of the usual roots, young rich had the chance 632 00:34:19,840 --> 00:34:22,560 Speaker 1: to peddle the leftover vegetables. The first thing to Voss 633 00:34:22,600 --> 00:34:24,759 Speaker 1: ever sold was a bag of onions. His father let 634 00:34:24,840 --> 00:34:28,640 Speaker 1: him pocket the profit. So that's apparently how Richard Divoss 635 00:34:28,680 --> 00:34:30,600 Speaker 1: claims he got and that may very well be a 636 00:34:30,640 --> 00:34:34,160 Speaker 1: lie because it's a very folksy story, you know. Um, 637 00:34:34,200 --> 00:34:37,920 Speaker 1: But rich is very very bullish about the trade, the 638 00:34:37,960 --> 00:34:40,680 Speaker 1: craft of being a salesman. He kind of builds his 639 00:34:40,719 --> 00:34:44,080 Speaker 1: whole life around that. Um. The official away account of 640 00:34:44,120 --> 00:34:46,799 Speaker 1: both men's life from the website Amway Global dot Com 641 00:34:47,000 --> 00:34:49,879 Speaker 1: runs just a few paragraphs long. They stayed up front 642 00:34:50,000 --> 00:34:52,759 Speaker 1: quote the founders of Amway, Rich DeVos and j Van 643 00:34:52,760 --> 00:34:55,520 Speaker 1: Andel first became friends in high school in Grand Rapids, Michigan. 644 00:34:55,560 --> 00:34:57,600 Speaker 1: They had no way of knowing that their individual lives 645 00:34:57,600 --> 00:35:00,680 Speaker 1: would become forever entwined, or that their combined would change 646 00:35:00,719 --> 00:35:04,080 Speaker 1: the landscape of business for good. But they don't give 647 00:35:04,080 --> 00:35:05,839 Speaker 1: a lot of detail about these guys. Again, it's kind 648 00:35:05,840 --> 00:35:07,560 Speaker 1: of hard to nail down on a whole lot about 649 00:35:07,600 --> 00:35:10,600 Speaker 1: their early lives. So, as I stated, Richard and j 650 00:35:10,840 --> 00:35:14,399 Speaker 1: started as independent Neutral Life distributors in nineteen forty nine, 651 00:35:14,520 --> 00:35:17,800 Speaker 1: right after World War Two. Direct sales were a big 652 00:35:17,840 --> 00:35:19,960 Speaker 1: deal at the time, and the concept of people going 653 00:35:20,000 --> 00:35:22,360 Speaker 1: door to door to sell things was still fairly common 654 00:35:22,400 --> 00:35:24,520 Speaker 1: and not really weird, right. Part of what's weird about 655 00:35:24,560 --> 00:35:26,719 Speaker 1: m l m's now is that like business doesn't work 656 00:35:26,760 --> 00:35:29,040 Speaker 1: that way anymore, where like a salesman just like buys 657 00:35:29,080 --> 00:35:31,839 Speaker 1: a bunch of products wholesale and like goes around selling them. 658 00:35:32,040 --> 00:35:34,279 Speaker 1: That did used to be a kind of normal. When 659 00:35:34,400 --> 00:35:37,160 Speaker 1: J and Rich got involved in Neutral Life, it was 660 00:35:37,239 --> 00:35:39,480 Speaker 1: fighting off an attack by the f d A who 661 00:35:39,560 --> 00:35:42,719 Speaker 1: accused the company of false advertising. So again I think 662 00:35:42,719 --> 00:35:45,840 Speaker 1: that their vitamin things were kind of a scam um. 663 00:35:45,960 --> 00:35:48,399 Speaker 1: J and Rich were very good salesman, but the blu 664 00:35:48,480 --> 00:35:50,640 Speaker 1: Ha hall with the FDA concerned them. So after ten 665 00:35:50,719 --> 00:35:53,520 Speaker 1: years as Neutral Life distributors, they quit and they spun 666 00:35:53,560 --> 00:35:57,359 Speaker 1: off their own company to sell different household products. They 667 00:35:57,400 --> 00:36:01,880 Speaker 1: called it the American Way, or am for short. Now. 668 00:36:01,920 --> 00:36:04,560 Speaker 1: A few short years later, Von Andelen Divos would buy 669 00:36:04,640 --> 00:36:07,279 Speaker 1: Neutral Life from Carl Rainberg, and it today remains one 670 00:36:07,280 --> 00:36:09,759 Speaker 1: of the staples of their product line. But the first 671 00:36:09,840 --> 00:36:13,719 Speaker 1: Amway product was a type of highly concentrated organic detergent 672 00:36:13,800 --> 00:36:16,239 Speaker 1: which they bought as a patent from a Detroit area 673 00:36:16,320 --> 00:36:19,600 Speaker 1: scientist who had fallen on hard times. The organic home 674 00:36:19,640 --> 00:36:22,120 Speaker 1: cleaner was called Frisk, and the men liked it because 675 00:36:22,120 --> 00:36:24,920 Speaker 1: it was the kind of product that they claimed anybody 676 00:36:24,920 --> 00:36:29,359 Speaker 1: could sell. Amway was successful early on offering Americans during 677 00:36:29,400 --> 00:36:32,560 Speaker 1: an unprecedented economic boom, the chance to quote own a 678 00:36:32,600 --> 00:36:35,280 Speaker 1: business of their own. And this is from the beginning 679 00:36:35,280 --> 00:36:36,960 Speaker 1: a huge part of the pitch, right, a lot of 680 00:36:37,000 --> 00:36:39,560 Speaker 1: people are getting rich. This is the biggest economic expansion 681 00:36:39,560 --> 00:36:42,120 Speaker 1: in history, and they're like, am Way is a chance 682 00:36:42,160 --> 00:36:45,120 Speaker 1: to own your own business. So you're not our employees. 683 00:36:45,120 --> 00:36:47,520 Speaker 1: You're starting their own business to sell these great products, 684 00:36:47,520 --> 00:36:49,440 Speaker 1: and like, that's how you're going to get your piece 685 00:36:50,080 --> 00:36:52,960 Speaker 1: of of the American Dream. That was the m Way 686 00:36:53,000 --> 00:36:55,400 Speaker 1: pitch from the beginning, and am Way wrapped itself in 687 00:36:55,440 --> 00:36:58,319 Speaker 1: the cult of the American Dream. Rich and Jay's most 688 00:36:58,400 --> 00:37:01,880 Speaker 1: quoted line on modern a Way company websites is quote, 689 00:37:02,160 --> 00:37:05,120 Speaker 1: we were just two guys from Ouda, Michigan, USA who 690 00:37:05,160 --> 00:37:08,000 Speaker 1: wanted to have a business of our own. The Amway 691 00:37:08,120 --> 00:37:11,960 Speaker 1: slogan is you can do it too, right, And you 692 00:37:12,040 --> 00:37:17,439 Speaker 1: see the the I mean the this is a little 693 00:37:17,440 --> 00:37:19,600 Speaker 1: bit of the evolution of the grift, right, these ponzi 694 00:37:19,640 --> 00:37:21,960 Speaker 1: and how these first schemes. It's you know, how rich 695 00:37:22,000 --> 00:37:24,600 Speaker 1: people are making their money, you can do that too. 696 00:37:25,080 --> 00:37:28,200 Speaker 1: And this is more of like a a an intimate 697 00:37:28,200 --> 00:37:30,240 Speaker 1: sort of thing. We're just two regular guys who started 698 00:37:30,239 --> 00:37:31,920 Speaker 1: a business and it got us rich, and you can 699 00:37:32,000 --> 00:37:35,920 Speaker 1: do that. They're selling entrepreneurship as a brand, right, Like 700 00:37:36,040 --> 00:37:38,520 Speaker 1: you two could be your own entrepreneur. You could start 701 00:37:38,520 --> 00:37:40,960 Speaker 1: your own business, be your own business owner, because that 702 00:37:41,120 --> 00:37:43,040 Speaker 1: is what all the rich people that you've read about 703 00:37:43,920 --> 00:37:47,960 Speaker 1: have always done. Like they really are like basically selling 704 00:37:48,360 --> 00:37:52,040 Speaker 1: the American dream, like the American way. Like that they 705 00:37:52,040 --> 00:37:54,440 Speaker 1: tell you in the title exactly what they're going to 706 00:37:54,520 --> 00:37:58,560 Speaker 1: do to you. Yep, that's exactly right now. Rich Divos, 707 00:37:58,760 --> 00:38:01,560 Speaker 1: I think was more than driver of the duo um 708 00:38:01,600 --> 00:38:04,440 Speaker 1: and he was first and foremost a salesman. He wrote 709 00:38:04,480 --> 00:38:08,239 Speaker 1: in a nineteen book quote. My own particular thing has 710 00:38:08,280 --> 00:38:11,000 Speaker 1: always been salesmanship. I am always amazed to see how 711 00:38:11,000 --> 00:38:13,600 Speaker 1: many people look down their noses at salesmanship as a 712 00:38:13,600 --> 00:38:17,279 Speaker 1: worthy occupation. Now to sell am Way, Rich had to 713 00:38:17,320 --> 00:38:19,799 Speaker 1: sell his own lifestyle, the fact that he was rich, 714 00:38:19,840 --> 00:38:22,279 Speaker 1: big house, nice cars, and he'd all learned it through 715 00:38:22,320 --> 00:38:24,359 Speaker 1: am Way. And if Rich could do it, you could 716 00:38:24,400 --> 00:38:27,560 Speaker 1: do it too. He would warn his new distributors that 717 00:38:27,600 --> 00:38:29,960 Speaker 1: A Way wasn't about making a quick buck. It was 718 00:38:30,000 --> 00:38:32,800 Speaker 1: about making your own slice of the American dreamer reality 719 00:38:32,840 --> 00:38:36,839 Speaker 1: through hard work from Politico quote. He helped his distributors 720 00:38:36,840 --> 00:38:39,279 Speaker 1: along the way with guidelines and best practices, but he 721 00:38:39,320 --> 00:38:42,040 Speaker 1: mostly saw himself as a cheerleader for people to realize 722 00:38:42,040 --> 00:38:44,400 Speaker 1: their own capabilities and to expand their ideas of what 723 00:38:44,520 --> 00:38:48,600 Speaker 1: is possible, all while undergirded by specific political and spiritual ideas. 724 00:38:48,640 --> 00:38:51,600 Speaker 1: He saw is fundamental to the American Way. And this 725 00:38:51,680 --> 00:38:54,920 Speaker 1: is again what separates this from these early pyramid schemes 726 00:38:54,920 --> 00:38:58,000 Speaker 1: are promising d return, you'll get rich. You know, you 727 00:38:58,040 --> 00:39:00,239 Speaker 1: do nothing but handing your money, you get rich. The 728 00:39:00,320 --> 00:39:03,280 Speaker 1: much more durable version of the grift is it's gonna 729 00:39:03,280 --> 00:39:05,319 Speaker 1: be hard work. It's gonna you'll get rich, sure, but 730 00:39:05,360 --> 00:39:06,799 Speaker 1: you have to do you know, you have to put 731 00:39:06,800 --> 00:39:08,839 Speaker 1: in this work. This is the you know you can. 732 00:39:08,920 --> 00:39:10,799 Speaker 1: This is your own business. This is not like a 733 00:39:10,880 --> 00:39:13,520 Speaker 1: quick return thing you'll get you'll be a millionaire if 734 00:39:13,560 --> 00:39:15,640 Speaker 1: you follow these steps. But you have to follow these 735 00:39:15,680 --> 00:39:18,080 Speaker 1: steps and it's gonna be hard. And that's a lot 736 00:39:18,120 --> 00:39:20,799 Speaker 1: more durable. And it also means if all you're doing 737 00:39:20,880 --> 00:39:23,600 Speaker 1: is handing in money being promised to return when the 738 00:39:23,640 --> 00:39:25,839 Speaker 1: return doesn't come, it's pretty easy to figure out who 739 00:39:25,840 --> 00:39:28,640 Speaker 1: to blame. If you have to do put in the 740 00:39:28,680 --> 00:39:32,120 Speaker 1: hard work quote unquote um, then if it doesn't work out, 741 00:39:32,200 --> 00:39:34,839 Speaker 1: because maybe it's close to impossible for it to work out, 742 00:39:35,000 --> 00:39:38,080 Speaker 1: the blame is on you, which is a much smarter grift. 743 00:39:38,160 --> 00:39:42,280 Speaker 1: You know, right, you're and like your family as you're 744 00:39:42,320 --> 00:39:44,200 Speaker 1: you know, taking out a second mortgage on your house 745 00:39:44,239 --> 00:39:47,960 Speaker 1: to buy like wheelbarrows full of fucking cleaning solution that 746 00:39:48,000 --> 00:39:50,680 Speaker 1: doesn't really work in your family is like don't do this. 747 00:39:51,160 --> 00:39:53,880 Speaker 1: You're like, don't you trust me? Like I'm going to 748 00:39:54,120 --> 00:39:57,560 Speaker 1: I Am going to make this happen because just through 749 00:39:57,600 --> 00:40:00,080 Speaker 1: sheer tyranny of will, because like that's what America it 750 00:40:00,120 --> 00:40:04,160 Speaker 1: treats teaches us as possible, and then you know, when 751 00:40:04,160 --> 00:40:07,439 Speaker 1: it doesn't happen, you're kind of fucked because you already 752 00:40:07,480 --> 00:40:10,160 Speaker 1: like kind of put it on your own shoulders. Yeah. Yeah, 753 00:40:10,200 --> 00:40:13,759 Speaker 1: that's exactly right, and that's brilliant. It's much smarter than 754 00:40:13,760 --> 00:40:17,920 Speaker 1: what Ponzi and how we're doing. But it's very evil, 755 00:40:17,960 --> 00:40:23,480 Speaker 1: but it's also legally not a scam. Yeah. So, for Divorce, 756 00:40:23,800 --> 00:40:27,479 Speaker 1: the American Way meant a country that embraced the free 757 00:40:27,600 --> 00:40:31,319 Speaker 1: enterprise system, exalted God, and held true to the conservative 758 00:40:31,400 --> 00:40:35,040 Speaker 1: Christian principles. This country was built on a religious heritage, 759 00:40:35,040 --> 00:40:37,600 Speaker 1: he wrote in his book Believe and We'd better get 760 00:40:37,640 --> 00:40:39,879 Speaker 1: back to it. It meant a country where the only 761 00:40:39,960 --> 00:40:42,360 Speaker 1: limit to what one could achieve was how hard one worked. 762 00:40:42,560 --> 00:40:44,799 Speaker 1: I think being poor is something many people do, he 763 00:40:44,840 --> 00:40:47,239 Speaker 1: said in a nineteen sixties six speech. It sort of 764 00:40:47,280 --> 00:40:49,560 Speaker 1: has to do with being poor by choice. And it 765 00:40:49,640 --> 00:40:52,520 Speaker 1: meant a country where personal responsibility and belief in yourself 766 00:40:52,600 --> 00:40:55,200 Speaker 1: were two sides of the same coin. In the nineteen 767 00:40:55,280 --> 00:40:58,040 Speaker 1: sixties and seventies, Divorce believed that those values were under 768 00:40:58,040 --> 00:41:00,200 Speaker 1: threat from the rise of the welfare state, that a 769 00:41:00,280 --> 00:41:02,720 Speaker 1: client of religion to the Soviet threat and the spread 770 00:41:02,719 --> 00:41:06,240 Speaker 1: of Communism in Southeast Asia. At the time, Conservative Christians 771 00:41:06,239 --> 00:41:09,600 Speaker 1: hadn't become yet a potent political force, but the makings 772 00:41:09,640 --> 00:41:12,280 Speaker 1: of the movement were there. The sexual Revolution, the Supreme 773 00:41:12,320 --> 00:41:15,640 Speaker 1: Courts rov Wade ruling, the pornography wars, the white backlash 774 00:41:15,680 --> 00:41:19,000 Speaker 1: to desegregation, the backlash to the women's lib lib movement, 775 00:41:19,160 --> 00:41:21,680 Speaker 1: the rise of the silent majority in quoth. It's all 776 00:41:21,680 --> 00:41:25,200 Speaker 1: from Politico's obituary of the Man, and it makes a 777 00:41:25,200 --> 00:41:27,560 Speaker 1: good point about like where where this guy is situating 778 00:41:27,640 --> 00:41:30,799 Speaker 1: himself very consciously, So he's from the beginning not just 779 00:41:30,920 --> 00:41:34,000 Speaker 1: a businessman, and from the beginning doing the kind of 780 00:41:34,040 --> 00:41:37,640 Speaker 1: thing that that William Pennpatrick did. This isn't just a 781 00:41:37,680 --> 00:41:40,600 Speaker 1: money making scene. This is wrapped up in in in 782 00:41:40,640 --> 00:41:43,279 Speaker 1: this cult of Americana, and it is wrapped up in 783 00:41:43,400 --> 00:41:48,200 Speaker 1: Christianity and this this religious belief in the free market um. 784 00:41:48,239 --> 00:41:50,360 Speaker 1: And again that makes it all much more durable because 785 00:41:50,360 --> 00:41:52,319 Speaker 1: it's not just a matter of well, if this doesn't work, 786 00:41:52,360 --> 00:41:54,799 Speaker 1: maybe it was a scam. It's a matter of like, well, 787 00:41:54,800 --> 00:41:57,040 Speaker 1: this must work, and so if it's not working, it's 788 00:41:57,080 --> 00:42:01,000 Speaker 1: on me, because this is what God wants you know now, 789 00:42:01,360 --> 00:42:04,200 Speaker 1: the religious right in the nineteen seventies, which is when 790 00:42:04,560 --> 00:42:07,319 Speaker 1: Amway really starts to make serious money, was not yet 791 00:42:07,360 --> 00:42:10,200 Speaker 1: an organized factor in US politics. That didn't come around 792 00:42:10,280 --> 00:42:13,200 Speaker 1: until nineteen seventy nine. But Richard knew the future was 793 00:42:13,239 --> 00:42:17,520 Speaker 1: in marrying conservative electoral politics with Christian fundamentalism and free 794 00:42:17,520 --> 00:42:20,920 Speaker 1: market ideology. By the early nineteen seventies, he was wealthy 795 00:42:21,040 --> 00:42:23,320 Speaker 1: enough to start spreading some of his money around to 796 00:42:23,440 --> 00:42:27,960 Speaker 1: deserving causes. He founded the Christian Freedom Foundation, which he shaired. 797 00:42:28,280 --> 00:42:30,640 Speaker 1: Now today there's an organization by this name that comes 798 00:42:30,680 --> 00:42:34,440 Speaker 1: to be an apostolic law ministry UM, but that is 799 00:42:34,480 --> 00:42:37,520 Speaker 1: not the the the CF that existed at his time. 800 00:42:37,520 --> 00:42:40,280 Speaker 1: According to a Mother Jones report from one the purpose 801 00:42:40,320 --> 00:42:42,880 Speaker 1: of the CF was quote was as stated by a 802 00:42:42,920 --> 00:42:46,719 Speaker 1: member during one meeting to elect conservative Christians to Congress. 803 00:42:47,280 --> 00:42:49,920 Speaker 1: Shortly after giving it twenty five thousand dollars, Richard Vos 804 00:42:50,120 --> 00:42:53,000 Speaker 1: took divorce, took control of the board of the CF, 805 00:42:53,040 --> 00:42:55,600 Speaker 1: and ran it. He used funds from the organization to 806 00:42:55,680 --> 00:42:59,520 Speaker 1: funnel money into yet another right wing theocratic organization, Third 807 00:42:59,600 --> 00:43:03,600 Speaker 1: Century publishers. These fund folks published a guide book for 808 00:43:03,640 --> 00:43:07,320 Speaker 1: conservative Christians who wanted to win local elections. They framed 809 00:43:07,360 --> 00:43:09,920 Speaker 1: this as returning to America quote as it was when 810 00:43:10,040 --> 00:43:14,360 Speaker 1: first founded a Christian Republic. Now, during the same period, 811 00:43:14,600 --> 00:43:17,960 Speaker 1: j Van Andel, the co founder of Amway, organized the 812 00:43:18,040 --> 00:43:22,480 Speaker 1: Chamber Citizens Choice Lobby, which agitated against government regulations that 813 00:43:22,520 --> 00:43:25,080 Speaker 1: he claimed reduced choice and that other people said reduced 814 00:43:25,080 --> 00:43:28,120 Speaker 1: the ability of corporations to like crush workers with factory equipment. 815 00:43:28,520 --> 00:43:31,640 Speaker 1: So both of these guys are are are seeing both 816 00:43:31,719 --> 00:43:34,959 Speaker 1: like the fight for deregulation and whatnot, in the fight 817 00:43:35,040 --> 00:43:38,040 Speaker 1: for um, you know, corporate rights as the same as 818 00:43:38,080 --> 00:43:40,840 Speaker 1: like fighting for a Christian republic, because obviously a Christian 819 00:43:40,880 --> 00:43:44,439 Speaker 1: republic would have no limitations on what capital can do. Now, 820 00:43:44,480 --> 00:43:48,200 Speaker 1: the Amway co founders established the Center for Free Enterprise 821 00:43:48,280 --> 00:43:52,279 Speaker 1: and Ada, Michigan as the and this is like kind 822 00:43:52,280 --> 00:43:55,000 Speaker 1: of like a museum, it sounds like. The lobby of 823 00:43:55,040 --> 00:43:58,040 Speaker 1: this building featured life size bronze statues of both men. 824 00:43:58,200 --> 00:44:01,319 Speaker 1: Mother Jones described the it has quote one of many 825 00:44:01,360 --> 00:44:04,160 Speaker 1: displays in the saucer shaped building that illustrate the rewards 826 00:44:04,160 --> 00:44:07,080 Speaker 1: of a capitalism stewarded not by the federal government but 827 00:44:07,200 --> 00:44:11,040 Speaker 1: by God fearing tycoons themselves. It's like a propaganda outlet 828 00:44:11,160 --> 00:44:14,480 Speaker 1: right this like this, this this museum dedicated to the UH, 829 00:44:14,760 --> 00:44:17,160 Speaker 1: the wonderful history of free enterprise and all that goes 830 00:44:17,160 --> 00:44:18,880 Speaker 1: great when the government stays out of the way of 831 00:44:19,000 --> 00:44:22,280 Speaker 1: Richmond and its first full year of business nineteen sixty, 832 00:44:22,320 --> 00:44:24,799 Speaker 1: a Way had made just half a million dollars. By 833 00:44:24,880 --> 00:44:27,399 Speaker 1: nineteen seventy seven, the company was selling more than three 834 00:44:27,440 --> 00:44:30,480 Speaker 1: hundred million dollars in products per year, mostly to its 835 00:44:30,520 --> 00:44:33,479 Speaker 1: own distributors. While Amway had started off as a multi 836 00:44:33,560 --> 00:44:36,760 Speaker 1: level marketing company, the focus was initially on selling products 837 00:44:36,760 --> 00:44:39,799 Speaker 1: to actual customers. It quickly became clear that this was 838 00:44:39,840 --> 00:44:41,960 Speaker 1: not the best way to make a fortune. If you 839 00:44:41,960 --> 00:44:44,360 Speaker 1: relied on selling products the normal way, you had to 840 00:44:44,360 --> 00:44:46,839 Speaker 1: worry about whether or not they worked oral marketed well 841 00:44:46,880 --> 00:44:50,560 Speaker 1: to customers. Instead, DeVos and Van Andel created a modified 842 00:44:50,600 --> 00:44:53,840 Speaker 1: cult dedicated to convincing people to buy more Amway products 843 00:44:54,000 --> 00:44:57,600 Speaker 1: in the guise of independent businesses that they would ostensibly sell, 844 00:44:57,680 --> 00:44:59,880 Speaker 1: but in most cases would just kind of accrue in 845 00:45:00,000 --> 00:45:03,000 Speaker 1: their house because they were unable to move them. Um 846 00:45:03,160 --> 00:45:06,400 Speaker 1: Mother Jones lays it all out quote. Am Way measures 847 00:45:06,400 --> 00:45:09,320 Speaker 1: a distributor success by how many products the person sells 848 00:45:09,360 --> 00:45:12,160 Speaker 1: and by the size of their distributors downline. Each time 849 00:45:12,160 --> 00:45:14,319 Speaker 1: the distributors get a new recruit, they add to their 850 00:45:14,320 --> 00:45:17,480 Speaker 1: personal salesforce and elevate their own position, increasing the amount 851 00:45:17,480 --> 00:45:19,760 Speaker 1: of money they get from people below them, while acquiring 852 00:45:19,800 --> 00:45:24,239 Speaker 1: ever loftier titles first Direct than Ruby, Emerald, Diamond and 853 00:45:24,280 --> 00:45:29,040 Speaker 1: so on. So you can are technically make money by 854 00:45:29,040 --> 00:45:31,160 Speaker 1: selling the products, but the real way to make money 855 00:45:31,200 --> 00:45:33,920 Speaker 1: is by selling Amway to new people, right, because then 856 00:45:33,960 --> 00:45:35,600 Speaker 1: you get a and in order to stay in it, 857 00:45:35,640 --> 00:45:37,600 Speaker 1: you're you're pressured to buy a certain amount of the 858 00:45:37,600 --> 00:45:39,759 Speaker 1: products a month. Most of most of what's bought is 859 00:45:39,880 --> 00:45:42,560 Speaker 1: distributors buying it just so that they can say that 860 00:45:42,560 --> 00:45:45,719 Speaker 1: they're continuing to quote unquote cell products. And if there's 861 00:45:45,719 --> 00:45:47,600 Speaker 1: people are in your downline, you get a chunk every 862 00:45:47,640 --> 00:45:49,560 Speaker 1: time they buy more Amway stuff, so they pressure them 863 00:45:49,560 --> 00:45:51,000 Speaker 1: to buy more Amway stuff. And if you have a 864 00:45:51,000 --> 00:45:53,120 Speaker 1: lot of people in your downline, you make a shipload 865 00:45:53,120 --> 00:45:56,600 Speaker 1: of money. You know, down means like so you get 866 00:45:56,640 --> 00:46:00,879 Speaker 1: somebody to join an Amway who like answers to you, 867 00:46:01,280 --> 00:46:06,160 Speaker 1: and then they get people to join them. All those 868 00:46:06,200 --> 00:46:08,759 Speaker 1: people are in your downline, their their money is rolling 869 00:46:08,840 --> 00:46:15,080 Speaker 1: up flowing as they buy the products too, then yeah, exactly, 870 00:46:15,120 --> 00:46:17,839 Speaker 1: And again you don't if you can think about the 871 00:46:17,880 --> 00:46:19,719 Speaker 1: shape that that would be if you were to dry 872 00:46:19,800 --> 00:46:23,560 Speaker 1: out the way that arrangement works. Um. But yeah, that's 873 00:46:23,560 --> 00:46:28,200 Speaker 1: all we can say on the matter. So triangular, definitely, 874 00:46:28,239 --> 00:46:31,320 Speaker 1: like a triangular is shape to the way the money 875 00:46:31,320 --> 00:46:36,040 Speaker 1: would be flowing. Um. Yeah. Now. William Campbell, a distributor 876 00:46:36,120 --> 00:46:39,279 Speaker 1: for the company, explained the traditional Amway sales pitch this 877 00:46:39,360 --> 00:46:42,520 Speaker 1: way for when he was interviewed for a nineteen seven article. 878 00:46:43,120 --> 00:46:45,960 Speaker 1: Ama is just the good old American dream. Everybody has 879 00:46:45,960 --> 00:46:47,640 Speaker 1: the idea to open their own business and see it 880 00:46:47,719 --> 00:46:51,600 Speaker 1: go and wait lets you And of course most AMIA 881 00:46:51,680 --> 00:46:55,560 Speaker 1: distributors either made nothing or lost money. This discrepancy between 882 00:46:55,560 --> 00:46:57,839 Speaker 1: the wealth made by Amway and the poverty of many 883 00:46:57,840 --> 00:47:00,640 Speaker 1: AMIA distributors lead to Vos and van Handle to earn 884 00:47:00,680 --> 00:47:04,080 Speaker 1: the nickname the gold Dust Twins. Um. I don't know 885 00:47:04,120 --> 00:47:05,960 Speaker 1: who gave him that nickname, but that's what people. I 886 00:47:05,960 --> 00:47:08,160 Speaker 1: am pretty sure they gave themselves that. Yeah, it does 887 00:47:08,200 --> 00:47:10,799 Speaker 1: sound like a nickname, give yourself. Despite all of their 888 00:47:10,840 --> 00:47:14,400 Speaker 1: growing propaganda operations, de Vos continued to prefer to deliver 889 00:47:14,520 --> 00:47:17,840 Speaker 1: his sermons on capitalism and Christianity in person to wrapt 890 00:47:17,880 --> 00:47:21,840 Speaker 1: audiences of Amway distributors. His speeches at regular Amway events 891 00:47:21,840 --> 00:47:24,399 Speaker 1: were said to drive the audience into a quote near 892 00:47:24,560 --> 00:47:27,800 Speaker 1: frenzy and always ended in a chorus of weepy God, 893 00:47:27,800 --> 00:47:31,280 Speaker 1: bless America's from the mostly husband and wife teams who attended. 894 00:47:32,080 --> 00:47:36,360 Speaker 1: And we purchased its own radio broadcasting system. In one interview, 895 00:47:36,400 --> 00:47:39,880 Speaker 1: Devas explained that purchasing the media directly was important to 896 00:47:39,920 --> 00:47:42,760 Speaker 1: Amway so that, quote, we can expose to a broader 897 00:47:42,800 --> 00:47:46,040 Speaker 1: audience the things we feel are important in the future 898 00:47:46,160 --> 00:47:48,919 Speaker 1: of this country. Keep that in mind, because that's gonna 899 00:47:48,960 --> 00:47:52,399 Speaker 1: come up again soon. Am We also increasingly published its 900 00:47:52,440 --> 00:47:55,799 Speaker 1: own cartoons, films, booklets, and audio cassettes. Many of these 901 00:47:55,800 --> 00:47:58,480 Speaker 1: were geared at training people to sell, but more were 902 00:47:58,560 --> 00:48:03,680 Speaker 1: pure ideology, aimed towards in their war words, objectively fighting 903 00:48:03,760 --> 00:48:08,720 Speaker 1: the unfair scapegoating of the profit motive by the left now. 904 00:48:09,040 --> 00:48:11,960 Speaker 1: DeVos and Van Andel also took the fight directly to 905 00:48:12,080 --> 00:48:16,160 Speaker 1: politicians in Washington, generally by you know, buying them out right. 906 00:48:16,320 --> 00:48:19,080 Speaker 1: When Gerald Ford took office in nineteen seventy three after 907 00:48:19,200 --> 00:48:22,680 Speaker 1: some unpleasantness with his old boss, the Amway founders had 908 00:48:22,680 --> 00:48:26,000 Speaker 1: been shotgunning money his direction and towards the Republican Party 909 00:48:26,040 --> 00:48:29,200 Speaker 1: for years, and so they quickly became regular guests at 910 00:48:29,239 --> 00:48:32,000 Speaker 1: the White House. This came in really handy for them 911 00:48:32,000 --> 00:48:34,640 Speaker 1: because in nineteen seventy five am we fell under a 912 00:48:34,719 --> 00:48:37,799 Speaker 1: Federal Trade Commission investigation to determine whether or not they 913 00:48:37,800 --> 00:48:42,640 Speaker 1: were a pyramid scheme. Um, but beyond speaking terms with 914 00:48:42,680 --> 00:48:45,279 Speaker 1: the president, when the FTC starts looking into whether or 915 00:48:45,320 --> 00:48:48,560 Speaker 1: not you're a grifter, but Jack, you know who the 916 00:48:48,640 --> 00:48:51,960 Speaker 1: FTC never looks into as far as we know, as 917 00:48:51,960 --> 00:48:55,920 Speaker 1: far as far yeah is it is it? The product 918 00:48:56,400 --> 00:49:01,000 Speaker 1: is the products products ever never EC isn't even aware 919 00:49:01,040 --> 00:49:03,560 Speaker 1: of them. We fly right under the FDCs right our baby, 920 00:49:03,640 --> 00:49:06,640 Speaker 1: that's the promise behind. The bastards didn't even know what 921 00:49:06,680 --> 00:49:13,120 Speaker 1: we're doing. We use a VPN. It's fine. Um, here's 922 00:49:13,160 --> 00:49:31,400 Speaker 1: ads Okay, These these are returns from Adverick sir. Yeah. Yeah, 923 00:49:31,520 --> 00:49:34,319 Speaker 1: we've never won anything. Yeah, we've I've never won an 924 00:49:34,320 --> 00:49:37,919 Speaker 1: award and never will not not not not a one. 925 00:49:38,640 --> 00:49:45,320 Speaker 1: We're you know awards, Jack, We're back. Uh you know what, Robert, 926 00:49:45,400 --> 00:49:50,160 Speaker 1: you just reached my Ruby level of podcast hosts. So 927 00:49:50,400 --> 00:49:55,920 Speaker 1: you you get that reward, You're you're certified Ruby, thank you? 928 00:49:56,200 --> 00:49:58,120 Speaker 1: Does that? Does that come with a car? Do I 929 00:49:58,160 --> 00:50:00,640 Speaker 1: get the Do I get the Cadillac? Yeah? Yeah, of 930 00:50:00,640 --> 00:50:03,960 Speaker 1: course the red, the red Cadillac, the bright red Cadillac. 931 00:50:04,080 --> 00:50:07,799 Speaker 1: I'm gonna man go cruising in the main drag. So 932 00:50:09,160 --> 00:50:11,879 Speaker 1: just a question on kind of what we've covered so far, 933 00:50:12,080 --> 00:50:15,080 Speaker 1: because they're you know, they have these people who are 934 00:50:15,200 --> 00:50:20,080 Speaker 1: like the foot soldiers, Like are they rewarding those people 935 00:50:21,160 --> 00:50:25,840 Speaker 1: based on how enthusiastically they like sing the praises of 936 00:50:25,880 --> 00:50:29,120 Speaker 1: Amway because that that does seem to be like part 937 00:50:29,120 --> 00:50:34,000 Speaker 1: of it, right, is Like I'm assuming they think by 938 00:50:34,520 --> 00:50:39,879 Speaker 1: kissing us and saying his uh speeches like throw them 939 00:50:39,880 --> 00:50:46,359 Speaker 1: into like you know, orgasms of fucking capitalist joy, that 940 00:50:46,719 --> 00:50:50,920 Speaker 1: they are then like kind of finding favor in the 941 00:50:50,920 --> 00:50:54,200 Speaker 1: Amway world. Yeah. I mean, obviously you have to praise 942 00:50:54,239 --> 00:50:59,799 Speaker 1: the boss, but also the people. Thank you, Sophie was 943 00:51:00,040 --> 00:51:02,360 Speaker 1: what I was getting it, and I appreciate it. The 944 00:51:02,719 --> 00:51:06,160 Speaker 1: people who like get to give talk for Amway are 945 00:51:06,160 --> 00:51:08,680 Speaker 1: going to be other successful distributors. So you do have 946 00:51:08,840 --> 00:51:10,719 Speaker 1: you have the people who are actually trying to run 947 00:51:10,719 --> 00:51:14,080 Speaker 1: a business and like sell Amway products who uh don't 948 00:51:14,120 --> 00:51:17,000 Speaker 1: make money uh and wind up broke uh and and 949 00:51:17,080 --> 00:51:19,000 Speaker 1: dying on the street. And then you have the people 950 00:51:19,000 --> 00:51:21,600 Speaker 1: who are really good at getting people to be that person, 951 00:51:22,000 --> 00:51:24,319 Speaker 1: and those people do make money. There's not a lot 952 00:51:24,360 --> 00:51:25,920 Speaker 1: of them, but those are the people who get to 953 00:51:26,000 --> 00:51:29,080 Speaker 1: like who when you go out for quotes and whatnot, 954 00:51:29,280 --> 00:51:32,920 Speaker 1: are representing Amway. Right, these big distributors who are not 955 00:51:33,080 --> 00:51:35,600 Speaker 1: Amway employees. Often we'll talk a little bit about that, 956 00:51:35,640 --> 00:51:38,600 Speaker 1: but like, that's um like it in A big part 957 00:51:38,600 --> 00:51:41,759 Speaker 1: of it is like building this this cult of personality 958 00:51:41,840 --> 00:51:45,120 Speaker 1: around the founders and around the successful distributors, And it's 959 00:51:45,120 --> 00:51:48,200 Speaker 1: this huge part of what works about Amway is the 960 00:51:48,239 --> 00:51:51,120 Speaker 1: worship of success. So when somebody does make money, you 961 00:51:51,160 --> 00:51:53,040 Speaker 1: put that person in front of crowds, you have them 962 00:51:53,080 --> 00:51:55,040 Speaker 1: deliver these and the kind of people who are capable 963 00:51:55,040 --> 00:51:57,160 Speaker 1: of making money at Amway are going to be good 964 00:51:57,160 --> 00:52:00,400 Speaker 1: public speakers because they're kind of people who are charismatic. Right, 965 00:52:00,440 --> 00:52:04,080 Speaker 1: They're good at getting people to buy in people. Yeah, 966 00:52:04,120 --> 00:52:06,799 Speaker 1: and I don't think. I don't think that audience is 967 00:52:06,800 --> 00:52:10,040 Speaker 1: faking it. That audience is cheering and losing their minds 968 00:52:10,080 --> 00:52:13,320 Speaker 1: because they desperately want to believe in what Amway promises 969 00:52:13,320 --> 00:52:15,360 Speaker 1: because it's the only hope they have of living a 970 00:52:15,440 --> 00:52:21,919 Speaker 1: life that isn't wage slavery. Um. And so they they 971 00:52:21,080 --> 00:52:25,640 Speaker 1: they they want the promise that Amway is making them um. 972 00:52:25,719 --> 00:52:29,080 Speaker 1: And so when they hear someone tell them it's possible 973 00:52:29,480 --> 00:52:32,000 Speaker 1: you can do this. You know, you can succeed, you 974 00:52:32,040 --> 00:52:36,160 Speaker 1: can have the big house and the boats and everything, um, 975 00:52:36,320 --> 00:52:40,000 Speaker 1: they don't question it. Uh. And instead they find it 976 00:52:40,160 --> 00:52:43,160 Speaker 1: like inspiring. Um. And I'm sure when they get home 977 00:52:43,200 --> 00:52:46,680 Speaker 1: that night to their house full of unsold Amway products, UM, 978 00:52:46,719 --> 00:52:50,520 Speaker 1: there's there's a crushing feeling of inadequacy and failure. Um. 979 00:52:50,560 --> 00:52:52,880 Speaker 1: But it's it's maybe even made worse than it otherwise 980 00:52:52,880 --> 00:52:55,120 Speaker 1: would have been because they've convinced themselves, well, this guy 981 00:52:55,200 --> 00:52:56,960 Speaker 1: was able to do it. And so as the Amway 982 00:52:56,960 --> 00:52:59,920 Speaker 1: motto goes, I can do it too. You know, it's 983 00:53:00,080 --> 00:53:02,000 Speaker 1: if I haven't done it, there must be something wrong 984 00:53:02,040 --> 00:53:06,560 Speaker 1: with me. Um. It's I mean, it's it's how America 985 00:53:06,640 --> 00:53:09,319 Speaker 1: talks about homeless people and poor people. Right. It's just 986 00:53:09,360 --> 00:53:13,239 Speaker 1: like a company that's bottled that that discussion of like, 987 00:53:13,360 --> 00:53:16,520 Speaker 1: if you're not succeeding under this system, it's because there's 988 00:53:16,560 --> 00:53:21,319 Speaker 1: something wrong with you. Yeah, Now, in nineteen seventy five, 989 00:53:21,360 --> 00:53:23,520 Speaker 1: as I stated, and we the FTC is like this 990 00:53:23,640 --> 00:53:26,640 Speaker 1: might be a pyramid scheme. Holiday Magic had just been busted, 991 00:53:26,640 --> 00:53:28,399 Speaker 1: and the FTC was at this point kind of going 992 00:53:28,440 --> 00:53:32,440 Speaker 1: bullish lee after other MLMs. Their argument against Amway seemed 993 00:53:32,480 --> 00:53:35,759 Speaker 1: pretty strong, despite Richard divorces strident claims that Amway was 994 00:53:35,800 --> 00:53:38,080 Speaker 1: a good way to build an independent business and get rich. 995 00:53:38,320 --> 00:53:42,000 Speaker 1: The average gross monthly income of distributors with sixty seven 996 00:53:42,000 --> 00:53:46,480 Speaker 1: dollars a month. Now, and you have to consider that's 997 00:53:46,880 --> 00:53:49,560 Speaker 1: average when you consider guys like Von ANDL and Divorce, 998 00:53:49,600 --> 00:53:51,560 Speaker 1: who are making millions of dollars a month. Right, that's 999 00:53:51,600 --> 00:53:53,840 Speaker 1: the average when you include the people who are getting 1000 00:53:53,960 --> 00:53:56,600 Speaker 1: rich off of this stuff, which means the vast majority 1001 00:53:56,600 --> 00:53:59,399 Speaker 1: of the seven and fifty thousand away distributors were making 1002 00:53:59,400 --> 00:54:01,840 Speaker 1: nothing or loo using money. Right. I mean didn't you 1003 00:54:01,920 --> 00:54:04,919 Speaker 1: say at the top the independent distributors lose ninety nine 1004 00:54:04,920 --> 00:54:07,719 Speaker 1: point nine percent of their Yes, yeah, that's a more 1005 00:54:07,800 --> 00:54:10,480 Speaker 1: recent number, but yeah, like that, this was the number 1006 00:54:10,480 --> 00:54:12,520 Speaker 1: back then, right, with sixty seven dollars a month was 1007 00:54:12,560 --> 00:54:15,319 Speaker 1: the average in nineteen seventy five. Um, we now know 1008 00:54:15,520 --> 00:54:19,000 Speaker 1: based on again that when I started the episode with it. Yeah, 1009 00:54:19,080 --> 00:54:22,440 Speaker 1: ninety percent of people lose money. Um, you know the 1010 00:54:22,760 --> 00:54:25,320 Speaker 1: data on am Way obviously it's different throughout the years, 1011 00:54:25,360 --> 00:54:27,200 Speaker 1: and you know, we know more now than we did 1012 00:54:27,239 --> 00:54:30,520 Speaker 1: at that point. Um. So that same year, nineteen seventy five, 1013 00:54:30,600 --> 00:54:33,600 Speaker 1: Van Andel and Richard de Vos met with President Gerald 1014 00:54:33,640 --> 00:54:36,279 Speaker 1: Ford in the Oval Office for forty three minutes. The 1015 00:54:36,320 --> 00:54:40,200 Speaker 1: same year that like this, this investigation gets underway. Next 1016 00:54:40,239 --> 00:54:43,080 Speaker 1: from the Washington Post. A month later, Van Andel was 1017 00:54:43,160 --> 00:54:45,520 Speaker 1: quoted in a Michigan newspaper is saying that Ford was 1018 00:54:45,560 --> 00:54:48,640 Speaker 1: aware of em Ways travels with the FTC. Later, Warren 1019 00:54:48,719 --> 00:54:52,920 Speaker 1: rustan director of fords scheduling office, and William Nicholson, his assistant, 1020 00:54:53,080 --> 00:54:56,279 Speaker 1: were listed as stockholders in a Nebraska insurance company being 1021 00:54:56,320 --> 00:55:00,279 Speaker 1: formed by Van Andel and Divos Wrestling. Nicholson dropped doubt 1022 00:55:00,280 --> 00:55:03,000 Speaker 1: of the venture, despite White House approval of their participation. 1023 00:55:03,320 --> 00:55:07,239 Speaker 1: Nicholson was later hired in Amia's government affairs office. You know, 1024 00:55:08,360 --> 00:55:13,040 Speaker 1: there's ways of greasing things. Um. In nineteen seventy nine, 1025 00:55:13,080 --> 00:55:15,960 Speaker 1: the FTC ruled that Emily was not a pyramid scheme, 1026 00:55:16,080 --> 00:55:21,200 Speaker 1: but that the recruiting strategy. Yeah, amazing, a true underdog story. Yeah, 1027 00:55:21,239 --> 00:55:23,160 Speaker 1: if you have a forty three minute meeting with the 1028 00:55:23,160 --> 00:55:26,040 Speaker 1: president of the Oval Office. You two can make court stuff. 1029 00:55:26,080 --> 00:55:31,040 Speaker 1: Maybe not not continue. Yeah. Devas's picture on Wikipedia is 1030 00:55:31,360 --> 00:55:35,680 Speaker 1: him standing next to ford and at the White House 1031 00:55:35,719 --> 00:55:38,680 Speaker 1: holding up what appears to be the Constitution, like I 1032 00:55:38,760 --> 00:55:41,440 Speaker 1: don't know what, well, I don't know exactly what they're holding. 1033 00:55:41,440 --> 00:55:49,360 Speaker 1: It's like a single page documents. Yeah. Interest very funny 1034 00:55:49,520 --> 00:55:53,000 Speaker 1: and not at all corrupt. In nineteen seventy nine, again 1035 00:55:53,000 --> 00:55:54,920 Speaker 1: the FTC rules and is not a pyramid scheme, but 1036 00:55:54,920 --> 00:55:57,800 Speaker 1: the FTC the judge did note that the recruiting strategy 1037 00:55:57,880 --> 00:56:01,400 Speaker 1: had the capacity to deceive spective marks because it heavily 1038 00:56:01,400 --> 00:56:03,600 Speaker 1: implied they'd get rich, they were fine, and am we 1039 00:56:03,719 --> 00:56:06,120 Speaker 1: had to agree to change their ads to more accurately 1040 00:56:06,160 --> 00:56:09,880 Speaker 1: reflect what people could actually make. The reality is that 1041 00:56:09,920 --> 00:56:12,920 Speaker 1: they just got slightly more cunning it promising the same 1042 00:56:12,960 --> 00:56:15,640 Speaker 1: things to people while skirting right up to the legal line. 1043 00:56:15,880 --> 00:56:18,560 Speaker 1: I found a book, Merchants of Deception, published by a 1044 00:56:18,600 --> 00:56:22,680 Speaker 1: former am WI distributor named Eric schlib Scheibler. Uh. He 1045 00:56:22,719 --> 00:56:25,160 Speaker 1: came into Amway well after the FDC case, and he 1046 00:56:25,200 --> 00:56:26,960 Speaker 1: explains how it was sold to him. So this is 1047 00:56:27,040 --> 00:56:29,640 Speaker 1: kind of how they've modified things since the case to 1048 00:56:30,239 --> 00:56:34,680 Speaker 1: not make fraudulent claims so to speak. Quote. One of 1049 00:56:34,680 --> 00:56:37,279 Speaker 1: the many analogies used by am Way distributor leaders to 1050 00:56:37,320 --> 00:56:40,360 Speaker 1: illustrate this was a reference to the McDonald's franchising scheme. 1051 00:56:40,440 --> 00:56:43,080 Speaker 1: Would you rather own one McDonald's or be Ray Kroc 1052 00:56:43,239 --> 00:56:45,840 Speaker 1: and have the right to franchise or duplicate your efforts? 1053 00:56:46,080 --> 00:56:47,960 Speaker 1: Isn't it far better to have ten percent of a 1054 00:56:48,040 --> 00:56:51,000 Speaker 1: hundred businesses than a hundred percent of one. By helping 1055 00:56:51,040 --> 00:56:53,840 Speaker 1: many people succeed in owning their own franchise, so to speak, 1056 00:56:53,880 --> 00:56:56,200 Speaker 1: you could literally work yourself out of a job and 1057 00:56:56,239 --> 00:56:59,800 Speaker 1: live comfortably on the residual income generated by the businesses 1058 00:56:59,840 --> 00:57:03,000 Speaker 1: you started. This regidual income stream could even be passed 1059 00:57:03,000 --> 00:57:05,719 Speaker 1: onto your children as part of your estate. There was 1060 00:57:06,040 --> 00:57:08,400 Speaker 1: no way to lose money, that's end quote. As it 1061 00:57:08,440 --> 00:57:12,120 Speaker 1: was the perfect business opportunity with no employees or overhead 1062 00:57:12,200 --> 00:57:17,360 Speaker 1: because again, the people sales and no sales. When we 1063 00:57:17,440 --> 00:57:20,160 Speaker 1: questioned them about the apparent pyramid nature of the business, 1064 00:57:20,240 --> 00:57:22,720 Speaker 1: we were advised, no one makes more money off your 1065 00:57:22,760 --> 00:57:25,960 Speaker 1: business than you. Carry later informed us this is a 1066 00:57:26,080 --> 00:57:29,680 Speaker 1: legal requirement that keeps this business from being an illegal pyramid. 1067 00:57:30,520 --> 00:57:32,920 Speaker 1: Am Way claimed that the worst deception found in their 1068 00:57:32,920 --> 00:57:36,800 Speaker 1: marketing strategy was the fault of rogue distributors, individuals who 1069 00:57:36,840 --> 00:57:39,040 Speaker 1: had made their own money signing folks up for Amway 1070 00:57:39,080 --> 00:57:42,200 Speaker 1: and who had started posting, like pushing motivational tapes and 1071 00:57:42,280 --> 00:57:46,000 Speaker 1: pamphlets at conferences to teach people how to become super salesman. 1072 00:57:46,560 --> 00:57:49,200 Speaker 1: And this is not entirely untrue. All these things are 1073 00:57:49,280 --> 00:57:52,280 Speaker 1: hallmarks of Amway today, but they actually started as independent 1074 00:57:52,320 --> 00:57:55,640 Speaker 1: from the main Amway business. So all of again, everybody 1075 00:57:55,640 --> 00:57:57,920 Speaker 1: an ami Way, These are all independent little companies, and 1076 00:57:57,920 --> 00:58:00,200 Speaker 1: some of them are independent large companies. The people who 1077 00:58:00,200 --> 00:58:02,200 Speaker 1: are really successful, the guys who are good at getting 1078 00:58:02,200 --> 00:58:05,200 Speaker 1: people to buy an ami Way, those guys start selling 1079 00:58:05,400 --> 00:58:07,680 Speaker 1: books and pamphlets where they're talking about how rich you 1080 00:58:07,720 --> 00:58:10,960 Speaker 1: can get, and am Way claims like, well, that's that's 1081 00:58:10,960 --> 00:58:12,880 Speaker 1: a big part. That's that's what the FTC had an 1082 00:58:12,880 --> 00:58:14,400 Speaker 1: issue with. It wasn't what we were doing. We just 1083 00:58:14,440 --> 00:58:17,640 Speaker 1: weren't keeping enough of an eye on these distributors, you 1084 00:58:17,640 --> 00:58:21,920 Speaker 1: know of like gig workers almost like all the massive 1085 00:58:22,000 --> 00:58:24,440 Speaker 1: like tech companies built on gig workers who are not 1086 00:58:24,520 --> 00:58:27,400 Speaker 1: actually employees. It does seem a lot like what Uber 1087 00:58:28,240 --> 00:58:31,160 Speaker 1: is doing. Um Uber the company that a lot of 1088 00:58:31,160 --> 00:58:33,400 Speaker 1: people got rich for starting and has never made a profit, 1089 00:58:33,480 --> 00:58:38,280 Speaker 1: which is fun um It's neat. So as I noted, 1090 00:58:38,400 --> 00:58:40,200 Speaker 1: the way this worked in the beginning is that am 1091 00:58:40,200 --> 00:58:42,960 Speaker 1: Way sold products to distributors, who often started their own 1092 00:58:43,000 --> 00:58:45,120 Speaker 1: companies to sell said products, much in the same way 1093 00:58:45,120 --> 00:58:47,120 Speaker 1: as to Vos and van Andal got into the business. 1094 00:58:47,160 --> 00:58:49,520 Speaker 1: The money was in selling the products to distributors, and 1095 00:58:49,560 --> 00:58:52,400 Speaker 1: the smartest Amway distributors made money by promising the good 1096 00:58:52,440 --> 00:58:54,320 Speaker 1: life too smaller fish and getting them to buy a 1097 00:58:54,320 --> 00:58:57,880 Speaker 1: bunch of Amway products. Thanks to a nineteen eighties court case, 1098 00:58:57,920 --> 00:59:00,600 Speaker 1: we have a memo Richard DeVos wrote in the nineteen 1099 00:59:00,720 --> 00:59:03,760 Speaker 1: seventies as FTC scrutiny of his company reached a height. 1100 00:59:04,160 --> 00:59:06,680 Speaker 1: In it, he very bluntly laid out what the FTC 1101 00:59:06,800 --> 00:59:10,080 Speaker 1: would later say was true and weight distributors were being 1102 00:59:10,160 --> 00:59:14,320 Speaker 1: lied to quote and this is Richard devas widespread illegalities 1103 00:59:14,320 --> 00:59:17,600 Speaker 1: inherent and am Way distributor designed systems of tapes, books 1104 00:59:17,600 --> 00:59:20,480 Speaker 1: and rallies. While most of these systems were conceived of 1105 00:59:20,480 --> 00:59:22,800 Speaker 1: in the late nineteen sixties and early nineteen seventies, is 1106 00:59:22,880 --> 00:59:25,720 Speaker 1: genuine support programs to help and Way distributors developed their 1107 00:59:25,720 --> 00:59:30,480 Speaker 1: Amway business entrepreneurial higher higher pins discovered and developed programs 1108 00:59:30,480 --> 00:59:35,680 Speaker 1: for substantial, separate and additional income under the Amway umbrella. Again, 1109 00:59:35,680 --> 00:59:38,880 Speaker 1: he was very aware of what was going on. Richard 1110 00:59:38,920 --> 00:59:41,800 Speaker 1: outlined these support systems as a threat to the future 1111 00:59:41,800 --> 00:59:45,480 Speaker 1: security of the Amway Corporation. He acknowledged to his subordinates 1112 00:59:45,480 --> 00:59:49,160 Speaker 1: that the disproportionate to Amway sales, intensity and solicitation of 1113 00:59:49,200 --> 00:59:52,520 Speaker 1: these tools systems are illegal per se under several US 1114 00:59:52,600 --> 00:59:55,400 Speaker 1: federal and state laws. So he's aware and like the 1115 00:59:55,440 --> 00:59:58,280 Speaker 1: early seventies, that a lot of his distributors are breaking 1116 00:59:58,280 --> 01:00:02,200 Speaker 1: the law, but he he can't really like he's there's 1117 01:00:02,200 --> 01:00:04,760 Speaker 1: not He's not going to do anything about this, because 1118 01:00:05,080 --> 01:00:07,800 Speaker 1: those people are how Amway makes money, right, those big 1119 01:00:07,840 --> 01:00:10,120 Speaker 1: fish distributors who are all breaking the law and the 1120 01:00:10,160 --> 01:00:13,080 Speaker 1: promises they're making are also where his money comes from, 1121 01:00:13,120 --> 01:00:14,560 Speaker 1: because they all have a bunch of people in their 1122 01:00:14,600 --> 01:00:18,800 Speaker 1: down line. Um, but they're not Amway employees and they're 1123 01:00:18,840 --> 01:00:22,680 Speaker 1: not uh yeah, none of them. Yeah, And he's not 1124 01:00:22,720 --> 01:00:25,480 Speaker 1: the one doing the lying. So it's exactly feels like 1125 01:00:25,640 --> 01:00:29,280 Speaker 1: he's good, yeah, yeah, he I mean legally he was good. 1126 01:00:29,720 --> 01:00:32,880 Speaker 1: Um So, after the FTC decides that Amway is not 1127 01:00:32,920 --> 01:00:35,480 Speaker 1: a pyramid scheme, a bunch of different state attorneys general 1128 01:00:35,520 --> 01:00:37,920 Speaker 1: start investigating Amway to like try to figure out if 1129 01:00:37,960 --> 01:00:41,240 Speaker 1: there's anything else they're doing illegal that they can because 1130 01:00:41,400 --> 01:00:43,240 Speaker 1: you know, they're getting a lot of complaints. People who 1131 01:00:43,240 --> 01:00:46,120 Speaker 1: like come out of the Amway culture like, well, I 1132 01:00:46,280 --> 01:00:48,520 Speaker 1: lost a bunch of money. Something seems like they'd be 1133 01:00:48,520 --> 01:00:51,960 Speaker 1: wrong here. Uh. In Wisconsin, the state attorney general sent 1134 01:00:52,000 --> 01:00:55,000 Speaker 1: people into Amway meetings and he found these shady distributors 1135 01:00:55,040 --> 01:00:58,080 Speaker 1: running conferences and hawking tapes that made promises about wealth 1136 01:00:58,120 --> 01:01:00,680 Speaker 1: that am Way absolutely could not back up up. The 1137 01:01:00,720 --> 01:01:04,440 Speaker 1: state filed civil complaints against Amway, which sent journalists undercovered 1138 01:01:04,440 --> 01:01:07,240 Speaker 1: to poke around, which is when Richard DeVos finally started 1139 01:01:07,280 --> 01:01:10,600 Speaker 1: to care. He proposed a number of possible solutions, perhaps 1140 01:01:10,680 --> 01:01:12,560 Speaker 1: the funniest of which was to create what he called 1141 01:01:12,600 --> 01:01:15,720 Speaker 1: a truth squad to ferret out big distributors who were 1142 01:01:15,840 --> 01:01:19,640 Speaker 1: lying in their supplemental materials. But the very quickly realized 1143 01:01:19,680 --> 01:01:22,360 Speaker 1: there was nothing am We could actually do without harming 1144 01:01:22,600 --> 01:01:25,959 Speaker 1: like his ability to make money. As doctor Carol Juth, 1145 01:01:26,040 --> 01:01:30,080 Speaker 1: a sociologist who studies Direct Marketing, wrote, the entrepreneurs of 1146 01:01:30,080 --> 01:01:34,040 Speaker 1: the Amway Corporation, perhaps unwittingly, created an organizational structure which 1147 01:01:34,080 --> 01:01:38,320 Speaker 1: evolved into two powerful symbiotic organizations. The survival of the 1148 01:01:38,360 --> 01:01:41,920 Speaker 1: corporation and the distributor organizations are now dependent on and 1149 01:01:41,960 --> 01:01:45,040 Speaker 1: constrained by the other. The Amway Corporation is constrained and 1150 01:01:45,000 --> 01:01:47,640 Speaker 1: instability to garner desired profits because of the amount of 1151 01:01:47,640 --> 01:01:50,479 Speaker 1: money it must allow for distributor incentives and the fact 1152 01:01:50,480 --> 01:01:53,040 Speaker 1: that distributors are more inclined to sponsor rather than to 1153 01:01:53,120 --> 01:01:58,120 Speaker 1: sell retail. After the FTC find a way for false advertising, 1154 01:01:58,160 --> 01:02:00,880 Speaker 1: the company was forced to make change. Is since am 1155 01:02:00,880 --> 01:02:04,000 Speaker 1: we couldn't actually do without these big distributor organizations, they 1156 01:02:04,040 --> 01:02:07,080 Speaker 1: brought them in their propaganda into the whole deal. So 1157 01:02:07,080 --> 01:02:10,280 Speaker 1: they actually like kind of merge these two. They bring 1158 01:02:10,320 --> 01:02:13,080 Speaker 1: a lot of these distributors into like uh where, and 1159 01:02:13,160 --> 01:02:16,240 Speaker 1: particularly the propaganda they're they're making, they just start selling 1160 01:02:16,280 --> 01:02:19,720 Speaker 1: that as part of Amway um. These big distributors with 1161 01:02:19,800 --> 01:02:22,080 Speaker 1: ranks like double Diamond became a key part of the 1162 01:02:22,120 --> 01:02:25,400 Speaker 1: internal Amway business, and their motivational speeches and books were 1163 01:02:25,480 --> 01:02:29,040 Speaker 1: rolled into the product line. The grift got slightly smarter. 1164 01:02:29,120 --> 01:02:31,640 Speaker 1: Instead of saying this book or conference will teach you 1165 01:02:31,680 --> 01:02:34,280 Speaker 1: to be a millionaire, it became if you want to 1166 01:02:34,320 --> 01:02:37,720 Speaker 1: grow your business, this mentoring can help. I found one 1167 01:02:37,760 --> 01:02:40,480 Speaker 1: story and a mother Jones article from nineteen ninety six 1168 01:02:40,480 --> 01:02:43,680 Speaker 1: that relates the tale of two Amway distributors, Karen and 1169 01:02:43,720 --> 01:02:46,200 Speaker 1: Craig Jones, and I think this illustrates that where am 1170 01:02:46,240 --> 01:02:48,680 Speaker 1: Way moves after nineteen seventy nine in terms of like 1171 01:02:48,680 --> 01:02:51,680 Speaker 1: how these promises are made to people. After paying about 1172 01:02:51,680 --> 01:02:54,000 Speaker 1: a hundred dollars for a starter kit, the Joneses started 1173 01:02:54,040 --> 01:02:57,280 Speaker 1: buying motivational audio tapes recorded by such Amway leaders as 1174 01:02:57,320 --> 01:03:00,200 Speaker 1: Divorce Yeager and Bill Britt and other well known district eater. 1175 01:03:00,560 --> 01:03:03,160 Speaker 1: Before long, am we pressured them to place a standing 1176 01:03:03,280 --> 01:03:05,680 Speaker 1: order for new tapes, which cost six dollars a piece. 1177 01:03:06,040 --> 01:03:08,040 Speaker 1: They tell you that the people who are serious about 1178 01:03:08,040 --> 01:03:10,760 Speaker 1: their future in the business do this, Craig says. Soon 1179 01:03:10,800 --> 01:03:13,120 Speaker 1: the Joneses were receiving two tapes a week by mail, 1180 01:03:13,320 --> 01:03:15,200 Speaker 1: and we also expected them to buy at least two 1181 01:03:15,240 --> 01:03:18,480 Speaker 1: hundred dollars in Amway products each month. You start believing them, 1182 01:03:18,520 --> 01:03:20,200 Speaker 1: says Karen. You want to do what they did to 1183 01:03:20,200 --> 01:03:22,720 Speaker 1: get to where they are. Karen quit her cleaning business. 1184 01:03:22,760 --> 01:03:25,000 Speaker 1: The couple sold their three bedroom home in Charlotte and 1185 01:03:25,000 --> 01:03:27,520 Speaker 1: moved their three young children an hour north to Concord 1186 01:03:27,600 --> 01:03:31,080 Speaker 1: to be closer to their upline. They contacted every acquaintance 1187 01:03:31,120 --> 01:03:33,640 Speaker 1: they could think of, trying to recruit new distributors. It 1188 01:03:33,720 --> 01:03:36,440 Speaker 1: didn't work, Karen said, They lost friends and within a 1189 01:03:36,520 --> 01:03:39,040 Speaker 1: year we're broke. We would eat beans all week long. 1190 01:03:39,160 --> 01:03:42,360 Speaker 1: We sold our living room furniture and our TV. As 1191 01:03:42,400 --> 01:03:45,120 Speaker 1: Craig lost interest in Amway, Karen says she received a 1192 01:03:45,200 --> 01:03:48,080 Speaker 1: less than Christian response from her sponsors, who implied she 1193 01:03:48,120 --> 01:03:51,160 Speaker 1: should file for divorce. They tell him, they tell me, 1194 01:03:51,280 --> 01:03:53,920 Speaker 1: flush him, flush my husband, says Karen. If he's not 1195 01:03:53,960 --> 01:03:57,160 Speaker 1: doing his part, then flush him. After Karen stopped showing 1196 01:03:57,160 --> 01:04:00,520 Speaker 1: to meetings in April ninet, Craig returned to work full 1197 01:04:00,520 --> 01:04:03,560 Speaker 1: time as an architectural engineer. And we'll squeeze the jones 1198 01:04:03,560 --> 01:04:08,080 Speaker 1: is out. I know, right, business and architectural engine These 1199 01:04:08,080 --> 01:04:11,959 Speaker 1: people had real jobs, like but it's again, a real 1200 01:04:12,080 --> 01:04:15,920 Speaker 1: job is like hard and you yeah, you have to 1201 01:04:15,920 --> 01:04:19,360 Speaker 1: do it for years. Maybe you get to retire today 1202 01:04:18,960 --> 01:04:24,880 Speaker 1: and get rich. Yeah, like three kids eating means like 1203 01:04:25,280 --> 01:04:28,880 Speaker 1: for every meal, because they wanted to live closer to 1204 01:04:29,440 --> 01:04:32,480 Speaker 1: the person that they bought their giant boxes of soap 1205 01:04:32,560 --> 01:04:35,360 Speaker 1: from that they would just end up storing at their 1206 01:04:35,400 --> 01:04:37,960 Speaker 1: basement because they couldn't sell them to anyone because nobody 1207 01:04:38,000 --> 01:04:41,120 Speaker 1: wants this ship. Yeah, their business peaked at revenues of 1208 01:04:41,160 --> 01:04:44,720 Speaker 1: three hundred dollars a month um. And the couple claims 1209 01:04:44,760 --> 01:04:47,880 Speaker 1: that A Way cost them fifty dollars in nineteen nineties 1210 01:04:47,920 --> 01:04:49,880 Speaker 1: money and four and a half years of their lives. 1211 01:04:50,720 --> 01:04:56,439 Speaker 1: And having people who are struggling financially who just keep 1212 01:04:56,520 --> 01:05:02,000 Speaker 1: spinning their wheels blaming themselves. Uh, and than a group 1213 01:05:02,360 --> 01:05:06,959 Speaker 1: of people in power also blaming them is the most 1214 01:05:07,000 --> 01:05:10,800 Speaker 1: American thing that I can possibly imagine. Like, this is 1215 01:05:10,880 --> 01:05:14,920 Speaker 1: just I mean, couldn't be a better metaphor for everything 1216 01:05:14,920 --> 01:05:19,440 Speaker 1: about our country. Yeah, it's um, it's perfect, Jack, It's perfect. 1217 01:05:20,040 --> 01:05:24,160 Speaker 1: Well that's gonna be the end of part one. A 1218 01:05:25,120 --> 01:05:29,720 Speaker 1: A what A I don't know I was being Italian 1219 01:05:29,880 --> 01:05:35,280 Speaker 1: Jack wildly offensive. You're the co host of the Daily Zeitgeist. 1220 01:05:35,520 --> 01:05:38,760 Speaker 1: That's one of the geist. You can also find me 1221 01:05:38,760 --> 01:05:43,360 Speaker 1: on Twitter at Jack Underscore Old Brian Uh and yeah, 1222 01:05:43,560 --> 01:05:46,760 Speaker 1: that's those are the kind of the two man places awesome. UM. 1223 01:05:46,800 --> 01:05:48,400 Speaker 1: I want to end this with a little plug for 1224 01:05:48,520 --> 01:05:51,240 Speaker 1: something cool that a fan is making. Um. Those of 1225 01:05:51,280 --> 01:05:54,280 Speaker 1: you who listened to our episode, our Christmas episode on 1226 01:05:54,320 --> 01:05:59,040 Speaker 1: Nestor mack No, who is an anarchist warlord in a Ukraine. Um, 1227 01:05:59,040 --> 01:06:02,160 Speaker 1: this is about a different anarchist revolutionary guy who actually 1228 01:06:02,240 --> 01:06:04,800 Speaker 1: knew mock No and fought during the Spanish Civil War, 1229 01:06:04,920 --> 01:06:08,640 Speaker 1: a guy named Buena Ventura. Do Rudy. Um, there's uh. 1230 01:06:08,680 --> 01:06:12,280 Speaker 1: The Ringo Award nominated comic creator Brenton Lingle is creating 1231 01:06:12,280 --> 01:06:14,840 Speaker 1: a new comic series called Drudy's Shadow of the People, 1232 01:06:14,880 --> 01:06:16,800 Speaker 1: and he's looking for people to back it on Kickstarter. 1233 01:06:17,160 --> 01:06:19,080 Speaker 1: Do you go to Kickstarter and you search for d 1234 01:06:19,360 --> 01:06:22,360 Speaker 1: U r r U t I d Rudy. Um, you'll 1235 01:06:22,360 --> 01:06:23,760 Speaker 1: be able to find it if you're back at the 1236 01:06:23,760 --> 01:06:26,360 Speaker 1: book level or higher and comment bastards. He'll send you 1237 01:06:26,400 --> 01:06:29,400 Speaker 1: a unique signed print free. It's a cool product. Uh, 1238 01:06:29,520 --> 01:06:34,200 Speaker 1: do Rudy at Kickstarter. Um, and you'll find Brenton's Brenton's project. 1239 01:06:34,240 --> 01:06:38,840 Speaker 1: So I think it's Nate. Check it out. Um anything else? Jack, 1240 01:06:39,280 --> 01:06:43,400 Speaker 1: nothing for me, Robert, nothing from you. Well that's all 1241 01:06:43,440 --> 01:06:47,360 Speaker 1: for me. Also, all right, I can't wait until next episode. 1242 01:06:47,920 --> 01:06:52,080 Speaker 1: I I can I can't. I can't. Let's wait. Let's 1243 01:06:52,080 --> 01:06:54,960 Speaker 1: wait like a day, Let's wait like okay. Okay, sounds good. 1244 01:06:55,240 --> 01:06:55,640 Speaker 1: All right,