WEBVTT - A Good Walk Spoiled 0:00:15.356 --> 0:00:20.676 Bushkin. I have a friend who lives in Brentwood, on 0:00:20.716 --> 0:00:23.356 the west side of Los Angeles, between Beverly Hills and 0:00:23.396 --> 0:00:26.276 Santa Monica. He is a little pool house in his 0:00:26.316 --> 0:00:29.236 backyard and I stay there whenever I come to LA, 0:00:29.876 --> 0:00:32.356 kind of like cato'kalon if your memory for O. J. 0:00:32.516 --> 0:00:39.236 Simpson Esoterica goes back that far. Anyway, my friend's street 0:00:39.276 --> 0:00:42.596 dead ends on San Vicente Boulevard, one of the central 0:00:42.676 --> 0:00:46.196 east west corridors in LA. And on the other side 0:00:46.196 --> 0:00:50.156 of San Vicente is this absolutely gorgeous golf course, one 0:00:50.196 --> 0:00:52.716 of the many private country clubs that LA is famous for. 0:00:53.716 --> 0:00:56.916 If you drive down Wilshire Boulevard into Beverly Hills, ten 0:00:56.956 --> 0:01:00.116 minutes east of Brentwood, you go right past Los Angeles 0:01:00.116 --> 0:01:03.156 Country Club, which costs maybe a quarter of a million 0:01:03.196 --> 0:01:06.196 dollars just to join. That is, if they'll even consider 0:01:06.236 --> 0:01:11.876 your application. There's bel Air Country Club just north of Ucla, 0:01:12.396 --> 0:01:14.916 which might be the most beautiful golf course in the country, 0:01:15.596 --> 0:01:19.276 Hillcrest offf Pico, Wilshire country Club in Hancock Park. I 0:01:19.316 --> 0:01:27.156 could go on. They're everywhere, vast, gorgeous and private. The 0:01:27.196 --> 0:01:29.756 one near my friend's house is called Brentwood country Club 0:01:29.996 --> 0:01:32.516 and it has a tall chain link fence around it 0:01:32.796 --> 0:01:35.036 which goes almost all the way out to the street, 0:01:35.276 --> 0:01:39.436 leaving just this narrow, rocky dirt track. There's no sidewalk, 0:01:39.996 --> 0:01:41.796 and since there aren't a lot of places to run 0:01:41.796 --> 0:01:44.836 in Los Angeles, tons of people run around the Brentwood 0:01:44.836 --> 0:01:52.996 Country Club on that narrow dirt track. And there's one 0:01:53.036 --> 0:01:55.436 thing that always bothers me every time I run that route. 0:01:56.316 --> 0:01:58.676 Why do all the runners of West Los Angeles have 0:01:58.756 --> 0:02:02.196 to squeeze into this narrow, rocky little track when there's 0:02:02.236 --> 0:02:05.116 a huge, magnificent park just on the other side of 0:02:05.156 --> 0:02:11.516 the fence. My name is Malcolm Gladwell, and you're listening 0:02:11.596 --> 0:02:16.516 to Revisionist History, my podcast about things overlooked and misunderstood. 0:02:21.436 --> 0:02:25.836 This episode is about the problem with golf. I hate 0:02:25.876 --> 0:02:29.756 golf and hopefully by the end of this you'll hate 0:02:29.796 --> 0:02:39.796 golf too. I'm standing here would Die day Zac, who 0:02:39.916 --> 0:02:44.996 is a very successful landscape architect Santa Monica, and we're 0:02:45.036 --> 0:02:48.796 on the corner of Sanma Sente and Berlin Game and 0:02:48.836 --> 0:02:53.236 we're looking into the Brentwood Country Club and the first 0:02:53.236 --> 0:02:54.516 thing I see is barbed wire. 0:02:55.156 --> 0:02:57.876 Looks like a couple of layers of barbed wire. 0:02:58.276 --> 0:03:00.276 This looks like it looks like the Berlin Wall. 0:03:00.636 --> 0:03:02.996 It like they want us to get in there. 0:03:02.876 --> 0:03:04.476 Are you what are we seeing? We're seeing this. Move 0:03:04.476 --> 0:03:07.476 a little closer here. What's that stand up trees? Do 0:03:07.516 --> 0:03:08.276 you know what those are? 0:03:09.436 --> 0:03:12.956 That looks like silk oaks in the foreground? And then 0:03:13.236 --> 0:03:17.596 I see a Sadris theodora, quite lovely. Lots of larger trees, 0:03:17.636 --> 0:03:20.836 which are unusual in Los Angeles because there's so little 0:03:21.436 --> 0:03:26.556 open space. Yeah, there's some piness. Canariensis looks like a 0:03:26.636 --> 0:03:27.676 redwood in there. 0:03:28.276 --> 0:03:30.196 I don't think Daezak has ever played a round of 0:03:30.196 --> 0:03:33.756 golf in her life. That's exactly why I wanted her opinion. 0:03:34.276 --> 0:03:37.636 I wanted someone objective to tell me what it would 0:03:37.636 --> 0:03:39.436 take to turn this place into a park. 0:03:39.676 --> 0:03:41.876 Well, first of all, I would get rid of the 0:03:41.956 --> 0:03:42.836 two layers. 0:03:42.556 --> 0:03:46.756 Of bark wire. Were the whole Eastern European feel east, 0:03:46.836 --> 0:03:49.276 Your German field would have to be corrected. 0:03:49.876 --> 0:03:53.556 I mean that might be some people's bag, but it's 0:03:53.596 --> 0:03:54.636 not very welcoming. 0:03:55.276 --> 0:03:59.876 Yeah. 0:03:59.996 --> 0:04:03.116 The typical golf course is two hundred acres, give or take. 0:04:03.516 --> 0:04:06.156 That's a lot of land. You have to landscape. It, 0:04:06.396 --> 0:04:10.236 mow it, drench it, and pesticides keep this sand traps perfect. 0:04:10.916 --> 0:04:13.316 I read somewhere that when a fancy golf course rebuilds 0:04:13.316 --> 0:04:16.796 its bunkers, it typically takes about three hundred and eighty 0:04:16.876 --> 0:04:21.556 nine truckloads of sand three hundred and eighty nine just 0:04:21.596 --> 0:04:25.116 to keep everything nice and white and fluffy. But at 0:04:25.156 --> 0:04:28.796 the same time, because golf involves launching a potentially lethal 0:04:28.916 --> 0:04:33.356 projectile at great speeds across enormous distances, you have to 0:04:33.396 --> 0:04:35.396 severely limit the number of people on the course at 0:04:35.396 --> 0:04:39.236 any one time. Typically, a good private course can handle 0:04:39.276 --> 0:04:42.236 no more than seventy two golfers at once. So that's 0:04:42.236 --> 0:04:44.796 one golfer per one hundred and twenty thousand, eight hundred 0:04:44.796 --> 0:04:48.236 and thirty three square feet. Can you imagine if basketball 0:04:48.276 --> 0:04:51.436 had the same population density as golf. I did the math. 0:04:52.036 --> 0:04:55.876 If basketball was played according to the geographical requirements of golf, 0:04:56.196 --> 0:05:00.756 a basketball court would be thirty acres. Picture that that 0:05:00.876 --> 0:05:08.996 had to play on motorcycles. Okay, another fact about golf. 0:05:09.596 --> 0:05:13.556 Rich people really really like it. They're obsessed with it 0:05:13.876 --> 0:05:15.876 in a way that there just isn't any parallel for 0:05:15.956 --> 0:05:20.276 ordinary people. Because serious golfers are super anal about their scores. 0:05:20.516 --> 0:05:24.356 We can actually quantify their obsession in order to calculate 0:05:24.396 --> 0:05:27.636 their handicap, basically how well they're playing relative to other 0:05:27.676 --> 0:05:30.236 people at the country club. They all post their results 0:05:30.276 --> 0:05:33.476 on a database maintained by the United States Golf Association. 0:05:34.036 --> 0:05:37.436 So we have a record, and it's a gold mine. 0:05:37.476 --> 0:05:39.716 To be able to calculate your handicap and track it 0:05:39.756 --> 0:05:43.196 through time. You will log into the system either at 0:05:43.316 --> 0:05:45.436 your course or on your home computer. 0:05:45.876 --> 0:05:48.756 I'm talking to an economist at Miami University named Lee 0:05:48.836 --> 0:05:53.396 bigger Staff. He's interested in the habits of top corporate executives. 0:05:53.996 --> 0:05:56.636 If you have the corner office and a multimillion dollar 0:05:56.756 --> 0:05:59.756 stock option and a golf stream five, does that make 0:05:59.796 --> 0:06:01.916 you more or less likely to put in a hard 0:06:01.956 --> 0:06:06.316 day's work. The USGA database is of serious professional interest 0:06:06.396 --> 0:06:07.516 to a guy like bigger Staff. 0:06:07.836 --> 0:06:11.436 And you input you played and what day you played on, 0:06:11.716 --> 0:06:14.716 and what your score was, and you know, after a 0:06:14.716 --> 0:06:18.476 certain number of rounds being played, the USGA will indicate 0:06:18.516 --> 0:06:21.436 what your handicap is, your level of skill, which allows 0:06:21.436 --> 0:06:23.756 you to compete against other golfers of different skill level 0:06:23.796 --> 0:06:25.316 and kind of normalize against that. 0:06:25.716 --> 0:06:27.916 You know, how you always hear that CEOs play a 0:06:27.956 --> 0:06:31.756 lot of golf. Bigger Staff's insight is that the USGA 0:06:31.876 --> 0:06:35.116 database allows us to know exactly how much they play. 0:06:35.756 --> 0:06:37.916 All you need to do is cross reference that list 0:06:37.916 --> 0:06:40.676 of scores with a list of the CEOs of America's 0:06:40.756 --> 0:06:44.276 largest companies. So that's what he does. It takes forever, 0:06:44.356 --> 0:06:44.996 by the way. 0:06:44.876 --> 0:06:47.316 We started while as a PhD student, and so this 0:06:47.396 --> 0:06:49.996 certainly was a multi month process. So it's not something 0:06:49.996 --> 0:06:51.556 that nine issy want to repeat in the near term 0:06:51.556 --> 0:06:53.316 just because it took a lot of collection time. 0:06:53.316 --> 0:06:56.316 There, how can you not love this? Surely this is 0:06:56.316 --> 0:06:59.956 why God invented graduate students. Bigger Staff begins with the 0:07:00.036 --> 0:07:02.996 names of the heads the top fifteen hundred publicly held 0:07:02.996 --> 0:07:06.596 companies in the US. Three hundred and sixty three of 0:07:06.636 --> 0:07:09.836 those fifteen hundred turn out to be I'm so obsessed 0:07:09.876 --> 0:07:13.116 with golf that they enter their scores into the USGA database. 0:07:13.316 --> 0:07:16.836 What you're seeing, on average is, I think fifteen rounds 0:07:16.836 --> 0:07:19.236 a year is kind of the average CEO is playing 0:07:19.276 --> 0:07:22.356 that amount of golf. But it's a heavily skewed distribution, right, 0:07:22.356 --> 0:07:23.356 So we have a lot of people that are playing 0:07:23.436 --> 0:07:27.156 very little golf, and then we have a tail where 0:07:27.236 --> 0:07:29.876 we're picking it up. The top quartile we're looking at, 0:07:29.916 --> 0:07:31.956 which is twenty two or more rounds per year, And. 0:07:31.956 --> 0:07:33.956 If you go to the top ten percent of Bigger 0:07:33.956 --> 0:07:37.876 Staff sample, the CEOs are playing around at least thirty 0:07:37.916 --> 0:07:43.916 seven times a year. A round of golf is a 0:07:43.916 --> 0:07:46.236 good four four and a half hours, So if you 0:07:46.316 --> 0:07:49.076 play thirty seven times a year, that's more than one 0:07:49.156 --> 0:07:52.396 hundred and sixty hours on the course, the equivalent of 0:07:52.436 --> 0:07:56.036 five and a half weeks of work. By the way, 0:07:56.236 --> 0:07:59.716 these are understatements. They don't include the time spent driving 0:07:59.716 --> 0:08:02.996 to the course, warming up, getting changed, having a drink. 0:08:03.436 --> 0:08:06.476 Doesn't include the hours spent practicing shots on the putting 0:08:06.516 --> 0:08:08.836 green or the driving range, or all the rounds you 0:08:08.916 --> 0:08:11.396 play that you don't enter into the database, like if 0:08:11.396 --> 0:08:13.756 you're only playing nine holes or playing a fun round, 0:08:14.156 --> 0:08:18.356 so the real time is probably way higher. Bigger Staff 0:08:18.396 --> 0:08:20.476 then goes on to show that the more golf of 0:08:20.596 --> 0:08:24.316 CEO plays, the worse his firm does, and also that 0:08:24.356 --> 0:08:26.996 the more golf of CEO plays, the more likely he 0:08:27.076 --> 0:08:30.196 is to be fired. In other words, this isn't a 0:08:30.236 --> 0:08:34.796 harmless habit, it's a dangerous habit. Remember the Wall Street 0:08:34.876 --> 0:08:38.556 investment bank bear Stearns. They went bankrupt during the mortgage 0:08:38.596 --> 0:08:42.516 crisis in July of two thousand and seven, Right when 0:08:42.556 --> 0:08:46.196 the crisis was beginning. The CEO of bear Stearns would 0:08:46.236 --> 0:08:49.316 often helicopter out from Wall Street on Friday afternoons to 0:08:49.356 --> 0:08:51.996 his exclusive course in New Jersey to get a round 0:08:51.996 --> 0:08:55.916 in before sunset. Even when his company was collapsing, he 0:08:55.956 --> 0:09:00.836 couldn't stop playing golf. Out of President Donald Trump's first 0:09:00.876 --> 0:09:03.996 four months in office, he visited his own golf courses 0:09:04.396 --> 0:09:08.076 twenty five times. One week he played three times. You 0:09:08.116 --> 0:09:10.236 would think he would be at the office learning how 0:09:10.236 --> 0:09:13.476 to be president, reading intelligence briefings, drading the swamp. No, 0:09:13.636 --> 0:09:17.596 he's golfing. It's an addiction, right, because the definition of 0:09:17.636 --> 0:09:21.116 an addiction is a self destructive habit. Just think if 0:09:21.116 --> 0:09:23.876 I said to you that an important employee of a 0:09:23.916 --> 0:09:27.556 major organization made lifestyle choices that caused him to miss 0:09:27.676 --> 0:09:30.836 enormous amounts of work, harm his performance, and put his 0:09:30.876 --> 0:09:34.276 own career in jeopardy, you would say, WHOA, check that 0:09:34.316 --> 0:09:39.716 guy into rehab. That's golf crack cocaine for rich white guys. 0:09:41.116 --> 0:09:44.276 The highest in the sample one hundred and forty six 0:09:44.356 --> 0:09:47.156 or one hundred and forty eight rounds recorded in a 0:09:47.196 --> 0:09:48.716 single year, which I mean that at that point, that's 0:09:48.716 --> 0:09:51.076 a tremendous amount of time spent on the golf course. 0:09:51.436 --> 0:09:53.996 You thought I was engaging in hyperbole, didn't you that 0:09:54.036 --> 0:09:57.316 I was using the word addiction metaphorically? One hundred and 0:09:57.316 --> 0:09:59.436 forty eight rounds a year is a round of golf 0:09:59.556 --> 0:10:01.716 every three days. 0:10:01.876 --> 0:10:03.516 And that would be if it was kind of uniformly 0:10:03.516 --> 0:10:07.516 distributed across the year. It's you know, GoF certainly has 0:10:07.556 --> 0:10:09.956 a season where it's a little bit more dents in 0:10:10.036 --> 0:10:12.036 terms of the summer versus the winner. 0:10:12.876 --> 0:10:16.596 And you can't tell me what company it is. I 0:10:16.636 --> 0:10:17.996 want to know what company it is. 0:10:18.676 --> 0:10:21.636 Yeah, we're just with this data, given it somewhat sensitive, 0:10:23.236 --> 0:10:25.436 we're unwilling to name out CEOs. 0:10:25.996 --> 0:10:28.276 I can't believe you won't tell me. I mean, here, 0:10:28.316 --> 0:10:31.596 we have an activity that is incredibly expensive, that is 0:10:31.756 --> 0:10:35.236 organized in just about the most extravagant manner possible, and 0:10:35.316 --> 0:10:38.876 at the same time, this expensive habit is incredibly addictive, 0:10:39.036 --> 0:10:41.236 to the point that there's a chief executive out there 0:10:41.396 --> 0:10:45.196 of a major American corporation who plays an average of 0:10:45.236 --> 0:10:47.756 one hundred and forty eight rounds of golf a year 0:10:48.236 --> 0:10:51.556 and is so completely unself conscious about that fact that 0:10:51.636 --> 0:10:54.476 he posts all one hundred and forty eight rounds on 0:10:54.516 --> 0:10:58.276 a public database where it can be analyzed by graduate students. 0:10:59.196 --> 0:11:01.556 So what happens to rich white guys with a dangerous, 0:11:01.596 --> 0:11:05.236 costly obsession. Do they burn through their life savings paying 0:11:05.276 --> 0:11:08.956 for their addiction like ordinary addicts do? Please give them 0:11:08.956 --> 0:11:09.916 a little more respect. 0:11:12.476 --> 0:11:14.836 By the way, this is my fifteenth year in television. 0:11:14.876 --> 0:11:16.556 Imagine that fifteen years of me. 0:11:18.676 --> 0:11:20.756 The longest stomach test in the history of show. 0:11:20.756 --> 0:11:24.436 Of everyone, you could argue, I would say in the 0:11:24.476 --> 0:11:26.916 forties and fifties there was no one who was more 0:11:26.956 --> 0:11:29.196 widely popular in America than Bob Hope. 0:11:29.316 --> 0:11:33.436 I'm talking to Richard Saglan, Bob Hope's biographer. I think 0:11:33.436 --> 0:11:35.916 Bob Hope has been a little forgotten in recent years, 0:11:36.196 --> 0:11:38.236 but in his day he was huge. 0:11:38.756 --> 0:11:41.996 Every late night comedian who does a stand up monologue 0:11:41.996 --> 0:11:44.356 at the beginning of the show owes a debt to 0:11:44.396 --> 0:11:46.676 Bob Hope because he kind of invented that thing, a 0:11:46.756 --> 0:11:49.596 stand up comedy monologue that sort of took note of 0:11:49.596 --> 0:11:51.556 what was going on in the world, what was going 0:11:51.596 --> 0:11:54.596 on in Hollywood, what was going on everywhere, and he 0:11:54.716 --> 0:11:57.956 was just the voice of America. I think for a 0:11:57.956 --> 0:11:58.516 long time. 0:11:59.516 --> 0:12:01.636 Bob Hope is a crucial part of the story of 0:12:01.636 --> 0:12:05.356 golf in America, although I'm warning you things are going 0:12:05.396 --> 0:12:08.236 to get a little complicated, which is sort of the point, 0:12:08.316 --> 0:12:10.156 because you don't get to run the world for as 0:12:10.196 --> 0:12:13.196 long as rich white guys have without being pretty wily, 0:12:13.916 --> 0:12:16.876 and some of their best and wiliest work has been 0:12:16.916 --> 0:12:22.076 on the golf course. So there's a principal and property 0:12:22.116 --> 0:12:25.156 tax law called highest and best use, which is that 0:12:25.196 --> 0:12:27.316 one of the ways you figure out how much to 0:12:27.436 --> 0:12:30.276 tax a piece of property is to estimate what its 0:12:30.316 --> 0:12:33.476 best use might be. For example, if I have a 0:12:33.476 --> 0:12:36.196 one acre plot and the fanciest part of Manhattan that 0:12:36.276 --> 0:12:38.596 I used to grow vegetables, I can't say to the 0:12:38.636 --> 0:12:42.156 city that land is worthless, it's just a vegetable garden. No, 0:12:42.716 --> 0:12:44.996 the city's going to say we're going to value that 0:12:45.036 --> 0:12:47.276 one acre and tax it as if it had an 0:12:47.276 --> 0:12:50.356 apartment block on it, because that's the best use of 0:12:50.436 --> 0:12:53.596 land in the fancy parts of Manhattan. Now, if you've 0:12:53.596 --> 0:12:55.636 got a vast golf course in the middle of Beverly 0:12:55.716 --> 0:12:59.036 Hills or Brentwood. Highest and best use makes you really 0:12:59.156 --> 0:13:02.916 nervous because plainly, the highest and best use of land 0:13:02.956 --> 0:13:04.636 in the middle of one of the most expensive and 0:13:04.676 --> 0:13:07.316 densely populated cities in the world is not a private 0:13:07.356 --> 0:13:12.356 golf course. So years ago, in nineteen sixty, California's country 0:13:12.356 --> 0:13:15.236 clubs realize they have to act or they're going to 0:13:15.236 --> 0:13:19.076 get taxed into oblivion. They get together and they propose 0:13:19.196 --> 0:13:23.196 an amendment to the state constitution that permanently exempts them 0:13:23.396 --> 0:13:26.436 from the highest and best use standard. They want their 0:13:26.516 --> 0:13:31.516 vegetable garden to be taxed as a vegetable garden. If 0:13:31.556 --> 0:13:36.196 you think about it, this is seriously audacious. Private golf 0:13:36.196 --> 0:13:40.716 courses are these massive, opulent, gated playgrounds, and membership is 0:13:40.756 --> 0:13:44.076 often restricted. In Los Angeles in nineteen sixty, a lot 0:13:44.076 --> 0:13:46.876 of these clubs didn't let in Jews. They certainly didn't 0:13:46.916 --> 0:13:49.036 let in black people except to work in the kitchen. 0:13:49.556 --> 0:13:54.356 Yet they wanted a constitutional exemption to ordinary property taxes 0:13:54.556 --> 0:13:57.356 like they were some kind of public amenity. How can 0:13:57.396 --> 0:14:01.356 they argue this, They don't, not really. They just bring 0:14:01.396 --> 0:14:04.036 in Bob Hope, who in addition to being the most 0:14:04.076 --> 0:14:08.956 popular entertainer in America, is also an obsessive golfer. Obsessive 0:14:09.676 --> 0:14:10.156 I might. 0:14:10.036 --> 0:14:10.876 As well level with you. 0:14:10.916 --> 0:14:13.316 I spent so much time in Sandtrap they sent me 0:14:13.356 --> 0:14:16.996 citizenship papers from Saudi Arabia. Oh yeah, I love to 0:14:17.036 --> 0:14:17.676 hear the whole. 0:14:17.836 --> 0:14:21.356 Bob Hope once wrote an entire book just devoted to 0:14:21.436 --> 0:14:24.636 his golf game, called Confessions of a Hooker, in which 0:14:24.676 --> 0:14:28.156 he estimates that he had played on two thousand different 0:14:28.196 --> 0:14:30.276 golf courses over the course of his life. 0:14:30.396 --> 0:14:34.076 He belonged to the Lakeside Country Club in La near 0:14:34.156 --> 0:14:40.076 where he lived a life of the prestigiousstigious. I think so. Yeah. 0:14:40.196 --> 0:14:42.436 The genius at picking Bob Hope is the face of 0:14:42.436 --> 0:14:46.996 California's country clubs is that his whole persona, his whole act, 0:14:47.276 --> 0:14:50.596 was about being every man. He's self deprecating. Half his 0:14:50.716 --> 0:14:53.076 jokes are about how he's not part of the inn group, 0:14:53.236 --> 0:14:55.396 even though, of course there's no one more in than 0:14:55.436 --> 0:14:55.996 Bob Hope. 0:14:56.116 --> 0:14:58.196 Isn't this wonderful love being here in California? 0:14:58.236 --> 0:14:59.436 I just love it. Look at that guy. 0:15:00.596 --> 0:15:02.036 That's the only place in the world where you can 0:15:02.076 --> 0:15:03.356 get four seasons in one day. 0:15:03.396 --> 0:15:05.716 I want to tell you that this is. 0:15:05.996 --> 0:15:07.876 We better hurry. We'll be able to be snowing before 0:15:07.916 --> 0:15:08.396 the third hole. 0:15:09.476 --> 0:15:10.036 Let's move on. 0:15:10.156 --> 0:15:13.236 Oh boy, So how did the Bob Hope for Golf 0:15:13.276 --> 0:15:17.956 campaign do in nineteen sixty It wins. The proposition passes 0:15:18.196 --> 0:15:21.116 and is added to Article thirteen of the California Constitution, 0:15:21.516 --> 0:15:25.516 where it remains to this day. In order to win 0:15:25.716 --> 0:15:28.276 a set of privileges for the very wealthy, in other words, 0:15:28.636 --> 0:15:32.236 California's country clubs turn to a man who symbolizes the 0:15:32.236 --> 0:15:35.756 common man. I mean, when does it ever happen that 0:15:35.796 --> 0:15:38.676 a TV celebrity wins a sweetheart deal for his rich 0:15:38.716 --> 0:15:41.516 golf buddies by posing as a friend of the common man. 0:15:42.476 --> 0:15:50.476 If you get my drift to give me back, just like, 0:15:50.796 --> 0:15:54.596 totally understand Prop thirteen property has passed in nineteen seventy eight, 0:15:55.396 --> 0:16:01.476 and what are the principal stipulations of the proposition. I'm 0:16:01.476 --> 0:16:03.756 in a big conference room in the Los Angeles County 0:16:03.836 --> 0:16:07.756 Municipal building, one of those beautiful nineteen thirties office buildings 0:16:07.756 --> 0:16:10.396 that are all over downtown Las Ane Angels. There are 0:16:10.476 --> 0:16:12.676 four people on the other side of the table. They're 0:16:12.716 --> 0:16:15.916 from the La County tax Assessor's office. I'm on my 0:16:16.036 --> 0:16:18.996 quest to figure out why Brentwood Country Club isn't just 0:16:19.036 --> 0:16:21.476 a big park that I can go running through, and 0:16:21.516 --> 0:16:24.836 I've decided to start the people who run the tax system. 0:16:25.116 --> 0:16:29.356 These are serious folks, deliberate, thoughtful. They have promised to 0:16:29.396 --> 0:16:32.436 help me. You'll have to guess what they really think. 0:16:34.116 --> 0:16:37.636 The tax rate is set is one percent of the value, 0:16:37.876 --> 0:16:39.996 as opposed to a variable rate, which it was before. 0:16:40.316 --> 0:16:43.556 The man speaking is Brian Donnelly. He's talking about the 0:16:43.556 --> 0:16:47.916 most famous amendment to the California Constitution, Proposition thirteen. 0:16:48.396 --> 0:16:52.236 The properties only get reassessed with when there's a transfer 0:16:52.356 --> 0:16:56.156 or a change of ownership, or there's new construction. Those 0:16:56.196 --> 0:16:57.796 are the primary parts of it. 0:16:58.076 --> 0:17:00.836 Here's what he's saying. If you own a house, every 0:17:00.836 --> 0:17:03.516 one or two years, typically the value of your property 0:17:03.556 --> 0:17:05.836 is reassessed by the city or county where you live. 0:17:06.556 --> 0:17:09.076 So if your house doubles in value, the local government 0:17:09.196 --> 0:17:13.036 will raise your taxes accordingly. That's the way property taxes work, 0:17:13.716 --> 0:17:18.276 except in California. Proposition thirteen said that for tax purposes, 0:17:18.556 --> 0:17:21.476 the value of any piece of property in California is 0:17:21.636 --> 0:17:25.476 frozen at pre nineteen seventy eight levels, and the only 0:17:25.556 --> 0:17:28.756 way that property can be reassessed at its real current 0:17:28.876 --> 0:17:32.116 value is if the property is sold, or, to be 0:17:32.156 --> 0:17:35.796 more specific, if ownership of more than fifty percent of 0:17:35.836 --> 0:17:40.196 the property changes hands. In other words, California has two 0:17:40.276 --> 0:17:43.956 kinds of taxpayers, the post nineteen seventy eight people who 0:17:43.996 --> 0:17:47.716 pay normal property taxes, and the people lucky and old 0:17:47.836 --> 0:17:50.036 enough to be living in the same house they owned 0:17:50.076 --> 0:17:53.276 in nineteen seventy eight, who pay a tiny fraction of 0:17:53.316 --> 0:17:54.036 their fair share. 0:17:54.316 --> 0:17:56.876 You know, I've got family members who've owned their house 0:17:56.916 --> 0:18:01.156 in nineteen sixty nine and they're paying I think their 0:18:01.196 --> 0:18:04.356 tax will value is about ninety thousand dollars or something 0:18:04.356 --> 0:18:06.516 like that. The houses in that neighborhood sell for six hundred, 0:18:07.076 --> 0:18:11.396 so they're paying a lot less than It's the properteen conundrum, 0:18:11.396 --> 0:18:12.836 which I'm sure you've read about. 0:18:16.116 --> 0:18:20.796 Please understand, this system is insane, totally crazy. I mean, 0:18:20.876 --> 0:18:23.076 just think of all the reasons why someone might deserve 0:18:23.116 --> 0:18:26.156 a big tax break. I mean, they're sick, they're poor, 0:18:26.756 --> 0:18:29.116 they have tons of young kids, they've made a big 0:18:29.156 --> 0:18:32.236 investment in their business. The state of California says, no, 0:18:33.076 --> 0:18:36.156 we think the most deserving group are people whose property 0:18:36.156 --> 0:18:40.956 hasn't changed hands in forty years. Okay, now imagine that 0:18:41.036 --> 0:18:44.636 you're a private golf club. You did that spectacular bit 0:18:44.676 --> 0:18:47.436 of jiu jitsu with Bob Hope in nineteen sixty, which 0:18:47.476 --> 0:18:50.676 means that you don't pay real property taxes. Gift from 0:18:50.716 --> 0:18:55.636 God number one. Then comes proposition thirteen, and you get 0:18:55.636 --> 0:19:00.116 a second gift from God because proposition thirteen says that 0:19:00.156 --> 0:19:05.116 those already artificially low property taxes are now frozen forever 0:19:05.276 --> 0:19:08.996 at nineteen seventy eight levels, so long as your country 0:19:09.196 --> 0:19:12.756 club does not change hands. And that last part is 0:19:12.836 --> 0:19:16.796 crucial because if you have a change in ownership, then 0:19:16.876 --> 0:19:20.396 you have to pay real property tax like every other 0:19:20.596 --> 0:19:24.156 long suffering California taxpayer who hasn't been in one place 0:19:24.156 --> 0:19:28.716 since nineteen seventy eight. So the country clubs of Los 0:19:28.756 --> 0:19:33.716 Angeles all hang by a thread. They continue to exist 0:19:34.476 --> 0:19:37.916 only so long as the tax system perceives that they 0:19:37.956 --> 0:19:42.756 have not changed hands. And for years everyone assumes they 0:19:42.756 --> 0:19:47.276 haven't changed hands. I mean Brentwood, LA country Club, Wiltshire. 0:19:47.596 --> 0:19:50.356 All the major golf clubs were all founded before nineteen 0:19:50.396 --> 0:19:54.796 seventy eight, but then a neighborhood newspaper called the Los 0:19:54.796 --> 0:20:00.396 Angeles Garment and Citizen runs an article January sixteenth, twenty ten, 0:20:00.756 --> 0:20:05.076 in which they say, wait a minute, most private country 0:20:05.076 --> 0:20:09.356 clubs in Los Angeles have what's called equity ownership. They're 0:20:09.436 --> 0:20:12.436 owned by their members. When you admit it, you get 0:20:12.436 --> 0:20:15.316 a share. When you die or quit, someone else takes 0:20:15.316 --> 0:20:19.196 your share. So over time, if enough members die or quit, 0:20:19.556 --> 0:20:23.276 isn't that a change in ownership. That question was put 0:20:23.316 --> 0:20:25.796 to Rick Auerbach, who was then the head of tax 0:20:25.796 --> 0:20:27.196 assessment for La County. 0:20:27.476 --> 0:20:28.876 I think the quote was kind of funny for me. 0:20:28.876 --> 0:20:31.916 You said something about, let's see, on most issues we 0:20:31.916 --> 0:20:34.076 haven't heard at least the question asked before. He said 0:20:34.116 --> 0:20:35.556 he'd worked in the office thirty nine years, but this 0:20:35.636 --> 0:20:36.156 was a new one. 0:20:36.356 --> 0:20:39.916 So hour Back refers the question to the city's lawyers. 0:20:40.356 --> 0:20:42.636 They put their best and brightest legal minds on it 0:20:42.916 --> 0:20:46.956 for six months, and on June second, twenty ten, the 0:20:46.996 --> 0:20:51.476 County's tax court issues a solemn, four page ruling. They conclude, 0:20:51.756 --> 0:20:56.636 no country clubs haven't changed hands. If you're keeping track, 0:20:56.876 --> 0:20:59.596 that's the third straight up gift from God that LA's 0:20:59.596 --> 0:21:01.996 private country clubs have gotten in the last fifty years. 0:21:02.516 --> 0:21:05.236 I was talking to someone who's a member of Bella 0:21:05.436 --> 0:21:08.916 Country Clubs and I said, what percentage of the members 0:21:08.916 --> 0:21:12.396 of bel Air today? We're members in seventy eight and 0:21:12.436 --> 0:21:16.156 he said, you know, ten percent? So why isn't that 0:21:16.196 --> 0:21:17.156 a change of ownership? 0:21:17.476 --> 0:21:19.476 Right? If I haven't had a chance to dig through 0:21:19.516 --> 0:21:22.276 this a whole lot since I got it out of 0:21:22.276 --> 0:21:24.436 the file the other day. But they kind of get 0:21:24.436 --> 0:21:27.676 into it. It's they're saying, if there's no one event 0:21:27.876 --> 0:21:31.156 that is that is more than fifty percent of a transfer, 0:21:31.596 --> 0:21:34.396 then it's not. Each of those little individual slices are 0:21:34.436 --> 0:21:36.076 not a change of ownership on their own. 0:21:37.116 --> 0:21:44.596 Did you find that argument plausible? Well, yeah, that's that's. 0:21:44.596 --> 0:21:46.036 We were implementers of the law. 0:21:46.276 --> 0:21:46.396 Right. 0:21:46.516 --> 0:21:50.796 You don't have opinions? No, Well no, I could swear 0:21:50.956 --> 0:21:52.956 as I looked across the table at Donnelly and his 0:21:53.036 --> 0:21:56.556 cohorts that they were twitching like they desperately wanted to 0:21:56.556 --> 0:21:59.356 say something but had to bite their tongue. You know 0:21:59.396 --> 0:22:03.836 what it's like. You know that famous paradox I forgot 0:22:03.836 --> 0:22:06.716 with the ship. Well, you the question is if you 0:22:06.836 --> 0:22:08.596 change if you have a ship and you change a sex. 0:22:08.676 --> 0:22:11.636 Some ancient think and you change one board at a time. 0:22:12.716 --> 0:22:14.516 Is at the end of the day, is a ship different? 0:22:15.196 --> 0:22:18.516 That's what this is. The thing I can't remember is 0:22:18.556 --> 0:22:22.076 a ship of theseus? The famous thought experiment described by 0:22:22.076 --> 0:22:27.916 the Greek philosopher Plutarch roughly two thousand years ago. Plutarch says, 0:22:28.356 --> 0:22:31.476 imagine theseus is sailing on a ship, and one by 0:22:31.516 --> 0:22:34.196