WEBVTT - William Lazonick on How The Stock Market Killed Tech 0:00:02.520 --> 0:00:06.960 Also media, Hello, and welcome to Better Offline. 0:00:06.960 --> 0:00:21.640 I am, of course your host ed Zittron and know 0:00:21.720 --> 0:00:23.720 a lot of people have been asking, hundreds of thousands 0:00:23.720 --> 0:00:25.520 of people. In fact, I will be submitting myself at 0:00:25.520 --> 0:00:27.400 the next d NC is the left is Joe Rogan. 0:00:27.760 --> 0:00:30.400 I am two or three inches taller as well. But 0:00:30.440 --> 0:00:34.199 today I'm joined by Professor William Lazonek. He's a professor 0:00:34.200 --> 0:00:37.560 emeritus of Economics ever at University of Massachusetts and the 0:00:37.600 --> 0:00:40.519 co founder of the Academic Industry Research Network. William, thank 0:00:40.520 --> 0:00:41.280 you so much for coming. 0:00:41.560 --> 0:00:42.360 Pleasure to be here. 0:00:42.520 --> 0:00:45.960 All right, So, if you look at the tech industry 0:00:46.040 --> 0:00:48.080 right now, it's probably the most it's definitely the most 0:00:48.120 --> 0:00:50.760 profitable it's ever been, and probably the worst. It feels 0:00:50.800 --> 0:00:54.360 like the furthest it's been from really innovating, and it's 0:00:54.400 --> 0:00:57.720 moved to value extraction, I think, and you know, you 0:00:57.760 --> 0:00:58.720 know a great deal about that. 0:00:59.080 --> 0:01:01.319 How did we get here? And I mean historically, how 0:01:01.320 --> 0:01:02.000 did we get here? 0:01:02.840 --> 0:01:06.240 Well, first of all, you have to understand that the 0:01:06.319 --> 0:01:11.200 United States as the most formidable developmental state in history. 0:01:11.240 --> 0:01:16.759 A lot of people think that Japan in the eighties 0:01:16.880 --> 0:01:20.360 invented the developmental state, but actually the United States was 0:01:20.440 --> 0:01:22.840 japan developmental state from the point of view of technology. 0:01:23.160 --> 0:01:24.200 So I won't go into. 0:01:24.000 --> 0:01:25.840 The whole history of that, but it goes back to 0:01:25.880 --> 0:01:30.760 the nineteenth century building of Langrand colleges, railroads, and going 0:01:30.800 --> 0:01:33.920 into aviation, the computer. 0:01:33.640 --> 0:01:34.240 Industry, etc. 0:01:35.080 --> 0:01:39.800 So tech was provided with all kinds of resources. 0:01:41.200 --> 0:01:42.440 Those resources were. 0:01:42.280 --> 0:01:51.040 Originally used by large corporations that actually gave people lifetime employment. 0:01:51.200 --> 0:01:54.640 So that's something else. When people discovered Japanese competition in 0:01:54.640 --> 0:01:57.200 the nineteen eighties, he said, oh, a secret to Japan's 0:01:57.240 --> 0:02:00.800 success is they give people permanent employment, life time employment. 0:02:01.720 --> 0:02:05.120 US companies were doing that, particularly post World War Two. 0:02:06.520 --> 0:02:10.160 Iconic company that did that, which became a totally shareholder 0:02:10.200 --> 0:02:15.040 value company, and that's where I'm going was IBM. You 0:02:15.080 --> 0:02:16.799 had a job for life, so you had a defined 0:02:16.840 --> 0:02:21.960 benefit pension, you had all your medical compenses paid, et cetera. 0:02:23.840 --> 0:02:27.640 Those companies were highly innovative, A lot of them connected 0:02:27.639 --> 0:02:32.280 to what was called the military industrial complex, and in 0:02:32.320 --> 0:02:37.919 the early late fifties early sixties, some companies started setting off, 0:02:37.960 --> 0:02:41.280 spinning off of that, companies that would have been like 0:02:41.440 --> 0:02:46.200 companies here today that that were, and they went on, 0:02:46.280 --> 0:02:49.000 they went public and they were called glamorous stocks, but 0:02:49.080 --> 0:02:52.560 they were thinly traded. So the Security and Exchange Commission, 0:02:52.600 --> 0:02:55.000 which was set up in the mid thirties to get 0:02:55.080 --> 0:03:01.280 rid of manipulation and fraud on markets, they had what 0:03:01.400 --> 0:03:04.959 was called a Special Study that created Nasdaq, which you 0:03:05.080 --> 0:03:07.600 all know about, but you probably don't know the origins 0:03:07.600 --> 0:03:10.560 of it. So Nasdaq was really backed by the US 0:03:10.680 --> 0:03:15.760 government to create a liquid market in a spec highly 0:03:15.800 --> 0:03:20.560 speculative stocks. And so the National Association Dealer's Automated Quotation 0:03:20.680 --> 0:03:24.560 system came online in April nineteen seventy one, and it 0:03:24.600 --> 0:03:27.520 wasn't actually a trading market, it was just a quotation system. 0:03:27.560 --> 0:03:30.120 So the security dealers who were all working on their 0:03:30.160 --> 0:03:34.240 phones and rollodexes in isolation and never knowing what the 0:03:34.240 --> 0:03:36.280 price of a stock would be, all of a sudden. 0:03:36.320 --> 0:03:39.720 This is really the first use of internetworking, right, because 0:03:40.040 --> 0:03:43.240 computers mainframes had just come in in the sixties, So 0:03:43.280 --> 0:03:46.280 you now have NASDAK. One of the first companies that 0:03:46.400 --> 0:03:50.240 listened on Nasdaq was Intel, three years after was founded. 0:03:50.360 --> 0:03:54.200 That would never have been possible with the New York 0:03:54.240 --> 0:03:57.040 Stock Exchange. They could have gone the over counter market 0:03:57.080 --> 0:04:00.720 because the New York Stock exchange had listen requirements in 0:04:00.800 --> 0:04:04.640 terms of capitalization profitability that would require ten to fifteen 0:04:04.680 --> 0:04:08.280 years at least, right, Okay, but now you could get 0:04:08.400 --> 0:04:10.000 companies going pro public. 0:04:10.200 --> 0:04:11.400 They didn't even have a product. 0:04:12.360 --> 0:04:16.000 That really was the thing that brought venture capital into 0:04:16.040 --> 0:04:20.440 the picture. There was no well defined venture capital industry 0:04:20.520 --> 0:04:24.800 until nineteen seventy two, a year after Nasdaq was created, 0:04:24.839 --> 0:04:27.120 and it came out of Silicon Valley, which by the way, 0:04:27.640 --> 0:04:30.120 was dubbed Silicon Valley in nineteen seventy one by a 0:04:30.160 --> 0:04:34.159 journalist because there were so many startups producing silicon ship. 0:04:34.080 --> 0:04:34.680 Fill this point. 0:04:34.800 --> 0:04:37.720 Going public required you to be a good company. 0:04:37.960 --> 0:04:40.400 You had to, yeah, so often you went over the 0:04:40.400 --> 0:04:42.760 counter and then graduated to what they called the Big 0:04:42.760 --> 0:04:46.040 Board the New York Stockution be Yeah, and you had 0:04:46.080 --> 0:04:48.880 to have a lot of different shareholders, cetera. Yeah, so 0:04:49.839 --> 0:04:55.320 rid of that, and well, those companies tended to pay dividends, 0:04:55.640 --> 0:04:57.680 but they didn't do something which I'm going to talk 0:04:57.720 --> 0:05:01.320 about today, which is the way the datory value extraction 0:05:01.520 --> 0:05:05.120 is working in the US economy, particularly in the tech sector, 0:05:05.360 --> 0:05:08.479 and that's the phenomenon of companies buying back their stock. 0:05:09.080 --> 0:05:11.120 Okay, but before we get to that. 0:05:11.000 --> 0:05:14.680 We basically have to see that in the nineteen seventies 0:05:15.240 --> 0:05:20.240 there was a change in the institutions of the stock market, 0:05:20.520 --> 0:05:24.799 particularly around Nasdaq and venture capital, that made it possible 0:05:25.279 --> 0:05:30.880 all of a sudden to get funding from for startups 0:05:30.920 --> 0:05:32.560 that couldn't get funding before. 0:05:33.279 --> 0:05:33.520 Now. 0:05:33.560 --> 0:05:36.960 A big change was and it was really under the radar, 0:05:38.160 --> 0:05:41.800 was in nineteen seventy nine July of nineteen seventy nine 0:05:42.440 --> 0:05:46.279 when the Department of Labor in the US said that 0:05:46.360 --> 0:05:49.800 pension funds could put some of their money into risky assets. 0:05:50.480 --> 0:05:53.880 There had been some legislation earlier in the decade which 0:05:53.920 --> 0:05:57.320 said that if pension fund managers put their money into 0:05:57.560 --> 0:06:01.279 companies like the companies on show here they're trying to 0:06:01.279 --> 0:06:03.480 go public, that they could get into. 0:06:03.640 --> 0:06:05.240 Trouble or company, it's a company. 0:06:05.760 --> 0:06:09.280 Immediately, from that point in time on, there was no 0:06:09.360 --> 0:06:12.680 shortage of money in the US economy for venture. 0:06:12.400 --> 0:06:13.520 Capital, for new firms. 0:06:13.560 --> 0:06:16.359 There was really always Since then, it's been a shortage 0:06:16.400 --> 0:06:19.320 of good firms and a lot of money chasing. 0:06:19.720 --> 0:06:23.560 Well. Pushing back on that way, yeah, agreeing, But isn't 0:06:23.560 --> 0:06:27.160 the problem more so that venture capital no longer really works. 0:06:27.200 --> 0:06:29.839 It isn't really taking risks, it's just okay doing more 0:06:29.920 --> 0:06:30.640 value extraction. 0:06:30.800 --> 0:06:34.400 Now, venture capital at that point where it was really 0:06:34.440 --> 0:06:37.160 dominated by people who came out of the industries in 0:06:37.200 --> 0:06:39.880 which they were investing. Right, So there were individuals who 0:06:39.960 --> 0:06:44.520 decided to be a like Don Valentine who backed Cisco 0:06:44.640 --> 0:06:49.200 and other companies. He came out of National Semiconductor, had 0:06:49.240 --> 0:06:51.479 been in the semiconductor industry. They were in a whole 0:06:51.560 --> 0:06:54.839 number of them, and so they understood the industries in 0:06:54.839 --> 0:06:55.839 which they were investing. 0:06:55.880 --> 0:06:57.479 Some of them were better, some of the worst. 0:06:57.600 --> 0:07:03.400 Right, But really what put it venture capital made it 0:07:03.520 --> 0:07:07.000 something that people would now say, hey, let's go after 0:07:07.080 --> 0:07:11.720 this stuff. We're two IPOs in nineteen eighty one was 0:07:11.760 --> 0:07:15.720 Apple and the other was Genentech. One attack and one 0:07:15.720 --> 0:07:20.000 on biotech. And from then on there was well, in 0:07:20.040 --> 0:07:23.200 the early eighties, there was a whole bunch of investing 0:07:23.400 --> 0:07:26.920 in venture capital. Here's your point comes up. There was 0:07:26.960 --> 0:07:29.080 a very good book written in nineteen eighty five by 0:07:29.160 --> 0:07:35.080 BusinessWeek journalist your named John Wilson, called The New Ventures. 0:07:35.320 --> 0:07:36.960 It was the first real good book. 0:07:36.800 --> 0:07:40.400 Out there on venture capital, and the last chapter was 0:07:40.480 --> 0:07:45.680 vulture Capital. So it was basically the bad venture capitalists 0:07:45.760 --> 0:07:50.040 coming in and just hyping companies and the whole thing 0:07:50.080 --> 0:07:52.680 falling apart. And then so you always you have these 0:07:52.720 --> 0:07:57.040 cycles of good venture capital, and then you know, in 0:07:57.120 --> 0:07:59.200 the dot com period you have the boom and bust, 0:07:59.200 --> 0:07:59.640 et cetera. 0:08:00.040 --> 0:08:03.560 I think, I think what I'm thinking is the way 0:08:03.640 --> 0:08:06.960 venture capital is today is strange because after twenty twenty one, 0:08:07.040 --> 0:08:09.800 the collapse of the zero interest free era, you're kind 0:08:09.800 --> 0:08:12.080 of seeing that a lot of venture capitalists did not 0:08:12.320 --> 0:08:14.320 exactly know how to invest in companies at all. 0:08:14.320 --> 0:08:16.880 They knew how to invest in concepts, in. 0:08:17.000 --> 0:08:19.600 Things that they could take public or things that they 0:08:19.600 --> 0:08:23.360 could flog to another company. And that's venture capital is 0:08:23.400 --> 0:08:24.600 falling off quite a lot. 0:08:24.680 --> 0:08:24.920 Now. 0:08:26.320 --> 0:08:29.040 Is that something that reflects the larger market conditions of 0:08:29.080 --> 0:08:31.520 the tech industry, because it feels like the same problem 0:08:31.520 --> 0:08:34.400 in that meta makes their Facebook sucks. Now, if I'm 0:08:34.400 --> 0:08:36.480 sure you all use Instagram and Facebook, if you don't 0:08:36.480 --> 0:08:38.240 think it's bad, please go on the app take a look. 0:08:38.800 --> 0:08:39.800 It feels like they're. 0:08:39.679 --> 0:08:42.959 All following the same thing of they have all fallen 0:08:43.000 --> 0:08:47.640 into Jack Welch's shareholder value system of bigger, more money 0:08:47.880 --> 0:08:51.000 as much as we can squeeze my users as possible, 0:08:51.040 --> 0:08:52.880 which only appears to work in the public market. 0:08:53.000 --> 0:08:57.840 So how did how did we we really get here? Though? Like, 0:08:57.880 --> 0:09:01.000 how do how do we get to the sho Okay? 0:09:01.040 --> 0:09:07.400 So, now what you had with venture capital, with Nasdak 0:09:07.640 --> 0:09:10.679 being part part of it, with a shift actually of 0:09:10.760 --> 0:09:15.600 Wall Street self from investing in these older companies and 0:09:15.800 --> 0:09:18.839 doing their bond issues to trading in stocks that also 0:09:18.840 --> 0:09:22.000 occurred in the nineteen seventy you when the stock market 0:09:22.000 --> 0:09:22.680 actually was. 0:09:22.600 --> 0:09:23.600 Not doing very well. 0:09:23.960 --> 0:09:28.400 But you then had a whole situation where you had, 0:09:29.520 --> 0:09:34.520 I mean, this really did unleash innovation. The older economy companies, 0:09:34.800 --> 0:09:37.319 they were good at doing some things, but a lot 0:09:37.360 --> 0:09:43.520 of them became conglomertized, became sclorotic, et cetera. There was 0:09:43.559 --> 0:09:48.480 a demand coming out of basically conservative economics, led by 0:09:48.480 --> 0:09:51.480 a guy named Michael Jensen, to discourage the free cash flow, 0:09:51.520 --> 0:09:54.800 as they called it. It actually invented the term free 0:09:54.840 --> 0:09:57.320 cash flow, which every company used. A free cash flow, 0:09:57.360 --> 0:09:59.319 by the way, means that if you got to lay 0:09:59.360 --> 0:10:02.120 off five thousand and workers to create free cash flow, 0:10:02.160 --> 0:10:05.360 well that's fine, you know, as long as anything that 0:10:05.800 --> 0:10:10.600 isn't nailed down is free cash flow. And this prioritized 0:10:12.559 --> 0:10:17.840 shareholder value ideology that I witnessed firsthand when I was 0:10:17.840 --> 0:10:20.440 at Harvard Business School in the mid nineteen eighties, and 0:10:20.480 --> 0:10:22.920 they hired this guy, Michael Jensen. I'm not sure if 0:10:22.960 --> 0:10:25.440 you've heard of him, but he died recently, the guru 0:10:25.440 --> 0:10:28.000 of a maximizing shareholder value. 0:10:28.600 --> 0:10:32.079 And once he did that, you start. 0:10:31.800 --> 0:10:34.120 Getting hits in the Wall Street Journal of Financial Time 0:10:34.160 --> 0:10:39.040 Center shareholder value. Okay, then they start with executive pay, 0:10:39.480 --> 0:10:42.559 stock based pay. That was already the longer history of that, 0:10:42.600 --> 0:10:45.479 but that comes in in the nineteen eighties. That's aligning 0:10:45.880 --> 0:10:49.320 the top executives with shareholder value. 0:10:49.679 --> 0:10:51.160 And then how do you. 0:10:52.160 --> 0:10:57.000 Create and I use creative quotes value for shareholders. Not 0:10:57.040 --> 0:11:00.960 only do you pay dividends, but you buy back the 0:11:01.000 --> 0:11:04.480 company's stock the stock buy back. You tell your broker 0:11:04.840 --> 0:11:08.600 go into the market, buy back our stock. You're giving 0:11:08.640 --> 0:11:11.640 their money away to get the stock price up, and 0:11:11.679 --> 0:11:17.280 you're nactually not benefiting shareholders who get dividends. You're benefiting 0:11:17.320 --> 0:11:21.760 share sellers who are using the opportunity to sell their shares, 0:11:21.760 --> 0:11:26.480 including the top executives who pay is stock based stock options. 0:11:26.800 --> 0:11:31.200 Now it's more stock awards, but also corporate raiders who 0:11:31.240 --> 0:11:33.520 want to come in and say, get the stock price up, 0:11:34.320 --> 0:11:38.280 do the buybacks, then we'll sell the shares. So this 0:11:38.360 --> 0:11:45.080 becomes a massive phenomenon. Now, this was enabled by in 0:11:45.160 --> 0:11:50.320 nineteen eighty two again the Security Exchange Commission, which has 0:11:50.360 --> 0:11:53.560 said was set up to get rid of manipulation and 0:11:53.640 --> 0:11:56.760 fraud in the market. It went from being a regulator 0:11:56.960 --> 0:11:59.000 of the stock market to being a promoter of the 0:11:59.000 --> 0:12:02.720 stock market. And to this day that's what the Security 0:12:02.760 --> 0:12:05.720 Exchange Commission is. It is not a regulator of the 0:12:05.760 --> 0:12:08.360 stock market, it's a promoter of the stock market. 0:12:09.080 --> 0:12:13.000 And what they did it was really under the radar. 0:12:13.200 --> 0:12:16.559 Usually in the US you have public comment on these issues. 0:12:17.559 --> 0:12:22.520 They said, any company on any single trading day can 0:12:22.559 --> 0:12:25.960 buy back twenty five percent of their average daily trading 0:12:26.040 --> 0:12:30.920 volume over the previous four weeks without being charged with manipulation. 0:12:31.040 --> 0:12:32.000 It was a safe harbor. 0:12:32.440 --> 0:12:35.000 So didn't say if you went over that you would 0:12:35.080 --> 0:12:36.960 be charged. It just said if you want to be 0:12:37.280 --> 0:12:40.960 sure that you won't be charged manipulation, that's how much 0:12:41.000 --> 0:12:42.800 you can you can do and buy backs. 0:12:42.840 --> 0:12:45.679 Now, so how does this lead to where we are today, 0:12:45.679 --> 0:12:46.880 which is a death of innovation? 0:12:47.440 --> 0:12:52.079 Okay, So What that means is that a company like Apple. 0:12:53.600 --> 0:12:56.199 I looked at the figures, they change a bit from 0:12:56.400 --> 0:12:58.840 year to year, or sometimes quite a bit. They could 0:12:58.840 --> 0:13:02.840 do about four billion a day day in buybacks, day. 0:13:02.640 --> 0:13:05.880 After day after day. They Apple just. 0:13:05.840 --> 0:13:09.160 Came out with his twenty twenty four annual report. They 0:13:09.200 --> 0:13:11.920 did ninety five billion in buybacks. They had ninety four 0:13:11.920 --> 0:13:16.760 billion of profits. Hugely profitable, but ninety five billion in buybacks. 0:13:16.800 --> 0:13:20.679 Apple has done seven hundred and twenty six billion dollars 0:13:20.720 --> 0:13:26.760 in stock buybacks over the previous twelve years, plus about 0:13:26.800 --> 0:13:31.240 one about two hundred billion in dividends. The buybacks are 0:13:31.240 --> 0:13:36.360 about ninety three percent of its profits. Now Apples hugely profitable, 0:13:37.400 --> 0:13:41.480 but there are costs to doing that now. By the way, 0:13:41.640 --> 0:13:45.640 when if you look on Apple's website, they call this 0:13:45.800 --> 0:13:50.880 program of paying out dividends and doing buybacks, which really 0:13:50.920 --> 0:13:51.600 only got going. 0:13:51.960 --> 0:13:53.319 Is a longer history to this. 0:13:54.240 --> 0:13:57.120 When Steve Jobs left in nineteen eighty five or was 0:13:57.160 --> 0:14:00.240 pushed out of Apple, the executives there start paying doing 0:14:00.320 --> 0:14:03.319 giving in the buyback almost drove the company into bankruptcy. 0:14:03.720 --> 0:14:06.640 Jobs came back in nineteen ninety seven said we're not 0:14:06.760 --> 0:14:09.640 doing that. We're doing what I call retaining and reinvesting. 0:14:10.400 --> 0:14:13.720 And we know the history of that. They have the iPod, iPhone, iPad, 0:14:13.760 --> 0:14:19.960 et cetera. Steve Jobs died in twenty eleven. Shortly before 0:14:20.000 --> 0:14:23.600 he did that, he died, he gave the CEO position 0:14:23.720 --> 0:14:27.000 to Tim Cook, who was claimed to fame. There was 0:14:27.120 --> 0:14:30.120 outsourcing their manufacturing to China and. 0:14:30.680 --> 0:14:33.360 Courtually everything that operations guy, yeah, operation guy. 0:14:33.440 --> 0:14:38.040 And he got pressured by the hedge fund activists starting 0:14:38.080 --> 0:14:44.160 in twenty twelve twenty thirteen, including Carl Icon, and they 0:14:44.200 --> 0:14:46.640 started doing the buybacks. And once they started doing them, 0:14:46.640 --> 0:14:49.560 they just kept doing more and more of them, as 0:14:49.560 --> 0:14:53.480 I say, an average of sixty billion a year over 0:14:53.920 --> 0:14:56.640 the last twelve years. Now they call it their capital 0:14:56.680 --> 0:15:00.400 return program. But the only time Apple ever got money 0:15:00.440 --> 0:15:03.440 from the stock market was in nineteen eighty and it's ibo, 0:15:04.720 --> 0:15:06.560 so who is it returning capital too? 0:15:06.680 --> 0:15:09.200 But what I understand this is bad because it makes 0:15:09.240 --> 0:15:12.400 it's basically just money going into the corporation's mouth from. 0:15:12.240 --> 0:15:14.280 It hand its hands. But how does this fuck up 0:15:14.280 --> 0:15:15.080 the innovation economy? 0:15:15.080 --> 0:15:17.880 How does this stop people actually building more cool stuff, 0:15:18.040 --> 0:15:20.200 all right, or useful things I guess, or at least, 0:15:20.200 --> 0:15:21.680 how does it enable the bad habits. 0:15:21.840 --> 0:15:25.320 Yeah, okay, so first of all, again, sticking with a 0:15:25.360 --> 0:15:30.200 company like Apple, they could be paying people in the 0:15:30.240 --> 0:15:35.000 Apple stores maybe twenty percent more, maybe twenty five percent more, 0:15:35.200 --> 0:15:37.680 making those even though they can might be able to 0:15:37.720 --> 0:15:40.440 substitute a lot of those people fairly easily. But they 0:15:40.560 --> 0:15:42.840 could have made those the best jobs that anybody could 0:15:42.880 --> 0:15:44.520 have in the economy. It wouldn't just be in the 0:15:44.560 --> 0:15:46.360 US all over the place, and that would have pulled 0:15:46.440 --> 0:15:48.640 up wages for the kinds of people who work in 0:15:48.680 --> 0:15:52.560 the Apple stores by other competitors, right, you know, and 0:15:53.400 --> 0:15:55.160 this is not just Apple, there's a whole all the 0:15:55.200 --> 0:15:56.160 big companies. 0:15:55.840 --> 0:15:59.040 Are doing this stuff. Okay. 0:15:59.120 --> 0:16:05.359 They could have invested in innovation that was not immediately 0:16:05.400 --> 0:16:12.040 profitable or commercially profitable, but for public good like for 0:16:12.080 --> 0:16:16.800 disabilities things like this. They did hardly any of that. 0:16:17.240 --> 0:16:19.960 Okay, they sornety billion. 0:16:19.720 --> 0:16:24.080 Year when they did try to move into new technology. 0:16:24.080 --> 0:16:26.600 And I use all the Apple products you know out there, 0:16:26.640 --> 0:16:28.600 but the ones they didn't produce, the you know, AI, 0:16:29.080 --> 0:16:32.320 self driving cars, et cetera. They spent billions and failed. 0:16:32.600 --> 0:16:37.360 But it's worse than that. The US is now engaged 0:16:37.400 --> 0:16:42.560 in what some people call the chipwar with Samsung and TSMC. 0:16:43.280 --> 0:16:49.240 Intel turned down the contract for Apple processors after the 0:16:49.280 --> 0:16:52.160 iPhone was launched in two thousand and seven. That's because 0:16:52.320 --> 0:16:55.920 Intel was doing massive buybacks at the time and they 0:16:55.920 --> 0:17:01.240 had a financial guy running the company. But then they 0:17:01.280 --> 0:17:05.640 gave the contract to Samsum. Sansum became a high end 0:17:05.680 --> 0:17:10.520 producer fabricator of chips, the highest end by doing the 0:17:10.560 --> 0:17:11.159 products for. 0:17:13.000 --> 0:17:13.320 Apple. 0:17:13.840 --> 0:17:16.760 Then they became a competitor, so they switched to TSMC. 0:17:18.400 --> 0:17:22.160 And so basically the US is from a US point 0:17:22.160 --> 0:17:27.199 of view, does not have a leading edge producer of 0:17:27.520 --> 0:17:32.640 fabricator of chips now because in fact it was outsourced 0:17:32.680 --> 0:17:36.400 by one of the leading companies that could have actually 0:17:37.000 --> 0:17:40.159 sixty billion dollars away would build a state of the 0:17:40.240 --> 0:17:44.000 art plant. That's that's that's what TSMC is spending in 0:17:44.800 --> 0:17:47.760 Arizona now, and that's just the one year with Apple's 0:17:48.119 --> 0:17:49.800 is spent on average. 0:17:59.200 --> 0:18:01.600 Maybe I want to take a step further out because 0:18:02.160 --> 0:18:05.720 whiles stock buybacks are a major problem, there is a 0:18:05.840 --> 0:18:08.080 much larger one as well, with the growth of all 0:18:08.160 --> 0:18:10.159 coast row economy. As I call it, the idea that 0:18:10.200 --> 0:18:12.399 every single company I mentioned matter earlier The reason my 0:18:12.440 --> 0:18:15.200 bag on matter is because the average Instagram Facebook experience 0:18:15.280 --> 0:18:18.800 is horrible, interfered with, it's full of aislop. In fact, 0:18:18.800 --> 0:18:21.000 Mark Zuckerbot literally just said he wants to have a 0:18:21.080 --> 0:18:23.680 channel just for AI. Slop makes you want a channel 0:18:23.680 --> 0:18:26.119 a gun in my mouth. And the thing is, we 0:18:26.160 --> 0:18:29.320 are seeing tech getting worse. And it's not just these buybacks. 0:18:29.359 --> 0:18:32.480 It's if they had that money to spend, they probably 0:18:32.520 --> 0:18:35.080 wouldn't spend it on an innovation. If we're honest, they're 0:18:35.080 --> 0:18:39.080 not incentivized to innovate. So how do we change this? 0:18:39.119 --> 0:18:42.560 How do we actually unfucked this system? Because right now, 0:18:42.600 --> 0:18:45.640 if you look at Google, you look at Microsoft, these 0:18:45.680 --> 0:18:48.040 products are getting worse as they get more profitable. 0:18:48.560 --> 0:18:50.440 How do you write this and what can be done 0:18:50.480 --> 0:18:51.800 to them to change them? 0:18:52.080 --> 0:18:59.680 Okay, well yeah, so first, companies that prioritize getting this 0:18:59.760 --> 0:19:04.240 stuff price up over investing in innovation and that, by 0:19:04.240 --> 0:19:06.600 the way, that doesn't mean just spending money on our ID. 0:19:06.720 --> 0:19:10.600 It means employing people, integrating them, getting the learning going, 0:19:10.800 --> 0:19:14.760 and actually maintaining a stable labor force so that you 0:19:14.840 --> 0:19:18.439 can actually produce those products serve as those products once 0:19:18.520 --> 0:19:23.440 in the market. But companies that prioritize shareholder value get 0:19:23.480 --> 0:19:26.119 involved in other kinds of all kinds of mysfils like 0:19:26.720 --> 0:19:30.680 they price gouge, they tax avoid taxes, they layoff lots 0:19:30.680 --> 0:19:37.040 of workers. When they're profitable, they'll basically shareholder value takes 0:19:37.080 --> 0:19:42.160 over everything. Okay, so how do you deal with that? Yes, okay, 0:19:42.800 --> 0:19:47.520 here's part of the problem that the people, a lot 0:19:47.520 --> 0:19:50.359 of people understand that this is a problem, at least 0:19:50.640 --> 0:19:54.040 the work I've done on this. On stock buybacks, I 0:19:54.040 --> 0:19:56.560 had an article in Harvard Business Review ten years ago, 0:19:56.600 --> 0:20:00.200 which was just an article I wrote, but because where 0:20:00.240 --> 0:20:03.520 it appeared and because it had it was called profits 0:20:03.560 --> 0:20:06.359 without Prosperity. The subtitle was the best part, how stock 0:20:06.440 --> 0:20:10.119 buybacks manipulate the market at least most Americans worse off. 0:20:10.680 --> 0:20:14.520 It shocked me that Harvard Business Review actually published that article. 0:20:14.840 --> 0:20:19.520 Usually yeah, yeah, okay, so but the fact is that 0:20:19.560 --> 0:20:20.760 it did get a lot of attention. 0:20:21.280 --> 0:20:22.160 Right, But. 0:20:23.840 --> 0:20:25.360 If you are in power. 0:20:25.160 --> 0:20:28.800 As the Democrats were for the last four years, they 0:20:28.840 --> 0:20:31.320 gave it a lot of attention when Trump was in power. 0:20:32.480 --> 0:20:35.080 But I got to push back on that. I'm sorry, 0:20:35.080 --> 0:20:36.240 did they because. 0:20:35.920 --> 0:20:40.480 Oh no, yeah, they did? Pal okay around the Trump 0:20:40.520 --> 0:20:44.920 tax cuts. They had what it was called hashtag GOP 0:20:45.119 --> 0:20:47.280 tax scam. It was all about stock buybacks. 0:20:47.400 --> 0:20:51.080 I know he's the thing, okay, the larger economic conditions 0:20:51.119 --> 0:20:54.159 of the problem here. The tax thinks, sure, it's a 0:20:54.200 --> 0:20:57.080 part of it. But the problem is that the incentive 0:20:57.359 --> 0:21:01.320 is the dual company grows and continues for writing shareholder value, which, 0:21:01.640 --> 0:21:04.240 as my listeners will know, into the audience here literally 0:21:04.280 --> 0:21:07.480 just means what will increase stock price and increased dividends. 0:21:07.600 --> 0:21:11.800 Very basic, Jack Welsh, bullshit. How do you change those incentives? 0:21:11.880 --> 0:21:14.000 Because I don't think that true, and this is not 0:21:14.040 --> 0:21:16.600 even a political statement. I don't think there's any movement 0:21:17.560 --> 0:21:21.639 to stop that other than maybe Lena Khan and rip 0:21:21.840 --> 0:21:24.760 very soon, probably sadly, an attempt to move away from 0:21:24.760 --> 0:21:27.960 the monopolies. How do you actually breach this machine, because 0:21:28.000 --> 0:21:29.560 the machine is breaking everything else. 0:21:29.800 --> 0:21:35.600 There is actually legislation, okay, influenced by the work first 0:21:36.160 --> 0:21:40.040 introduced by Senator Tammy Baldwin, who won by a whisker 0:21:40.080 --> 0:21:43.360 in Wisconsin, was reelected, called the Reward Work. 0:21:43.160 --> 0:21:46.119 Act, and it would ban buy backs. 0:21:46.160 --> 0:21:49.000 It would get rid of this rule from nineteen eighty 0:21:49.000 --> 0:21:51.680 two that allows companies to do and without being charged 0:21:51.680 --> 0:21:54.159 with manipulation, and so in effect, it would say that 0:21:54.200 --> 0:21:56.280 if you do buybacks on the scale that you're doing 0:21:56.280 --> 0:22:00.840 them now would man it also the other side of it, 0:22:01.560 --> 0:22:06.000 which is that you would put worker representatives on boards. 0:22:07.000 --> 0:22:10.359 I think you have to put representatives on boards. I 0:22:10.440 --> 0:22:12.960 think they actually I want to be as a taxpayer 0:22:13.000 --> 0:22:16.160 represented on boards if they're using my money, if Elon 0:22:16.280 --> 0:22:20.720 Musk is using my money of apples, yeah, I mean. 0:22:20.560 --> 0:22:22.760 The boards boards, boards are a joke. 0:22:22.880 --> 0:22:26.800 I mean the notion of independent board members and given 0:22:26.960 --> 0:22:30.440 given the money that board members are making went from 0:22:30.440 --> 0:22:31.359 shareholder value. 0:22:31.480 --> 0:22:32.040 Yeah. 0:22:32.240 --> 0:22:37.959 We just wrote an article on Elon musk twenty eighteen 0:22:38.280 --> 0:22:39.719 pay package. 0:22:40.880 --> 0:22:42.639 The so called independent. 0:22:43.720 --> 0:22:49.200 Directors have made hundreds of millions of dollars on giving 0:22:49.240 --> 0:22:52.480 him that PayPal being around giving that and staying on 0:22:52.520 --> 0:22:55.800 the board. Interestingly enough, there was one board member, her 0:22:55.880 --> 0:22:59.400 name was Linda Johnson Rice, who actually made one hundred 0:22:59.440 --> 0:23:03.560 and thirty five dollars from her stock based pay because 0:23:04.119 --> 0:23:08.280 they didn't renew her her board seat after twenty nineteen 0:23:08.640 --> 0:23:10.880 and she left. We calculate one hundred and seventy three 0:23:10.880 --> 0:23:14.400 million dollars of options on the table, So that's what happened. 0:23:14.440 --> 0:23:16.800 Then it came out that she had spoken out against 0:23:17.040 --> 0:23:20.760 Musk Anyway, that's part of the problem is you have 0:23:21.000 --> 0:23:23.280 a totally corrupt governance system. 0:23:23.640 --> 0:23:27.240 It's that, but it's also bigger. The market is incentivized 0:23:27.240 --> 0:23:30.200 for growth. You can these are pieces of the puzzle. 0:23:30.280 --> 0:23:33.879 But how do I realize that what I'm suggesting destroy 0:23:33.920 --> 0:23:36.879 the markets, which is the markets are focused on growth. 0:23:36.920 --> 0:23:39.879 They are five actually just one part of this machine. 0:23:40.200 --> 0:23:42.879 And as long as that happens, innovation is going to 0:23:42.880 --> 0:23:45.680 be stemy because if you're just trying to make more 0:23:45.720 --> 0:23:48.360 money and not even more profit, just trying to grow 0:23:48.400 --> 0:23:51.440 the stock value, you're not trying to make yeah, lots 0:23:51.440 --> 0:23:51.840 of things. 0:23:52.400 --> 0:23:57.040 A company it's successful by producing a higher quality, lower 0:23:57.040 --> 0:23:57.679 cost product. 0:23:57.880 --> 0:24:00.600 Then I'm sorry, look at me. I have to hate 0:24:00.600 --> 0:24:03.879 to disagree that. Look at Meta, Look at Microsoft. The 0:24:04.000 --> 0:24:06.160 Microsoft three sixty five is a product of realign't going 0:24:06.119 --> 0:24:06.800 to little NSA. 0:24:07.119 --> 0:24:08.640 It's become a worse product. 0:24:08.800 --> 0:24:11.879 Oh no, I'm not saying that. I said it becomes 0:24:12.240 --> 0:24:14.800 it gets into that position. Now what you call a 0:24:14.880 --> 0:24:17.440 higher quality product, you know different people can have. 0:24:17.640 --> 0:24:19.760 Oh do you mean this in a higher quality selling 0:24:19.800 --> 0:24:23.560 product that makes more money. 0:24:22.200 --> 0:24:26.080 It's one that can get customers. Okay, all right, and 0:24:26.280 --> 0:24:30.880 now there is a problem I call it. Okay, companies 0:24:30.920 --> 0:24:33.639 retain and reinvest when they when they are doing this, 0:24:33.680 --> 0:24:37.879 they retain their money, they reinvest in the company. The 0:24:37.960 --> 0:24:40.159 other side of that is they do what I call 0:24:40.240 --> 0:24:43.280 downsize and distribute. They downsize the labor force and distribute 0:24:43.280 --> 0:24:46.600 cast channel. There's most tech that are doing the big 0:24:46.640 --> 0:24:49.440 bypass are in between. I call them dominate and distribute. 0:24:49.520 --> 0:24:51.960 That's where Microsoft comes in. Yes, so they have a 0:24:52.000 --> 0:24:54.640 dominant product. No one can get in there. Now, that's 0:24:54.680 --> 0:24:56.840 where there's an element of monopoly there. 0:24:57.119 --> 0:24:57.399 Uh. 0:24:57.440 --> 0:25:00.679 And but but basically they they're they're pulling in the 0:25:00.720 --> 0:25:04.760 cash from from that product, from their their their their 0:25:04.800 --> 0:25:08.280 software suite, and uh they're using it to pump up 0:25:08.280 --> 0:25:08.960 their stock. 0:25:08.720 --> 0:25:11.440 Price right and crushing crushing gold competition. 0:25:11.640 --> 0:25:15.359 Yeah and so, and not investing in things like Apple, 0:25:15.480 --> 0:25:20.000 not investing in a fab Apple outsourced dolls, it's rechargeable 0:25:20.040 --> 0:25:23.200 batteries to China and running. 0:25:23.240 --> 0:25:25.479 Because Apple, one of the best moves was when they 0:25:25.480 --> 0:25:26.720 invested in their own silicon. 0:25:27.040 --> 0:25:29.200 It's probably been one of the best softest moves. 0:25:29.280 --> 0:25:31.840 Well, of course they put Tim Cook that was the 0:25:31.880 --> 0:25:33.879 guy they put in charge there with you know, he 0:25:34.680 --> 0:25:38.359 outsourced the Fox con et cetera. And okay, now, but 0:25:38.440 --> 0:25:41.040 I think the bigger issue maybe that you're getting at, 0:25:42.200 --> 0:25:47.399 is where did this whole idea of shareholder value come from? Right? 0:25:48.240 --> 0:25:53.440 And you know, people often cite an article by Milton Friedman, 0:25:54.560 --> 0:26:00.119 Chicago economists, who in nineteen seventy wrote an article in 0:26:00.160 --> 0:26:03.680 The New York Times called the only responsibility or social 0:26:03.680 --> 0:26:08.600 responsibility of a company is to increase its profits. 0:26:08.760 --> 0:26:10.800 This man is one of the most evil people alone. 0:26:10.880 --> 0:26:12.520 Well he's dead now, he's bounding in hell. But he 0:26:12.840 --> 0:26:13.840 just to be clear, he is. 0:26:13.880 --> 0:26:19.080 Like, yeah, now, okay, what's interesting about that? And off 0:26:19.119 --> 0:26:21.440 and overlooked when people read the articles. 0:26:22.400 --> 0:26:22.920 Two things. 0:26:23.720 --> 0:26:27.080 One is he wrote that, in the context of a 0:26:27.720 --> 0:26:32.600 what was called campaign GM against general motors to put 0:26:32.680 --> 0:26:37.880 three public interests people on the board, right, Okay, they 0:26:37.920 --> 0:26:42.280 wanted one person to be They wanted to deal with pollution, 0:26:43.119 --> 0:26:45.880 they wanted to deal with safety, and they wanted an. 0:26:45.800 --> 0:26:48.800 African American on the board. They okay, okay. 0:26:49.840 --> 0:26:52.679 That came out of the consumer movement that was launched 0:26:52.680 --> 0:26:55.920 in nineteen sixty five by Ralph Nator's book unsafe at 0:26:55.920 --> 0:27:00.160 any speed. Al Ralph Nator's still around with his podcast 0:27:00.000 --> 0:27:08.520 The Government. Yeah, okay that Actually many corporate executives, top level, 0:27:09.400 --> 0:27:12.080 they wanted to do some of those things, but people 0:27:12.119 --> 0:27:15.119 like Milton Friedman came along and said, this is what 0:27:15.200 --> 0:27:19.399 he called it is pure unadulterated socialism. Okay, to put 0:27:20.160 --> 0:27:23.280 those people on the board. Now we know the history 0:27:23.320 --> 0:27:26.520 of what's happened in the auto industry since then. Okay, 0:27:26.640 --> 0:27:28.960 if you didn't produce safer cars, you lost market share. 0:27:29.000 --> 0:27:31.520 If you didn't produce more fuel efficient cars, you lost 0:27:31.600 --> 0:27:34.440 my market share. Actually, what happened in the US automobile 0:27:34.480 --> 0:27:39.639 industry that African Americans became a very important source of 0:27:40.240 --> 0:27:43.680 semi skilled and skilled blue collar workers during the sixties 0:27:43.680 --> 0:27:46.680 and seventies when immigration was low, So that was important 0:27:46.680 --> 0:27:51.040 for them in terms of being competitive, having a blue. 0:27:50.800 --> 0:27:51.680 Collar day perforce. 0:27:52.119 --> 0:27:54.440 They should have put those people on the board, absolutely, 0:27:54.720 --> 0:27:58.000 and they might have done better. So you get back 0:27:58.040 --> 0:28:03.000 to this notion that it sharedholders who basically owned the company. 0:28:03.359 --> 0:28:05.840 All those profits belonged to them, and that was what 0:28:05.920 --> 0:28:10.160 shareholder value kind of legitimized. And it came out of academia. 0:28:11.359 --> 0:28:15.000 I mean it's Milton Friedman won so called Nobel Prize 0:28:15.040 --> 0:28:18.680 in economics. It's really a Swedish Central Bank Prize in economics. 0:28:18.800 --> 0:28:25.840 But basically, and it was also in many ways that 0:28:25.880 --> 0:28:32.000 whole movement was racist, sexist, et cetera. Why because the 0:28:32.000 --> 0:28:37.679 world that I described of secure employment that existed up 0:28:37.720 --> 0:28:39.840 to that time, and I think this had a lot 0:28:39.880 --> 0:28:43.080 to do with it, was a white man's world. And 0:28:43.320 --> 0:28:46.400 what happened is the labor force was changing. Women were 0:28:46.400 --> 0:28:50.640 getting into the l African Americans both because of demand 0:28:50.680 --> 0:28:54.400 and equal opportunity. Okay, And this was a backlash against it. 0:28:54.400 --> 0:28:57.360 It was a backlash against Nator and a backlash against 0:28:57.400 --> 0:29:00.480 the civil rights movement. So it has to be seen 0:29:00.480 --> 0:29:05.440 in that context, although it was often disguised as you know, 0:29:06.600 --> 0:29:11.720 mainstream economics, legitimate economic yes, yes. And by the way, 0:29:11.760 --> 0:29:14.080 you know, of course it's called liberal and conservative in 0:29:14.120 --> 0:29:17.360 the US. You know, the liberal counterpart of that was 0:29:17.480 --> 0:29:20.280 a guy named Paul Samuelson. There was no difference really 0:29:20.360 --> 0:29:23.680 ultimately between Paul Samuelson and Milton Freeman in terms of 0:29:23.680 --> 0:29:26.480 their fundamental economics. They thought, just let the market work 0:29:26.480 --> 0:29:29.440 and everything will be fine if it fails. In Paul 0:29:29.480 --> 0:29:32.760 Samuels said, Okay, the government should intervene a little bit, 0:29:33.160 --> 0:29:37.760 but basically what they missed was the role of the corporation, 0:29:37.920 --> 0:29:41.760 for better or worse in the economy. I mean basically, 0:29:42.080 --> 0:29:45.920 right now, there's about two thousand companies in the US 0:29:46.480 --> 0:29:49.440 that employ five thousand or more people to average about 0:29:49.480 --> 0:29:53.400 twenty twenty two thousand. That account for about thirty five 0:29:53.440 --> 0:29:56.560 percent of total business sector employment in the US. And 0:29:56.600 --> 0:29:59.400 those are the most profitable companies. They pay higher wages. 0:30:00.160 --> 0:30:04.040 The investment decisions that they may drive the economy. They 0:30:04.080 --> 0:30:06.760 determine what kind of jobs are availed in the economy. 0:30:07.040 --> 0:30:10.880 They determine what kind of education we get, They determine 0:30:10.920 --> 0:30:12.000 what kind of resources go. 0:30:12.200 --> 0:30:13.760 So if they if they decided. 0:30:14.640 --> 0:30:18.960 And so, yeah, and so, once those companies changed their 0:30:19.040 --> 0:30:25.800 their their purpose, they they they they became a big problem. 0:30:25.880 --> 0:30:29.120 And so Friedman was successful in influencing. 0:30:29.320 --> 0:30:32.200 Yeah, it took time, but he was successful and he 0:30:32.360 --> 0:30:35.800 was successful. Now here's where the tech industry comes in, 0:30:36.320 --> 0:30:42.880 because the tech industry was much more dependent on the 0:30:42.920 --> 0:30:46.640 stock market than those old economy companies. Okay, the old 0:30:46.680 --> 0:30:50.840 economy companies. There's five functions of the stock market for 0:30:50.920 --> 0:30:54.640 a company what they called creation, which is inducing venture 0:30:54.680 --> 0:30:57.880 capital to come in. You create companies because you can exit. 0:30:57.600 --> 0:30:58.480 On the stock market. 0:30:59.040 --> 0:31:03.840 There's control that is separating ownership and control, which a 0:31:03.880 --> 0:31:06.360 lot of the shareholder value people see as the original 0:31:06.360 --> 0:31:10.280 sin of American industry. But it's actually necessary because once 0:31:10.320 --> 0:31:13.680 you have owner entrepreneurs who want to pass on the company, 0:31:14.040 --> 0:31:15.719 what they did in the United States, they passed on 0:31:15.720 --> 0:31:19.440 on to professional managers. Yes, and this actually opened up 0:31:19.520 --> 0:31:21.760 the growth of the company. When did that still happening, Well, 0:31:21.800 --> 0:31:24.360 that was already come in, That was already by the 0:31:24.440 --> 0:31:25.160 nineteen twenties. 0:31:25.200 --> 0:31:26.400 And how do we get rid of them? 0:31:26.640 --> 0:31:29.000 Is the thing because if you look at most major 0:31:29.040 --> 0:31:32.479 tech companies, Apple included, MBAs, these people are right now. 0:31:32.560 --> 0:31:35.640 Yeah, but that's the problem, that's the way nbas are educated. 0:31:36.080 --> 0:31:36.320 Now. 0:31:37.120 --> 0:31:39.720 Basically, the people who are running companies in the twenties 0:31:39.720 --> 0:31:45.480 and thirties were basic engineers. The thirties, even though the 0:31:45.520 --> 0:31:50.120 Great Depression that was incredibly important. 0:31:49.640 --> 0:31:52.080 But the value multiplieres was so much smaller of us. 0:31:52.160 --> 0:31:52.400 Yeah. 0:31:52.480 --> 0:31:55.680 Yeah, but these companies for the US, and this is 0:31:55.720 --> 0:32:00.480 true globally, these large companies and critical industries dominated and 0:32:01.240 --> 0:32:03.440 you had to be they had to be run professionally, 0:32:04.840 --> 0:32:08.640 and yeah, basically you got this separation, so that that's 0:32:08.680 --> 0:32:12.600 the second thing control. The third is what it called combination. 0:32:12.720 --> 0:32:15.200 You can use your stock to acquire other companies, right. 0:32:15.280 --> 0:32:17.760 The fourth is compensation, you can use your stock to 0:32:17.800 --> 0:32:20.960 pay people, and the fifth is cash. Most people think 0:32:21.200 --> 0:32:23.160 that the role of the stock market is raised cash 0:32:23.200 --> 0:32:26.719 for companies. That is not necessarily true, and it certainly 0:32:26.760 --> 0:32:31.080 wasn't true historically. Okay, Now, what happened with the rise 0:32:31.280 --> 0:32:33.760 of the what I call these new economy companies coming 0:32:33.880 --> 0:32:37.640 up basically out of Silicon Valley is they started using 0:32:38.040 --> 0:32:42.360 cash the stock market to induce venture capital, They started 0:32:42.440 --> 0:32:45.800 using it to acquire other companies. They started using it 0:32:45.840 --> 0:32:50.360 to compensate people deep down in terms of stock options, 0:32:50.720 --> 0:32:55.440 and particularly in the biotech industry where companies go public 0:32:55.520 --> 0:32:57.760 without a product, they raised tons of money on the. 0:32:57.680 --> 0:33:01.240 Side they effectively to so, so yeah, they pay. 0:33:02.160 --> 0:33:06.440 So once they start within that model, you basically are 0:33:06.520 --> 0:33:09.480 looking at your stock price all the time, and so 0:33:10.000 --> 0:33:15.680 it's hard to resist the shareholder value arguments, particularly when 0:33:15.680 --> 0:33:20.680 they're self serving. Now, and once those companies became big, 0:33:21.200 --> 0:33:23.719 they all started saying, oh, we got to keep our 0:33:23.720 --> 0:33:28.040 stock price up, so I can trace when companies like Intel, Apple, Microsoft, 0:33:28.120 --> 0:33:31.280 et cetera started going from just saying all that money 0:33:31.280 --> 0:33:33.000 we're bringing in, we got to just put it back 0:33:33.000 --> 0:33:36.600 in the company, to oh, no, that company that money 0:33:36.640 --> 0:33:39.560 can go out and just boost our stock price. And 0:33:39.600 --> 0:33:46.120 then you get a whole system of what called results 0:33:46.120 --> 0:33:49.520 in predatory value extraction, which have to do with corporate raiders, 0:33:50.280 --> 0:33:53.520 institutional shareholders, pension funds, everybody is trying to get their 0:33:53.600 --> 0:33:58.719 yields out of companies and basically support this. And this 0:33:59.080 --> 0:34:03.920 is based for the economy as a whole. This means 0:34:04.040 --> 0:34:09.040 a huge increase in income inequality driven by the stock market, 0:34:09.080 --> 0:34:11.200 making money in the stock market and then looking for 0:34:11.280 --> 0:34:14.080 other ways to make that money through private equity, et cetera. 0:34:15.640 --> 0:34:19.960 One figure, the top one tenth of one percent of 0:34:20.000 --> 0:34:22.320 households in terms of net worth in the United States 0:34:22.680 --> 0:34:25.799 about fifteen percent of their assets we're in the stock market. 0:34:25.560 --> 0:34:26.520 In nineteen ninety. 0:34:26.719 --> 0:34:29.520 Now it's about forty five percent of their assets. So 0:34:29.840 --> 0:34:32.480 their wealth is very much tied up with the stock market. 0:34:32.880 --> 0:34:36.160 The stock market is very hard to crash now because 0:34:36.160 --> 0:34:39.480 there's so many people are making so much money out 0:34:39.480 --> 0:34:42.040 of money that they have to put it somewhere. And 0:34:42.280 --> 0:34:46.200 actually this number of listed stock the companies are shrinking 0:34:46.560 --> 0:34:49.080 and through buybacks the shares out there. 0:34:48.960 --> 0:34:51.720 At some point this has to fall apart though, because 0:34:52.520 --> 0:34:54.880 surely if everything is based on the value of the stock, 0:34:55.000 --> 0:34:57.960 every single large company is effectively at the will of 0:34:58.000 --> 0:34:59.879 the stock market, which will mean that the companies will 0:34:59.880 --> 0:35:02.200 have eventually stop making things with the purpose of doing 0:35:02.239 --> 0:35:05.200 anything of them. Than racing shareholder value does not lead Okay, 0:35:05.320 --> 0:35:06.040 death of innovation. 0:35:06.200 --> 0:35:09.760 Yeah, okay, yes it does, but it doesn't happen overnight. 0:35:10.440 --> 0:35:11.640 We're watching it happen now. 0:35:11.760 --> 0:35:15.319 And and so, uh, you start seeing China has a 0:35:15.320 --> 0:35:17.920 different model. They start out competing the United States, and 0:35:18.000 --> 0:35:20.239 you try to block China. Right, this is a big 0:35:20.280 --> 0:35:24.960 problem for the United States because tech companies are so 0:35:25.600 --> 0:35:29.240 they're so integrally related with trade with China and manufacturing 0:35:29.280 --> 0:35:30.360 and imparting from China. 0:35:30.880 --> 0:35:32.960 This is a total disaster. 0:35:33.360 --> 0:35:38.719 And but but basically what has happened is companies, and 0:35:38.760 --> 0:35:41.080 I can have a whole bunch of them, have fallen 0:35:41.120 --> 0:35:44.799 behind global competitors in the US because they stuck with 0:35:44.880 --> 0:35:46.560 this shareholder value model. 0:35:46.840 --> 0:35:47.680 So the US is. 0:35:47.600 --> 0:35:50.680 Falling behind in a whole range of critical technologies. So 0:35:50.800 --> 0:35:55.200 reasons there's no major EVY battery produced in the United States, 0:35:55.239 --> 0:35:59.280 the problem of FABS, which I already mentioned. The problem 0:35:59.400 --> 0:36:04.640 well Boeing they did forty three billion dollars in buybacks 0:36:04.920 --> 0:36:09.080 from twenty thirteen to the week before the second crash. 0:36:09.280 --> 0:36:13.520 Jack Welch Boys then yeah, and they had Boeing's Boeing 0:36:13.560 --> 0:36:16.800 stock price was at a record level in March March first, 0:36:17.120 --> 0:36:21.120 twenty twenty nineteen, ten days before the second crash, and 0:36:21.160 --> 0:36:23.200 there was no doubt. I wrote an article on this 0:36:24.200 --> 0:36:28.359 in May of twenty nineteen that the. 0:36:28.320 --> 0:36:32.080 Boeing crashes were the result of top. 0:36:31.920 --> 0:36:37.040 Management ignoring issues of safety because it would. 0:36:36.920 --> 0:36:52.520 Hurt the stockprist Right, So I have a theory. 0:36:52.920 --> 0:36:54.960 I'd love to run it by your school, the roll Coombubble. 0:36:56.200 --> 0:36:58.400 Right now, I think the tech industry is reckoning with 0:36:58.480 --> 0:37:00.640 the fact that they're all no big ideas. Sure the 0:37:00.680 --> 0:37:02.600 audience will love this. I do not think general if 0:37:02.600 --> 0:37:05.480 AI is the future. I think it is a ginied 0:37:05.560 --> 0:37:10.080 up software product based on desperation. But what happens if 0:37:10.120 --> 0:37:13.280 the tech industry stops coming up with hypergrowth markets because 0:37:13.280 --> 0:37:16.799 they haven't had one for a while, what happens, like, 0:37:16.840 --> 0:37:18.840 what happens to these companies stop having new things? 0:37:19.680 --> 0:37:25.320 Well, first of all, were reliant on these things still, Yes, 0:37:25.680 --> 0:37:28.360 so even though they're not new things, we're still using 0:37:29.000 --> 0:37:30.080 the whole ecosystem. 0:37:30.200 --> 0:37:30.400 You know. 0:37:30.480 --> 0:37:33.239 Again, I use the Apple products, and to Apple is 0:37:33.239 --> 0:37:36.120 going to make money off of me because I'm. 0:37:36.000 --> 0:37:37.240 Standing by every iPhone. 0:37:37.239 --> 0:37:39.800 I'm just saying, what if this is I have the 0:37:39.840 --> 0:37:41.600 new iPhone with me because I'm a little pig and 0:37:41.640 --> 0:37:45.160 I own for Apple every time. What happens if this 0:37:45.320 --> 0:37:47.680 is about as good as it gets, if each version 0:37:47.960 --> 0:37:50.799 is more incremental, is just more and more incremental, If 0:37:50.800 --> 0:37:53.560 it's faster but not that faster, because we're hitting a 0:37:53.600 --> 0:37:56.480 wall on CPUs as well, More's lawa is falling apart. 0:37:57.239 --> 0:37:59.359 Well, we don't really have to. I mean it's easy 0:37:59.360 --> 0:38:02.360 to answer that question. We get Donald Trump. 0:38:02.719 --> 0:38:05.640 I mean basically, well we have Donald Trump. What happens 0:38:05.640 --> 0:38:06.000 off to that? 0:38:06.120 --> 0:38:09.520 Okay, well that will find out because you know this, 0:38:10.680 --> 0:38:10.920 you know. 0:38:11.440 --> 0:38:13.880 Say sorry, but perhaps like me whil back, are you 0:38:13.920 --> 0:38:16.160 saying that the death of innovation led to Trump? 0:38:16.239 --> 0:38:19.319 No, I'm saying the financialization of the economy. Oh yeah, 0:38:19.480 --> 0:38:20.399 so so oh yeah. 0:38:20.400 --> 0:38:21.600 Also the corporate authoritisery. 0:38:21.640 --> 0:38:24.480 Say so, even here's the problem. Even when I put 0:38:24.520 --> 0:38:28.000 more stress on, even when there is innovation, the wrong 0:38:28.000 --> 0:38:31.960 people are going to grab it. Okay, and the economy 0:38:32.000 --> 0:38:37.160 is going to become more financialized, you know, the people 0:38:37.200 --> 0:38:40.800 who actually should be sharing in in the first instance, 0:38:40.880 --> 0:38:43.799 employees of those companies. They can be laid off and 0:38:43.840 --> 0:38:46.840 in some elon musk one hundred and forty thousand people 0:38:47.160 --> 0:38:51.920 at Tesla the end of last year, just like that, 0:38:52.000 --> 0:38:53.279 laid off twenty thousand people. 0:38:53.840 --> 0:38:55.920 Yeah. Yeah, But my point is if they have no 0:38:55.960 --> 0:38:59.120 other vehicles for growth, because you look at Microsoft for example, 0:38:59.320 --> 0:39:01.719 they are able to They've had I think a year 0:39:01.760 --> 0:39:04.320 of a year growth of over lower ten percents. 0:39:04.719 --> 0:39:06.520 You these companies are slowing down. 0:39:06.680 --> 0:39:06.879 Yeah. 0:39:06.920 --> 0:39:10.239 Well, first of all, I don't think that the companies 0:39:10.280 --> 0:39:12.520 themselves don't need to grow bigger and bigger. They could 0:39:12.520 --> 0:39:17.279 spin off other companies, okay, And I think that that's 0:39:17.320 --> 0:39:20.200 a model that works very well because you create incentives 0:39:20.200 --> 0:39:23.080 for people in those companies to become their own bosses, 0:39:23.120 --> 0:39:24.840 to become the head of other. 0:39:24.800 --> 0:39:27.279 If that's not their culture. Though, the reason I'm pushing isn't. 0:39:27.480 --> 0:39:31.160 Yeah, the reason I'm pushing on this is I'm thinking Microsoft, 0:39:31.200 --> 0:39:35.520 I'm thinking Meta especially, I'm thinking I mean Cisco as well, 0:39:35.560 --> 0:39:39.360 and even Oracle. I mean these companies don't have new innovations. 0:39:39.360 --> 0:39:41.680 Oracles doing a ripe smokes up, became the largest customer, 0:39:41.719 --> 0:39:45.240 they make data sentence, fine, but what if they stop 0:39:45.360 --> 0:39:47.640 being able to grow revenue every year? Like that is 0:39:47.680 --> 0:39:48.520 the real question. 0:39:48.840 --> 0:39:53.000 What happens, Well, they'll lay off some of their workers, 0:39:53.480 --> 0:39:57.760 you know, that's that's the first thing that is not enough. Well, 0:39:57.960 --> 0:40:01.040 then they might you know, they might go out of existence. 0:40:01.120 --> 0:40:09.280 I mean this has happened to some companies who Sun Microsystems. Yeah, okay, 0:40:09.360 --> 0:40:12.040 so you know there are companies that that that just 0:40:12.680 --> 0:40:17.920 don't make it. And you know, but once once you 0:40:18.000 --> 0:40:21.439 have made it, it's very hard to disappear in ten 0:40:21.520 --> 0:40:25.600 years or twenty years, of course, because you have that 0:40:25.600 --> 0:40:29.359 that that demand base, and you have the capabilities, you 0:40:29.440 --> 0:40:33.120 have very very basically the barriers to entry. You have 0:40:33.160 --> 0:40:36.200 a whole lot of advantages that allow you to dominate. 0:40:37.400 --> 0:40:41.360 And the question is, you know, and then if you 0:40:41.400 --> 0:40:44.719 take the global competitors and you try to just shut 0:40:44.760 --> 0:40:46.760 them out, then you have a problem. 0:40:46.800 --> 0:40:50.239 I mean, the I think my bigger point is that 0:40:50.960 --> 0:40:54.840 in the lost ten years, the tech industry has categorically 0:40:54.880 --> 0:40:59.040 failed to find any hypergrowth movement that matches smartphones, that 0:40:59.080 --> 0:41:03.400 matches clouds software. They've not had any of them to 0:41:03.560 --> 0:41:06.759 create the level of value that those did. And they 0:41:06.800 --> 0:41:11.960 are squeezing everything. And my concern is what happens if 0:41:12.040 --> 0:41:15.400 they don't have anything left to squeeze Because they're all Microsoft, METSA, 0:41:15.480 --> 0:41:17.439 all these companies. They've laid up tens of thousands of people, 0:41:17.440 --> 0:41:19.480 they've tried that, and they could lay off more. And 0:41:19.520 --> 0:41:23.160 now they're putting billions into a two hundred billion into. 0:41:23.000 --> 0:41:25.880 Capex into that to lose money. I just feel like 0:41:26.000 --> 0:41:27.800 we're in a corporate psychosis. 0:41:27.960 --> 0:41:30.720 Well see the other Another way to answer this question 0:41:31.000 --> 0:41:35.480 is is today, ultimately, what is the economy run for 0:41:36.280 --> 0:41:37.600 the economy? Actually? 0:41:39.200 --> 0:41:40.760 Is this a normative? 0:41:41.400 --> 0:41:44.160 In my view, should be run to provide services to 0:41:44.239 --> 0:41:50.080 people that are not profitable like healthcare, education, uh, you know, 0:41:50.560 --> 0:41:55.200 care for all people whatever. That's what a prosperous economy 0:41:55.200 --> 0:42:01.000 should do. Now, these goods producing companies, these innovative companies, 0:42:01.360 --> 0:42:04.480 have a lot of capability produced through those markets. But 0:42:04.560 --> 0:42:09.040 that means the government becomes a big source or it's 0:42:09.080 --> 0:42:13.280 either governments or you're well paid employees, right become sources 0:42:13.360 --> 0:42:19.839 of demand for those products. And that's the opportunity that's 0:42:19.880 --> 0:42:25.160 been missed. Yeah, yeah, And and what you have now 0:42:25.320 --> 0:42:28.560 is with all this financialization of the whole economy, with 0:42:28.600 --> 0:42:32.640 all this money being funneled out of these highly successful 0:42:32.680 --> 0:42:36.960 goods producing companies successful in terms of profits, you have 0:42:37.040 --> 0:42:40.120 money looking money looking to make more money. And you 0:42:40.200 --> 0:42:43.080 have the whole which has been written about a lot recently, 0:42:43.120 --> 0:42:47.160 private equity moving into healthcare, for example, moving into areas 0:42:47.200 --> 0:42:49.920 which would not be for profit at all, buying up 0:42:49.960 --> 0:42:56.040 doctors office, thensince's office, you know, yeh, basically nursing, labor supply, 0:42:56.760 --> 0:42:58.839 what have you. A lot of stuff being written about 0:42:58.880 --> 0:43:00.560 that now, and a lot of it is kind of 0:43:00.640 --> 0:43:02.720 under the radar because you don't even know who owns 0:43:03.280 --> 0:43:06.520 these various companies that the corporate structures are so paid. 0:43:06.840 --> 0:43:12.120 But basically what should have been happening all along was 0:43:12.160 --> 0:43:16.120 that when you became prosperous, this was really taking some 0:43:16.200 --> 0:43:19.720 of those profits, not just paying your workers better, creating 0:43:19.800 --> 0:43:23.800 more stable employment upwards socio economic ability. We have downwards 0:43:23.800 --> 0:43:26.160 socio economic ability for a lot of a lot of 0:43:26.239 --> 0:43:31.319 big proportion of the population, into more education, into more 0:43:32.040 --> 0:43:37.200 producing things that people need but aren't necessarily the next 0:43:37.320 --> 0:43:41.000 big profitable product. Actually, some of those would become profitable 0:43:41.040 --> 0:43:45.400 products if in fact you have enough government demand for 0:43:45.440 --> 0:43:48.600 them and you are the companies as as in the military. 0:43:48.800 --> 0:43:51.520 So that's what that's what should have been happening. That's 0:43:51.560 --> 0:43:52.560 what's not been happening. 0:43:52.560 --> 0:43:54.440 So how do we make it happen? How do we 0:43:54.480 --> 0:43:55.120 force them? 0:43:55.280 --> 0:43:57.399 Well, okay, so you have to change the whole way 0:43:57.400 --> 0:43:59.520 in which companies allocate resources. 0:43:59.560 --> 0:44:00.319 So how do you do that? 0:44:00.920 --> 0:44:03.360 Well, so'm I. 0:44:03.360 --> 0:44:06.200 If you wanted to talk practically, you say, you cannot 0:44:06.239 --> 0:44:07.200 do buybacks anymore. 0:44:07.320 --> 0:44:09.279 You're manipulating the market. There should be a need. 0:44:09.560 --> 0:44:14.000 This, this is a phenomenon. Buybacks are past dividends as 0:44:14.040 --> 0:44:17.120 distribut starts of distribution shareholders in nineteen ninety seven. They're 0:44:17.200 --> 0:44:20.720 much more volatile, but way bigger than dividends. 0:44:20.760 --> 0:44:22.360 But it's bigger than just by this. 0:44:23.280 --> 0:44:25.400 Well, okay, but that's the start. Okay. 0:44:26.160 --> 0:44:29.719 You stop tying executive pay to the stock market. You 0:44:30.120 --> 0:44:32.680 tie executive paid to the success of the company in 0:44:32.760 --> 0:44:37.920 terms of employing people, keeping people employed, innovative products. You 0:44:38.640 --> 0:44:44.360 change corporate boards. Okay, you put people on corporate boards 0:44:44.360 --> 0:44:48.040 who have a real interest in that company's position in 0:44:48.600 --> 0:44:53.359 the economy. Okay, you change the tax system. The tax 0:44:53.400 --> 0:44:58.319 system rewards value extraction rather than value creation. Uh. And 0:44:59.040 --> 0:45:01.960 you basically, and this I think is the most important thing, 0:45:03.120 --> 0:45:08.840 you figure out how to mobilize all the resources in 0:45:08.880 --> 0:45:12.719 the economy, the human resources in particular, or what I 0:45:12.760 --> 0:45:15.880 call collective and cumulative learning. When you get down to it, 0:45:15.960 --> 0:45:19.960 innovation is about people getting together collectively. 0:45:19.960 --> 0:45:21.200 And learning cumulatively. 0:45:21.280 --> 0:45:24.440 That is, what you learned yesterday determines what you can 0:45:24.520 --> 0:45:33.160 learn today. And what happens is when these companies stop 0:45:33.840 --> 0:45:38.560 retaining and reinvesting, you just have all kinds of people 0:45:38.600 --> 0:45:43.680 with capabilities who are not living up using those capabilities, 0:45:43.800 --> 0:45:46.280 or in the end never even get those capabilities because 0:45:46.440 --> 0:45:49.319 money doesn't go back through the education. I mean the 0:45:49.440 --> 0:45:53.040 US at a point in time in the nineteen eighties 0:45:53.840 --> 0:45:57.880 when it was necessary to everybody knew you had to 0:45:57.960 --> 0:46:03.000 really up the educational system. And the US was absolutely 0:46:03.040 --> 0:46:07.160 and still is ideally situated for that because of the 0:46:07.280 --> 0:46:10.920 history of higher education in the United States, which goes 0:46:10.960 --> 0:46:13.320 back to something called the Lion Grand colleges, which really 0:46:13.640 --> 0:46:16.719 came out in the late nineteenth century and were the 0:46:16.760 --> 0:46:20.360 bedrock of innovation in the US economy at that point 0:46:20.360 --> 0:46:24.640 in time. The huge investments that should have been made 0:46:24.680 --> 0:46:28.280 were not made. Public education was virtually in every state 0:46:28.320 --> 0:46:32.479 free before then became expensive student loans. The interest rates 0:46:32.480 --> 0:46:37.359 that extortionate in the US from the government. Basically it 0:46:37.440 --> 0:46:40.200 was white people not wanting to fund other people. 0:46:40.920 --> 0:46:41.880 For upward mobilities. 0:46:41.880 --> 0:46:47.640 So that's definitely yeah, and that's when you now, how 0:46:47.760 --> 0:46:51.560 was that resolved. It was resolved through the fact that Asia, 0:46:52.120 --> 0:46:57.080 in particular in the tech industry, was educating people and 0:46:57.280 --> 0:47:01.719 those people were in the United States and I think 0:47:01.760 --> 0:47:04.160 to the benefit of them and benefit of the United States. 0:47:04.520 --> 0:47:07.600 So I'm not saying that Asians in some case took 0:47:07.640 --> 0:47:12.120 any jobs away from anybody they but they became an 0:47:12.160 --> 0:47:15.239 available labor supply through what's called L one visas, H 0:47:15.320 --> 0:47:20.560 one B VISUS permanent VISUS employee and preference visas. I've 0:47:20.600 --> 0:47:23.919 got all the data on this. This is all encapsulated 0:47:23.960 --> 0:47:27.200 in the Immigration Act of nineteen ninety and for the 0:47:27.280 --> 0:47:31.240 tech industry, they were now off the hook in terms 0:47:31.280 --> 0:47:35.120 of US economy for saying, oh, we have to ensure 0:47:35.480 --> 0:47:42.280 that higher education is available for African Americans, available for 0:47:43.400 --> 0:47:48.160 white families who are coming out of low income that 0:47:48.239 --> 0:47:52.560 we have to be sure that this system is available 0:47:53.600 --> 0:47:57.680 for upwer mobility. They took a walk on that, and 0:47:57.719 --> 0:47:59.680 they were able to take a walk on that because 0:47:59.680 --> 0:48:01.200 they were part of the global system. 0:48:01.280 --> 0:48:01.839 That's what I mean. 0:48:01.920 --> 0:48:05.880 It's very ironic now that United States is in this 0:48:05.960 --> 0:48:06.839 conflict with things. 0:48:06.840 --> 0:48:09.960 It feels like we've gone yeah, socially regressive. 0:48:09.640 --> 0:48:14.000 Absolutely absolutely, And what you see is concentration on the 0:48:14.040 --> 0:48:19.799 top downwards socioeconomic mobility for people particularly who have no 0:48:19.880 --> 0:48:22.879 more than high school educations. And that's why I say, 0:48:22.920 --> 0:48:26.400 that's why it leads to Trump. Basically, it's no big mystery. 0:48:26.440 --> 0:48:30.480 Once you understand the concentration on the top, the money 0:48:30.520 --> 0:48:31.960 that will go, and. 0:48:31.960 --> 0:48:34.400 I imagine to some extent, even if you don't understand it, 0:48:35.000 --> 0:48:37.040 you look at the system, you look at the current 0:48:37.440 --> 0:48:41.280 political apparatus. Why would you trust authority even if Trump 0:48:41.320 --> 0:48:44.040 is a he's obviously not going to do a whole 0:48:44.040 --> 0:48:45.800 bunch of stuff, and he's going to do much worse. 0:48:47.239 --> 0:48:49.520 It's almost like you, I feel like people need to 0:48:49.560 --> 0:48:53.640 realize everything you've discussed today, is just describing how the 0:48:53.680 --> 0:48:57.640 system fucks regular people, how the system has somehow we 0:48:57.640 --> 0:49:01.720 were more progressive in America in the seventy's corporate why 0:49:01.760 --> 0:49:05.000 it's just it's very worrying. So I'm gonna end on 0:49:05.040 --> 0:49:07.440 a nice note. What actually should give people hope? 0:49:07.680 --> 0:49:09.720 Where can people find it right now? In your opinion? 0:49:10.280 --> 0:49:11.120 Ah? 0:49:11.400 --> 0:49:15.760 Well, that's hard to say right now, I mean because 0:49:15.800 --> 0:49:21.160 because I mean the you know, there was a notion 0:49:21.840 --> 0:49:27.480 that with all the opposition before the election and before 0:49:27.640 --> 0:49:32.000 before Biden had that disasters debate. Okay, you know, he 0:49:32.040 --> 0:49:34.719 had tried to push policies in a much more progressive way, 0:49:34.719 --> 0:49:35.560 and I think it's true. 0:49:35.800 --> 0:49:36.640 Yeah, they were trying. 0:49:36.680 --> 0:49:39.120 They couldn't get any of the family stuff passed, but 0:49:39.160 --> 0:49:41.920 they were trying to do it. They got the infrastructure 0:49:42.000 --> 0:49:47.920 infrastructure Builds pass, et cetera, Inflation Reduction Act, starting finally 0:49:48.000 --> 0:49:52.520 to to try to negotiate health care prices. Basically, they 0:49:52.520 --> 0:49:56.239 were trying to do some things that got a resounding 0:49:56.360 --> 0:49:59.360 no from the electorate. And in fact, that part of 0:49:59.400 --> 0:50:03.759 the regressive policy was not part of the campaign. And 0:50:04.160 --> 0:50:09.440 certainly Joe Biden was a big fan of this stuff 0:50:09.480 --> 0:50:13.719 on binding buybacks back when he was vice president. I'll 0:50:13.719 --> 0:50:15.319 tell you a little story about that. We can end 0:50:15.360 --> 0:50:20.760 on this, which is not that. Basically, in twenty sixteen, 0:50:21.120 --> 0:50:22.839 when he was still vice president, he wrote an op 0:50:22.960 --> 0:50:24.520 ed in the New York Times in the Wall Street 0:50:24.560 --> 0:50:27.960 Journal about stock buybacks executive pay and said, we have 0:50:28.040 --> 0:50:30.560 to rain all this stuff in. This is really screwing 0:50:30.640 --> 0:50:33.759 up the economy. The future of the economy depends on it. 0:50:35.120 --> 0:50:38.960 In that article he named one person that was me. 0:50:39.520 --> 0:50:42.720 It said, according to economist, William was on at Comma, 0:50:42.920 --> 0:50:44.959 and then he had data from the article I mentioned 0:50:45.000 --> 0:50:48.040 in twenty fourteen. I looked at it a couple of 0:50:48.080 --> 0:50:51.000 years ago when a journalist contacted me and I said, oh, Biden, 0:50:51.160 --> 0:50:54.840 when he was vice president was I really thought this 0:50:54.960 --> 0:50:57.640 was a problem. Now he's not saying anything about it. 0:50:57.680 --> 0:50:59.279 And I said, look at the article. I looked at 0:50:59.320 --> 0:51:03.880 the article and it said, according to economists, blank space Comma, 0:51:04.200 --> 0:51:05.839 someone had actually hacked out my name. 0:51:07.640 --> 0:51:10.880 Yes, it feels like it. We need a populist movement, 0:51:10.920 --> 0:51:12.279 then straight up pro no. 0:51:12.719 --> 0:51:19.520 Basically, Basically, the when the Democrats got into power, and 0:51:19.640 --> 0:51:21.440 this happened under Obama, It's happened. 0:51:22.120 --> 0:51:23.440 It was happened under Clinton. 0:51:24.160 --> 0:51:27.680 Uh, they have just cosied up to Wall Street, cosied 0:51:27.800 --> 0:51:31.840 up to rich people. Basically, they do not have a 0:51:31.840 --> 0:51:36.680 critique of shareholder value. There is nothing coming out of 0:51:36.280 --> 0:51:38.920 the of from the Democrats when they are in power 0:51:38.920 --> 0:51:43.200 in particular. Uh, and that that is that it's confronting 0:51:43.280 --> 0:51:47.880 this and I think it's now basically comfortull circle in 0:51:47.960 --> 0:51:51.319 terms of the people being affected by the lack of 0:51:51.600 --> 0:51:55.719 upward mobility, the lack of job security, living people living 0:51:55.719 --> 0:51:59.439 paycheck to paycheck while other people are getting richer and richer. 0:51:59.560 --> 0:52:04.680 Finding Okay, we'll just take someone who you know with 0:52:04.760 --> 0:52:06.640 a hope that they're going to do something different. Of 0:52:06.680 --> 0:52:09.880 course they're not. So yeah, So what's what's the where's 0:52:09.880 --> 0:52:12.760 the optimism of courts? We need, we need a progressive movement. 0:52:13.600 --> 0:52:15.719 But but it is, Yeah. 0:52:15.600 --> 0:52:17.359 I feel like you can find hope in the fact 0:52:17.400 --> 0:52:20.040 that these ideas will become more prevalent because at some point, 0:52:20.440 --> 0:52:23.239 we mean, we need to review these systems. We need 0:52:23.280 --> 0:52:26.640 to also realize that worker power will make cooler shit, 0:52:26.719 --> 0:52:29.799 it will make more innovation. William, thank you so much 0:52:29.840 --> 0:52:31.440 for joining me, and everyone, thank you so much for 0:52:31.520 --> 0:52:34.440 joining us today for the first live episode of Better Offline. 0:52:34.440 --> 0:52:37.640 From the beautiful country of Portugal. Websummit. 0:52:37.680 --> 0:52:49.040 Thank you everyone, Thanks, thank you for listening to Better Offline. 0:52:49.160 --> 0:52:51.600 The editor and composer of the Better Offline theme song 0:52:51.640 --> 0:52:54.320 is Matasowski. 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