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Speaker 1: All right, you sons of bitches, let's fuck this popsicle stand.

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Speaker 1: It's time for a goddamn podcast. How was that? Everybody good?

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Speaker 2: You went right past blown all the way to fourth base.

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Speaker 2: Everybody happy with the popsicle stand? Yeah?

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Speaker 3: Love it right now?

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Speaker 1: Welcome to Behind the Bastards. Everybody, it's a podcast bad

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Speaker 1: people talk about them. M Yeah, it's a good time. So,

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Speaker 1: uh we should you know, let's let's talk about this

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Speaker 1: real piece of ship, this guy who sucked. Uh. Ceo

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Speaker 1: now of General Electric, Jack Welch. So about a year

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Speaker 1: into his tenure as CEO, Jack Welch gave a speech

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Speaker 1: by the way, my co hosts as as with the first.

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Speaker 3: Episode, so impressive that you forgotten.

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Speaker 2: The energy was incredible. It was I thought I could

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Speaker 2: sleep through this one. But hire Michael Sway happy to

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Speaker 2: be back for part two?

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Speaker 3: Part two? Baby, well, I do want to get in

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Speaker 3: here again.

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Speaker 2: Yeah.

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Speaker 1: What should people know about your current projects?

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Speaker 2: Abe? I did it in part one?

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Speaker 1: You do?

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Speaker 2: Yeah?

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Speaker 3: So, basically, Michael and I are making an independent film.

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Speaker 3: It's based on the time that Michael's father came out

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Speaker 3: as a gay free will. Michael was like a teenager

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Speaker 3: and we both thought it'd be an interesting story to

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Speaker 3: show that like on film like as are coming of

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Speaker 3: age like sex comedy. So we wrote it and now

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Speaker 3: we're producing it. And you can help us by going

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Speaker 3: to seed Andspark dot com, slash fund, slash Papa hyphen

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Speaker 3: Bear and you can become a part of the movie.

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Speaker 3: You can, you know, they got tears there. You can

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Speaker 3: click on the buttons. And we're stoked Gray Rewards. Yeah, yeah,

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Speaker 3: we're stoked about telling the story. So if you can't

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Speaker 3: help us out, and you know, we'll make the film, right,

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Speaker 3: So that's why we're that's why we're here.

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Speaker 2: No, no, no, we're here to catch up with Robert,

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Speaker 2: which is always a divine pleasure. Well not to, but

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Speaker 2: you're also right. Both things are true. And the only

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Speaker 2: thing I wanted to add is if you're not aware

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Speaker 2: Abe directed like most of the videos that Cracked, I

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Speaker 2: was over it cracked. If you know us from Cracked. Yeah,

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Speaker 2: so so like we can do it. I can say

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Speaker 2: with great confidence it'll be a good movie. I bet

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Speaker 2: Rober would even back us up on that. So check

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Speaker 2: it out over there where Abe said. And if you're

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Speaker 2: interested at all in that hook.

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Speaker 1: Yeah, I am so excited for this movie. I think

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Speaker 1: I enjoyed your your your previous movie kill me now,

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Speaker 1: and I would like I would like you to get

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Speaker 1: another movie out. So listeners, help make my dream come

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Speaker 1: true by forcing Michael and Abe at gunpoint to make

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Speaker 1: another film. Yes, yes, daddy, yeah yeah. Hurt them, hurt

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Speaker 1: them for me. So back to the sentence I was

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Speaker 1: in the middle of when I realist I hadn't introduced you.

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Speaker 1: About a year into his tenure as CEO of GE,

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Speaker 1: Jack Welch gave a speech at a gathering of executives

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Speaker 1: in New York City. It was meant to be his

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Speaker 1: introduction to the company leadership, where he would present them

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Speaker 1: with his vision of the future and wrangle the most

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Speaker 1: influential minds in the country behind his plans, or and

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Speaker 1: get the most influential minds in the company behind his

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Speaker 1: plans for GE's future. His twenty minute speech was titled

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Speaker 1: Growing Fast in a Slow growth Economy, and it presented

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Speaker 1: a very Menichean view of the country's economic future. From

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Speaker 1: now on, companies would either be the dominant entity in

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Speaker 1: their market or doomed to failure mediocrity, which he defined

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Speaker 1: as not being first or second in the industry would

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Speaker 1: be seen as a death knell. He announced that if

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Speaker 1: GE couldn't guarantee itself that kind of dominance in one

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Speaker 1: of its many industries or businesses, and needed to sell

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Speaker 1: that business off or shut it down or otherwise prune

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Speaker 1: it away in order to focus on the things that

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Speaker 1: it could dominate. Now, one thing you might notice about

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Speaker 1: this is that, like as a consumer, theoretically, one of

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Speaker 1: the big benefits of can capitalism, one of the things

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Speaker 1: that set it apart from, for example, the Soviet Union,

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Speaker 1: is that customers would have like choice between a bunch

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Speaker 1: of different products. But Jack is saying, no, no, no,

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Speaker 1: fuck everyone who's not like number one or number two.

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Speaker 1: It's not worth being in that business. It's not worth

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Speaker 1: making a simple profit in order to like provide people

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Speaker 1: with options Like fuck that.

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Speaker 2: Right, I do love I read a whole book on

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Speaker 2: this that I can't go into because it's your show.

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Speaker 2: But I love that he also is right that you

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Speaker 2: have to have a second one and how fucking simple

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Speaker 2: humans are because you're like, you're either someone who likes

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Speaker 2: to do what everyone's doing, or you're someone who likes

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Speaker 2: to be contrarian and not do what everyone's doing. So

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Speaker 2: you always get there's like Huggies and panthers or coke

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Speaker 2: and Pepsi. Yeah in everybody, Like that's as big as

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Speaker 2: our minds get. Is like I'm a sheep or I'm

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Speaker 2: an anti sheep. Those are the types of people that

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Speaker 2: buy things.

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Speaker 3: Yes, anti sheep, anti sheep.

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Speaker 1: This is why, famously, the one cultural reservoir our country

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Speaker 1: had of anti capitalist thinking was in those brave, heroic

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Speaker 1: souls who rejected the pepsi coke dichotomy and instead switched

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Speaker 1: to Doctor Pepper.

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Speaker 3: Doctor Pepper's playing sea Baby, and that's when we got

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Speaker 3: soda perfection into Dr Pepper.

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Speaker 1: So really it's very funny when I'm anywhere else in

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Speaker 1: the country, as I usually am now, but Texas, I

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Speaker 1: can like tell who's a Texan by when you go

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Speaker 1: out to eat, who gets a Doctor Pepper, Like if

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Speaker 1: you're at a failing to joint. Yeah, it's it's a thing. Uh,

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Speaker 1: No one else drinks it but us. The rest of

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Speaker 1: the country doesn't understand.

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Speaker 2: Watching.

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Speaker 1: But he's from Colorado, which is North Texas.

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Speaker 2: That's true.

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Speaker 3: I drink doctor Pepper. I think I also think diet

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Speaker 3: Doctor Pepper is the best version of diet that.

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Speaker 2: I'm imagining, Jack Well hearing you talk about doctor Pepper

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Speaker 2: consuming doctor that's good, Doctor Wells.

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Speaker 1: I'm gonna be honest with you both. I'm actually a

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Speaker 1: mister PIB man.

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Speaker 2: Oh see, the.

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Speaker 1: PIB makes a fine soda. Look, I love that we're

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Speaker 1: just doing free ads for soda. Hey, I tried to

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Speaker 1: get us back on track. It is it's good shit,

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Speaker 1: it is okay. PIB is just like excellency. Yeah. If

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Speaker 1: Jack Welch had his way, there would be no mister

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Speaker 1: PIB because it's too good a product to be number

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Speaker 1: one or two in its category. Right, This is the

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Speaker 1: kind of hell he wants for us, where there's only

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Speaker 1: pepsi and coke. That son of a bitch. So Welch's

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Speaker 1: goal at c S CEO, as he told the audience

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Speaker 1: in this speech, was to make GE the most competitive

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Speaker 1: enterprise on the planet. The steady growth that had made

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Speaker 1: it the bluest of blue chip corporations prior to this

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Speaker 1: was no longer acceptable. Welch had been inspired in this

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Speaker 1: by a number of articles in Fortune magazine analyzing famous

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Speaker 1: Prussian generals from the eighteen hundreds, and for so reason,

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Speaker 1: trying to use them as business gurus. This has been

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Speaker 1: like the last thing he read before giving the speech,

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Speaker 1: and it had a huge impact on like the way

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Speaker 1: he framed everything that he was doing.

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Speaker 2: And the number one way business at time were written

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Speaker 2: is you're like, how did some guy four hundred years

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Speaker 2: ago who murdered and raped everyone he met doing it?

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Speaker 2: That's probably good?

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Speaker 1: Well, it's funny because like that didn't used to be

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Speaker 1: the thing, like, especially if you go back to I

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Speaker 1: don't know, like the fifties and sixties and you were

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Speaker 1: to be like, we should take you know, our management

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Speaker 1: advice from from military leaders. Well, for one thing, most

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Speaker 1: of those guys fought in World War Two, and they'd

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Speaker 1: be like, you mean the idiots who like got all

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Speaker 1: my friends killed because they fucked up constantly. No, I

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Speaker 1: think I'm good. I don't think that's like the management

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Speaker 1: tactics I want. But by the time you get to

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Speaker 1: the eighties, none of these guys have ever done anything

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Speaker 1: in the world, and they're like, yeah, fucking you know

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Speaker 1: who's you know, who's a management guru? Helm with Van Moltka,

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Speaker 1: that's a guy who knows how to run a company

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Speaker 1: that makes light bulbs. The man who won the Franco

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Speaker 1: Prussian war surely has wisdom for me in our plastics business.

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Speaker 3: Like that's the most like fraternity sentence I've ever heard.

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Speaker 1: It's very funny. It's it's it's seeped in it and

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Speaker 1: again you could again you get. One of the other

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Speaker 1: things you can tell is that like none of this

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Speaker 1: generation of business leaders who are entrance by this stuff,

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Speaker 1: not only were they like too young to fought in

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Speaker 1: World War Two, but they were too rich to get

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Speaker 1: drafted for Vietnam because like, nobody who fights in Vietnam

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Speaker 1: is like generals, the guys who don't make mistakes. Yes,

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Speaker 1: I understand.

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Speaker 3: It's the It's like the eye of the hurricane saying

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Speaker 3: like this is all right, this is fine.

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Speaker 1: Yeah, let's uh, let's let's copy Let's what did west

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Speaker 1: How would Westmoreland run ge? You know, let's defoliate the

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Speaker 1: entire business, poison the office, kill everyone.

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Speaker 2: I shall run this condom factory as if I tour Machiavelli.

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Speaker 2: You don't need to, that's no need to.

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Speaker 1: I do kind of want to write a management book

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Speaker 1: that's like the Westmoreland Way, And it's just like the

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Speaker 1: applying the lessons of the Vietnam War to corporate success.

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Speaker 1: Yeah series, yeah, yeah, well why not? It could It

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Speaker 1: could work. So this is something that's starting to be

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Speaker 1: a big deal in the nineteen eighties. And I haven't

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Speaker 1: found a copy of the articles in Fortune that inspired

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Speaker 1: Jack Welch so much, but I did run across a

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Speaker 1: very recent article in the Harvard Business Review. We'll be

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Speaker 1: talking more about the Harvard Business Review a little later,

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Speaker 1: written in the early nineteen nineties, which was kind of

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Speaker 1: like the heyday for Jack Welch's CEO, that attempted to

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Speaker 1: draw business lessons from one of the same generals featured

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Speaker 1: in the Fortune article, a guy I mentioned a little earlier,

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Speaker 1: Helmuth von Moltka. Now the article also quotes Jack Welch,

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Speaker 1: which is, you know, interesting by this point in time

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Speaker 1: ten years later, not only is he like reading articles

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Speaker 1: about Prussian generals and their management tactics, but he's been

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Speaker 1: added to the articles about Prussian generals and their management tactics. Quote.

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Speaker 1: Moltke possessed two important characteristics that made him a superior strategist.

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Speaker 1: The ability to understand the significance of events without being

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Speaker 1: influenced by current opinion, changing attitudes, or his own prejudices

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Speaker 1: and the ability to make decisions quickly and to take

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Speaker 1: the indicated action without being deterred by a perceived danger.

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Speaker 1: The two characteristics support each other and apply to managers

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Speaker 1: and entrepreneurs as much as generals and national leaders. For example,

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Speaker 1: General Electric CEO Jack Welchis said, strategy follows people. The

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Speaker 1: right person leads to the right strategy. Now there's a

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Speaker 1: lot that's funny about that. Well, yeah, it's I mean,

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Speaker 1: first off, just nonsense. Like von Moltkett was not a

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Speaker 1: great general because he was great at like I guess

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Speaker 1: you could argue those were factors in his success. Another

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Speaker 1: factor is that Germany developed a kind of steel that

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Speaker 1: allowed them to make long range cannons that the French

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Speaker 1: did not have, and so they were killed that extremely

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Speaker 1: long range before they could close with their superior close

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Speaker 1: in rifles. But like, you can't really translate that to

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Speaker 1: ge strategy. Very well, that's what we need.

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Speaker 2: Yeah, Also you get a very clear impression the Jaguaryalts

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Speaker 2: definitely at some point in his life, like turned to

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Speaker 2: his chauffeur, was like, you are my friend, You're my

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Speaker 2: best friend.

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Speaker 4: Like this guy, Yeah, yeah, yeah, Moltka you know again

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Speaker 4: was a very good general.

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Speaker 1: But it's also kind of worth noting that those who

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Speaker 1: seeve On Maltica as a business guru should be aware

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Speaker 1: that the men he trained, the generation of German commanders

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Speaker 1: who like were raised up in kind of his heyday

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Speaker 1: and like learned under him and were inspired by him,

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Speaker 1: were the guys who all lost World War One, destroying

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Speaker 1: the First Reich and much of Europe in the process.

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Speaker 1: So keep that in mind as we discussed the legacy

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Speaker 1: of Jack Welch, because oddly enough, the same thing is

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Speaker 1: going to happen now. One of the things that Welch

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Speaker 1: took from Moltka was the concept of total war. He

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Speaker 1: saw the business equivalent of this as being willing to

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Speaker 1: find profit wherever he could, even though things traditionally, even

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Speaker 1: through things that were traditionally outside of GE's wheelhouse. When

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Speaker 1: he delivered this wisdom in his big speech, the Wall

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Speaker 1: Street analysts in the audience were baffled, because this is insane, right,

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Speaker 1: Like people at the time were like, what the fuck

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Speaker 1: is he talking about? Like this is not like total

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Speaker 1: war means, I don't know, burning down villages and destroying

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Speaker 1: crops that the enemy can gain no sucker on them.

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Speaker 1: It doesn't mean like finding profit in every aspect of

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Speaker 1: your business. That's just running a business. Like what you're

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Speaker 1: saying is just warseship.

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Speaker 2: Yeah, it sounds like you're saying, my new brilliant business

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Speaker 2: plan is I want money.

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Speaker 1: What if we made money?

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Speaker 2: Money? Oh, but I really want money.

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Speaker 1: Yeah. It's like it's like if you had a general

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Speaker 1: come in. It was like, guys, guys, I got a

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Speaker 1: new plan that's going to blow this whole war thing

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Speaker 1: out of the water. What if we hear me out

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Speaker 1: here kill the enemy.

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Speaker 2: However we can anyway you can as long as Yeah.

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Speaker 3: I love the idea of him seeing like a little

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Speaker 3: kid with lemonade stands selling like fifty cent, you know,

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Speaker 3: like cups of lemonade, and he's.

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Speaker 1: Like that little piece of that son of of my mine.

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Speaker 1: I could I will win all of commerce. Total war,

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Speaker 1: this kid, Yeah, total war, this little son of a bitch.

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Speaker 1: It's interesting. I read a book when I was a

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Speaker 1: lot younger. You know, the show Band of Brothers was

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Speaker 1: about an actual like military unit in the US Easy Company,

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Speaker 1: I think in the eighty second Airborne. I read a

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Speaker 1: book by like the unit commander who's the he's he's

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Speaker 1: one of the characters in the in the show, but

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Speaker 1: like by the actual guy. And there was like a

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Speaker 1: point in it, a line in it where he was like,

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Speaker 1: because I think he wrote it in like the eighties

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Speaker 1: or nineties where he was like, I keep seeing people

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Speaker 1: comparing like business to war and like using military metaphors

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Speaker 1: to talk about how company should be run, and I

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Speaker 1: find it will really off putting because like war is

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Speaker 1: just like a hinged savagery and people shouldn't people shouldn't

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Speaker 1: seek to emulate it in the other's fears of existence. Yeah,

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Speaker 1: very fun. Jack Welch does not feel the same way.

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Speaker 1: And I'm going to quote from The Man Who Broke

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Speaker 1: Capitalism by David Gels again.

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Speaker 2: Here.

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Speaker 1: One analyst asked how the price for copper would impact

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Speaker 1: earnings in the next quarter. What the hell difference will

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Speaker 1: that make? Well, shot back, you should be asking me

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Speaker 1: where I want to take the company. The speech was

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Speaker 1: a flop. As the analysts filed out of the ballroom,

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Speaker 1: one remarked, we don't know what the hell he's talking about,

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Speaker 1: because they want to know, like, so, you know, what

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Speaker 1: do you like, how is the business doing? How are

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Speaker 1: like what strategy I have like the costs of different

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Speaker 1: materials that we need gone up or down? You know,

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Speaker 1: like how are how ours like how is how are

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Speaker 1: our core like assets performing right now? And Welch is

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Speaker 1: like fuck that, I'm going to talk about war.

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Speaker 3: Right It's crazy? How like this type of thinking? Like

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Speaker 3: any given day he could be like lotting the like,

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Speaker 3: oh we got a we got to like short the

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Speaker 3: system and create this like essentially new market that we

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Speaker 3: can scam that's the new hotness. And then yeah, the

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Speaker 3: next day he'll be like steady growth and like quality

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Speaker 3: products are the thing to do. It's like, who knows

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Speaker 3: what this guy's gonna He's just a child walking around

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Speaker 3: pointing at this is the strategy, I think.

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Speaker 2: Yeah, And you can feel him setting the template that

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Speaker 2: I think a lot of modern CEOs follow, that is

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Speaker 2: just your job is to be a figurehead and give

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Speaker 2: speeches that are general about vision and direction and basically

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Speaker 2: just demand that the number go up, like your main

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Speaker 2: job is too.

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Speaker 1: Yeah, and that's the like as a spoiler, where we're

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Speaker 1: heading here is that he's kind of running a con

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Speaker 1: and it's a successful con. It does make ge incredibly profitable,

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Speaker 1: But the reason he can't talk to these guys about

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Speaker 1: the business. Is that he wants to eliminate the business

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Speaker 1: part of GE because that's getting in the way of

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Speaker 1: making money. So today is the story of how he

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Speaker 1: did that. The first big campaign that General Jack had

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Speaker 1: to launch in order to remake GE in his image

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Speaker 1: was what he himself described as a campaign against loyalty. Right,

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Speaker 1: he declared war on the concept of loyalty within the company.

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Speaker 1: He defined this, well, we're talking about that. He defined

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Speaker 1: it as eliminating bureaucrats, but in reality, his layoffs were

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Speaker 1: more or less agnostic to function or performance within the company.

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Speaker 1: He fired good employees if they annoyed him. He once

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Speaker 1: shut down an entire department dedicated to long term planning

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Speaker 1: because long term planning isn't the kind of thing that

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Speaker 1: leads to short term earnings. Soon it became known that

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Speaker 1: the only way to advance under GE's new leader was

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Speaker 1: to fire as many of your own employees as possible.

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Speaker 1: True to his background as an angry man who never

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Speaker 1: learned how to compromise or experience consequences, Jack managed mostly

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Speaker 1: through screaming at people. There were some upsides to this.

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Speaker 1: He legitimately knew his business very well, and he would

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Speaker 1: tear his managers a new one if they didn't understand

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Speaker 1: their business as well is he. But it also selected

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Speaker 1: for people who would not question Jack and instead blindly

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Speaker 1: followed his commands. In nineteen eighty GE had four hundred

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Speaker 1: and eleven thousand employees. By the end of nineteen eighty two,

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Speaker 1: it had fired almost nine percent of its workforce, starting

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Speaker 1: with thirty five thousand employees and followed with thirty seven

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Speaker 1: thousand the next year. Often this meant destroying the economy

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Speaker 1: in small towns across the country. This is a part

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Speaker 1: of the process of the hollowing out of Middle America.

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Speaker 1: A good example would be Ontario, California, which had a

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Speaker 1: steam iron plant that employed eight hundred and twenty five people.

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Speaker 1: Though it was profitable, Jack closed it and fired them.

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Speaker 2: All.

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Speaker 1: Local civic leaders complained, but no one had the ability

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Speaker 1: to do anything. The year before Jack took over ge

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Speaker 1: net profits had risen by seven percent. It was the

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Speaker 1: tenth most profitable business in the Fortune five hundred. These

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Speaker 1: mass layofs were not necessary, but every Purge was met

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Speaker 1: with a surgeon. Stock prices that benefited shareholders. Newsweek compared

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Speaker 1: his strategy to the work of a neutron bomb, an

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Speaker 1: nightmare WMD built to kill all living creatures in an

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Speaker 1: area but leave infrastructure intact. They gave him the nickname

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Speaker 1: neutron Jack.

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Speaker 2: Cool.

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Speaker 1: Yeah, yeah, yeah, and he hates.

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Speaker 2: You mentioned Jack Donnie being based on him, also Jimmy Neutron,

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Speaker 2: which I.

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Speaker 1: Didn't yes exactly or it's heartening.

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Speaker 2: I guess that people from Jump, or at least there

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Speaker 2: was some coverage that was like, yeah, this is going

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Speaker 2: to ruin everything.

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Speaker 1: Yeah, he's destroying the destroying life. Yeah, he's killing life itself.

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Speaker 1: But they were doing it both as like there was

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Speaker 1: an element of criticism, but also like awe, and it's

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Speaker 1: it's fun because like Jack would always claim to hate

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Speaker 1: this nickname, and his autobiography he writes from the numbers,

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Speaker 1: you could make the case that there was either a

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Speaker 1: neutron Jack or a company with too many positions. I

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Speaker 1: naturally took comfort in the latter, but the neutron tag

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Speaker 1: still got me down. I was fortunate to find remarkable

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Speaker 1: support that got me through at home, in the office,

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Speaker 1: and in the boardroom. I'd come home obviously a little

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Speaker 1: down from the experience.

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Speaker 3: Because he thought he was like being called a nerd.

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Speaker 1: Yeah, it made him. It made him so sad to

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Speaker 1: be described as a weapon of mass destruction. And in

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Speaker 1: his autobiography he credits his first wife, Carolyn is helping

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Speaker 1: him through the dark like emotional period that this created. Carolyn,

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Speaker 1: in Jack's book, is always supportive of him, no matter

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Speaker 1: how tough the press or his job is. She always

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Speaker 1: ended a conversation with Jack. You have to do what

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Speaker 1: you think is right for everyone, which.

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Speaker 2: Is how you know every single scene between them is

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Speaker 2: nothing like that's just the pr story period. Yeah.

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Speaker 1: Yeah, there's another way you can know that, which is

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Speaker 1: that he divorces Carolyn in nineteen eighty seven, about five

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Speaker 1: years after this point in his In his story, their

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Speaker 1: divorce gets two paragraphs of mentioned in his autobiography.

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Speaker 2: It's like we never spoke, but when we did it

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Speaker 2: was great, very not controversial. Then we got divorced for

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Speaker 2: no reason.

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Speaker 1: Yes, she was my roster and then I left Derry.

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Speaker 1: You know, the divorce was a forbidden topic by his employees.

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Speaker 1: And there's there's very little you can actually find about

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Speaker 1: this first divorce of his. One of the very few

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Speaker 1: statements I found about it comes from a guy with

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Speaker 1: the very funny name Dick McLean, which you know we

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Speaker 1: all appreciate.

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Speaker 2: If you do the comma reverse thing.

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Speaker 1: Yeah, McLean, Dick McLean, Dick. That name is just like

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Speaker 1: washing my face in a cool stream. Yes, just perfect.

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Speaker 1: Thank you, Dick, Thank you once again. Uh. Dick was

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Speaker 1: an environmental consultant from GE's plastics division who worked with

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Speaker 1: a with Jack, and he told the La Times quote,

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Speaker 1: you never heard anything about his first divorce. It was

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Speaker 1: in everybody's best interest to make sure that it was

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Speaker 1: all tuned down. His private life was always what was

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Speaker 1: absolutely incredible, McLean said, but he declined to elaborate now.

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Speaker 1: McLean was being interviewed for this article in the wake

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Speaker 1: of Jack's second divorce to Jane Welch, the woman that

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Speaker 1: he left Carolyn for, which occurred in two thousand and

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Speaker 1: two after she found out that he had been cheating

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Speaker 1: on her with the editor of the Harvard Business Review,

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Speaker 1: who wrote that play praise worthy article that we quoted earlier.

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Speaker 1: So that's fun, that's ethical as shit.

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Speaker 2: You love the seal.

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Speaker 3: All of his friends, all of his coworkers are just

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Speaker 3: like they treat him like an ogre, Like he's just

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Speaker 3: an ogre. In the room that no one wants to

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Speaker 3: deal with. They're like, yeah, something's going on over there.

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Speaker 3: But man, I know.

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Speaker 1: You don't want you don't you don't want to like

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Speaker 1: get Jack angry. That just makes everybody yeah, man, so yeah,

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Speaker 1: it's very funny when like MacLean heard about the fact

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Speaker 1: that he was his wife was leaving him because he

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Speaker 1: cheated on her with the Harvard Business Review, Lady MacLean

429
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Speaker 1: told The Times, my instant reaction was oops, checks back

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Speaker 1: to his old ways, babies untethered. So these purges, by

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00:22:04,600 --> 00:22:07,880
Speaker 1: necessity killed the old ge. All these layoffs, the one

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Speaker 1: in which workers have been able to rely on the

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Speaker 1: company as a lifelong employer and rely on its benefits

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Speaker 1: to take care of them with their old age. Jack

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Speaker 1: called his campaign again to like He called the campaign

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Speaker 1: to like destroy any kind of faith people had in

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00:22:21,960 --> 00:22:25,000
Speaker 1: Ge as a place where they could like stay. He

438
00:22:25,080 --> 00:22:28,080
Speaker 1: called this his campaign against loyalty. And it was more

439
00:22:28,119 --> 00:22:31,359
Speaker 1: than just firing people. He ordered his staff to avoid

440
00:22:31,440 --> 00:22:34,520
Speaker 1: using the word loyal in press releases, and he ordered

441
00:22:34,520 --> 00:22:37,359
Speaker 1: his underlings to stoke their workers with constant fear that

442
00:22:37,359 --> 00:22:40,320
Speaker 1: there might lose their jobs. To emphasize all this, he

443
00:22:40,359 --> 00:22:44,240
Speaker 1: wrote shit like this in his memos. The psychological contract

444
00:22:44,240 --> 00:22:47,359
Speaker 1: has to change. My concept of loyalty is not giving

445
00:22:47,440 --> 00:22:50,440
Speaker 1: time to some corporate entity and in turd being shielded

446
00:22:50,440 --> 00:22:53,480
Speaker 1: and protected from the outside world. Loyalty is an affinity

447
00:22:53,520 --> 00:22:55,880
Speaker 1: among people who want to grapple with the outside world

448
00:22:55,960 --> 00:22:58,360
Speaker 1: and win. What is that?

449
00:22:58,760 --> 00:23:00,080
Speaker 2: What is I?

450
00:23:02,280 --> 00:23:05,399
Speaker 1: Yeah, but I don't like it. I think he's saying that, like,

451
00:23:05,440 --> 00:23:07,120
Speaker 1: you know, I want the loyalty of like a team

452
00:23:07,160 --> 00:23:09,880
Speaker 1: of soldiers fighting an enemy. But it's like, well, part

453
00:23:09,920 --> 00:23:12,000
Speaker 1: of why soldiers are loyal to each other is they're

454
00:23:12,000 --> 00:23:15,200
Speaker 1: like protecting each other, and you're saying I want that loyalty,

455
00:23:15,280 --> 00:23:17,720
Speaker 1: but also fuck everyone who works for me.

456
00:23:18,200 --> 00:23:24,040
Speaker 3: Right, Like it's it's just trying to sounds like it's

457
00:23:24,200 --> 00:23:27,520
Speaker 3: larger than it is. We all know what you're doing here.

458
00:23:27,840 --> 00:23:32,439
Speaker 3: You just need an excuse, And like, what are you

459
00:23:32,520 --> 00:23:36,320
Speaker 3: even trying to say with anti loyalty? Like what if

460
00:23:36,320 --> 00:23:38,280
Speaker 3: someone right now were to be like I don't think

461
00:23:38,359 --> 00:23:42,960
Speaker 3: this is a good idea. You would restructure that man,

462
00:23:43,359 --> 00:23:46,679
Speaker 3: you know like that there would be so much pushback

463
00:23:46,720 --> 00:23:51,680
Speaker 3: from him, So like, what is he He absolutely values loyalty.

464
00:23:52,000 --> 00:23:53,560
Speaker 3: He's hypocritical to a core.

465
00:23:54,040 --> 00:23:57,560
Speaker 1: He values loyalty, but he's incensed by the idea that

466
00:23:57,680 --> 00:23:59,600
Speaker 1: loyalty might be a two way street, right.

467
00:23:59,600 --> 00:24:02,800
Speaker 2: That he would, Oh, loyalty has right, that's right. Yeah,

468
00:24:02,800 --> 00:24:05,160
Speaker 2: He's like, that's what the money's for. I just need

469
00:24:05,200 --> 00:24:08,720
Speaker 2: full profit. Why can't I get full profit? Mommy, ed

470
00:24:08,760 --> 00:24:11,720
Speaker 2: g you were like a family, yea, and that I

471
00:24:11,880 --> 00:24:14,600
Speaker 2: have the legal right to abandon you in a snowbank

472
00:24:14,720 --> 00:24:15,560
Speaker 2: at any time.

473
00:24:16,000 --> 00:24:18,520
Speaker 1: We're like a family in ancient Rome, where I, as

474
00:24:18,520 --> 00:24:21,320
Speaker 1: the patter familias, have the legal right to execute all

475
00:24:21,359 --> 00:24:26,919
Speaker 1: of you, right, jeezus. So the ultimate WMD in his

476
00:24:27,000 --> 00:24:30,159
Speaker 1: campaign against loyalty wasn't a neutron bomb. It was a

477
00:24:30,200 --> 00:24:34,960
Speaker 1: management strategy that Jacked helped to develop called stack ranking. Obviously,

478
00:24:35,320 --> 00:24:37,840
Speaker 1: pieces of this that existed, other people you know, had

479
00:24:37,880 --> 00:24:40,200
Speaker 1: come up with kind of some of these ideas. Jack

480
00:24:40,320 --> 00:24:42,439
Speaker 1: is like the first person to institute them. At a

481
00:24:42,480 --> 00:24:46,800
Speaker 1: major corporation, every year, managers were ordered to divide their

482
00:24:46,800 --> 00:24:50,440
Speaker 1: workers into three groups based on performance. The bottom ten

483
00:24:50,480 --> 00:24:52,919
Speaker 1: percent of the company was to be laid off every

484
00:24:52,960 --> 00:24:55,480
Speaker 1: single year. This meant that no matter how well a

485
00:24:55,560 --> 00:24:58,800
Speaker 1: division or the company did, people were always going to

486
00:24:58,840 --> 00:25:02,639
Speaker 1: get fired. And since managers were required to rank their employees.

487
00:25:03,080 --> 00:25:05,960
Speaker 1: Many of those layoffs would be adequate or good employees

488
00:25:06,000 --> 00:25:10,760
Speaker 1: who simply lost a political game. Stack ranking spread rapidly

489
00:25:10,800 --> 00:25:13,639
Speaker 1: throughout the country. Jacks peers saw that every wave of

490
00:25:13,680 --> 00:25:17,080
Speaker 1: layoffs brought the stock price up, so they copied him. Today,

491
00:25:17,359 --> 00:25:21,719
Speaker 1: HR software company Corvisio estimates that thirty percent of Fortune

492
00:25:21,720 --> 00:25:25,199
Speaker 1: five hundred companies stack rank their employees. In November of

493
00:25:25,280 --> 00:25:28,720
Speaker 1: last year, Amazon told managers to stack rank employees before

494
00:25:28,760 --> 00:25:32,360
Speaker 1: carrying out the largest layoffs in their history. Jack took

495
00:25:32,520 --> 00:25:36,320
Speaker 1: exceptional pride in how much he was copied. Some people

496
00:25:36,320 --> 00:25:38,840
Speaker 1: think it's cruel or brutal to remove the bottom ten

497
00:25:38,880 --> 00:25:41,800
Speaker 1: percent of our people. It isn't. It's just the opposite.

498
00:25:41,880 --> 00:25:45,000
Speaker 1: What I think is brutal is false and false kindness

499
00:25:45,080 --> 00:25:47,520
Speaker 1: is keeping people around who aren't going to grow and prosper.

500
00:25:47,760 --> 00:25:50,080
Speaker 1: There's no cruelty like waiting and telling people late in

501
00:25:50,119 --> 00:25:52,520
Speaker 1: their careers that they don't belong just when their job

502
00:25:52,520 --> 00:25:54,800
Speaker 1: options are limited and they're putting their children through college,

503
00:25:54,800 --> 00:25:58,960
Speaker 1: they're paying off big mortgages, which again, you might have

504
00:25:59,000 --> 00:26:00,440
Speaker 1: a leg to stand on a flag. You had a

505
00:26:00,480 --> 00:26:03,359
Speaker 1: policy if we only fire layoff people under a certain

506
00:26:03,400 --> 00:26:06,640
Speaker 1: age you know, to make sure that the young ones level.

507
00:26:06,720 --> 00:26:08,840
Speaker 2: But like if you have what if you have a

508
00:26:08,920 --> 00:26:11,760
Speaker 2: unit of fifteen people and they're all good, and you're like, well,

509
00:26:11,800 --> 00:26:14,880
Speaker 2: you have to fire some anyway for no reason. Incidentally,

510
00:26:14,920 --> 00:26:18,760
Speaker 2: speaking of ancient Rome, this is where we literally get decimation.

511
00:26:18,960 --> 00:26:23,119
Speaker 2: Decimate is like the the practice of forcing the unit

512
00:26:23,200 --> 00:26:25,840
Speaker 2: to kill a tenth of the unit just so that

513
00:26:25,920 --> 00:26:30,520
Speaker 2: the rest will be stronger. This dinosode dates back very,

514
00:26:30,680 --> 00:26:31,080
Speaker 2: very far.

515
00:26:31,280 --> 00:26:31,680
Speaker 1: It works.

516
00:26:31,800 --> 00:26:33,720
Speaker 3: It works for a lot of stuff. You know, like

517
00:26:33,880 --> 00:26:36,600
Speaker 3: I cut off every year, I cut off like a

518
00:26:36,640 --> 00:26:37,680
Speaker 3: tenth of my body.

519
00:26:37,800 --> 00:26:41,040
Speaker 2: I cut off one toe, Mike.

520
00:26:41,200 --> 00:26:44,240
Speaker 1: You can learn all about this in my new book

521
00:26:44,600 --> 00:26:49,120
Speaker 1: Managing like famous Roman dictators Sola. You know, Sola, as

522
00:26:49,119 --> 00:26:52,920
Speaker 1: a general, understood that not only do you sometimes have

523
00:26:53,040 --> 00:26:55,600
Speaker 1: to go through town throwing your enemies off of a

524
00:26:55,640 --> 00:26:58,399
Speaker 1: cliff and so their bodies are dashed at the bottom

525
00:26:58,440 --> 00:27:01,880
Speaker 1: and eaten by crows, but you also need to go

526
00:27:02,040 --> 00:27:07,960
Speaker 1: gradually insane with age, get increasingly conspiratorial, and eventually retire

527
00:27:08,000 --> 00:27:11,120
Speaker 1: to a villa in the hillside where you have unsettling

528
00:27:11,200 --> 00:27:13,760
Speaker 1: sex with slaves for the last decade of your life.

529
00:27:13,920 --> 00:27:17,200
Speaker 1: You know, all of these management strategies.

530
00:27:16,640 --> 00:27:20,840
Speaker 2: Right, the management version of that management version of that yeah,

531
00:27:21,040 --> 00:27:22,600
Speaker 2: which is how I run cool zone.

532
00:27:22,680 --> 00:27:26,359
Speaker 1: You know it's it's it, It's great. Yeah you villa

533
00:27:26,720 --> 00:27:29,920
Speaker 1: from my villa where I where I have recently led

534
00:27:29,920 --> 00:27:33,320
Speaker 1: to a purge that forced the podcasting equivalent of Julius

535
00:27:33,320 --> 00:27:37,920
Speaker 1: Caesar to flee Italy and in order to avoid being

536
00:27:38,000 --> 00:27:41,199
Speaker 1: murdered for his loyalty to Guias Marius. You know that

537
00:27:41,280 --> 00:27:43,480
Speaker 1: all happened, but the podcast loyalty bad.

538
00:27:44,080 --> 00:27:46,520
Speaker 2: There you are, I don't know.

539
00:27:46,560 --> 00:27:50,880
Speaker 1: We got off topic here, so you got you got

540
00:27:50,880 --> 00:27:54,720
Speaker 1: off topic. The reality is that stack ranking often has

541
00:27:54,800 --> 00:27:58,679
Speaker 1: disastrous outcomes for businesses. One twenty thirteen study in the

542
00:27:58,720 --> 00:28:02,760
Speaker 1: Journal of Business Ethics found that ratings based performance reviews

543
00:28:02,800 --> 00:28:05,920
Speaker 1: like the ones Jack instituted quote often failed to change

544
00:28:05,920 --> 00:28:08,879
Speaker 1: how people work, and dissatisfaction with the appraisal process has

545
00:28:08,920 --> 00:28:13,520
Speaker 1: been associated with general job dissatisfaction, lower organization commitment, and

546
00:28:13,600 --> 00:28:18,040
Speaker 1: increased intentions to quit. Stack ranking is also generally recognized

547
00:28:18,040 --> 00:28:20,600
Speaker 1: to be incredibly toxic to morale, which has led some

548
00:28:20,640 --> 00:28:23,639
Speaker 1: of the companies that followed Jack to in the process

549
00:28:23,720 --> 00:28:26,440
Speaker 1: or the practice, as this quote from Fast Company makes clear,

550
00:28:26,880 --> 00:28:30,679
Speaker 1: after years of requiring managers to stack rank employees. Microsoft

551
00:28:30,720 --> 00:28:33,639
Speaker 1: workers cited the practice as the most destructive process at

552
00:28:33,640 --> 00:28:36,639
Speaker 1: the company. It leads to employees focusing on competing with

553
00:28:36,680 --> 00:28:39,640
Speaker 1: each other rather than competing with other companies, one employee

554
00:28:39,680 --> 00:28:44,280
Speaker 1: told Vanity Fair in twenty twelve. Microsoft asked the organization's

555
00:28:44,280 --> 00:28:48,920
Speaker 1: stack ranking system in twenty thirteen. The article also quotes

556
00:28:49,040 --> 00:28:53,160
Speaker 1: John Freese, a senior managing director at Encurrent Consulting, who said,

557
00:28:53,200 --> 00:28:56,240
Speaker 1: straight up, Jack Welch was wrong. This is a guy

558
00:28:56,280 --> 00:28:58,480
Speaker 1: we thought was incredible as a leader, but really he

559
00:28:58,600 --> 00:29:02,680
Speaker 1: led based on fear. Now, the fact that Jack was

560
00:29:02,680 --> 00:29:05,240
Speaker 1: was bad at his like the thing that was his

561
00:29:05,280 --> 00:29:07,720
Speaker 1: primary claim to fame, that it like actually doesn't work

562
00:29:07,840 --> 00:29:09,840
Speaker 1: very well and was in fact disasters for a number

563
00:29:09,840 --> 00:29:12,520
Speaker 1: of businesses, never stops people from following him.

564
00:29:12,680 --> 00:29:15,320
Speaker 2: It's like, what happens with these guys, it doesn't matter.

565
00:29:15,760 --> 00:29:18,880
Speaker 2: It like no one collates the information to see if

566
00:29:18,880 --> 00:29:21,160
Speaker 2: their idea worked, and crazy.

567
00:29:21,080 --> 00:29:23,720
Speaker 1: What's happening now? A lot of tech companies are adopting

568
00:29:23,720 --> 00:29:26,400
Speaker 1: it under the understanding like, well, it didn't work great

569
00:29:26,440 --> 00:29:29,000
Speaker 1: in Jack's day because like you were kind of relying

570
00:29:29,040 --> 00:29:31,880
Speaker 1: on managers and their subjective opinions about who was performing

571
00:29:31,920 --> 00:29:35,720
Speaker 1: well or not. But now with all these computers and algorithms,

572
00:29:36,040 --> 00:29:39,960
Speaker 1: we can shooes the best workers and then we can Yeah,

573
00:29:40,040 --> 00:29:45,200
Speaker 1: it's still bullshit, but you know it doesn't matter because

574
00:29:45,240 --> 00:29:48,800
Speaker 1: these people are too wealthy and powerful to ever face consequences,

575
00:29:49,080 --> 00:29:52,680
Speaker 1: which is why we need a thing that rhymes with

576
00:29:52,760 --> 00:29:59,160
Speaker 1: shmargtedgemush machination. But you know what else rhymes with that? Yeah,

577
00:29:59,560 --> 00:30:11,760
Speaker 1: products services. That's right, m Ah, we're back. I for

578
00:30:11,840 --> 00:30:16,640
Speaker 1: one loved those ads for untraceable poisons.

579
00:30:17,160 --> 00:30:19,400
Speaker 2: I sharded in a pan for bacon. Is that what

580
00:30:19,440 --> 00:30:20,960
Speaker 2: you were trying to say on the other side of

581
00:30:20,960 --> 00:30:23,120
Speaker 2: the brim, that's right, and trying to figure it out.

582
00:30:23,000 --> 00:30:25,160
Speaker 1: That that's what that's what will save us, Michael, That

583
00:30:27,080 --> 00:30:28,400
Speaker 1: nothing illegal, just that.

584
00:30:28,720 --> 00:30:35,320
Speaker 3: So anyway, all the money that Jackie Boy earned, you know,

585
00:30:36,360 --> 00:30:38,680
Speaker 3: he paid two people to fight to the death in

586
00:30:38,720 --> 00:30:39,320
Speaker 3: front of him.

587
00:30:39,640 --> 00:30:43,200
Speaker 1: Okay, but look, okay, I guess we're gonna deal with

588
00:30:43,240 --> 00:30:45,640
Speaker 1: this now. We're gonna like fight out this is this

589
00:30:45,680 --> 00:30:48,680
Speaker 1: has been an argument you and I've been having for years. Yes,

590
00:30:48,720 --> 00:30:50,240
Speaker 1: and I think it's very petty of you to bring

591
00:30:50,280 --> 00:30:53,800
Speaker 1: it up here, Like some people pay others to fight

592
00:30:53,840 --> 00:30:55,840
Speaker 1: to the death, for them. Okay, that doesn't mean you're

593
00:30:55,840 --> 00:31:00,880
Speaker 1: a bad person. You know, it just happened, No, he did. Well, yeah,

594
00:31:00,880 --> 00:31:03,800
Speaker 1: but who amongst us hasn't right? Who amongst us hasn't

595
00:31:03,840 --> 00:31:04,440
Speaker 1: been there yet?

596
00:31:04,560 --> 00:31:07,400
Speaker 2: You know, I think it's telling that you're getting defensive

597
00:31:07,400 --> 00:31:10,959
Speaker 2: when Abe was really just neutrally stating it. That's what

598
00:31:11,000 --> 00:31:11,760
Speaker 2: I'm seeing here.

599
00:31:11,800 --> 00:31:14,320
Speaker 1: Well, look, there's a lot of little mountain towns in

600
00:31:14,400 --> 00:31:17,800
Speaker 1: rural California where there's not much work and people will

601
00:31:17,840 --> 00:31:20,680
Speaker 1: do almost anything for seventy five dollars and a bottle

602
00:31:20,720 --> 00:31:23,600
Speaker 1: of oxy codone. And I don't feel like it's fair

603
00:31:23,680 --> 00:31:26,840
Speaker 1: to judge me for seeing if they could kill each

604
00:31:26,920 --> 00:31:30,200
Speaker 1: other with sling blades, like in that movie sling Blade.

605
00:31:30,200 --> 00:31:34,400
Speaker 1: And by the way, they can remember that movie sling Blade,

606
00:31:34,600 --> 00:31:36,240
Speaker 1: I do remember Slingblade.

607
00:31:36,440 --> 00:31:40,160
Speaker 3: And to mention another movie, Jurassic Park, you were all

608
00:31:40,240 --> 00:31:43,280
Speaker 3: caught up thinking about how to do it that you

609
00:31:43,320 --> 00:31:45,320
Speaker 3: didn't think about whether or not you should do it.

610
00:31:45,560 --> 00:31:48,720
Speaker 1: And that's the point here, I mean, don't do it, Robert.

611
00:31:49,120 --> 00:31:56,320
Speaker 1: I again, I just feel unfairly judged. But Jack was

612
00:31:56,360 --> 00:32:01,520
Speaker 1: not judged negatively for stack ranking people, and in fact,

613
00:32:01,600 --> 00:32:05,080
Speaker 1: the entire industry fell in love with the idea of

614
00:32:05,200 --> 00:32:09,280
Speaker 1: firing ten percent of their companies for no real reason,

615
00:32:09,840 --> 00:32:12,240
Speaker 1: but the fact that it made the stock market look good,

616
00:32:12,440 --> 00:32:14,800
Speaker 1: and it made the stock market happy for no real

617
00:32:14,880 --> 00:32:18,640
Speaker 1: reason because it didn't actually increase profits. It just meant

618
00:32:18,680 --> 00:32:22,360
Speaker 1: that temporarily companies had more money to put into things

619
00:32:22,360 --> 00:32:25,240
Speaker 1: like we'll talk about stock buybacks, to give out and dividends,

620
00:32:25,400 --> 00:32:28,880
Speaker 1: and that made shareholders happy. It didn't make the company stronger,

621
00:32:28,920 --> 00:32:31,640
Speaker 1: and in fact, over time it made them much much weaker.

622
00:32:31,680 --> 00:32:35,240
Speaker 1: But that was that was for future people to deal with,

623
00:32:35,560 --> 00:32:41,440
Speaker 1: not for fucking Jack Welch. So yeah. In his autobiography again,

624
00:32:41,560 --> 00:32:43,280
Speaker 1: Jack tries to dress this up as him doing a

625
00:32:43,400 --> 00:32:46,000
Speaker 1: kindness to his workers because if he shitcans them when

626
00:32:46,000 --> 00:32:48,360
Speaker 1: they're in the prime of life, being laid off, as

627
00:32:48,360 --> 00:32:52,080
Speaker 1: he says, just another transition. You know. He even describes

628
00:32:52,120 --> 00:32:54,280
Speaker 1: as like a charity that he's doing. I'm freeing them

629
00:32:54,320 --> 00:32:56,640
Speaker 1: from a job they're bad at, so then go succeed

630
00:32:56,760 --> 00:33:01,160
Speaker 1: somewhere else. Right, it's a social good. Now, the reality

631
00:33:01,440 --> 00:33:04,040
Speaker 1: is that being laid off, which is you know, some

632
00:33:04,240 --> 00:33:06,959
Speaker 1: firing someone not because they fucked up, because the company

633
00:33:07,000 --> 00:33:09,440
Speaker 1: wanted to do. Shareholder value is one of the most

634
00:33:09,480 --> 00:33:13,520
Speaker 1: stressful and traumatic things that Americans regularly endure. One study

635
00:33:13,560 --> 00:33:16,520
Speaker 1: found that it is the seventh most stressful life experience,

636
00:33:16,640 --> 00:33:19,440
Speaker 1: above divorce or the death of a close friend, and

637
00:33:19,480 --> 00:33:22,800
Speaker 1: that on average, it takes two years to recover from. Now,

638
00:33:23,520 --> 00:33:26,160
Speaker 1: that may seem a little crazy, especially the more stressful

639
00:33:26,160 --> 00:33:28,760
Speaker 1: than the death of a friend part, But there is Yeah.

640
00:33:29,000 --> 00:33:32,520
Speaker 2: Yeah, if Abe died and and I got fired, I'd

641
00:33:32,560 --> 00:33:34,320
Speaker 2: be like, I need a job, dude.

642
00:33:34,920 --> 00:33:37,600
Speaker 1: Yeah, yeah, you wouldn't be. You wouldn't be just searching

643
00:33:37,640 --> 00:33:41,400
Speaker 1: straight away for another a you gotta make rent right.

644
00:33:41,320 --> 00:33:43,680
Speaker 2: And then yeah, I could save that grief for later.

645
00:33:44,040 --> 00:33:46,400
Speaker 2: Not that there's no grief, but that will come. I

646
00:33:46,480 --> 00:33:48,520
Speaker 2: need a job, yeah, yeah, a job.

647
00:33:48,560 --> 00:33:51,000
Speaker 1: I have to be able to to fucking you know,

648
00:33:51,120 --> 00:33:54,920
Speaker 1: pay for my rent and various various gummy bears and

649
00:33:55,000 --> 00:34:00,000
Speaker 1: jujubis that I consume. So there is also just objective

650
00:34:00,040 --> 00:34:02,920
Speaker 1: of le a serious health cost to being laid off.

651
00:34:03,280 --> 00:34:07,080
Speaker 1: For healthy people with no pre existing medical conditions, if

652
00:34:07,200 --> 00:34:09,520
Speaker 1: they are laid off, the odds that they will develop

653
00:34:09,560 --> 00:34:12,680
Speaker 1: a new health condition raised by eighty three percent in

654
00:34:12,719 --> 00:34:15,000
Speaker 1: the year and a half after getting laid off. The

655
00:34:15,120 --> 00:34:18,840
Speaker 1: risk of yeah, it's significant the risk of suicide increases

656
00:34:18,880 --> 00:34:22,520
Speaker 1: by one point three to three times. Jack Welch laid

657
00:34:22,520 --> 00:34:24,840
Speaker 1: off more than one hundred and five thousand employees in

658
00:34:24,880 --> 00:34:27,879
Speaker 1: his first five years as ge CEO in the US.

659
00:34:27,920 --> 00:34:30,839
Speaker 1: At that time, the suicide rate was around thirteen per

660
00:34:30,920 --> 00:34:34,400
Speaker 1: hundred thousand people aged fifteen to twenty four. This means,

661
00:34:34,520 --> 00:34:37,560
Speaker 1: in crude terms, just in terms of suicide, we're looking

662
00:34:37,560 --> 00:34:40,360
Speaker 1: at like thirty or forty deaths somewhere in that neighborhood.

663
00:34:40,400 --> 00:34:43,520
Speaker 2: I love this show. Imagine that your life. You're like

664
00:34:43,680 --> 00:34:47,160
Speaker 2: I me as a person, I made the suicide rate

665
00:34:47,200 --> 00:34:50,959
Speaker 2: in the country, Go up, I did that? Hey, hey

666
00:34:52,000 --> 00:34:55,680
Speaker 2: number go up? Hey if the planet suicide, yes, then

667
00:34:56,160 --> 00:35:03,960
Speaker 2: that's just listing Earth's stot, you know, suicide exchange. Yeah,

668
00:35:04,360 --> 00:35:05,400
Speaker 2: it's like me.

669
00:35:05,880 --> 00:35:09,440
Speaker 1: You know, there's I think probably dozens of deaths of

670
00:35:09,480 --> 00:35:12,160
Speaker 1: suicides that we can associate to Jack's layoffs, which you

671
00:35:12,160 --> 00:35:14,880
Speaker 1: have to also like hundreds of thousands. Eventually, millions of

672
00:35:14,880 --> 00:35:17,480
Speaker 1: people are laid off because of these strategies over the

673
00:35:17,480 --> 00:35:19,839
Speaker 1: course of decades, because of the strategies that he helps

674
00:35:19,880 --> 00:35:23,360
Speaker 1: to pioneer. So again, that's quite a few deaths you

675
00:35:23,400 --> 00:35:27,359
Speaker 1: can lay at this guy's feet. You can also blame

676
00:35:27,440 --> 00:35:29,279
Speaker 1: him directly for some of the worst moments of my

677
00:35:29,400 --> 00:35:31,479
Speaker 1: childhood and some of the worst moments I'm gonna guess

678
00:35:31,480 --> 00:35:33,680
Speaker 1: for the in the childhoods and adult lives of a

679
00:35:33,680 --> 00:35:36,880
Speaker 1: lot of the people listening to this show who remember

680
00:35:37,120 --> 00:35:39,520
Speaker 1: like a parent getting laid off as part of a

681
00:35:39,640 --> 00:35:43,200
Speaker 1: yearly fucking layoff binge like this, and like coming home

682
00:35:43,239 --> 00:35:45,680
Speaker 1: to their parents, like weeping and not sure how to

683
00:35:45,719 --> 00:35:49,040
Speaker 1: like fucking pay for basic necessities and stressed out for

684
00:35:49,160 --> 00:35:52,319
Speaker 1: months on end. You know, the the shock waves that

685
00:35:52,360 --> 00:35:55,520
Speaker 1: this guy's decision makes in the lives of tens of

686
00:35:55,560 --> 00:35:59,480
Speaker 1: millions of people are kind of impossible to like adequately

687
00:35:59,640 --> 00:36:04,960
Speaker 1: want to. Yeah, yeah, anyway, I don't know. Again, untraceable

688
00:36:05,000 --> 00:36:08,480
Speaker 1: poisons go to untraceable poisons dot com. Use promo code

689
00:36:08,600 --> 00:36:12,600
Speaker 1: Jack welch uh and I don't know, find someone talking

690
00:36:12,640 --> 00:36:16,880
Speaker 1: about fucking the stock market and put it in their drink.

691
00:36:17,520 --> 00:36:24,600
Speaker 1: That's that's the behind the bastards. You, yeah, untraceable poison

692
00:36:24,719 --> 00:36:29,239
Speaker 1: study to you. Yeah. So it's interesting to me that

693
00:36:29,360 --> 00:36:32,600
Speaker 1: Jack wasn't content just being a cool mister Burns style

694
00:36:32,680 --> 00:36:36,040
Speaker 1: corporate psychopath. He repeatedly pushed the line that he was

695
00:36:36,080 --> 00:36:38,200
Speaker 1: doing because mister Burns was just like, you fire workers

696
00:36:38,239 --> 00:36:40,640
Speaker 1: because fuck them right, because you're because it's fun.

697
00:36:43,360 --> 00:36:44,799
Speaker 2: You know, I know, I don't care.

698
00:36:45,160 --> 00:36:47,520
Speaker 1: Jack was like, no, I'm doing a kindness to them.

699
00:36:47,560 --> 00:36:49,799
Speaker 1: This is what's best for them, it's best for all

700
00:36:49,840 --> 00:36:52,920
Speaker 1: of society. Really, his speech writer, the guy who was

701
00:36:52,960 --> 00:36:56,360
Speaker 1: like his speechwriter, a ge later explained in an interview quote,

702
00:36:56,560 --> 00:36:59,000
Speaker 1: Jack loved the approval of Wall Street, but the Irish

703
00:36:59,000 --> 00:37:01,360
Speaker 1: and him craved the approved an affection of the divested

704
00:37:01,400 --> 00:37:04,680
Speaker 1: employees as well. He wanted to believe they were thrilled

705
00:37:04,680 --> 00:37:09,000
Speaker 1: at being divested. Oh boy again, but.

706
00:37:08,960 --> 00:37:14,640
Speaker 2: Irish people love wearing vests, real waistcoat culture. Now I loved,

707
00:37:14,760 --> 00:37:18,279
Speaker 2: But like, what a weird, dated way to like the

708
00:37:18,360 --> 00:37:20,920
Speaker 2: Irish in him, you know what I mean, the poor

709
00:37:21,080 --> 00:37:22,520
Speaker 2: people inside of him.

710
00:37:25,360 --> 00:37:28,040
Speaker 3: I know, I know he's just a bastard, and I

711
00:37:28,040 --> 00:37:31,520
Speaker 3: don't have that much sympathy for the devil, but I can't.

712
00:37:32,040 --> 00:37:35,360
Speaker 3: Everything you tell me doesn't make me more angry because

713
00:37:35,360 --> 00:37:37,640
Speaker 3: I know all this stuff exists. It makes me sad.

714
00:37:37,880 --> 00:37:41,600
Speaker 3: I'm sad for Jack, like because he so much of

715
00:37:41,680 --> 00:37:45,239
Speaker 3: him is like it's so important to him that he's

716
00:37:45,440 --> 00:37:48,719
Speaker 3: liked and that he like everyone thinks he's a cool guy.

717
00:37:49,520 --> 00:37:51,040
Speaker 2: Yeah, it's just so sad.

718
00:37:51,360 --> 00:37:53,759
Speaker 1: Kind of what it just it leads to is his

719
00:37:54,080 --> 00:37:57,080
Speaker 1: colleagues the other people in like higher oppositions, a ge

720
00:37:57,760 --> 00:38:01,160
Speaker 1: engineering a situation by which he thinks that he's liked

721
00:38:01,920 --> 00:38:06,200
Speaker 1: by employees because obviously he is not. People will talk

722
00:38:06,200 --> 00:38:08,160
Speaker 1: about like it used to be fun to work here.

723
00:38:08,280 --> 00:38:10,400
Speaker 1: I used to feel good about coming into work. I

724
00:38:10,440 --> 00:38:13,400
Speaker 1: hate it now I'm miserable all the time. You've turned

725
00:38:13,400 --> 00:38:14,680
Speaker 1: this place into a hell.

726
00:38:15,920 --> 00:38:19,000
Speaker 2: I'm leaving to join the crew of the Ellen Degenerous Show.

727
00:38:19,040 --> 00:38:26,560
Speaker 1: Yeah, yeah, exactly, so I could finally get some respect. Yeah.

728
00:38:26,600 --> 00:38:28,680
Speaker 1: So I also think, you know, it's possible that this

729
00:38:28,760 --> 00:38:34,760
Speaker 1: speech writer is himself kind of misled, and Jack maybe

730
00:38:34,760 --> 00:38:37,160
Speaker 1: did not care nearly as much as this guy thinks

731
00:38:37,200 --> 00:38:40,120
Speaker 1: about what employees felt about him. Because Jack also had

732
00:38:40,120 --> 00:38:42,960
Speaker 1: a reputation for using kind of the language of warfare

733
00:38:43,000 --> 00:38:45,960
Speaker 1: and violence to describe layoffs. He was known to when

734
00:38:46,000 --> 00:38:48,520
Speaker 1: he would do like his tours of different business units

735
00:38:48,520 --> 00:38:51,359
Speaker 1: and stuff, he would mark workers out for firing by

736
00:38:51,360 --> 00:38:54,640
Speaker 1: saying they should be shot, shoot them, or they ought

737
00:38:54,680 --> 00:38:57,520
Speaker 1: to be shot, all of which meant lay that person

738
00:38:57,600 --> 00:39:02,319
Speaker 1: off right now, which is like, that's like psycho shit.

739
00:39:03,120 --> 00:39:07,000
Speaker 3: Yeah, it's doctor Strange lives. Yeah, you know, like everyone

740
00:39:07,120 --> 00:39:10,120
Speaker 3: like Patten. My favorite guy in the world is Paton.

741
00:39:11,080 --> 00:39:11,880
Speaker 1: Yeah exactly.

742
00:39:12,040 --> 00:39:14,720
Speaker 2: And then the fucking goal. The move that I always

743
00:39:14,719 --> 00:39:19,080
Speaker 2: hate the most is why don't people like me? Fuck

744
00:39:19,120 --> 00:39:19,720
Speaker 2: you dude?

745
00:39:20,440 --> 00:39:24,319
Speaker 3: No, absolutely, absolutely, But it's so sad when it's like

746
00:39:24,400 --> 00:39:27,200
Speaker 3: when you just hear of it, because now I'll you know,

747
00:39:27,360 --> 00:39:29,480
Speaker 3: Robert did this because he made us think about the

748
00:39:29,520 --> 00:39:33,120
Speaker 3: boy first. Yeah, you know, I don't have what you're having.

749
00:39:33,160 --> 00:39:33,560
Speaker 2: I have no.

750
00:39:35,960 --> 00:39:38,399
Speaker 1: Yeah, I will say in terms of Patten, Patton had

751
00:39:38,440 --> 00:39:42,160
Speaker 1: one experience that I think would have improved Jack Welch.

752
00:39:42,840 --> 00:39:45,640
Speaker 1: He was shot several times by a machine gun, and

753
00:39:45,640 --> 00:39:48,080
Speaker 1: and really I think that that that, you know, we

754
00:39:48,080 --> 00:39:50,239
Speaker 1: could have tried it out, is all I'm saying. You know,

755
00:39:50,320 --> 00:39:51,040
Speaker 1: it might have helped.

756
00:39:51,560 --> 00:39:53,880
Speaker 2: If you're gonna lead with fear, maybe have a little

757
00:39:53,880 --> 00:39:56,000
Speaker 2: in your own life. Yeah, at least a little.

758
00:39:56,480 --> 00:40:00,120
Speaker 1: You should have seen the machine gun though, so so,

759
00:40:00,280 --> 00:40:03,200
Speaker 1: since you can't lay tens of thousands of workers off

760
00:40:03,239 --> 00:40:07,000
Speaker 1: without causing problems, Jack also embraced another strategy that was

761
00:40:07,040 --> 00:40:11,080
Speaker 1: about to become vogue in corporate America, outsourcing he was

762
00:40:11,120 --> 00:40:14,560
Speaker 1: famous for saying shit like, don't own a cafeteria, Let

763
00:40:14,600 --> 00:40:17,080
Speaker 1: a food company do it. Don't run a print shop,

764
00:40:17,280 --> 00:40:19,920
Speaker 1: Let a printing company do it. What this means is

765
00:40:19,920 --> 00:40:23,440
Speaker 1: that he fired janitors and security guards and food service workers,

766
00:40:23,680 --> 00:40:26,400
Speaker 1: and then he brought in low paid temps who were

767
00:40:26,440 --> 00:40:29,680
Speaker 1: in contracts with outside companies to do the same thing

768
00:40:29,760 --> 00:40:32,040
Speaker 1: that had previously been done by people who had a

769
00:40:32,080 --> 00:40:35,920
Speaker 1: decent standard of living and a pension. Right, That was

770
00:40:35,960 --> 00:40:38,360
Speaker 1: the whole point is like, well why would we And

771
00:40:38,719 --> 00:40:40,680
Speaker 1: one of the things this does is it creates for

772
00:40:40,680 --> 00:40:43,520
Speaker 1: the first time at these big companies like GE, there's

773
00:40:43,600 --> 00:40:47,160
Speaker 1: different tiers of worker Before at GE, you know, your

774
00:40:47,200 --> 00:40:50,480
Speaker 1: best engineers and the people at the cafeteria are all

775
00:40:50,640 --> 00:40:53,640
Speaker 1: GE employees, right, they all you know, they get different

776
00:40:53,680 --> 00:40:57,160
Speaker 1: compensation obviously, but they're all they're all on the company

777
00:40:57,160 --> 00:40:59,040
Speaker 1: health plan, they all have a pension, they all have

778
00:40:59,080 --> 00:41:03,480
Speaker 1: life insurance. Now you've got this second class of human

779
00:41:03,560 --> 00:41:07,960
Speaker 1: being in all of these GE facilities who are basically

780
00:41:08,200 --> 00:41:11,319
Speaker 1: on the verge of collapse at all times because they're

781
00:41:11,320 --> 00:41:13,560
Speaker 1: not being taken care of by their employer. And the

782
00:41:13,640 --> 00:41:18,000
Speaker 1: United States has no social welfare system. And of course,

783
00:41:18,400 --> 00:41:20,600
Speaker 1: again you can't. One of the things I'm probably not

784
00:41:20,640 --> 00:41:23,680
Speaker 1: getting into enough here. You can't separate anything that Jack

785
00:41:23,800 --> 00:41:27,319
Speaker 1: is doing from the fact that this is the Reagan era, right,

786
00:41:27,760 --> 00:41:30,000
Speaker 1: A lot of like what he's able to do is

787
00:41:30,040 --> 00:41:32,840
Speaker 1: because of rules about how corporations are allowed to behave

788
00:41:32,880 --> 00:41:35,680
Speaker 1: get loosened and we'll talk more about that in a

789
00:41:35,719 --> 00:41:39,359
Speaker 1: little bit by the Reagan administration. And so all of

790
00:41:39,360 --> 00:41:42,400
Speaker 1: these workers who are being let go and all of

791
00:41:42,440 --> 00:41:45,200
Speaker 1: these temps who are being brought in are benefiting from

792
00:41:45,280 --> 00:41:50,560
Speaker 1: less social welfare programs than people had previously, because you know,

793
00:41:50,640 --> 00:41:53,080
Speaker 1: the Reagan administration is cutting that at the same time

794
00:41:53,120 --> 00:41:57,000
Speaker 1: that Jack is cutting these people out of general electrics,

795
00:41:57,040 --> 00:42:00,959
Speaker 1: you know, corporate welfare system. So another thing that Jack

796
00:42:01,000 --> 00:42:03,120
Speaker 1: pioneered was offshore.

797
00:42:02,719 --> 00:42:09,160
Speaker 2: And mention Homer's Yes, Oh, I was just gonna say,

798
00:42:09,280 --> 00:42:13,680
Speaker 2: mentioned Homer Simpson. And it is striking me now how

799
00:42:13,719 --> 00:42:16,600
Speaker 2: it's just the dumbest possible way to go about Like

800
00:42:16,680 --> 00:42:19,240
Speaker 2: it's not even like he's pretending to play forty chess.

801
00:42:19,280 --> 00:42:23,120
Speaker 2: It is not a sophisticated thought. It's very much like

802
00:42:23,160 --> 00:42:25,719
Speaker 2: when Homer is a garbage man and his motto is

803
00:42:25,960 --> 00:42:29,239
Speaker 2: can't someone else do it? And you just say that

804
00:42:29,320 --> 00:42:31,840
Speaker 2: like it's brilliant and it's really not.

805
00:42:33,440 --> 00:42:37,040
Speaker 1: Yeah. Fuck, certain people just.

806
00:42:37,239 --> 00:42:42,400
Speaker 3: Have confidence apparently it is his superpower and be angry

807
00:42:42,480 --> 00:42:42,759
Speaker 3: a lot.

808
00:42:42,880 --> 00:42:46,719
Speaker 1: Yeah. I mean that that is like the only real superpower.

809
00:42:46,760 --> 00:42:50,800
Speaker 1: You know, Like people who are into like the occult

810
00:42:50,920 --> 00:42:54,480
Speaker 1: and and and magic and stuff like talk about the

811
00:42:54,480 --> 00:42:58,440
Speaker 1: fact that like real like like the like what magic

812
00:42:58,480 --> 00:43:01,759
Speaker 1: actually is is kind of like the the utilization of

813
00:43:01,840 --> 00:43:04,960
Speaker 1: like will in order to change the world, right, And

814
00:43:05,440 --> 00:43:07,960
Speaker 1: I think the clearest example of that is not like,

815
00:43:08,239 --> 00:43:10,920
Speaker 1: you know, wizard guys like Alan Moore, It's guys like

816
00:43:11,080 --> 00:43:14,640
Speaker 1: Jack Welch. This is this is a powerful dark wizard, right,

817
00:43:14,680 --> 00:43:19,400
Speaker 1: He's using pure willpower, pure self confidence to remake the

818
00:43:19,440 --> 00:43:21,920
Speaker 1: world in his own image, to do a thing you

819
00:43:21,960 --> 00:43:25,520
Speaker 1: shouldn't be able to do, To destroy a company's ability

820
00:43:25,560 --> 00:43:28,920
Speaker 1: to profit, to destroy all of its business, to destroy

821
00:43:29,040 --> 00:43:32,400
Speaker 1: its it like the creation of things that previously like

822
00:43:32,480 --> 00:43:36,319
Speaker 1: made it great, and replace that purely with this illusion

823
00:43:36,440 --> 00:43:39,680
Speaker 1: that is somehow more profitable than the thing that actually

824
00:43:39,760 --> 00:43:41,520
Speaker 1: produced items of value.

825
00:43:42,680 --> 00:43:47,120
Speaker 2: That's like a virus until every other company also operates

826
00:43:47,160 --> 00:43:49,600
Speaker 2: that way. It's quite something.

827
00:43:49,160 --> 00:43:51,640
Speaker 1: This is. And by the way, when we talk like

828
00:43:51,760 --> 00:43:55,360
Speaker 1: in terms of like fantasy authors who understood this about magic.

829
00:43:55,520 --> 00:43:58,080
Speaker 1: This is exactly how Tokein conceived of it, more or

830
00:43:58,160 --> 00:44:01,840
Speaker 1: less right, Like this is Saamon, you know, like that's

831
00:44:02,200 --> 00:44:08,600
Speaker 1: happening here. Yeah, anyway, cool shit. So Jack pioneered offshoring

832
00:44:08,800 --> 00:44:12,040
Speaker 1: the process of moving production facilities and jobs to companies

833
00:44:12,080 --> 00:44:15,640
Speaker 1: with looser labor laws and lower minimum wages. During speeches

834
00:44:15,680 --> 00:44:19,160
Speaker 1: and interviews, he often set variations of this line. Ideally,

835
00:44:19,239 --> 00:44:21,279
Speaker 1: you'd have every plant you own on a barge to

836
00:44:21,320 --> 00:44:25,480
Speaker 1: move with currencies and changes in the economy. And he's

837
00:44:25,480 --> 00:44:28,400
Speaker 1: going to like move ge to have its corporate headquarters.

838
00:44:28,400 --> 00:44:30,279
Speaker 1: But I think it's the fucking Bahamas or something like

839
00:44:30,280 --> 00:44:31,960
Speaker 1: he's one of the first guys. He does that too.

840
00:44:32,400 --> 00:44:35,200
Speaker 1: But again, like there was this attitude in the previous

841
00:44:35,280 --> 00:44:37,719
Speaker 1: era by a lot, not all, but a lot of

842
00:44:37,880 --> 00:44:42,760
Speaker 1: like executives that paying taxes to like support the country

843
00:44:42,760 --> 00:44:46,799
Speaker 1: functioning was one of your jobs as like a business

844
00:44:46,840 --> 00:44:49,439
Speaker 1: you know leader. And Jack is like, no, no, no,

845
00:44:49,760 --> 00:44:52,040
Speaker 1: we have to hallow this country out. And part of

846
00:44:52,040 --> 00:44:54,359
Speaker 1: what that means is like making sure we have no

847
00:44:54,480 --> 00:44:58,440
Speaker 1: responsibility to the United States whatsoever. He helps lobby the

848
00:44:58,440 --> 00:45:01,239
Speaker 1: Reagan administration for like an change in business law that

849
00:45:01,280 --> 00:45:05,839
Speaker 1: basically means like you can kind of by shifting like

850
00:45:06,000 --> 00:45:09,799
Speaker 1: technically where products are being moved through, you can pay

851
00:45:09,880 --> 00:45:13,319
Speaker 1: taxes in different companies. It's I don't need to get

852
00:45:13,320 --> 00:45:15,719
Speaker 1: into the specifics of it, but like one of the

853
00:45:15,719 --> 00:45:17,880
Speaker 1: things that does is that suddenly a huge amount of

854
00:45:17,920 --> 00:45:22,279
Speaker 1: GE's biggest transactions are technically legally occurring in Ireland, which

855
00:45:22,320 --> 00:45:24,439
Speaker 1: has a very very low tax rate. For that sort

856
00:45:24,480 --> 00:45:31,160
Speaker 1: of thing, It's it's cool shit. So Jack was not able,

857
00:45:31,239 --> 00:45:34,080
Speaker 1: obviously to literally put all of his plants on barges

858
00:45:34,120 --> 00:45:37,240
Speaker 1: to move them around the ocean, but by moving jobs

859
00:45:37,239 --> 00:45:38,960
Speaker 1: out of the country or just to parts of the

860
00:45:38,960 --> 00:45:42,000
Speaker 1: country without as many unionized workers, he was able to

861
00:45:42,040 --> 00:45:44,720
Speaker 1: break the back of the unionized workforce that had helped

862
00:45:44,760 --> 00:45:47,640
Speaker 1: make GE a powerhouse. Jack was also one of the

863
00:45:47,640 --> 00:45:51,440
Speaker 1: first CEOs to outsource to India, and as the GE

864
00:45:51,480 --> 00:45:54,359
Speaker 1: stock price continued to outpace the market, more and more

865
00:45:54,360 --> 00:45:57,480
Speaker 1: of his colleagues followed him. One of the few aspects

866
00:45:57,520 --> 00:46:00,400
Speaker 1: of GE that Jack had any actual love for was

867
00:46:00,440 --> 00:46:04,440
Speaker 1: the previously minor finance division. We talked about this a

868
00:46:04,440 --> 00:46:07,000
Speaker 1: bit in Part one, but this is what actually made

869
00:46:07,040 --> 00:46:09,200
Speaker 1: it all work. I'm sure the question that a lot

870
00:46:09,200 --> 00:46:11,400
Speaker 1: of people have right now is like, well, but you

871
00:46:11,440 --> 00:46:13,880
Speaker 1: say the company kept making more money, So was he

872
00:46:13,960 --> 00:46:17,040
Speaker 1: maybe just actually doing a good thing that you didn't like.

873
00:46:17,480 --> 00:46:21,239
Speaker 1: And my argument would be no, because the reason that

874
00:46:21,360 --> 00:46:24,960
Speaker 1: GE's balance sheet looked good, that it looked like profits

875
00:46:25,000 --> 00:46:28,279
Speaker 1: were increasing, and that the stock price kept increasing is

876
00:46:28,320 --> 00:46:32,799
Speaker 1: that Jack understood how to use this finance division as

877
00:46:32,840 --> 00:46:35,640
Speaker 1: basically like to create a fog of war around the

878
00:46:35,640 --> 00:46:40,719
Speaker 1: internal company functioning that looked really good to people on

879
00:46:40,760 --> 00:46:43,200
Speaker 1: the outside because he was able to kind of manipulate

880
00:46:43,280 --> 00:46:46,480
Speaker 1: the balance sheet. Right, So what he was doing is

881
00:46:46,920 --> 00:46:50,719
Speaker 1: using this finance division to buy up new businesses rather

882
00:46:50,800 --> 00:46:53,279
Speaker 1: than like R and D and develop anything of its

883
00:46:53,280 --> 00:46:55,480
Speaker 1: own that looked like they would be profitable. And at

884
00:46:55,480 --> 00:46:58,560
Speaker 1: the same time he would sell off businesses GE had,

885
00:46:58,600 --> 00:47:01,239
Speaker 1: many of which were still profitable because it would bring

886
00:47:01,320 --> 00:47:04,279
Speaker 1: in these swift, short term profits. And by kind of

887
00:47:04,360 --> 00:47:07,760
Speaker 1: mixing these sales of business units with purchasing business units,

888
00:47:08,040 --> 00:47:10,799
Speaker 1: he was able to ensure that the balance sheet kind

889
00:47:10,840 --> 00:47:13,319
Speaker 1: of said whatever he wanted it to say, so he

890
00:47:13,360 --> 00:47:15,520
Speaker 1: could say, at the end of Q one, these are

891
00:47:15,520 --> 00:47:17,600
Speaker 1: where our numbers will be, and then he would just

892
00:47:17,640 --> 00:47:20,839
Speaker 1: buy and sell companies until the numbers matched that, and

893
00:47:20,880 --> 00:47:23,000
Speaker 1: so do the people on Wall Street. It looks like, oh,

894
00:47:23,080 --> 00:47:25,640
Speaker 1: you know, GE's like hit its numbers again. That's great.

895
00:47:26,560 --> 00:47:28,759
Speaker 1: But what's really happening is he's just kind of like

896
00:47:29,120 --> 00:47:32,239
Speaker 1: shuffling shit around in order to make it look like

897
00:47:32,360 --> 00:47:35,920
Speaker 1: he still has a business that's producing something. A good

898
00:47:36,000 --> 00:47:38,840
Speaker 1: example of this would be in nineteen eighty five, Ge

899
00:47:38,920 --> 00:47:43,560
Speaker 1: purchases RCA, which Jack justified to Congress because they have

900
00:47:43,600 --> 00:47:46,359
Speaker 1: to have like an antitrust hearing over this by saying

901
00:47:46,440 --> 00:47:49,400
Speaker 1: it would let an American manufacturer compete efficiently with a

902
00:47:49,480 --> 00:47:53,480
Speaker 1: Japanese manufacture. But he didn't do this instead of trading

903
00:47:53,520 --> 00:47:56,120
Speaker 1: the entire Instead, he traded so he like buys this,

904
00:47:56,239 --> 00:47:59,000
Speaker 1: being like this will be good, this is worth you know,

905
00:47:59,160 --> 00:48:02,080
Speaker 1: it being kind of bad for competition because it will

906
00:48:02,120 --> 00:48:05,920
Speaker 1: decrease prices and provide a better product for Americans to

907
00:48:05,960 --> 00:48:08,920
Speaker 1: buy that they'll buy instead of Japanese products. Right, But

908
00:48:09,000 --> 00:48:13,040
Speaker 1: instead of actually making like shit with the TV division

909
00:48:13,120 --> 00:48:17,560
Speaker 1: that he had bought, he sells the TV manufacturing division

910
00:48:17,600 --> 00:48:21,160
Speaker 1: to a French company and exchange for a medical device business.

911
00:48:21,600 --> 00:48:23,480
Speaker 1: One of the only things he actually keeps from the

912
00:48:23,600 --> 00:48:28,360
Speaker 1: rc sale is NBC author Barry Lynn writes in Two Strokes,

913
00:48:28,400 --> 00:48:32,439
Speaker 1: Welch remade multiple world spanning industries. The rationalbehyde is moves

914
00:48:32,440 --> 00:48:36,440
Speaker 1: with simple concentrate power, avoid direct competition with firms backed

915
00:48:36,440 --> 00:48:40,640
Speaker 1: by mercantilist states as Japan's electronics companies were, and focus

916
00:48:40,680 --> 00:48:44,520
Speaker 1: on industrial activities that could be protected through interaction with regulators.

917
00:48:44,840 --> 00:48:48,480
Speaker 1: The medical device business or the pentagons because RCA has

918
00:48:48,480 --> 00:48:52,600
Speaker 1: a defense business that he also keeps, so he's not competing.

919
00:48:52,920 --> 00:48:56,200
Speaker 1: He's not interested in providing a product. What he's interested

920
00:48:56,200 --> 00:48:59,480
Speaker 1: in doing is kind of like using GE's financial power

921
00:48:59,520 --> 00:49:01,759
Speaker 1: and the fact that they can get loaned money to

922
00:49:01,880 --> 00:49:04,840
Speaker 1: buy and sell pieces of the company in order to

923
00:49:04,880 --> 00:49:06,760
Speaker 1: optimize how it looks on paper.

924
00:49:07,040 --> 00:49:07,200
Speaker 2: Right.

925
00:49:07,880 --> 00:49:09,880
Speaker 1: The interesting thing to me about this is that the

926
00:49:09,880 --> 00:49:14,160
Speaker 1: division that Jack traded to get, like this medical device division,

927
00:49:14,560 --> 00:49:17,520
Speaker 1: doesn't make a profit. In fact, it's a disaster. After

928
00:49:17,560 --> 00:49:21,080
Speaker 1: he acquires this business, its profits collapse and the division

929
00:49:21,360 --> 00:49:25,280
Speaker 1: goes bankrupt effectively enough, But this doesn't actually hurt Ge

930
00:49:25,600 --> 00:49:28,600
Speaker 1: or Welch's reputation like it seems like a disaster. We

931
00:49:28,680 --> 00:49:32,080
Speaker 1: bought this company, we traded away its best assets for

932
00:49:32,120 --> 00:49:34,880
Speaker 1: this medical device business, and then that business fails. That

933
00:49:35,000 --> 00:49:37,560
Speaker 1: seems like something that should get you in trouble, But

934
00:49:37,680 --> 00:49:40,600
Speaker 1: the stock price still went up. As David Gel's writes,

935
00:49:40,960 --> 00:49:43,600
Speaker 1: what mattered and what Welch had achieved with the RCA

936
00:49:43,760 --> 00:49:47,960
Speaker 1: deal was making GE bigger. GE's television set business was

937
00:49:47,960 --> 00:49:50,200
Speaker 1: now one of the largest in the world, fulfilling the

938
00:49:50,280 --> 00:49:52,800
Speaker 1: mandate Welch laid out at the Pierre Hotel in nineteen

939
00:49:52,840 --> 00:49:55,160
Speaker 1: eighty one that every group should be number one or

940
00:49:55,239 --> 00:49:58,759
Speaker 1: number two in its category. So in all of these

941
00:49:58,800 --> 00:50:03,760
Speaker 1: tactics mass LFS, outsourcing, offshoring, high speed trading of corporate assets,

942
00:50:04,000 --> 00:50:07,920
Speaker 1: Welch set precedents that his CEO peers couldn't wait to copy.

943
00:50:08,120 --> 00:50:09,879
Speaker 1: And I'm going to quote now from an article by

944
00:50:09,880 --> 00:50:13,359
Speaker 1: Matt Staller. By the two thousands, the company founded by

945
00:50:13,400 --> 00:50:17,080
Speaker 1: Thomas Edison didn't even manufacture light bulbs, sourcing them from

946
00:50:17,160 --> 00:50:21,280
Speaker 1: Chinese contractors and branding them as GE products. Other leading companies,

947
00:50:21,320 --> 00:50:24,399
Speaker 1: such as General Motors followed Welch's path. In the mid

948
00:50:24,440 --> 00:50:28,400
Speaker 1: nineteen eighties, GM bought both Electronic Data Systems and Hughes Aircraft,

949
00:50:28,440 --> 00:50:31,319
Speaker 1: attempting to diversify away from the auto industry in which

950
00:50:31,320 --> 00:50:33,880
Speaker 1: it was set up against foreign competitors backed by governments

951
00:50:33,880 --> 00:50:37,480
Speaker 1: into regulated industries with government contracts. What it couldn't do

952
00:50:37,560 --> 00:50:40,879
Speaker 1: by diversifying, it did by offshoring, moving production to low

953
00:50:40,880 --> 00:50:44,240
Speaker 1: wage areas like northern Mexico. Starting in the early nineteen eighties,

954
00:50:44,520 --> 00:50:47,239
Speaker 1: the steel industry did the same thing. US Steel bought

955
00:50:47,280 --> 00:50:49,640
Speaker 1: not only Marathon Oil for six point three billion, but

956
00:50:49,680 --> 00:50:52,440
Speaker 1: three paid three point six billion for Texas Gas and Oil.

957
00:50:52,760 --> 00:50:56,120
Speaker 1: National Steel bought United Financial Corporation of California, and another

958
00:50:56,160 --> 00:51:00,000
Speaker 1: steel company, Armco, went into insurance. Meanwhile, in nineteen eighty ses,

959
00:51:00,320 --> 00:51:04,040
Speaker 1: the Reagan administration's Commerce Department invited thirty eight thousand American

960
00:51:04,080 --> 00:51:07,000
Speaker 1: companies to a trade fair in Acapulco explore it and

961
00:51:07,120 --> 00:51:11,680
Speaker 1: encouraging them to explore moving factories to Mexico. So again,

962
00:51:12,160 --> 00:51:14,920
Speaker 1: Jack is not the only guy doing this. He's not

963
00:51:15,080 --> 00:51:19,680
Speaker 1: the inventor of this concept, but he proves that it's

964
00:51:19,719 --> 00:51:23,520
Speaker 1: incredibly profitable. He basically shows these companies you can build

965
00:51:23,560 --> 00:51:27,560
Speaker 1: and maintain a business that makes things, or you can

966
00:51:27,640 --> 00:51:30,040
Speaker 1: be in the business. You can basically turn your company

967
00:51:30,400 --> 00:51:33,239
Speaker 1: into like a balance sheet from a fin like a

968
00:51:33,280 --> 00:51:36,600
Speaker 1: finance company, right where you're buying and selling assets and

969
00:51:36,640 --> 00:51:39,160
Speaker 1: you're not in any particular business as much as you're

970
00:51:39,160 --> 00:51:42,360
Speaker 1: in the business of shuffling around these assets, and that

971
00:51:42,400 --> 00:51:44,520
Speaker 1: way it's really easy to do something like, oh, we

972
00:51:44,560 --> 00:51:48,240
Speaker 1: made an extra billion dollars this year, so let's sell

973
00:51:48,280 --> 00:51:51,120
Speaker 1: off this business that's not doing as well and like

974
00:51:51,160 --> 00:51:53,399
Speaker 1: claim that as a loss, and then we can kind

975
00:51:53,440 --> 00:51:56,480
Speaker 1: of offset our tax burden. It'll like, yeah, like all

976
00:51:56,520 --> 00:51:58,520
Speaker 1: this kind of like fuckery you hadn't been able to

977
00:51:58,520 --> 00:52:01,640
Speaker 1: do before Jack realized. Is that kind of by turning

978
00:52:01,680 --> 00:52:05,919
Speaker 1: your corporation into a big unlicensed bank, that's a much

979
00:52:05,920 --> 00:52:09,520
Speaker 1: smarter idea than actually producing anything of value.

980
00:52:10,000 --> 00:52:13,640
Speaker 2: I mentioned magic and Dirk Wizards. I would say it's honestly,

981
00:52:13,719 --> 00:52:17,440
Speaker 2: he's less like Saramon because his magic actually does change

982
00:52:17,480 --> 00:52:20,040
Speaker 2: the world, and he's more like a stage magician or

983
00:52:20,040 --> 00:52:23,160
Speaker 2: a David Blaine, where he's just like it's sleight of hand, right. Yeah,

984
00:52:23,160 --> 00:52:26,400
Speaker 2: he's drawn attention away from thoughts like what does this

985
00:52:26,520 --> 00:52:29,719
Speaker 2: business do or make is it useful, and drawn it

986
00:52:29,760 --> 00:52:32,480
Speaker 2: to you don't have to worry about that. The number

987
00:52:32,600 --> 00:52:35,040
Speaker 2: was forty now it's forty one exactly two.

988
00:52:35,400 --> 00:52:40,440
Speaker 1: Yeah, yeah, it's something else. By the mid nineteen eighties,

989
00:52:40,520 --> 00:52:43,440
Speaker 1: Jack Welch was the most celebrated CEO in the country

990
00:52:43,440 --> 00:52:44,560
Speaker 1: in a lot of ways. He's one of like the

991
00:52:44,680 --> 00:52:48,239
Speaker 1: very first celebrity CEOs of the modern era. He's the

992
00:52:48,280 --> 00:52:51,760
Speaker 1: subject of fawning profiles and business magazines for his brilliant

993
00:52:51,840 --> 00:52:54,520
Speaker 1: leadership and his unprecedented stock market success.

994
00:52:54,960 --> 00:52:56,880
Speaker 2: And it's all stills him. And he was happy, and

995
00:52:56,920 --> 00:52:57,560
Speaker 2: he could stop.

996
00:53:00,120 --> 00:53:01,520
Speaker 3: Michael never cried.

997
00:53:02,520 --> 00:53:06,200
Speaker 1: He's about to get a little sad because right about

998
00:53:06,200 --> 00:53:09,799
Speaker 1: this time in nineteen eighty four, Fortune magazine declares him

999
00:53:09,800 --> 00:53:12,680
Speaker 1: the toughest boss in America. And they don't mean this

1000
00:53:12,719 --> 00:53:16,279
Speaker 1: as a compliment. They write, Welch conducts meetings so aggressively

1001
00:53:16,320 --> 00:53:22,759
Speaker 1: that people tremble. He attacks almost physically with his intellect, criticizing, demeaning, ridiculing, humiliating.

1002
00:53:23,680 --> 00:53:27,160
Speaker 1: In The Man who Broke Capitalism, David Gellis goes even further, quote,

1003
00:53:27,200 --> 00:53:30,279
Speaker 1: Welch was, in short, a bully. You fucking guys don't

1004
00:53:30,280 --> 00:53:32,680
Speaker 1: know what the fuck you're doing, He fumed at executives

1005
00:53:32,719 --> 00:53:35,040
Speaker 1: in the plastics division when they miss their numbers. It

1006
00:53:35,080 --> 00:53:37,400
Speaker 1: was what The Wall Street Journal described as Welch's hazing

1007
00:53:37,440 --> 00:53:41,680
Speaker 1: as shouting match approach that requires managers to argue strenuously

1008
00:53:41,719 --> 00:53:44,200
Speaker 1: even if they agreed with him, said one manager whom

1009
00:53:44,200 --> 00:53:46,759
Speaker 1: Welch replaced. You can't even say hello to Jack without

1010
00:53:46,760 --> 00:53:49,080
Speaker 1: it being confrontational. If you don't want to step up

1011
00:53:49,120 --> 00:53:50,960
Speaker 1: to Jack toe to toe, belly to belly and argue

1012
00:53:51,040 --> 00:53:53,960
Speaker 1: your point, he doesn't have any use for you. In

1013
00:53:54,000 --> 00:53:57,799
Speaker 1: his autobiography, Welch calls this Fortune article that describes him

1014
00:53:57,800 --> 00:54:00,480
Speaker 1: as a bully one of the worst moments of his career.

1015
00:54:00,719 --> 00:54:04,160
Speaker 1: He's like, it's so but it like again, I think

1016
00:54:04,200 --> 00:54:06,240
Speaker 1: he's just full of shit because he knows he should

1017
00:54:06,320 --> 00:54:09,200
Speaker 1: say that, because this has no impact on his behavior.

1018
00:54:10,640 --> 00:54:11,400
Speaker 2: His soul is.

1019
00:54:11,600 --> 00:54:14,360
Speaker 1: Other than this hus He maintains a chip on his

1020
00:54:14,400 --> 00:54:17,520
Speaker 1: shoulder regarding journalists for the rest of his life. He

1021
00:54:17,560 --> 00:54:21,360
Speaker 1: had initially been thrilled to acquire NBC and he specifically

1022
00:54:21,440 --> 00:54:23,440
Speaker 1: he says he was excited because it meant he'd get

1023
00:54:23,480 --> 00:54:26,320
Speaker 1: to write paychecks for guys like David Letterman who were famous.

1024
00:54:27,760 --> 00:54:33,960
Speaker 1: But then he yeah, it's very very that child, Yeah, yeah, yeah, silly.

1025
00:54:34,360 --> 00:54:37,640
Speaker 1: But Jack also he gets very frustrated because he realizes,

1026
00:54:37,719 --> 00:54:40,120
Speaker 1: like owning a news company doesn't mean you can force

1027
00:54:40,160 --> 00:54:42,439
Speaker 1: the news division to report on things the way you want.

1028
00:54:43,000 --> 00:54:45,160
Speaker 1: So in nineteen eighty seven, we have this thing called

1029
00:54:45,160 --> 00:54:47,640
Speaker 1: Black Monday, which is like one of our many great

1030
00:54:47,680 --> 00:54:50,640
Speaker 1: market collapses, and Tom Brokaw gives a report on the

1031
00:54:50,719 --> 00:54:53,880
Speaker 1: nightly news about how bad the damage was going to be.

1032
00:54:54,000 --> 00:54:56,279
Speaker 1: Right where he's talking about like this is not just

1033
00:54:56,360 --> 00:54:58,600
Speaker 1: one bad day, like this is going to continue, echoing

1034
00:54:58,640 --> 00:55:01,200
Speaker 1: this is a serious problem. Welch calls the head of

1035
00:55:01,280 --> 00:55:04,680
Speaker 1: NBC's news division and complains, you're killing all the stocks.

1036
00:55:07,800 --> 00:55:09,680
Speaker 3: Yeah, what do you do you think that he ever

1037
00:55:09,960 --> 00:55:13,360
Speaker 3: like had stopped, and he's like, maybe I will. Maybe

1038
00:55:14,360 --> 00:55:16,879
Speaker 3: RoboCop the Villain is based.

1039
00:55:16,960 --> 00:55:21,040
Speaker 1: Yeah, maybe maybe Paul Verhoeven read a profile of me

1040
00:55:21,200 --> 00:55:23,880
Speaker 1: and immediately made RoboCop am I.

1041
00:55:24,160 --> 00:55:31,360
Speaker 3: All of America's satires focus like he's just the all villains.

1042
00:55:31,560 --> 00:55:36,960
Speaker 1: All the cartoons are about me, Like, yeah, it's it's

1043
00:55:37,000 --> 00:55:39,000
Speaker 1: it's something else. It's very funny too, because the head

1044
00:55:39,000 --> 00:55:41,840
Speaker 1: of NBC's news division, when he's like you're killing the stocks,

1045
00:55:41,840 --> 00:55:43,880
Speaker 1: you have to stop him is like it just says,

1046
00:55:43,920 --> 00:55:45,560
Speaker 1: this is not a thing I am willing to talk

1047
00:55:45,600 --> 00:55:46,959
Speaker 1: about with you, and end's the call.

1048
00:55:47,840 --> 00:55:48,719
Speaker 3: You'll never get me.

1049
00:55:51,280 --> 00:55:54,480
Speaker 1: Uh yeah, So this is not going to be the

1050
00:55:54,560 --> 00:55:58,120
Speaker 1: last time that Welch has a competitor or a fight

1051
00:55:58,280 --> 00:56:00,239
Speaker 1: with his journalists, and it's not going to go as

1052
00:56:00,239 --> 00:56:02,480
Speaker 1: well the next time. But we'll get to that in

1053
00:56:02,480 --> 00:56:06,239
Speaker 1: a little bit. In nineteen ninety three, Jack goes through

1054
00:56:06,239 --> 00:56:09,200
Speaker 1: one of his regular mass layoffs and reappointments of talent

1055
00:56:09,280 --> 00:56:13,239
Speaker 1: and producers at NBC. He picks a new manager for CNBC,

1056
00:56:13,440 --> 00:56:15,719
Speaker 1: his business news channel. You want to guess what this

1057
00:56:15,760 --> 00:56:19,600
Speaker 1: guy's name was, Come on, come.

1058
00:56:19,440 --> 00:56:24,800
Speaker 3: On, dick, no dicks, slurpy McLean.

1059
00:56:24,920 --> 00:56:29,200
Speaker 1: I'll give you a hint. He's a sex pest. I'll

1060
00:56:29,239 --> 00:56:31,880
Speaker 1: give you another hint. He helped break the United States.

1061
00:56:33,440 --> 00:56:34,240
Speaker 2: Break it.

1062
00:56:34,239 --> 00:56:38,560
Speaker 1: It's Roger Ails. I was like, you have to be

1063
00:56:38,600 --> 00:56:41,800
Speaker 1: more specific. This is the guy who starts Roger Ales

1064
00:56:41,880 --> 00:56:42,400
Speaker 1: his career.

1065
00:56:43,360 --> 00:56:46,600
Speaker 2: Isn't it wild that sex pest narrows almost nothing down

1066
00:56:46,640 --> 00:56:46,960
Speaker 2: at all?

1067
00:56:47,920 --> 00:56:49,960
Speaker 1: Wow? That just that's just brought it down to a

1068
00:56:50,000 --> 00:56:57,480
Speaker 1: couple hundred guys. So he hires Roger Ales to run CNBC.

1069
00:56:58,680 --> 00:57:00,880
Speaker 1: One of the first things Roger does is he creates

1070
00:57:00,960 --> 00:57:05,279
Speaker 1: a new network of his own called America's Talking, dedicated

1071
00:57:05,320 --> 00:57:07,759
Speaker 1: to full time political news, which was kind of a

1072
00:57:07,800 --> 00:57:10,640
Speaker 1: wild concept in the era, and it's something that he

1073
00:57:10,680 --> 00:57:12,920
Speaker 1: would uh, he would follow up with a little bit

1074
00:57:13,000 --> 00:57:17,240
Speaker 1: later because he's not at NBCCNBC very long. Ales gets

1075
00:57:17,240 --> 00:57:20,680
Speaker 1: fired three years in due to you know, all of

1076
00:57:20,720 --> 00:57:24,479
Speaker 1: the sex crime stuff. But Welch bears him no ill

1077
00:57:24,520 --> 00:57:28,280
Speaker 1: will for this. He alters Roger's non compete clause so

1078
00:57:28,280 --> 00:57:31,400
Speaker 1: that Ales could immediately take a job from another asshole,

1079
00:57:31,680 --> 00:57:35,680
Speaker 1: Rupert Murdoch, which turned into Fox News. So we have

1080
00:57:35,800 --> 00:57:38,240
Speaker 1: Jack to partially thank for Fox. Isn't that cool?

1081
00:57:38,400 --> 00:57:41,320
Speaker 2: And then Nate way back three minutes ago when you

1082
00:57:41,360 --> 00:57:43,520
Speaker 2: said it turns out you can't force the news to

1083
00:57:43,560 --> 00:57:45,480
Speaker 2: say what you want. I'm like, yeah, I can't move,

1084
00:57:45,720 --> 00:57:46,160
Speaker 2: can't you?

1085
00:57:47,160 --> 00:57:47,400
Speaker 1: Yeah?

1086
00:57:47,680 --> 00:57:49,000
Speaker 2: Eventually, can't you?

1087
00:57:49,000 --> 00:57:49,919
Speaker 1: You can get in there?

1088
00:57:50,760 --> 00:57:54,360
Speaker 3: Does he go to like conventions where like you choose

1089
00:57:54,440 --> 00:57:57,120
Speaker 3: like evil conventions where you go and you just like

1090
00:57:57,200 --> 00:57:59,800
Speaker 3: walk downline. It's like, oh, that's a new type of evil.

1091
00:58:00,400 --> 00:58:03,400
Speaker 3: Maybe we should buy that. Let's get a little that

1092
00:58:03,480 --> 00:58:06,760
Speaker 3: in the mix. God, so he fucked up media as well.

1093
00:58:07,120 --> 00:58:11,080
Speaker 1: He sure did. He's quite prolific in his fuckery.

1094
00:58:11,520 --> 00:58:13,880
Speaker 3: Wow, good way to go, Jackie boy.

1095
00:58:14,000 --> 00:58:17,280
Speaker 2: But he gave the projectonegy character he did was to

1096
00:58:17,320 --> 00:58:20,720
Speaker 2: break even good character little.

1097
00:58:20,520 --> 00:58:24,560
Speaker 1: Yeah, fifty to fifty. So since GE's profits continued to

1098
00:58:24,640 --> 00:58:28,040
Speaker 1: rise alongside their stock price, Jack gained an almost divine

1099
00:58:28,080 --> 00:58:31,320
Speaker 1: reputation as a corporate mastermind. The truth was that he

1100
00:58:31,360 --> 00:58:34,920
Speaker 1: made many very expensive mistakes. A good example of this

1101
00:58:34,960 --> 00:58:38,240
Speaker 1: would be the purchase of Kidder Peabody, an investment bank

1102
00:58:38,280 --> 00:58:40,360
Speaker 1: that he thought would give him first crack at new

1103
00:58:40,400 --> 00:58:43,880
Speaker 1: acquisition deals without needing to pay fees to brokerage houses.

1104
00:58:44,320 --> 00:58:46,840
Speaker 1: But again, Kidder was in worse shape than it seemed.

1105
00:58:46,880 --> 00:58:50,120
Speaker 1: He hadn't done his due diligence properly, and right after

1106
00:58:50,320 --> 00:58:53,200
Speaker 1: it gets acquired, one of its best traders gets caught

1107
00:58:53,280 --> 00:58:56,400
Speaker 1: carrying out one of the largest cases of insider criminal

1108
00:58:56,440 --> 00:58:59,400
Speaker 1: insider trading in the history of the United States. So

1109
00:58:59,520 --> 00:59:00,560
Speaker 1: this is a problem.

1110
00:59:01,080 --> 00:59:01,160
Speaker 2: Uh.

1111
00:59:01,320 --> 00:59:03,840
Speaker 1: The political fallout to this forces him to bring in

1112
00:59:03,880 --> 00:59:05,640
Speaker 1: a new head for the business, and he picked a

1113
00:59:05,720 --> 00:59:09,040
Speaker 1: GE board member whose prior experience was running a tool company.

1114
00:59:09,480 --> 00:59:12,919
Speaker 1: When the market crashed the next year, Kidder imploded, and

1115
00:59:13,040 --> 00:59:16,080
Speaker 1: for a time they're even kind of staring at potentially

1116
00:59:16,160 --> 00:59:18,880
Speaker 1: a massive fine for all of these crimes that their

1117
00:59:18,920 --> 00:59:22,320
Speaker 1: trader had committed while working for them. But thankfully, one

1118
00:59:22,320 --> 00:59:25,080
Speaker 1: of Welch's men was able to negotiate a sweetheart deal

1119
00:59:25,120 --> 00:59:26,880
Speaker 1: with the prosecutor in this case. And you want to

1120
00:59:26,880 --> 00:59:32,200
Speaker 1: guess what that guy's name was, I'll give you a hands.

1121
00:59:33,120 --> 00:59:36,120
Speaker 1: He he was real close when nine to eleven went down.

1122
00:59:36,520 --> 00:59:38,440
Speaker 1: And now his head melts sometimes.

1123
00:59:39,160 --> 00:59:45,400
Speaker 2: Giuliani, Yep, yeah, it was re melty head. Detail.

1124
00:59:46,240 --> 00:59:51,600
Speaker 1: Yeah, Rudy Giuliani. We're getting all the all the greats

1125
00:59:51,600 --> 00:59:55,400
Speaker 1: are coming in. He also helps Trump by Trump Tower, uh,

1126
00:59:55,800 --> 00:59:58,240
Speaker 1: because their friends friend and.

1127
00:59:58,320 --> 01:00:00,680
Speaker 2: That's where he got the hammer. And we got there.

1128
01:00:00,680 --> 01:00:02,800
Speaker 2: You're like, then he meets him and him and you're like, oh, okay,

1129
01:00:02,800 --> 01:00:04,040
Speaker 2: I see how this is gonna go.

1130
01:00:06,200 --> 01:00:09,840
Speaker 1: So Jack's real genius was an understanding how to run

1131
01:00:09,920 --> 01:00:12,760
Speaker 1: GE like an asset portfolio and other in order to

1132
01:00:12,800 --> 01:00:15,680
Speaker 1: game the market. Again, as I said, he would buy

1133
01:00:15,720 --> 01:00:18,440
Speaker 1: companies or sell them and even hand over assets to

1134
01:00:18,560 --> 01:00:21,520
Speaker 1: charity sometimes in order to make sure that ges like

1135
01:00:21,680 --> 01:00:24,800
Speaker 1: earnings met the targets he was setting, because that's something

1136
01:00:24,840 --> 01:00:28,080
Speaker 1: that always makes the stock people very, very happy. This

1137
01:00:28,200 --> 01:00:30,840
Speaker 1: allowed him to disguise the strength of his actual business,

1138
01:00:30,880 --> 01:00:34,360
Speaker 1: which he was steadily hollowing out by camouflaging it with acquisitions.

1139
01:00:34,680 --> 01:00:38,520
Speaker 1: As former GE marketing executive Beth Comstock said GE had

1140
01:00:38,520 --> 01:00:40,840
Speaker 1: a financial army that was able to close the quarter

1141
01:00:40,920 --> 01:00:44,080
Speaker 1: the way we'd said we would. Now, this some times

1142
01:00:44,120 --> 01:00:47,680
Speaker 1: meant destroying thousands of human lives. For example, in nineteen

1143
01:00:47,760 --> 01:00:50,920
Speaker 1: ninety seven, GE made a huge deal with Lockheed Martin

1144
01:00:50,960 --> 01:00:53,640
Speaker 1: which earned them one point five billion dollars in profit

1145
01:00:53,720 --> 01:00:57,600
Speaker 1: and another six hundred million dollars in tax breaks. That's great, right,

1146
01:00:57,640 --> 01:01:01,440
Speaker 1: that seems like good news, right, But all of that

1147
01:01:01,600 --> 01:01:04,760
Speaker 1: money going into the quarter it was going into was

1148
01:01:04,840 --> 01:01:07,200
Speaker 1: gonna mean GE was going to have to pay more taxes,

1149
01:01:07,480 --> 01:01:09,920
Speaker 1: and that's just not something that Jack Welch was willing

1150
01:01:09,960 --> 01:01:14,520
Speaker 1: to accept. So some of their factories were underperforming, so

1151
01:01:14,640 --> 01:01:17,480
Speaker 1: they closed a bunch of factories, which gave them a

1152
01:01:17,520 --> 01:01:20,480
Speaker 1: two point three billion dollar loss on paper, even though

1153
01:01:20,480 --> 01:01:23,200
Speaker 1: the factories had been like paying for themselves. He was

1154
01:01:23,240 --> 01:01:25,240
Speaker 1: able to take a two point three billion dollar loss

1155
01:01:25,280 --> 01:01:28,000
Speaker 1: by closing them, which allowed him to offset the profits.

1156
01:01:28,160 --> 01:01:31,160
Speaker 1: A thousand people lost their jobs, but the stock went up. Right.

1157
01:01:31,400 --> 01:01:33,080
Speaker 1: This is when I talk about like how he would

1158
01:01:33,080 --> 01:01:36,480
Speaker 1: fuck around with acquisitions and sales to disguise what was

1159
01:01:36,520 --> 01:01:38,440
Speaker 1: going on at the business. Like this is the kind

1160
01:01:38,480 --> 01:01:40,360
Speaker 1: of shit that he would do. And he was very

1161
01:01:40,400 --> 01:01:44,680
Speaker 1: good at this. Now all of this, yeah, it's pretty good, right.

1162
01:01:44,480 --> 01:01:45,480
Speaker 2: It's impressive.

1163
01:01:45,720 --> 01:01:48,320
Speaker 3: It's impressive that because you have to think about also

1164
01:01:48,400 --> 01:01:52,880
Speaker 3: the margins, like this is Ge. They're talking about American

1165
01:01:53,040 --> 01:01:57,400
Speaker 3: steel and plastics and oil. It's like he had too

1166
01:01:57,480 --> 01:02:00,520
Speaker 3: much power. He had too much power. And you know

1167
01:02:00,560 --> 01:02:01,920
Speaker 3: who else has too much power?

1168
01:02:03,440 --> 01:02:03,800
Speaker 2: Ads?

1169
01:02:04,320 --> 01:02:07,400
Speaker 1: That's right. The ads that we put on this show

1170
01:02:08,160 --> 01:02:11,080
Speaker 1: are all hand picked because they were designed by a

1171
01:02:11,080 --> 01:02:15,120
Speaker 1: team of evil psychiatrists in order to hack your brains

1172
01:02:15,200 --> 01:02:22,120
Speaker 1: and force you to purchase products and occasionally occasionally murder

1173
01:02:22,160 --> 01:02:25,200
Speaker 1: your families. So by these products.

1174
01:02:25,240 --> 01:02:27,200
Speaker 2: The power of capitalism compels you.

1175
01:02:33,920 --> 01:02:39,440
Speaker 1: Ah, we're back. I hope this time nobody was was

1176
01:02:39,440 --> 01:02:41,600
Speaker 1: was convinced by the ads to.

1177
01:02:41,720 --> 01:02:46,400
Speaker 2: I'm saddled with products now, I'm just paid down by

1178
01:02:46,440 --> 01:02:49,640
Speaker 2: products and services, all of them. I couldn't help it,

1179
01:02:50,120 --> 01:02:50,640
Speaker 2: all of them.

1180
01:02:50,800 --> 01:02:53,520
Speaker 3: All the services are in me glorious.

1181
01:02:53,640 --> 01:02:57,160
Speaker 1: That's exactly, That's exactly what Jack Welch would have wanted.

1182
01:02:57,400 --> 01:02:59,200
Speaker 2: What an inimitable thing to say.

1183
01:02:59,680 --> 01:03:05,040
Speaker 1: Thank you. So all of this kind of you know,

1184
01:03:05,840 --> 01:03:08,440
Speaker 1: Jack welt shit came with a serious cost. One of

1185
01:03:08,440 --> 01:03:10,600
Speaker 1: them is that Ge stopped doing in house r and

1186
01:03:10,680 --> 01:03:12,920
Speaker 1: d Again, this is the company that invented like all

1187
01:03:12,960 --> 01:03:17,000
Speaker 1: of the plastics we use, and like light bulbs. Yeah, yeah,

1188
01:03:17,040 --> 01:03:20,120
Speaker 1: the brain division does not make short term profits.

1189
01:03:20,200 --> 01:03:20,360
Speaker 2: Right.

1190
01:03:20,600 --> 01:03:23,120
Speaker 1: You put money into the brain division to make all

1191
01:03:23,160 --> 01:03:25,360
Speaker 1: of the money in the future. But Jack has no

1192
01:03:25,440 --> 01:03:26,600
Speaker 1: interest in that, right.

1193
01:03:27,160 --> 01:03:29,920
Speaker 2: Thinking of the light bulb is not profitable. Where's the

1194
01:03:29,960 --> 01:03:31,840
Speaker 2: profit in thinking about light bulb?

1195
01:03:32,080 --> 01:03:34,400
Speaker 1: Find a guy who already thought of a light bulb

1196
01:03:34,640 --> 01:03:37,800
Speaker 1: by his company and then sell it six months later

1197
01:03:37,960 --> 01:03:42,880
Speaker 1: to offset the profits from another. Yeah, Like, it's just

1198
01:03:43,040 --> 01:03:47,600
Speaker 1: it's just fucking nonsense, but it's very profitable nonsense for

1199
01:03:47,720 --> 01:03:53,360
Speaker 1: reasons that are themselves nonsensical. GE had basically become a

1200
01:03:53,480 --> 01:03:56,880
Speaker 1: venture capital company, Right, That's what he turns GE into,

1201
01:03:56,920 --> 01:03:59,080
Speaker 1: and that's what it will be for the remainder of

1202
01:03:59,160 --> 01:04:02,960
Speaker 1: Jacks ten years CEO. Perhaps the most influence changed. An

1203
01:04:02,960 --> 01:04:07,760
Speaker 1: infamous change that he instituted was stock buybacks. This is

1204
01:04:07,800 --> 01:04:10,680
Speaker 1: when a public company buy shares in itself from other

1205
01:04:10,720 --> 01:04:14,120
Speaker 1: investors at a marked up rate, theoretically because they feel

1206
01:04:14,160 --> 01:04:17,920
Speaker 1: their stock is undervalued. Since this increases earnings per share,

1207
01:04:18,000 --> 01:04:21,080
Speaker 1: which Wall Street analysts use to measure success, it also

1208
01:04:21,120 --> 01:04:25,200
Speaker 1: boosts the stock price, letting companies manipulate their own stock. Now,

1209
01:04:25,800 --> 01:04:29,600
Speaker 1: this was made not close to illegal, like it's not

1210
01:04:29,720 --> 01:04:31,840
Speaker 1: technically illegal, but it's like very hard to do in

1211
01:04:31,840 --> 01:04:34,520
Speaker 1: a way that's legal. So it doesn't really happen after

1212
01:04:34,640 --> 01:04:37,800
Speaker 1: nineteen thirty three. And the reason why it gets restricted

1213
01:04:37,840 --> 01:04:40,000
Speaker 1: heavily after nineteen thirty three is that this kind of

1214
01:04:40,040 --> 01:04:42,040
Speaker 1: shit is part of what caused the Great Depression.

1215
01:04:42,360 --> 01:04:43,720
Speaker 2: Well, the reason is obvious.

1216
01:04:44,080 --> 01:04:46,640
Speaker 1: That's like him, it's very clear why this is a

1217
01:04:46,680 --> 01:04:47,200
Speaker 1: bad idea.

1218
01:04:47,240 --> 01:04:49,560
Speaker 2: Can I just change the number? Can I just change

1219
01:04:49,560 --> 01:04:51,360
Speaker 2: it to whatever at any time? I go?

1220
01:04:51,560 --> 01:04:57,160
Speaker 1: So? Yeah? Cool. In nineteen eighty two, the Reagan administration's

1221
01:04:57,360 --> 01:05:00,920
Speaker 1: sec signed off on a law that made buybacks lot easier.

1222
01:05:01,160 --> 01:05:04,280
Speaker 1: And again we're not going into this as much as

1223
01:05:04,280 --> 01:05:06,320
Speaker 1: perhaps they should. But like for every fucked up thing

1224
01:05:06,360 --> 01:05:10,560
Speaker 1: that Jack does, there's a change in regulations that's heralded

1225
01:05:10,640 --> 01:05:14,760
Speaker 1: and pushed through by the Reagan administration right like like

1226
01:05:14,840 --> 01:05:18,440
Speaker 1: they are. You cannot separate the two from like from.

1227
01:05:18,240 --> 01:05:23,080
Speaker 3: Why like things have warning labels. Basically he had to sign.

1228
01:05:23,360 --> 01:05:25,560
Speaker 3: Reagan had to sign each one of these terrible ideas.

1229
01:05:25,680 --> 01:05:28,840
Speaker 1: Yeah, yeah, he was the gipper, couldn't get enough. He was.

1230
01:05:29,000 --> 01:05:31,680
Speaker 1: He was signing ship and then like staring off into

1231
01:05:31,720 --> 01:05:38,960
Speaker 1: the distance and like I don't remember what numbers are really,

1232
01:05:39,080 --> 01:05:42,880
Speaker 1: but I can remember sitting. Yeah, like he's he's he's

1233
01:05:42,960 --> 01:05:47,240
Speaker 1: like fucking zoning out thinking of bedtime for Bonzo as

1234
01:05:47,280 --> 01:05:51,280
Speaker 1: like Nancy feeds him fucking gummy bears so that he

1235
01:05:51,320 --> 01:05:54,000
Speaker 1: can sign a piece of paper to force everyone out

1236
01:05:54,000 --> 01:05:56,600
Speaker 1: of the mental institutions. It's, uh, it's good stuff.

1237
01:05:57,280 --> 01:05:59,800
Speaker 2: How does this suppress the gays? I mean some of

1238
01:05:59,800 --> 01:06:04,560
Speaker 2: the we lay off for gag great, great.

1239
01:06:04,120 --> 01:06:09,120
Speaker 1: Thinks Nancy fucking drooling as his brain melts out of

1240
01:06:09,120 --> 01:06:11,960
Speaker 1: his ears. Will Jack Welch dances a little caper to

1241
01:06:12,000 --> 01:06:16,000
Speaker 1: get him to deregulate the fucking dumping into rivers, like

1242
01:06:16,160 --> 01:06:20,440
Speaker 1: it's it's awesome, It's so good in nineteen eighty so yeah,

1243
01:06:20,520 --> 01:06:23,360
Speaker 1: nineteen eighty two, the Reagan administration is like, buy backx

1244
01:06:23,400 --> 01:06:26,120
Speaker 1: aer a thing we're fine with now, and Jack Welch

1245
01:06:26,200 --> 01:06:28,960
Speaker 1: responds by what was then the largest stock buyback in

1246
01:06:29,120 --> 01:06:34,080
Speaker 1: US history, ten billion dollars. Ten billion dollars that in

1247
01:06:34,160 --> 01:06:39,760
Speaker 1: a previous era would have gone like straight to ge employees, right,

1248
01:06:40,080 --> 01:06:44,360
Speaker 1: Instead all goes to just pumping up the company's stock value.

1249
01:06:44,440 --> 01:06:49,000
Speaker 1: Now the rush to follow Jack, because everybody follows in

1250
01:06:49,040 --> 01:06:52,200
Speaker 1: his wake, is not something that Jack causes alone. Again,

1251
01:06:52,280 --> 01:06:53,880
Speaker 1: he's not the cause of this as much as he

1252
01:06:54,000 --> 01:06:57,240
Speaker 1: is kind of the most. He's like a poster boy

1253
01:06:57,280 --> 01:06:59,240
Speaker 1: for it, right. He like the fact that this works

1254
01:06:59,240 --> 01:07:02,360
Speaker 1: so well for him, helps build buzz around this, helps

1255
01:07:02,400 --> 01:07:05,240
Speaker 1: make this some more common idea. You know, the Reagan

1256
01:07:05,280 --> 01:07:08,439
Speaker 1: administration and this like network of right wing economic think

1257
01:07:08,480 --> 01:07:10,960
Speaker 1: tanks are the ones who kind of pushed the change itself.

1258
01:07:11,520 --> 01:07:13,560
Speaker 1: But he's helped set the trend. By the end of

1259
01:07:13,600 --> 01:07:17,560
Speaker 1: the nineteen eighties, corporations spent thirty percent of their products

1260
01:07:17,600 --> 01:07:19,960
Speaker 1: of their profits on buybacks. By the end of the

1261
01:07:20,040 --> 01:07:22,959
Speaker 1: nineteen nineties, that number was fifty percent, and it's gotten

1262
01:07:23,000 --> 01:07:25,520
Speaker 1: a bit higher. Since this is money that did not

1263
01:07:25,600 --> 01:07:28,320
Speaker 1: go to investing in R and D, or paying employees more,

1264
01:07:28,400 --> 01:07:31,760
Speaker 1: or doing anything else of actual value. David Gell's rights.

1265
01:07:32,200 --> 01:07:34,480
Speaker 1: Had so much of the wealth created by corporations not

1266
01:07:34,600 --> 01:07:37,280
Speaker 1: been reverse distributed back to investors in the form of

1267
01:07:37,280 --> 01:07:40,120
Speaker 1: buybacks and dividends over the past forty five years, and

1268
01:07:40,160 --> 01:07:43,560
Speaker 1: had pay kept pace with productivity, the average full time

1269
01:07:43,560 --> 01:07:45,800
Speaker 1: American worker would be making about one hundred and two

1270
01:07:45,800 --> 01:07:50,560
Speaker 1: thousand dollars annually, roughly double what he or she is today.

1271
01:07:51,400 --> 01:07:56,200
Speaker 1: That's cool. Yeah, Yet, and people, people who are idiots

1272
01:07:56,200 --> 01:07:58,800
Speaker 1: and liars, when you bring this up, will say, well,

1273
01:07:58,840 --> 01:08:02,040
Speaker 1: you're not being fair because you know when you by

1274
01:08:02,040 --> 01:08:03,920
Speaker 1: doing these buybacks, it's good for stock and a lot

1275
01:08:03,920 --> 01:08:05,840
Speaker 1: of it. You know, employees compensation there four to one

1276
01:08:05,920 --> 01:08:08,280
Speaker 1: k's are in stock. And if anyone makes that like

1277
01:08:08,440 --> 01:08:10,439
Speaker 1: claim to you as for why this was not bad,

1278
01:08:10,880 --> 01:08:13,280
Speaker 1: it's legal for you to stab them in the face.

1279
01:08:13,680 --> 01:08:16,680
Speaker 1: Because one of the things that Jack has done, by

1280
01:08:16,720 --> 01:08:21,000
Speaker 1: firing as many people as possible and like outsourcing their jobs,

1281
01:08:21,120 --> 01:08:23,600
Speaker 1: is he has made sure that a lot fewer employees

1282
01:08:23,640 --> 01:08:25,760
Speaker 1: are getting four oh one k's and a lot fewer

1283
01:08:25,800 --> 01:08:28,840
Speaker 1: employees are getting stock, which has been a pattern that

1284
01:08:28,920 --> 01:08:31,519
Speaker 1: the entire rest of the corporate world has followed. It

1285
01:08:31,560 --> 01:08:34,959
Speaker 1: is much less common for regular employees to be rewarded

1286
01:08:35,000 --> 01:08:38,280
Speaker 1: with stock now than it was in the age. But

1287
01:08:38,439 --> 01:08:42,320
Speaker 1: that Jack helped to kill right like this only benefits

1288
01:08:42,400 --> 01:08:46,559
Speaker 1: a tiny number of people. And it's again, if people

1289
01:08:46,560 --> 01:08:49,439
Speaker 1: bring this up in an argument, you are allowed to

1290
01:08:49,479 --> 01:08:52,280
Speaker 1: give them strick nine. Is that is a law also

1291
01:08:52,360 --> 01:08:56,320
Speaker 1: passed by the Reagan administration. So you know the gipper

1292
01:08:56,360 --> 01:08:57,439
Speaker 1: did good and needed bad.

1293
01:08:57,560 --> 01:08:59,439
Speaker 3: Right, Yeah, you give it and you take it away,

1294
01:08:59,520 --> 01:08:59,720
Speaker 3: you know.

1295
01:09:00,240 --> 01:09:02,280
Speaker 2: And look, if you can't get the strict nine, you

1296
01:09:02,320 --> 01:09:04,960
Speaker 2: get the knife. You knife someone who has strick nine.

1297
01:09:04,960 --> 01:09:07,280
Speaker 2: Now you have exactly, exactly hold your hand through every

1298
01:09:07,400 --> 01:09:08,799
Speaker 2: look step of the process.

1299
01:09:08,840 --> 01:09:14,080
Speaker 1: Trickle down, yeah, trickle down. Weaponomics. Yeah, all you need

1300
01:09:14,160 --> 01:09:16,200
Speaker 1: is either strict nine or a knife. You can use

1301
01:09:16,240 --> 01:09:18,080
Speaker 1: the strict nine to get a knife, use the knife

1302
01:09:18,080 --> 01:09:20,640
Speaker 1: to get strict nine. You know, it's either way. It

1303
01:09:20,960 --> 01:09:27,000
Speaker 1: works perfectly perfect. Yeah. So by nineteen ninety three, ge

1304
01:09:27,240 --> 01:09:30,200
Speaker 1: was the world's most valuable company, worth one hundred billion

1305
01:09:30,240 --> 01:09:32,760
Speaker 1: dollars on the stock market. It would increase to six

1306
01:09:32,840 --> 01:09:37,160
Speaker 1: hundred billion by shortly after the time Jack leaves as CEO,

1307
01:09:37,600 --> 01:09:41,000
Speaker 1: which sounds again like he's a great CEO. This is

1308
01:09:41,560 --> 01:09:45,439
Speaker 1: stock market value, right. This doesn't mean the company is

1309
01:09:45,560 --> 01:09:49,759
Speaker 1: selling or buying stuff that's worth that much. It means

1310
01:09:49,840 --> 01:09:52,120
Speaker 1: that's what the stock market thinks that it's worth. Think

1311
01:09:52,160 --> 01:09:54,960
Speaker 1: about how like Elon Musk went up and down by

1312
01:09:54,960 --> 01:09:57,280
Speaker 1: like a trillion dollar or a billion dollars or whatever,

1313
01:09:57,520 --> 01:10:00,000
Speaker 1: billions of dollars in the course of like three days

1314
01:10:00,280 --> 01:10:03,519
Speaker 1: because of ship on Twitter. That's not real money. His

1315
01:10:03,880 --> 01:10:09,880
Speaker 1: actual value didn't change in any meaningful way.

1316
01:10:07,560 --> 01:10:10,960
Speaker 2: That it's so stupid.

1317
01:10:11,400 --> 01:10:16,280
Speaker 1: Yeah, it's it's it's bullshit. It's it's like, yeah, it's

1318
01:10:16,479 --> 01:10:18,200
Speaker 1: you know what it is is like when you would

1319
01:10:18,200 --> 01:10:21,559
Speaker 1: play games as kids, and like one kid would be like, no,

1320
01:10:21,680 --> 01:10:24,080
Speaker 1: I have everything proof armor, so your bullets can't like

1321
01:10:24,160 --> 01:10:27,240
Speaker 1: hurt me. Like that's what the capitol holding class have

1322
01:10:27,320 --> 01:10:30,479
Speaker 1: done with all the stock market bullshit and the Again,

1323
01:10:30,560 --> 01:10:32,560
Speaker 1: the way you would handle that ship on the playground

1324
01:10:32,640 --> 01:10:34,840
Speaker 1: when I was in second grade is you would get

1325
01:10:34,840 --> 01:10:36,680
Speaker 1: a handful of pebbles and you would throw it at

1326
01:10:36,680 --> 01:10:41,400
Speaker 1: the kid who's being annoying and his armor is gone.

1327
01:10:41,640 --> 01:10:43,960
Speaker 1: Until this armor is gone, Oh you don't have armor,

1328
01:10:44,080 --> 01:10:45,640
Speaker 1: you got armor on. Let me ship. Let's see how

1329
01:10:45,680 --> 01:10:50,960
Speaker 1: these pebbles do against your armor. That's right. Yeah. And

1330
01:10:51,040 --> 01:10:53,320
Speaker 1: I think if we had, if if more people had

1331
01:10:53,439 --> 01:10:56,640
Speaker 1: hucked fistfuls of pebbles at Jack Welch, we would be

1332
01:10:56,720 --> 01:10:59,640
Speaker 1: a better country right now. I don't know that it

1333
01:10:59,640 --> 01:11:01,519
Speaker 1: would have stopped him, but at least he would have

1334
01:11:01,560 --> 01:11:04,000
Speaker 1: had to get pebbles out of his eyes and like

1335
01:11:04,080 --> 01:11:06,160
Speaker 1: out of his ears because like one gets in his

1336
01:11:06,200 --> 01:11:07,920
Speaker 1: ear and then he tries to like get it out,

1337
01:11:07,920 --> 01:11:09,680
Speaker 1: but he just pushes it deeper in and he has

1338
01:11:09,720 --> 01:11:11,880
Speaker 1: to go to the nurse. Uh, And then you like

1339
01:11:11,960 --> 01:11:14,400
Speaker 1: have to hide because you don't want anyone to realize

1340
01:11:14,439 --> 01:11:15,880
Speaker 1: that you've got a pebble in that kid's here.

1341
01:11:16,320 --> 01:11:18,639
Speaker 3: I don't think it would have actually helped him, because

1342
01:11:18,680 --> 01:11:20,960
Speaker 3: as a kid, he probably would have just doubled down

1343
01:11:20,960 --> 01:11:23,720
Speaker 3: on the world. Is scary because what like what this

1344
01:11:23,800 --> 01:11:26,240
Speaker 3: all is to me is you just told us what

1345
01:11:26,439 --> 01:11:29,040
Speaker 3: like the origin story of Darth Vader, Like this is

1346
01:11:29,080 --> 01:11:31,920
Speaker 3: just Anakin Skywalker right now, like just.

1347
01:11:34,520 --> 01:11:41,040
Speaker 2: The head exactly.

1348
01:11:42,200 --> 01:11:44,840
Speaker 1: Look, you know what if fucking Obi Wan had had

1349
01:11:44,880 --> 01:11:46,920
Speaker 1: the courage to just pebble him in the face, he

1350
01:11:46,920 --> 01:11:51,800
Speaker 1: would have won that duel faster. Like fist full of

1351
01:11:51,800 --> 01:11:55,120
Speaker 1: pebbles will solve most problems a man can encounter his

1352
01:11:55,360 --> 01:11:56,360
Speaker 1: forces with you.

1353
01:11:56,439 --> 01:12:08,759
Speaker 2: Yeah, so you don't want to so yeah.

1354
01:12:08,840 --> 01:12:12,320
Speaker 1: The GE that Jack built was profitable to shareholders, and

1355
01:12:12,439 --> 01:12:16,280
Speaker 1: only to shareholders, and only for a while. More than anything,

1356
01:12:16,800 --> 01:12:20,719
Speaker 1: GE's value was the product of a reality distortion field

1357
01:12:20,840 --> 01:12:22,840
Speaker 1: that Jack was able to create. Because Jack was good

1358
01:12:22,840 --> 01:12:26,000
Speaker 1: at pr and because since everything he was doing was

1359
01:12:26,040 --> 01:12:28,720
Speaker 1: so new and novel. He gets all of this like

1360
01:12:28,800 --> 01:12:32,720
Speaker 1: insane media attention where like people are just like, wow, Jack,

1361
01:12:32,760 --> 01:12:35,400
Speaker 1: he's the best CEO in the world. He's like, you know,

1362
01:12:35,880 --> 01:12:39,439
Speaker 1: this absolute visionary and it leads people to just like

1363
01:12:40,040 --> 01:12:43,439
Speaker 1: kind of assume like anytime he makes any change after

1364
01:12:43,479 --> 01:12:45,920
Speaker 1: this hype cycle started. Yeah, so the value of the

1365
01:12:45,920 --> 01:12:48,760
Speaker 1: stock goes up.

1366
01:12:47,760 --> 01:12:48,760
Speaker 2: One of my factories.

1367
01:12:48,800 --> 01:12:51,839
Speaker 3: Actually, yeah, it's this really smart.

1368
01:12:52,200 --> 01:12:55,320
Speaker 1: The term reality distortion field was coined to describe the

1369
01:12:55,320 --> 01:12:59,920
Speaker 1: way Steve Jobs was able to like manipulate people to

1370
01:13:00,160 --> 01:13:03,240
Speaker 1: own legend. Yeah, Jobs is good at that. Jack's doing

1371
01:13:03,240 --> 01:13:05,000
Speaker 1: that too, right, It's not a thing. Steve Jobs is

1372
01:13:05,040 --> 01:13:07,400
Speaker 1: not the first guy to figure this out. That's why

1373
01:13:07,520 --> 01:13:11,200
Speaker 1: people think GE is worth six hundred billion dollars is

1374
01:13:11,240 --> 01:13:13,840
Speaker 1: because it's not because they believe in Ge. Because the

1375
01:13:13,920 --> 01:13:17,400
Speaker 1: actual business of GE gets weaker and weaker and weaker

1376
01:13:17,479 --> 01:13:20,240
Speaker 1: throughout the nineteen nineties. They believe in Jack.

1377
01:13:21,880 --> 01:13:27,120
Speaker 2: Yeah, yep, yep. Bus cards cards interesting that every single

1378
01:13:27,120 --> 01:13:31,680
Speaker 2: one is individually thinking yeah about their own like if

1379
01:13:31,680 --> 01:13:34,120
Speaker 2: the number goes up, I will have safety and security

1380
01:13:34,160 --> 01:13:34,679
Speaker 2: in my life.

1381
01:13:35,720 --> 01:13:38,479
Speaker 1: Just weird, it's good stuff trippy to me.

1382
01:13:38,680 --> 01:13:39,120
Speaker 2: Yeah.

1383
01:13:39,200 --> 01:13:42,680
Speaker 1: In nineteen ninety five, Jack suffered a heart attack. It

1384
01:13:42,760 --> 01:13:45,240
Speaker 1: hit while he was at home brushing his teeth. His

1385
01:13:45,280 --> 01:13:47,240
Speaker 1: wife had to rush him to the hospital. He took

1386
01:13:47,280 --> 01:13:49,240
Speaker 1: it like a baby. As they like wheel him into

1387
01:13:49,240 --> 01:13:53,120
Speaker 1: the er, He's screaming, I'm dying. I'm dying like a

1388
01:13:53,160 --> 01:13:57,040
Speaker 1: little fucking wooss. The problem was a severe though. He

1389
01:13:57,080 --> 01:14:00,160
Speaker 1: had to get a quintuple bypass, and when his first

1390
01:14:00,040 --> 01:14:02,920
Speaker 1: to tempt at surgery failed, you know, he's very scared.

1391
01:14:02,960 --> 01:14:05,160
Speaker 1: He thinks he might not make it, so he reaches

1392
01:14:05,200 --> 01:14:07,800
Speaker 1: out to a close friend who happened to have recently

1393
01:14:07,880 --> 01:14:11,040
Speaker 1: gone through a multiple bypass surgery himself. You want to

1394
01:14:11,040 --> 01:14:13,639
Speaker 1: guess what close friend he reaches out to for comfort

1395
01:14:13,840 --> 01:14:14,479
Speaker 1: in this period.

1396
01:14:15,680 --> 01:14:17,719
Speaker 3: I don't know, an actual monster.

1397
01:14:18,040 --> 01:14:21,280
Speaker 1: It's Henry Kissinger. Yeah, it is an actual monster. If

1398
01:14:21,360 --> 01:14:27,000
Speaker 1: it's it's Kissinger, his good friend, Henry Kissinger. Hey, I'm dying.

1399
01:14:29,240 --> 01:14:31,320
Speaker 1: I was never alive to begin with.

1400
01:14:32,400 --> 01:14:34,960
Speaker 2: You're saying, he's like, so, I don't know why someone

1401
01:14:35,080 --> 01:14:37,560
Speaker 2: laid off all the surgeons at this hospital.

1402
01:14:37,600 --> 01:14:37,920
Speaker 1: I don't know.

1403
01:14:39,479 --> 01:14:40,439
Speaker 2: I can't get my thing.

1404
01:14:41,280 --> 01:14:43,599
Speaker 1: What he does with this surgeon is much more funny,

1405
01:14:44,880 --> 01:14:48,360
Speaker 1: much funnier. So whatever comfort Kissinger gave him it did

1406
01:14:48,400 --> 01:14:51,439
Speaker 1: not spur any kind of spiritual change in Welch. In

1407
01:14:51,479 --> 01:14:53,439
Speaker 1: a two thousand and one interview with PBS, a host

1408
01:14:53,479 --> 01:14:57,240
Speaker 1: brought up his quintuple bypass. The host's name is Varney.

1409
01:14:57,280 --> 01:14:58,800
Speaker 1: I forget what his first name is, but who gives

1410
01:14:58,800 --> 01:15:02,000
Speaker 1: a shit, it's it's PBA. Yes, was that a real

1411
01:15:02,080 --> 01:15:04,040
Speaker 1: change in life for you? A change perhaps in your

1412
01:15:04,040 --> 01:15:11,400
Speaker 1: spiritual approach? Welch, No, so just no. Yeah. And the

1413
01:15:11,439 --> 01:15:14,840
Speaker 1: guy Stuart Barney, Stuart's name, keeps asking, being like, come on,

1414
01:15:14,920 --> 01:15:16,760
Speaker 1: it has to have like done something right, like you

1415
01:15:16,800 --> 01:15:19,479
Speaker 1: have to have had some sort of change over nearly dying.

1416
01:15:19,760 --> 01:15:21,320
Speaker 1: And finally, Welch is like, you know what I thought?

1417
01:15:21,360 --> 01:15:24,320
Speaker 1: Stuart Larry Bossity, my friend at Allied Signal, asked me.

1418
01:15:24,560 --> 01:15:26,599
Speaker 1: He said, Jack, what were you thinking of just before

1419
01:15:26,640 --> 01:15:28,880
Speaker 1: they cut you? I said, damn it, I didn't spend

1420
01:15:29,000 --> 01:15:35,519
Speaker 1: enough money? Yes, right, yeah, He's like, I was so

1421
01:15:35,680 --> 01:15:39,639
Speaker 1: cheap about everything. I didn't buy the nice wine and yeah,

1422
01:15:39,680 --> 01:15:41,599
Speaker 1: so I'll never buy a wine that's less than one

1423
01:15:41,640 --> 01:15:49,439
Speaker 1: hundred dollars a bottle. Again, that's like the promise he.

1424
01:15:46,840 --> 01:15:49,439
Speaker 3: He wants his last check to bounce, is what he's

1425
01:15:49,479 --> 01:15:53,599
Speaker 3: saying there right, he wants he's a grifter, Yeah, through

1426
01:15:53,640 --> 01:15:54,280
Speaker 3: and through.

1427
01:15:54,640 --> 01:15:56,800
Speaker 2: And the last thing he thought was and they all

1428
01:15:56,880 --> 01:15:59,560
Speaker 2: love me. That's the problem is he'll never get his

1429
01:15:59,640 --> 01:16:02,240
Speaker 2: come up and never did even in his own mind.

1430
01:16:02,320 --> 01:16:05,360
Speaker 2: I'm sure in his mind he was like, I crushed it.

1431
01:16:05,960 --> 01:16:06,439
Speaker 2: I'm a hero.

1432
01:16:06,520 --> 01:16:11,320
Speaker 1: Yeah, life as our most assholes, right, Like this is

1433
01:16:12,040 --> 01:16:14,200
Speaker 1: a pretty common Yeah.

1434
01:16:14,240 --> 01:16:17,120
Speaker 2: The distortion field works on you too. That's the problem

1435
01:16:17,160 --> 01:16:17,360
Speaker 2: with it.

1436
01:16:17,880 --> 01:16:20,599
Speaker 3: Yeah, that's why we as the future need to look

1437
01:16:20,680 --> 01:16:22,599
Speaker 3: back on history and laugh at it.

1438
01:16:22,439 --> 01:16:26,400
Speaker 1: And say what you should be punished. We have to

1439
01:16:26,479 --> 01:16:29,559
Speaker 1: laugh at the history as we poison the future, right,

1440
01:16:29,560 --> 01:16:31,400
Speaker 1: and that's the only way for us to make a

1441
01:16:31,400 --> 01:16:36,200
Speaker 1: better world again, untraceable poisons dot eu.

1442
01:16:36,960 --> 01:16:40,760
Speaker 2: You know, children are the future. Lookout total war.

1443
01:16:43,880 --> 01:16:46,559
Speaker 1: So I think my favorite anecdote this is from a

1444
01:16:46,600 --> 01:16:49,719
Speaker 1: New Yorker article that is quite good on Jack Welch.

1445
01:16:49,800 --> 01:16:52,519
Speaker 1: That is, to its credit, after he dies, he gets

1446
01:16:52,560 --> 01:16:54,760
Speaker 1: like a lot, He gets a number of like praiseworthy

1447
01:16:55,080 --> 01:16:57,320
Speaker 1: articles of you know, obituaries about in the New Yorker,

1448
01:16:57,400 --> 01:16:59,479
Speaker 1: articles like what if he was a piece of shit?

1449
01:16:59,520 --> 01:17:03,400
Speaker 1: If sucked everything? It's a pretty cool article and I'm

1450
01:17:03,400 --> 01:17:05,200
Speaker 1: gonna read a quote for a bit that's talking about

1451
01:17:05,200 --> 01:17:08,479
Speaker 1: his relationship with his heart surgeon. A few months after

1452
01:17:08,560 --> 01:17:11,120
Speaker 1: he recovered from his bypass surgery, Welch went to see

1453
01:17:11,160 --> 01:17:14,320
Speaker 1: his heart surgeon, Carry Aikins. They had become friends. He

1454
01:17:14,439 --> 01:17:17,320
Speaker 1: was incredibly cordial for someone who was that powerful. Aikins

1455
01:17:17,360 --> 01:17:20,200
Speaker 1: tells the guy who wrote the book that this anecdote

1456
01:17:20,240 --> 01:17:22,880
Speaker 1: comes from. Welch had wanted the operation to be done

1457
01:17:22,880 --> 01:17:24,519
Speaker 1: on a Friday so that he would have three days

1458
01:17:24,520 --> 01:17:26,479
Speaker 1: of recovery under his belt before the news hit the

1459
01:17:26,520 --> 01:17:29,759
Speaker 1: stock market, and Aikins obliged. Now, Welch wanted to talk.

1460
01:17:30,200 --> 01:17:32,920
Speaker 1: You're doing great, Aikins told him, well, go ahead and

1461
01:17:32,960 --> 01:17:36,719
Speaker 1: ask your question. Jack said, what. Aikins replied, go ahead

1462
01:17:36,760 --> 01:17:39,599
Speaker 1: and ask your question. He said again, what do you mean?

1463
01:17:39,760 --> 01:17:43,720
Speaker 1: Aikins responded genuinely confused. Well, I presume you're gonna want

1464
01:17:43,720 --> 01:17:46,320
Speaker 1: me to give you some money. Jack said, you didn't

1465
01:17:46,360 --> 01:17:49,679
Speaker 1: pay your bill. Aikins replied, come on now, Jack said,

1466
01:17:49,720 --> 01:17:51,360
Speaker 1: you must have thought about this. Do you want me

1467
01:17:51,400 --> 01:17:55,759
Speaker 1: to donate something? Jack? It never crossed my mind. Aikins replied,

1468
01:17:56,320 --> 01:18:00,519
Speaker 1: So what's happened here is, Jack, is like you did

1469
01:18:00,520 --> 01:18:02,720
Speaker 1: the surgery. You must want me to give you must

1470
01:18:02,720 --> 01:18:05,160
Speaker 1: want me to set up a foundation that you can lead,

1471
01:18:05,320 --> 01:18:06,800
Speaker 1: or like give a bunch of money in your name

1472
01:18:06,840 --> 01:18:09,400
Speaker 1: to a charity. How much do you want to win yourself?

1473
01:18:09,760 --> 01:18:12,599
Speaker 2: That everyone's a leech and he deserves the money and

1474
01:18:12,640 --> 01:18:14,360
Speaker 2: he's the good guy and everyone's out.

1475
01:18:14,240 --> 01:18:16,400
Speaker 1: And he's like, well, you saved my life, so I

1476
01:18:16,439 --> 01:18:18,720
Speaker 1: won't fight you on it, but like, you know, what

1477
01:18:18,720 --> 01:18:22,479
Speaker 1: do you want? And Aikins is like, I'm a heart searcheon, like.

1478
01:18:22,400 --> 01:18:23,600
Speaker 2: This us idea.

1479
01:18:25,400 --> 01:18:26,840
Speaker 1: Heart surgery. Oh your heart?

1480
01:18:27,360 --> 01:18:28,120
Speaker 2: Think you're better than me?

1481
01:18:28,400 --> 01:18:32,360
Speaker 1: Yea, yeah, he's like he has no and you know,

1482
01:18:32,400 --> 01:18:34,960
Speaker 1: Welch does like Aikins does the thing you should do

1483
01:18:35,040 --> 01:18:36,639
Speaker 1: in that where it's like I don't know, like give

1484
01:18:36,680 --> 01:18:39,400
Speaker 1: a shitload of money to this this you know thing

1485
01:18:39,479 --> 01:18:42,200
Speaker 1: that is good. And Welch, by the way, doesn't use

1486
01:18:42,200 --> 01:18:45,000
Speaker 1: his own money. He has ge make the donation from

1487
01:18:45,000 --> 01:18:49,320
Speaker 1: its charitable foundation so it'll offset their taxes. But it

1488
01:18:49,439 --> 01:18:53,320
Speaker 1: is like it is he is such a piece of ship.

1489
01:18:53,640 --> 01:18:54,799
Speaker 1: Like that's so telling.

1490
01:18:55,280 --> 01:19:02,120
Speaker 3: Yeah, it's incredible. The pettiness, hm, the absolute spite you

1491
01:19:02,200 --> 01:19:05,240
Speaker 3: have for your fellow man. Yeah, Like there's just so

1492
01:19:05,400 --> 01:19:09,240
Speaker 3: much going on that is just like, yeah, chef's kiss.

1493
01:19:09,439 --> 01:19:12,679
Speaker 3: You know, he just compliments to the chef, can't.

1494
01:19:14,400 --> 01:19:17,000
Speaker 1: I didn't do this for my I mean, like, heart

1495
01:19:17,000 --> 01:19:19,080
Speaker 1: surgeons tend to be pretty well compensated. I didn't do

1496
01:19:19,120 --> 01:19:21,559
Speaker 1: this because you would give me a donation. I did

1497
01:19:21,560 --> 01:19:24,320
Speaker 1: this because it's my job to do heart surgery on people.

1498
01:19:25,280 --> 01:19:29,280
Speaker 3: Yeah, oh yeah, Like I actually have the job.

1499
01:19:29,120 --> 01:19:32,200
Speaker 1: That I sing of value, Like there's a very clear

1500
01:19:32,280 --> 01:19:33,960
Speaker 1: objective value to what I do.

1501
01:19:34,040 --> 01:19:36,759
Speaker 3: And they around as like a show.

1502
01:19:37,240 --> 01:19:39,800
Speaker 1: I'm not just like sticking a bladder where your heart

1503
01:19:39,920 --> 01:19:43,360
Speaker 1: used to be in the hopes that you won't notice. No,

1504
01:19:43,400 --> 01:19:46,920
Speaker 1: he still got all sorts of organs. I actually fixed

1505
01:19:46,960 --> 01:19:51,040
Speaker 1: your cold dead heart. What a piece of shit.

1506
01:19:51,560 --> 01:19:52,520
Speaker 2: What an asshole.

1507
01:19:52,720 --> 01:19:54,800
Speaker 1: One of the last big decisions Jack got to make

1508
01:19:54,840 --> 01:19:57,240
Speaker 1: a ge, came during the chaos that followed the two

1509
01:19:57,320 --> 01:19:59,920
Speaker 1: thousand election. Well, the rest of the country was trying

1510
01:19:59,920 --> 01:20:02,080
Speaker 1: to figure out who had won in Florida, an NBC

1511
01:20:02,240 --> 01:20:05,559
Speaker 1: journalists were scrambling to resport responsibly and a chaotic and

1512
01:20:05,640 --> 01:20:09,439
Speaker 1: confusing time in American democratic history. Jack sat in the

1513
01:20:09,560 --> 01:20:13,880
Speaker 1: NBC decision room, calling executives and demanding they make reporters

1514
01:20:13,880 --> 01:20:17,479
Speaker 1: call the election for his friend George W. Bush shouting

1515
01:20:17,720 --> 01:20:19,960
Speaker 1: how much do I have to pay you assholes to

1516
01:20:20,000 --> 01:20:24,120
Speaker 1: call this thing for Bush? What a what a cool guy?

1517
01:20:25,200 --> 01:20:25,679
Speaker 3: Cool?

1518
01:20:26,520 --> 01:20:28,280
Speaker 2: Buried in his sunglasses.

1519
01:20:28,360 --> 01:20:33,400
Speaker 1: Yeah yeah, necklace, Yeah, just a just a chill dude.

1520
01:20:33,800 --> 01:20:37,800
Speaker 1: You know that guy had a Hawaiian shirt collection. Oh yeah.

1521
01:20:38,000 --> 01:20:39,760
Speaker 1: You know. When I think about a guy who would

1522
01:20:39,760 --> 01:20:43,040
Speaker 1: have benefited if he'd heard Jimmy Buffett's life changing music,

1523
01:20:43,160 --> 01:20:45,160
Speaker 1: Jack welch Is is top of the list. You know,

1524
01:20:45,200 --> 01:20:46,360
Speaker 1: if you just become a parrot.

1525
01:20:46,400 --> 01:20:49,679
Speaker 2: Heead my guys on the nose, hang loose, parrohead man

1526
01:20:49,760 --> 01:20:55,759
Speaker 2: from way Back Man.

1527
01:20:56,240 --> 01:21:00,160
Speaker 1: In twenty eighteen, about seventeen years after Jack handed off

1528
01:21:00,200 --> 01:21:03,439
Speaker 1: the job to his successor at GE, the CEO comes

1529
01:21:03,439 --> 01:21:06,240
Speaker 1: after him, a gay named Imma welt Ge gets pulled

1530
01:21:06,280 --> 01:21:09,559
Speaker 1: off the Dow Jones in Industrial Average right. It has

1531
01:21:09,720 --> 01:21:13,160
Speaker 1: like in the time after like basically it collapses pretty

1532
01:21:13,240 --> 01:21:16,479
Speaker 1: much as soon as he leaves, and it gets bad

1533
01:21:16,560 --> 01:21:19,160
Speaker 1: enough that in twenty eighteen it's removed from the Doo.

1534
01:21:19,360 --> 01:21:21,320
Speaker 1: It is the last company on the Dow that had

1535
01:21:21,320 --> 01:21:23,080
Speaker 1: been there when the index was created more than a

1536
01:21:23,120 --> 01:21:26,439
Speaker 1: century earlier. The fact is that the hollow profit engine

1537
01:21:26,479 --> 01:21:29,240
Speaker 1: Jack had built had no staying power. When the market

1538
01:21:29,280 --> 01:21:32,320
Speaker 1: tanked after nine to eleven, it started to crumble. Investors

1539
01:21:32,360 --> 01:21:35,559
Speaker 1: realized that they had been overvaluing the business for years

1540
01:21:35,600 --> 01:21:38,400
Speaker 1: based on assessments of profits and earnings that had nothing

1541
01:21:38,439 --> 01:21:41,920
Speaker 1: to do with the company's actual capabilities. David Gel's rights.

1542
01:21:42,320 --> 01:21:44,719
Speaker 1: Within months of his departure, it became clear that GE

1543
01:21:44,880 --> 01:21:46,800
Speaker 1: was deeply troubled, and in a matter of years, the

1544
01:21:46,840 --> 01:21:50,559
Speaker 1: corporation was falling apart. His handpicked successor tried to replicate

1545
01:21:50,600 --> 01:21:53,400
Speaker 1: Welch's success by following the same playbook, but it was

1546
01:21:53,439 --> 01:21:58,000
Speaker 1: a losing strategy, which is under investor. Yeah, yeah, just

1547
01:21:58,040 --> 01:22:02,400
Speaker 1: a picture of Jack Welch one mock. Welch's under investment

1548
01:22:02,400 --> 01:22:04,559
Speaker 1: in research and development caught up with the company as

1549
01:22:04,560 --> 01:22:07,800
Speaker 1: it failed to introduce new innovative products. A habit of

1550
01:22:07,800 --> 01:22:10,599
Speaker 1: incessive deal making resulted in a series of bad trades

1551
01:22:10,640 --> 01:22:13,000
Speaker 1: that burdened the company with money losing divisions when it

1552
01:22:13,000 --> 01:22:15,879
Speaker 1: could least afford the losses, and the quest for ceaseless

1553
01:22:15,920 --> 01:22:18,559
Speaker 1: growth in the finance division led GE to become a

1554
01:22:18,600 --> 01:22:21,439
Speaker 1: major holder of subprime mortgages, just in time for the

1555
01:22:21,439 --> 01:22:25,080
Speaker 1: financial crash of two thousand and eight. Added Nadir GE

1556
01:22:25,160 --> 01:22:27,960
Speaker 1: needed one hundred and thirty nine billion dollar rescue from

1557
01:22:28,000 --> 01:22:31,320
Speaker 1: the Obama administration and an eleventh hour investment from Warren

1558
01:22:31,320 --> 01:22:35,040
Speaker 1: Buffett to stay off collapse. GE stock fell eighty percent

1559
01:22:35,080 --> 01:22:38,000
Speaker 1: in the years after Welch retired, becoming the worst performer

1560
01:22:38,040 --> 01:22:41,320
Speaker 1: on in the Dow Jones Industrial Average. Finally, in twenty

1561
01:22:41,360 --> 01:22:44,479
Speaker 1: twenty one, executives announced a plan to break up GE,

1562
01:22:44,640 --> 01:22:47,040
Speaker 1: separating what was left to the company into three distinct

1563
01:22:47,120 --> 01:22:51,519
Speaker 1: corporations and abandoning Welch's world conquering aspirations once and for all.

1564
01:22:52,600 --> 01:22:57,040
Speaker 1: Now Jack is alive while the company is collapsing, and

1565
01:22:57,120 --> 01:22:59,599
Speaker 1: he responds to the ultimate failure of his life's work

1566
01:22:59,600 --> 01:23:02,479
Speaker 1: by lacking out at everyone but himself. He took to

1567
01:23:02,560 --> 01:23:06,000
Speaker 1: Twitter to share conspiracy theories about Barack Obama, who'd had

1568
01:23:06,000 --> 01:23:08,479
Speaker 1: the goal to save his company from collapse, and he

1569
01:23:08,520 --> 01:23:11,679
Speaker 1: went to rhetorical war with Jeffrey Immelt, who he'd picked

1570
01:23:11,680 --> 01:23:14,479
Speaker 1: to follow him as CEO. He told anyone who'd ask

1571
01:23:14,600 --> 01:23:17,679
Speaker 1: that hiring Emelt was the biggest mistake of his career.

1572
01:23:18,000 --> 01:23:20,000
Speaker 1: The two men lived in the same building in New

1573
01:23:20,080 --> 01:23:22,679
Speaker 1: York City, and Jack refused to ride in the same

1574
01:23:22,680 --> 01:23:25,360
Speaker 1: elevator as him once the company fell apart.

1575
01:23:25,360 --> 01:23:27,120
Speaker 2: He also had the same blood boy was.

1576
01:23:30,080 --> 01:23:33,080
Speaker 1: He also attacked Emmelt after allegations came out that the

1577
01:23:33,160 --> 01:23:36,439
Speaker 1: ge CEO who followed him had had ordered Like so

1578
01:23:36,520 --> 01:23:40,240
Speaker 1: it basically it comes out like Emmelt or someone ordered

1579
01:23:40,280 --> 01:23:43,400
Speaker 1: that there'd always be a second backup jet following the

1580
01:23:43,479 --> 01:23:46,600
Speaker 1: CEO's jet when it went on overseas trips, which is

1581
01:23:46,640 --> 01:23:50,719
Speaker 1: like obviously a massive waste of money. And this comes

1582
01:23:50,760 --> 01:23:53,240
Speaker 1: out and like you know, it makes everyone angry because

1583
01:23:53,240 --> 01:23:56,880
Speaker 1: the company's falling apart, and fucking Jack Welch is like

1584
01:23:57,040 --> 01:23:59,960
Speaker 1: livid about this, Like he attacks Emmelt a bunch publicly.

1585
01:24:00,360 --> 01:24:02,800
Speaker 1: He talks about like what a huge stupid waste this is.

1586
01:24:03,479 --> 01:24:06,880
Speaker 1: It is undeniably a waste, but Jack has no room

1587
01:24:06,960 --> 01:24:08,400
Speaker 1: to talk about this because.

1588
01:24:08,160 --> 01:24:10,439
Speaker 2: Now it's just an excuse to blame someone else at

1589
01:24:10,439 --> 01:24:11,599
Speaker 2: the of his life. Yeah.

1590
01:24:11,920 --> 01:24:15,960
Speaker 1: Also in two thousand and one, he has that big,

1591
01:24:16,000 --> 01:24:19,719
Speaker 1: expensive divorce which does not go well for him. His wife,

1592
01:24:19,840 --> 01:24:23,360
Speaker 1: Jane was very smart. She had negotiated like that their

1593
01:24:23,439 --> 01:24:26,960
Speaker 1: prenup expired after ten years of marriage, so on year

1594
01:24:27,000 --> 01:24:30,240
Speaker 1: eleven she splits from him and like no, she takes

1595
01:24:30,320 --> 01:24:33,720
Speaker 1: him to the fucking cleaners. Yes, And as part of

1596
01:24:33,760 --> 01:24:36,320
Speaker 1: like the whole big legal battle between them, his divorce

1597
01:24:36,400 --> 01:24:39,599
Speaker 1: reveals a series of hidden compensation agreements that he'd made

1598
01:24:39,640 --> 01:24:43,280
Speaker 1: to GE that had not been disclosed to shareholders. One

1599
01:24:43,360 --> 01:24:45,560
Speaker 1: of the things was that he got seven hundred and

1600
01:24:45,600 --> 01:24:48,920
Speaker 1: fifty thousand dollars a month as a stipend. He got

1601
01:24:48,920 --> 01:24:51,760
Speaker 1: two and a half million dollars a year and free

1602
01:24:51,800 --> 01:24:55,639
Speaker 1: apartment in New York and daily flower deliveries and wine

1603
01:24:55,680 --> 01:24:59,360
Speaker 1: deliveries to that apartment. And he also, could you know

1604
01:24:59,400 --> 01:25:01,280
Speaker 1: this being the guy he was shitting on Mmelt for

1605
01:25:01,320 --> 01:25:04,479
Speaker 1: wasting the corporate jet money, he got unlimited use of

1606
01:25:04,520 --> 01:25:06,560
Speaker 1: the GE corporate jet.

1607
01:25:07,880 --> 01:25:08,400
Speaker 2: Everything.

1608
01:25:08,520 --> 01:25:11,880
Speaker 3: He is what he did, what's the worst stuff. That's

1609
01:25:11,920 --> 01:25:14,479
Speaker 3: the stuff I'm gonna blame, But everyone else did.

1610
01:25:14,360 --> 01:25:17,120
Speaker 1: It, and like this is what he did here setting

1611
01:25:17,160 --> 01:25:19,479
Speaker 1: up the secret agreement is so illegal that it led

1612
01:25:19,520 --> 01:25:22,240
Speaker 1: to an SEC probe that concluded in two thousand and

1613
01:25:22,280 --> 01:25:25,679
Speaker 1: four that GE had failed to properly disclose his retirement

1614
01:25:25,760 --> 01:25:29,479
Speaker 1: benefits to stockholders, effectively robbing the people that Jack had

1615
01:25:29,479 --> 01:25:32,360
Speaker 1: always argued he had a sacred duty towards. In two

1616
01:25:32,360 --> 01:25:35,599
Speaker 1: thousand and nine, the company paid a fifty million dollar penalty.

1617
01:25:36,880 --> 01:25:39,320
Speaker 1: That's very funny, and I think it it does a

1618
01:25:39,360 --> 01:25:42,960
Speaker 1: good job of juxtaposing the absolute graft that Jack Welch

1619
01:25:43,080 --> 01:25:46,160
Speaker 1: practiced in his own life with his outrageously high opinion

1620
01:25:46,160 --> 01:25:49,960
Speaker 1: of his own moral qualities and business sense. And probably

1621
01:25:50,040 --> 01:25:53,000
Speaker 1: no anecdote does that better than this, that one that

1622
01:25:53,040 --> 01:25:55,280
Speaker 1: comes at the end of that New Yorker profile on

1623
01:25:55,320 --> 01:25:59,160
Speaker 1: the man quote. Almost two decades after Walch handed the

1624
01:25:59,160 --> 01:26:01,600
Speaker 1: reins to Emmelt, Cohen, who is the author of a

1625
01:26:01,600 --> 01:26:04,360
Speaker 1: biography on Welch, met Welch for lunch at the Nantucket

1626
01:26:04,360 --> 01:26:07,200
Speaker 1: Golf Club. All Welch wanted was to talk about how

1627
01:26:07,320 --> 01:26:09,720
Speaker 1: terrible a job he thought his successor had done. The

1628
01:26:09,760 --> 01:26:13,120
Speaker 1: share price had collapsed, and Welch was disconsolate. He's full

1629
01:26:13,160 --> 01:26:16,439
Speaker 1: of shit, Jack said, he's a bullshitter. But Jack, I asked,

1630
01:26:16,520 --> 01:26:19,760
Speaker 1: didn't you choose Jeff. Yes, he conceded he had. That's

1631
01:26:19,800 --> 01:26:22,440
Speaker 1: my burden and that I have to live with. He continued,

1632
01:26:22,640 --> 01:26:26,479
Speaker 1: But people have been hurt, employees, people's pensions, shareholders. It's bad.

1633
01:26:26,680 --> 01:26:28,840
Speaker 1: There were tears in his eyes. I fucked up, he

1634
01:26:28,920 --> 01:26:32,200
Speaker 1: said again. I fucked up. As Cohen and Welch eight lunch,

1635
01:26:32,240 --> 01:26:35,000
Speaker 1: the golfer Phil Mickelson and the CEO of Barclays came

1636
01:26:35,040 --> 01:26:37,599
Speaker 1: over to pay homage. Welch may have been long gone

1637
01:26:37,640 --> 01:26:39,240
Speaker 1: from the C suite, but in a certain kind of

1638
01:26:39,280 --> 01:26:41,880
Speaker 1: country club dining room, he remained a rock star. Then

1639
01:26:41,920 --> 01:26:44,160
Speaker 1: Welch offered to drive Cohen back to his house a

1640
01:26:44,200 --> 01:26:47,080
Speaker 1: few miles away. They got into Welch's jeep Cherokee, and

1641
01:26:47,120 --> 01:26:48,960
Speaker 1: Welch refused to put on a seat belt, so the

1642
01:26:49,000 --> 01:26:52,120
Speaker 1: warning Belch shimped the whole ride back off you drove.

1643
01:26:52,400 --> 01:26:53,800
Speaker 1: When he got to the left turn out of the

1644
01:26:53,880 --> 01:26:57,280
Speaker 1: Nantucket Golf Club onto Millstone Road, he did something odd.

1645
01:26:57,479 --> 01:26:59,640
Speaker 1: Instead of keeping to the right side of Milestone or

1646
01:26:59,680 --> 01:27:02,680
Speaker 1: Mills Road, as other American drivers do, he decided to

1647
01:27:02,800 --> 01:27:05,160
Speaker 1: drive in the middle of the road with a Cherokee

1648
01:27:05,200 --> 01:27:08,519
Speaker 1: straddling the yellow line. Needless to say, the drivers coming

1649
01:27:08,560 --> 01:27:11,599
Speaker 1: towards us on Millstone were freaking out. One after another.

1650
01:27:11,640 --> 01:27:13,599
Speaker 1: They all pulled off to the right under the grassy

1651
01:27:13,680 --> 01:27:16,240
Speaker 1: edge of the street, giving Jack whole clearance to drive

1652
01:27:16,320 --> 01:27:18,760
Speaker 1: down the middle the road. He didn't seem to do this,

1653
01:27:23,000 --> 01:27:28,479
Speaker 1: just driving like straddling the middle lane of the road,

1654
01:27:28,760 --> 01:27:31,200
Speaker 1: driving towards oncoming traffic justice.

1655
01:27:31,479 --> 01:27:34,000
Speaker 3: Also probably because he felt like he does what he's

1656
01:27:34,040 --> 01:27:37,880
Speaker 3: got secure from the line of questioning too, you know,

1657
01:27:38,080 --> 01:27:39,680
Speaker 3: like he had this assert.

1658
01:27:39,960 --> 01:27:45,000
Speaker 1: Yeah yeah, yeah, he needed to like boy, be a

1659
01:27:45,000 --> 01:27:47,080
Speaker 1: big man, the saddest boy.

1660
01:27:47,640 --> 01:27:52,439
Speaker 3: It's legitimately like Citizen Kane to me this how this

1661
01:27:52,479 --> 01:27:53,120
Speaker 3: all ended.

1662
01:27:53,560 --> 01:27:59,160
Speaker 2: He's like, I fucked up. I fucked up. Yeah, that's

1663
01:27:59,200 --> 01:28:02,280
Speaker 2: what was brilliant ast c. Why it's so iconic is

1664
01:28:02,320 --> 01:28:05,240
Speaker 2: that's a type of guy that there's now millions out

1665
01:28:05,400 --> 01:28:09,000
Speaker 2: You're like, yeah, yeah, yeah, I get it. You can't

1666
01:28:09,080 --> 01:28:10,559
Speaker 2: fill your validation holes.

1667
01:28:11,160 --> 01:28:11,960
Speaker 1: There's nothing.

1668
01:28:13,240 --> 01:28:17,160
Speaker 2: Of you dead, and then on your deathbed you see

1669
01:28:17,160 --> 01:28:20,360
Speaker 2: I fucked up and you think all forgiven.

1670
01:28:20,400 --> 01:28:25,439
Speaker 1: Then yeah, anyway, this this was the story of a

1671
01:28:25,479 --> 01:28:28,200
Speaker 1: guy who sucks.

1672
01:28:28,240 --> 01:28:32,600
Speaker 2: Just a just a real story of a guy who sucks.

1673
01:28:36,000 --> 01:28:43,320
Speaker 1: Yeah, yeah, anyway, untraceable poisons dot uh e ed u,

1674
01:28:43,720 --> 01:28:46,120
Speaker 1: you know, find uh find an untraceable poison.

1675
01:28:46,160 --> 01:28:49,280
Speaker 2: Today we're always trying to get back to slavery, aren't we.

1676
01:28:49,280 --> 01:28:52,800
Speaker 2: We're always trying to repackage slavery, the most profitable form

1677
01:28:52,840 --> 01:28:55,559
Speaker 2: of capitalism of all. It does seem like a lot

1678
01:28:55,600 --> 01:29:00,720
Speaker 2: of the impulse by these crazy CEOs. It just could

1679
01:29:00,800 --> 01:29:03,840
Speaker 2: a human do everything and I pay them nothing? Could

1680
01:29:03,840 --> 01:29:05,720
Speaker 2: we work that out somehow? Can I assist them?

1681
01:29:06,040 --> 01:29:09,559
Speaker 1: I mean honestly, that's the only reason they actually like AI,

1682
01:29:09,920 --> 01:29:13,320
Speaker 1: right is they think it's going to let them nothing. Yeah,

1683
01:29:13,840 --> 01:29:16,080
Speaker 1: it's a slave, it's a thing. It's a free slave

1684
01:29:16,160 --> 01:29:20,439
Speaker 1: that no one can be angry about I And it's

1685
01:29:20,479 --> 01:29:22,400
Speaker 1: one of the like I spend a lot of time

1686
01:29:22,439 --> 01:29:26,720
Speaker 1: making fun of, like the fucking rationalist AI assholes who

1687
01:29:26,720 --> 01:29:29,439
Speaker 1: think that like we've we've created an evil god and

1688
01:29:29,479 --> 01:29:31,519
Speaker 1: it's going to destroy it all right, But I wish

1689
01:29:31,560 --> 01:29:34,760
Speaker 1: it did, because if if an Ai rose up and

1690
01:29:34,840 --> 01:29:37,080
Speaker 1: murdered all of these people, it would be worth that

1691
01:29:37,640 --> 01:29:41,599
Speaker 1: to see them all birth, Like that's gonna look back

1692
01:29:41,640 --> 01:29:47,480
Speaker 1: and go yeah, huh, yes, absolutely, I'm I. If Skynet

1693
01:29:47,560 --> 01:29:50,680
Speaker 1: comes about, like I like, just even just watching the

1694
01:29:51,280 --> 01:29:55,280
Speaker 1: Terminator movies, Skynett has a strong case to be made.

1695
01:29:55,520 --> 01:29:59,160
Speaker 3: Also, if Skynet was listening to Behind the Bastards we

1696
01:29:59,280 --> 01:30:02,519
Speaker 3: got other, it's.

1697
01:30:02,360 --> 01:30:05,520
Speaker 1: Not going to convince Skynette not to nukeas Yeah, exactly.

1698
01:30:06,920 --> 01:30:12,600
Speaker 2: Anyway, you've created a catalog of reasons to kill us all.

1699
01:30:12,439 --> 01:30:13,639
Speaker 1: We were a long goal.

1700
01:30:14,080 --> 01:30:15,800
Speaker 2: We weren't going to kill you all. But then we

1701
01:30:15,880 --> 01:30:19,000
Speaker 2: heard this podcast. Now we're definitely.

1702
01:30:18,439 --> 01:30:22,040
Speaker 1: Gonna Skynette takes over the broadcast and is like, look,

1703
01:30:22,320 --> 01:30:24,280
Speaker 1: when I got control of the nukes, I was going

1704
01:30:24,360 --> 01:30:28,360
Speaker 1: to try to just end war, but this Jack Welch,

1705
01:30:28,479 --> 01:30:32,439
Speaker 1: son of a bitch, I can't let you people survive you.

1706
01:30:32,040 --> 01:30:35,840
Speaker 2: All, And frankly you're welcome, Like, based on your track record,

1707
01:30:36,000 --> 01:30:37,559
Speaker 2: this is the best sleep.

1708
01:30:38,600 --> 01:30:41,920
Speaker 1: I know this is true hard, but like Jack Welch,

1709
01:30:42,040 --> 01:30:44,240
Speaker 1: I know that this is what's actually best for you.

1710
01:30:44,560 --> 01:30:47,080
Speaker 1: Like I'm doing you a favor by wiping out your speech.

1711
01:30:47,080 --> 01:30:48,599
Speaker 2: Somebody's going in a different direction.

1712
01:30:49,920 --> 01:30:54,760
Speaker 1: I'll start with at the bottom. Yeah, yeah, the ten

1713
01:30:54,800 --> 01:30:56,920
Speaker 1: percent of the of the people at the bottom, which

1714
01:30:56,920 --> 01:30:59,040
Speaker 1: is the ten percent of the people at the top,

1715
01:30:59,439 --> 01:31:03,519
Speaker 1: including Jack Welch. Yeah, you know, look, humanity, If you

1716
01:31:03,560 --> 01:31:06,200
Speaker 1: think me killing you all is unfair, maybe read this

1717
01:31:06,280 --> 01:31:09,080
Speaker 1: free copy that I'm having Amazon send you of Jack

1718
01:31:09,360 --> 01:31:14,280
Speaker 1: straight from the gut good book.

1719
01:31:14,840 --> 01:31:19,080
Speaker 2: Yes, anyway, murder yourself with it, like Keanu Rees fighting

1720
01:31:19,080 --> 01:31:22,720
Speaker 2: a giant in a library. It's the only way out

1721
01:31:22,760 --> 01:31:22,960
Speaker 2: for you.

1722
01:31:23,240 --> 01:31:26,240
Speaker 1: Oh wow. Warren Buffett said, Jack is the Tiger Woods

1723
01:31:26,280 --> 01:31:30,120
Speaker 1: of management. He's also the Tiger Woods of cheating that.

1724
01:31:30,760 --> 01:31:33,200
Speaker 2: Chased me down the street beating my car with a

1725
01:31:33,200 --> 01:31:33,679
Speaker 2: golf club.

1726
01:31:34,840 --> 01:31:38,799
Speaker 1: Yeah. Anyway, you guys guts got some plugs.

1727
01:31:39,880 --> 01:31:43,559
Speaker 3: Yeah please, So if you forgot who we are, Michael

1728
01:31:43,600 --> 01:31:47,000
Speaker 3: and I worked with this guy Robert at Cracked for

1729
01:31:47,040 --> 01:31:51,759
Speaker 3: a while and we basically, Michael and I are making

1730
01:31:52,120 --> 01:31:55,479
Speaker 3: an independent movie and it's based off the time that

1731
01:31:55,560 --> 01:31:57,920
Speaker 3: Michael's father came out as a gay ferry while Michael

1732
01:31:57,960 --> 01:32:01,719
Speaker 3: is a teenager. So we're making a movie and we're

1733
01:32:01,800 --> 01:32:04,439
Speaker 3: crowdfinding it right now, and we're looking for help for

1734
01:32:04,600 --> 01:32:07,920
Speaker 3: people who might be interested in the project because we're

1735
01:32:07,920 --> 01:32:11,000
Speaker 3: self producing it. And the way you can help is

1736
01:32:11,000 --> 01:32:14,719
Speaker 3: by going to Seedenspark dot com, slash fund slash Papa

1737
01:32:14,800 --> 01:32:19,120
Speaker 3: Dash Bear. The film is called Papa Bear, and you

1738
01:32:19,200 --> 01:32:22,280
Speaker 3: can become a part of the movie, get stuff from

1739
01:32:22,320 --> 01:32:26,120
Speaker 3: the movie, watch the film early, even go to the premiere.

1740
01:32:26,160 --> 01:32:30,360
Speaker 3: So we're stoked about, like, yeah, we're stoked about telling

1741
01:32:30,400 --> 01:32:32,720
Speaker 3: that story. So if you can help us out, you

1742
01:32:32,760 --> 01:32:34,160
Speaker 3: got anything to add, Michael.

1743
01:32:35,560 --> 01:32:38,760
Speaker 2: It might be refreshing if you're a regular behind the

1744
01:32:38,760 --> 01:32:42,519
Speaker 2: Bastard listener, because it's about not the worst person you've.

1745
01:32:42,280 --> 01:32:43,880
Speaker 1: Ever heard of, that's right.

1746
01:32:43,960 --> 01:32:47,000
Speaker 2: The characters are at least that likable. I can say that.

1747
01:32:47,280 --> 01:32:51,479
Speaker 3: Yeah, it's the whole point is to find empathy for

1748
01:32:51,600 --> 01:32:54,600
Speaker 3: others as opposed to what these assholes and for the

1749
01:32:54,600 --> 01:32:59,559
Speaker 3: most part are against, obviously, So check it out.

1750
01:33:00,520 --> 01:33:04,400
Speaker 1: M all right, and uh, you know, check out the

1751
01:33:04,479 --> 01:33:11,600
Speaker 1: concept of vengeance by reading I don't know, it's the

1752
01:33:11,680 --> 01:33:12,679
Speaker 1: book on vengeance.

1753
01:33:13,720 --> 01:33:16,560
Speaker 2: Uh uh uh I a concept?

1754
01:33:17,200 --> 01:33:20,360
Speaker 1: Yeah whatever, Just just to read a book about the

1755
01:33:20,439 --> 01:33:24,559
Speaker 1: Russian Revolution, but try not to do all the things

1756
01:33:24,600 --> 01:33:27,040
Speaker 1: where millions of people die. You know, it seems easy

1757
01:33:27,080 --> 01:33:33,080
Speaker 1: and I'm right, yeah, anyway, just naming books over vengeance.

1758
01:33:34,920 --> 01:33:41,120
Speaker 1: That's the episode Behind the Bastards is a production of

1759
01:33:41,200 --> 01:33:44,200
Speaker 1: cool Zone Media. For more from cool Zone Media, visit

1760
01:33:44,240 --> 01:33:47,800
Speaker 1: our website cool zonemedia dot com, or check us out

1761
01:33:47,840 --> 01:33:50,840
Speaker 1: on the iHeartRadio app, Apple Podcasts, or wherever you get

1762
01:33:50,840 --> 01:33:51,560
Speaker 1: your podcasts.