1 00:00:00,240 --> 00:00:04,680 Speaker 1: From UFOs to psychic powers and government conspiracies. History is 2 00:00:04,760 --> 00:00:09,080 Speaker 1: riddled with unexplained events. You can turn back now or 3 00:00:09,200 --> 00:00:12,079 Speaker 1: learn the stuff they don't want you to know. A 4 00:00:12,200 --> 00:00:25,520 Speaker 1: production of I Heart Radio. Hello, welcome back to the show. 5 00:00:25,560 --> 00:00:28,440 Speaker 1: My name is Matt, my name is Noel. They called 6 00:00:28,520 --> 00:00:30,840 Speaker 1: me Ben. We are joined as always with our super 7 00:00:30,920 --> 00:00:35,480 Speaker 1: producer Paul, Mission Control decand most importantly, you are you. 8 00:00:35,479 --> 00:00:38,760 Speaker 1: You are here, and that makes this the stuff they 9 00:00:38,880 --> 00:00:43,000 Speaker 1: don't want you to know. We're talking big business today. 10 00:00:43,400 --> 00:00:46,720 Speaker 1: Today's episode is a little bit different because it's about 11 00:00:46,800 --> 00:00:50,360 Speaker 1: not one, but multiple things that could rightly be called 12 00:00:50,400 --> 00:00:55,440 Speaker 1: conspiracies taking place in multiple companies in multiple countries across 13 00:00:55,520 --> 00:00:59,280 Speaker 1: the planet. And while these conspiracies may not be connected 14 00:00:59,320 --> 00:01:04,240 Speaker 1: by sign, they do share remarkable commonalities. They're almost the 15 00:01:04,360 --> 00:01:07,520 Speaker 1: genre of their own. And so maybe the best way 16 00:01:07,600 --> 00:01:11,600 Speaker 1: for us to begin today's episode is to ask why 17 00:01:11,640 --> 00:01:15,440 Speaker 1: does CEOs make so much money? It's like it's a 18 00:01:15,480 --> 00:01:17,760 Speaker 1: it's a question. The three of us have talked a 19 00:01:17,800 --> 00:01:20,800 Speaker 1: little bit about off air. You know, we we, like 20 00:01:21,000 --> 00:01:25,880 Speaker 1: many other employees and large and large corporations over the years, 21 00:01:26,200 --> 00:01:30,480 Speaker 1: UH sometimes sit around, you know, the proverbial water cooler 22 00:01:30,720 --> 00:01:32,960 Speaker 1: or hanging out at a happy hour, and we say 23 00:01:33,000 --> 00:01:41,919 Speaker 1: stuff like, huh, how much our bosses make Remember those conversations, guys, Sure, Okay, 24 00:01:41,920 --> 00:01:43,520 Speaker 1: I don't want to put us in a rough spot 25 00:01:43,640 --> 00:01:47,480 Speaker 1: necessarily odd, but yes, yeah, just just to just to 26 00:01:47,640 --> 00:01:51,560 Speaker 1: establish the fellow conspiracy realists, we think a lot of 27 00:01:51,600 --> 00:01:56,800 Speaker 1: people have had those conversations, and these conversations have accelerated, 28 00:01:57,120 --> 00:02:02,840 Speaker 1: especially in the recent years as CEOs especially continue to 29 00:02:02,920 --> 00:02:07,920 Speaker 1: do very well during the pandemic, even as companies were 30 00:02:07,960 --> 00:02:11,320 Speaker 1: floundering and there were hundreds of thousands of people being 31 00:02:11,400 --> 00:02:14,760 Speaker 1: laid off or furloughed. But let's let's break it down. 32 00:02:14,840 --> 00:02:18,240 Speaker 1: Let's talk turkey. Let's talk about the thing so many 33 00:02:18,280 --> 00:02:22,160 Speaker 1: employees are afraid to talk about, and so many employers 34 00:02:22,400 --> 00:02:27,280 Speaker 1: would rather no one discuss. Here are the facts. Inflation 35 00:02:27,840 --> 00:02:32,359 Speaker 1: the average worker. It's uh, it's not looking good. It's 36 00:02:32,400 --> 00:02:34,680 Speaker 1: I would say, let me know if you agree with this, 37 00:02:34,680 --> 00:02:37,200 Speaker 1: because I would say it has long been common knowledge 38 00:02:37,480 --> 00:02:40,440 Speaker 1: that the average value of a person's labor in the 39 00:02:40,560 --> 00:02:44,160 Speaker 1: US is going down and has been for some time, 40 00:02:44,200 --> 00:02:48,280 Speaker 1: and a lot of it's due to inflation. Yeah, because 41 00:02:48,800 --> 00:02:52,200 Speaker 1: average salaries have kind of stagnated. You can see this 42 00:02:52,400 --> 00:02:57,400 Speaker 1: represented in graphs across the internet from very intelligent people 43 00:02:57,440 --> 00:02:59,960 Speaker 1: who've been keeping track of this stuff, and you can 44 00:03:00,120 --> 00:03:04,000 Speaker 1: just see that on average, salaries of working people have 45 00:03:04,200 --> 00:03:07,960 Speaker 1: stagnated and inflation has increased in that same time. So 46 00:03:08,000 --> 00:03:11,600 Speaker 1: as inflation goes up, salary stagnate. You can't afford as 47 00:03:11,639 --> 00:03:15,600 Speaker 1: much stuff. You just can't. Yeah, Like, for a weird 48 00:03:15,720 --> 00:03:20,040 Speaker 1: made up example, let's say you make fifteen dollars an 49 00:03:20,040 --> 00:03:24,760 Speaker 1: hour and you always go to the same place for lunch. 50 00:03:24,800 --> 00:03:27,200 Speaker 1: You get a sub sandwich because you've never heard of 51 00:03:27,240 --> 00:03:31,200 Speaker 1: case ideas, and your local subplace. One day, due to 52 00:03:31,200 --> 00:03:34,560 Speaker 1: what they describe as increasing cost of supplies, they have 53 00:03:34,680 --> 00:03:38,600 Speaker 1: raised the price on every submarine sandwich by a couple 54 00:03:38,680 --> 00:03:40,080 Speaker 1: of bucks. You know what I mean. It's not like 55 00:03:40,120 --> 00:03:43,320 Speaker 1: twenty dollars anymore, but it's it used to be five 56 00:03:43,320 --> 00:03:46,520 Speaker 1: and now it's seven dollars. And then let's say every 57 00:03:46,560 --> 00:03:50,160 Speaker 1: place you could ever buy food from does the same thing. 58 00:03:50,480 --> 00:03:53,800 Speaker 1: And then let's say every business you would ever buy 59 00:03:53,840 --> 00:03:57,040 Speaker 1: anything from starts doing the same thing because of the 60 00:03:57,080 --> 00:04:00,000 Speaker 1: same rationale. We see this in the world of autumn 61 00:04:00,000 --> 00:04:04,320 Speaker 1: a Biles. We see this in the world of consumer electronics, construction, supplies, 62 00:04:04,400 --> 00:04:07,320 Speaker 1: you name it. What this means is that if you 63 00:04:07,400 --> 00:04:10,640 Speaker 1: are still making that fifteen dollars an hour, now you're 64 00:04:10,720 --> 00:04:14,800 Speaker 1: fifteen dollars is worth less and less. And this is 65 00:04:14,800 --> 00:04:18,920 Speaker 1: a phenomenon that is well established. It's not up for debate. 66 00:04:19,040 --> 00:04:23,840 Speaker 1: It is proven throughout time. Uh, inflation is real and 67 00:04:23,920 --> 00:04:28,880 Speaker 1: this phenomenon has accelerated at an insane rate. And not 68 00:04:29,000 --> 00:04:32,359 Speaker 1: to start off on bad news, but it is almost 69 00:04:32,360 --> 00:04:35,480 Speaker 1: certainly going to get worse before it gets better. Oh yeah, 70 00:04:35,600 --> 00:04:39,400 Speaker 1: And inflation itself is a fascinating thing to delve into. 71 00:04:39,520 --> 00:04:42,320 Speaker 1: And I'm you know, I'm not in ECON major. I 72 00:04:42,320 --> 00:04:44,520 Speaker 1: don't I didn't take many ECON classes. I don't know 73 00:04:44,600 --> 00:04:47,760 Speaker 1: much about it, but just getting kind of a surface 74 00:04:47,839 --> 00:04:52,039 Speaker 1: level understanding of inflation. For this episode, there's some weird 75 00:04:52,080 --> 00:04:54,880 Speaker 1: stuff that goes on in there, weird stuff that's like 76 00:04:54,960 --> 00:04:58,960 Speaker 1: across the board effects that can occur in a nation 77 00:04:59,200 --> 00:05:03,039 Speaker 1: or globally or in in a region, and it's weird stuff 78 00:05:03,080 --> 00:05:06,880 Speaker 1: with psychology similar to how stock markets function, where when 79 00:05:06,920 --> 00:05:10,840 Speaker 1: people like start thinking inflation is going up, then they 80 00:05:10,880 --> 00:05:13,120 Speaker 1: get uh, they ask for a small raise, which then 81 00:05:13,160 --> 00:05:16,279 Speaker 1: triggers other things, and like it's this strange cycle that 82 00:05:16,640 --> 00:05:19,240 Speaker 1: I can't fully wrap my head around, um, and that 83 00:05:19,360 --> 00:05:21,359 Speaker 1: you know that the way I descrid right there is 84 00:05:21,360 --> 00:05:24,800 Speaker 1: not exactly how inflation works overall. But it's like one 85 00:05:24,800 --> 00:05:28,880 Speaker 1: of those weird things. It's it's more complicated than I understood. 86 00:05:29,000 --> 00:05:32,479 Speaker 1: It's also not always bad, right, It's a product of 87 00:05:32,600 --> 00:05:36,039 Speaker 1: other things too, like economic growth, and in the same 88 00:05:36,040 --> 00:05:38,960 Speaker 1: way that like publicly traded companies are expected by their 89 00:05:38,960 --> 00:05:43,000 Speaker 1: stockholders to show year over year growth no matter what, right, 90 00:05:43,160 --> 00:05:46,400 Speaker 1: I mean, I just want to understand a little bit more. Um. 91 00:05:46,520 --> 00:05:50,440 Speaker 1: Does inflation ever go down? Yeah, it can in the 92 00:05:50,520 --> 00:05:54,680 Speaker 1: process known as deflation. But does it take like an 93 00:05:54,720 --> 00:05:57,800 Speaker 1: economic events, I mean, it takes something palpable for that 94 00:05:57,880 --> 00:06:01,080 Speaker 1: to happen. It's it's is it like all determined by 95 00:06:01,160 --> 00:06:06,520 Speaker 1: the FED and like you know, controllable UM parameters or 96 00:06:06,640 --> 00:06:08,520 Speaker 1: is it stuff that's sort of like out of the 97 00:06:08,560 --> 00:06:12,000 Speaker 1: control of of anyone in power. It's weird because you 98 00:06:12,000 --> 00:06:16,680 Speaker 1: know what, it reminds me sometimes of social dynamics in 99 00:06:17,040 --> 00:06:19,880 Speaker 1: escape rooms. And by escape rooms, I'm referring to the 100 00:06:20,000 --> 00:06:23,599 Speaker 1: recreational thing where you and a group of people that 101 00:06:23,640 --> 00:06:26,200 Speaker 1: you're hopefully still friends with at the end have to 102 00:06:26,320 --> 00:06:30,240 Speaker 1: cooperate to achieve a certain goal to get out of 103 00:06:30,279 --> 00:06:34,240 Speaker 1: the escape room. The global economy is a lot like that. 104 00:06:34,600 --> 00:06:36,560 Speaker 1: If you've ever been in an escape room and you're like, 105 00:06:36,600 --> 00:06:39,000 Speaker 1: what is wrong? Why aren't these people listening to each other? 106 00:06:39,400 --> 00:06:43,040 Speaker 1: That's kind of what happens. Deflation is just a general 107 00:06:44,040 --> 00:06:48,440 Speaker 1: decline in goods and services. And the FED here, the 108 00:06:48,520 --> 00:06:53,360 Speaker 1: US Federal Reserve here in the United States, is very 109 00:06:53,400 --> 00:06:59,000 Speaker 1: aware of these things and they try to keep a balance. 110 00:06:59,240 --> 00:07:02,280 Speaker 1: And you see you see this most often announced in 111 00:07:02,360 --> 00:07:05,960 Speaker 1: things like the FED is raising or cutting the interest rate. 112 00:07:06,360 --> 00:07:11,320 Speaker 1: So the FED can play a big role in in 113 00:07:11,480 --> 00:07:15,720 Speaker 1: maintaining this ballots, this precarious ballots, right, but they are 114 00:07:15,880 --> 00:07:20,920 Speaker 1: not the only factor. And honestly, economists still argue over 115 00:07:21,040 --> 00:07:24,520 Speaker 1: what the chief factors are. And you'll see economists arguing, 116 00:07:25,080 --> 00:07:29,440 Speaker 1: uh for contradictory things, people saying inflation is actually great 117 00:07:29,480 --> 00:07:32,480 Speaker 1: in the long term. You know, I think your escape 118 00:07:32,560 --> 00:07:35,880 Speaker 1: room metaphor is really appropriate because oftentimes, at least the 119 00:07:35,880 --> 00:07:38,480 Speaker 1: one time I did an escape room, the person that 120 00:07:38,560 --> 00:07:41,400 Speaker 1: was the most pushy and the most like leader, like 121 00:07:41,800 --> 00:07:46,679 Speaker 1: was dead wrong about everything. But throwing that weight around 122 00:07:47,080 --> 00:07:49,720 Speaker 1: and having that flex to the point where other people 123 00:07:49,800 --> 00:07:51,920 Speaker 1: kind of fell in line, even though what they were 124 00:07:51,960 --> 00:07:55,600 Speaker 1: proposing was not in the best interest of literally anybody. 125 00:07:56,040 --> 00:07:59,560 Speaker 1: Oh that it really applies to this entire episode. Um, 126 00:07:59,720 --> 00:08:02,160 Speaker 1: you just really quickly on the inflation thing the way 127 00:08:02,320 --> 00:08:05,120 Speaker 1: I was thinking about it in Any economists out there listening, 128 00:08:05,160 --> 00:08:08,120 Speaker 1: please correct me. But if there's something like subsidies that 129 00:08:08,160 --> 00:08:12,200 Speaker 1: get involved, like a government starts paying money for certain 130 00:08:12,600 --> 00:08:17,320 Speaker 1: you know, maybe food items or construction rains at all, 131 00:08:17,400 --> 00:08:19,520 Speaker 1: maybe would or whatever it is. If the if the 132 00:08:19,560 --> 00:08:23,120 Speaker 1: government starts injecting money into a sector like that, that 133 00:08:23,160 --> 00:08:26,360 Speaker 1: sector can then perhaps charge a little bit less for 134 00:08:26,520 --> 00:08:29,560 Speaker 1: whatever that thing is, so that the person at the end, 135 00:08:29,840 --> 00:08:32,679 Speaker 1: you me paying for it can pay a little less. 136 00:08:32,880 --> 00:08:35,280 Speaker 1: But isn't that counter to the idea of the free market, 137 00:08:35,600 --> 00:08:38,280 Speaker 1: Like if you're manipulating these factors, Like isn't aren't things 138 00:08:38,280 --> 00:08:40,840 Speaker 1: supposed to succeed or fail on their own merit without 139 00:08:41,160 --> 00:08:45,079 Speaker 1: intervention of that kind. Well, it's funny because the free 140 00:08:45,080 --> 00:08:49,160 Speaker 1: market itself is somewhat of a contradiction in terms. This 141 00:08:49,280 --> 00:08:51,360 Speaker 1: is not meant to be a hot take. It's just 142 00:08:51,440 --> 00:08:56,960 Speaker 1: pay attention to the the big poubas of the world 143 00:08:57,080 --> 00:08:59,840 Speaker 1: when they're talking about a free market. They're talking about 144 00:08:59,840 --> 00:09:03,520 Speaker 1: the market that they have undue control over, so it's 145 00:09:03,520 --> 00:09:07,160 Speaker 1: still not free. It's just them driving instead of you know, 146 00:09:07,720 --> 00:09:11,120 Speaker 1: a governmental institution. That's what like what That's what the 147 00:09:11,200 --> 00:09:13,920 Speaker 1: Koch brothers mean when they say free market. And this 148 00:09:14,000 --> 00:09:15,760 Speaker 1: is not to say that there are people who are 149 00:09:15,800 --> 00:09:18,640 Speaker 1: big proponents of that, Like it's not to say they're 150 00:09:18,679 --> 00:09:22,559 Speaker 1: not libertarians who are arguing in good faith and genuinely 151 00:09:22,600 --> 00:09:27,320 Speaker 1: believe that all things being equal, the Invisible Hand as 152 00:09:27,360 --> 00:09:30,880 Speaker 1: it is, would ultimately bring that kind of balance that 153 00:09:30,960 --> 00:09:35,520 Speaker 1: people are always striving for. Also, the Invisible Hand is 154 00:09:35,600 --> 00:09:39,040 Speaker 1: not mentioned near as often in that book as people 155 00:09:39,160 --> 00:09:42,839 Speaker 1: might think. Uh So, so when you hear somebody talking 156 00:09:42,840 --> 00:09:45,920 Speaker 1: about the Invisible Hand, make sure they actually read Adam Smith. 157 00:09:46,120 --> 00:09:49,679 Speaker 1: Just a pro tip there. But the reason we're talking 158 00:09:49,720 --> 00:09:52,440 Speaker 1: about this stuff, the reason we're talking about this is 159 00:09:52,480 --> 00:09:56,000 Speaker 1: not to create a snooze fest. It's to give everyone 160 00:09:56,040 --> 00:09:58,760 Speaker 1: the lay of the land on a very important problem. 161 00:09:58,800 --> 00:10:02,960 Speaker 1: If you check out something called the consumer price index, 162 00:10:04,000 --> 00:10:07,800 Speaker 1: you will see some troubling trends. The consumer price index 163 00:10:08,040 --> 00:10:12,320 Speaker 1: is an inflation gauge. It goes across dozens of items 164 00:10:12,400 --> 00:10:16,200 Speaker 1: like the old milk and bread measurement from various economists, 165 00:10:16,400 --> 00:10:23,240 Speaker 1: and according to them, it rose seven percent inflation overall, 166 00:10:23,559 --> 00:10:26,160 Speaker 1: just across the span of a year. Why does that matter. 167 00:10:26,440 --> 00:10:32,760 Speaker 1: That's the fastest rate of rising inflation since two the 168 00:10:32,880 --> 00:10:39,040 Speaker 1: fastest rate in almost forty years. And you know, your boss, 169 00:10:39,280 --> 00:10:41,679 Speaker 1: if you work at most companies, is aware of this. 170 00:10:42,080 --> 00:10:45,440 Speaker 1: And some businesses try to offset this, like you or 171 00:10:45,440 --> 00:10:48,000 Speaker 1: one of your friends or family member might have a 172 00:10:48,120 --> 00:10:51,079 Speaker 1: job that gives them like a cost of living or 173 00:10:51,200 --> 00:10:54,840 Speaker 1: merit increase every year, and often it's something kind of small, right, 174 00:10:54,880 --> 00:10:58,040 Speaker 1: It's like a percentage, you know, like, oh, inflations two, 175 00:10:58,480 --> 00:11:00,920 Speaker 1: so we'll give every one a three percent race. Yeah, 176 00:11:00,920 --> 00:11:04,960 Speaker 1: And we've actually experienced that before in working for the 177 00:11:05,040 --> 00:11:08,000 Speaker 1: company prior to this. We've seen that kind of three 178 00:11:08,000 --> 00:11:10,800 Speaker 1: percent year of a year race, which is just kind 179 00:11:10,800 --> 00:11:13,440 Speaker 1: of standard, as you said. And if you're interested in 180 00:11:13,480 --> 00:11:16,400 Speaker 1: researching more into that consumer price index on your own, 181 00:11:16,520 --> 00:11:21,000 Speaker 1: look up something called the personal consumption Expenditures price index 182 00:11:21,360 --> 00:11:25,840 Speaker 1: or PC just another one of those UH measurements that 183 00:11:25,920 --> 00:11:28,160 Speaker 1: you can look at that that many economists look at 184 00:11:28,320 --> 00:11:30,840 Speaker 1: to kind of check out how things are going. And 185 00:11:30,840 --> 00:11:33,520 Speaker 1: and these economists, by the way, are doing great work. 186 00:11:34,160 --> 00:11:37,959 Speaker 1: Uh and true. Yes, some some disciples of what's called 187 00:11:38,000 --> 00:11:41,480 Speaker 1: the dismal science do very much have an agenda, but 188 00:11:41,760 --> 00:11:44,360 Speaker 1: they are still you know, they're still working to conduct 189 00:11:44,400 --> 00:11:48,760 Speaker 1: science here. Um. It's it's heartbreaking because inflation can be 190 00:11:49,040 --> 00:11:55,079 Speaker 1: incredibly challenging. Just inflation on its own can be um 191 00:11:55,280 --> 00:11:58,800 Speaker 1: be a huge problem for a lot of individuals and households. 192 00:11:58,840 --> 00:12:01,880 Speaker 1: But this is not a one on one fight. Inflation 193 00:12:02,200 --> 00:12:05,520 Speaker 1: brings some goons to the bar fight of having enough 194 00:12:05,520 --> 00:12:08,800 Speaker 1: money to be alive. In America, things like global trade 195 00:12:08,840 --> 00:12:12,599 Speaker 1: competition shout out in NAFTA, for instance, driving down the 196 00:12:12,720 --> 00:12:16,520 Speaker 1: value of traditional manufacturing jobs, or things like we talked 197 00:12:16,520 --> 00:12:21,439 Speaker 1: about at length, increased automation that means it's rendered some 198 00:12:21,600 --> 00:12:26,840 Speaker 1: humans increasingly obsolete in some fields of employment. Civilization is 199 00:12:26,880 --> 00:12:29,280 Speaker 1: going through a John Henry moment. And the more I 200 00:12:29,320 --> 00:12:32,800 Speaker 1: think about that, the more accurate it is. But on 201 00:12:32,840 --> 00:12:35,440 Speaker 1: the other side, you know, this is what we mean 202 00:12:35,480 --> 00:12:37,440 Speaker 1: when we say the wage gap. On the other side, 203 00:12:37,440 --> 00:12:40,520 Speaker 1: we've got people at the top, the corporate executives, right, 204 00:12:40,640 --> 00:12:44,959 Speaker 1: all those acronyms CEO, c FO, c O O, drop 205 00:12:45,040 --> 00:12:47,120 Speaker 1: the beat. If we look at the other side of 206 00:12:47,120 --> 00:12:50,120 Speaker 1: the coin, the other side of the paycheck. We know that. 207 00:12:50,559 --> 00:12:53,319 Speaker 1: Pardon my French, things are difficult for a lot of 208 00:12:53,400 --> 00:12:58,040 Speaker 1: rank and file employees, your faithful correspondence included. But life 209 00:12:58,120 --> 00:13:01,240 Speaker 1: is pretty dope on the other side of the wealth gap, 210 00:13:01,800 --> 00:13:06,640 Speaker 1: you know, like CEOs aren't usually hurting for money. And 211 00:13:06,720 --> 00:13:09,280 Speaker 1: to be honest, I think a lot of people, for 212 00:13:09,360 --> 00:13:12,360 Speaker 1: a long time, myself included, I didn't really know what 213 00:13:12,440 --> 00:13:17,199 Speaker 1: a CEO did, right, Their chief, their executive, their officers. 214 00:13:17,360 --> 00:13:20,200 Speaker 1: Those are just three words slapped together into an acronym. 215 00:13:20,600 --> 00:13:24,040 Speaker 1: They make the decisions, right, They're the deciders, that's all 216 00:13:24,080 --> 00:13:27,280 Speaker 1: I know. They're the boss boss, They're the bosses of 217 00:13:27,320 --> 00:13:31,920 Speaker 1: the bosses. Um. They set the culture of the company 218 00:13:31,920 --> 00:13:34,800 Speaker 1: in any ways, they set the goals of the company 219 00:13:34,800 --> 00:13:38,320 Speaker 1: and they are responsible for meeting those goals because they 220 00:13:38,320 --> 00:13:42,040 Speaker 1: are responsible directly in a publicly traded company to the shareholders. 221 00:13:42,480 --> 00:13:46,880 Speaker 1: Uh and oftentimes they are also you know, the chairman 222 00:13:47,200 --> 00:13:50,680 Speaker 1: of the board of their you know, governing body for 223 00:13:50,760 --> 00:13:54,679 Speaker 1: the company to Yeah, yeah, the bosses bosses. I love that. 224 00:13:55,000 --> 00:13:57,040 Speaker 1: I love that we phrase it that way because that 225 00:13:57,240 --> 00:14:01,120 Speaker 1: is accurate. We're We're in no way being simplistic here. 226 00:14:01,520 --> 00:14:07,160 Speaker 1: The CEO is pretty often the main liaison between the 227 00:14:07,360 --> 00:14:11,920 Speaker 1: corporation and its operations overall to the board of directors. 228 00:14:12,000 --> 00:14:15,960 Speaker 1: So the board of directors are the are the people 229 00:14:16,160 --> 00:14:20,800 Speaker 1: who make those goals that the CEO follows, right, because 230 00:14:20,840 --> 00:14:23,880 Speaker 1: the CEO, despite being the bosses of bosses, kind of 231 00:14:23,920 --> 00:14:27,320 Speaker 1: have bosses of their own, and often the rank and 232 00:14:27,360 --> 00:14:30,760 Speaker 1: file employees are not going to meet the board of directors. 233 00:14:31,160 --> 00:14:35,080 Speaker 1: These these might be shareholders, they might be unaffiliated and 234 00:14:35,160 --> 00:14:37,400 Speaker 1: just paid to be on the board. They might be 235 00:14:37,480 --> 00:14:41,720 Speaker 1: working right, or they may own a specific class of 236 00:14:41,720 --> 00:14:46,200 Speaker 1: stock exactly because there's um, you know, voting class of 237 00:14:46,240 --> 00:14:48,320 Speaker 1: stock and then there's like sort of non voting or 238 00:14:48,360 --> 00:14:50,600 Speaker 1: silent class. I'm not sure exactly what the terms are, 239 00:14:50,600 --> 00:14:54,080 Speaker 1: but if we learned anything from Succession, we learned from 240 00:14:54,080 --> 00:14:56,560 Speaker 1: the episode with Adrian Brody where he plays kind of 241 00:14:56,600 --> 00:15:00,400 Speaker 1: like a silent partner in um ROYKO or was star 242 00:15:00,520 --> 00:15:03,720 Speaker 1: roy Co. It's because the amount that he owns is 243 00:15:03,760 --> 00:15:07,840 Speaker 1: beneath the threshold of a number that would then have 244 00:15:07,920 --> 00:15:12,200 Speaker 1: to be publicly reported, but it's enough that he can 245 00:15:12,200 --> 00:15:16,960 Speaker 1: flex on you know, Logan and Kendall and make them 246 00:15:17,000 --> 00:15:22,920 Speaker 1: squirm because he owns enough to basically rest control family 247 00:15:22,960 --> 00:15:26,640 Speaker 1: control away from the shareholders who are the actual family 248 00:15:27,040 --> 00:15:29,040 Speaker 1: uh in this family owned company, and that can be 249 00:15:29,080 --> 00:15:31,160 Speaker 1: a very powerful position to be in. But yeah, we 250 00:15:31,160 --> 00:15:34,280 Speaker 1: don't know who that person is, right, and that really happens. 251 00:15:34,560 --> 00:15:37,720 Speaker 1: That is that is based in factual events, are based 252 00:15:37,760 --> 00:15:42,400 Speaker 1: upon factual events. CEOs are also going to have executives 253 00:15:42,520 --> 00:15:46,880 Speaker 1: under them as well, like ceo os CFOs, And then 254 00:15:47,000 --> 00:15:50,880 Speaker 1: sometimes there will be someone who holds the title of president, 255 00:15:51,400 --> 00:15:55,320 Speaker 1: either president of a division or president of the company overall. 256 00:15:55,400 --> 00:15:58,840 Speaker 1: That name is a little misleading, you know, like sometimes 257 00:15:58,880 --> 00:16:03,560 Speaker 1: in in the I believe it's US astronautics, a flight 258 00:16:03,600 --> 00:16:06,040 Speaker 1: crew will have a captain and then I'll have someone 259 00:16:06,080 --> 00:16:08,720 Speaker 1: called a pilot, and really the captain is like the 260 00:16:08,760 --> 00:16:12,440 Speaker 1: main pilot and also just in charge overall. Don't you 261 00:16:12,480 --> 00:16:17,320 Speaker 1: Often those see president slash CEOs. Yes, And in frequently 262 00:16:17,920 --> 00:16:22,560 Speaker 1: in smaller companies, you'll see one person fulfilling both roles. 263 00:16:23,160 --> 00:16:26,320 Speaker 1: Or sometimes when there's a CEO who's like a cult 264 00:16:26,360 --> 00:16:29,200 Speaker 1: of personality, right and they're kind of a celebrity in 265 00:16:29,240 --> 00:16:31,960 Speaker 1: their own right, then they'll have both of those positions. 266 00:16:32,400 --> 00:16:35,320 Speaker 1: And then sometimes honestly it's a personality thing. They're just 267 00:16:35,360 --> 00:16:38,119 Speaker 1: control freaks and they don't want to delegate certain decisions. 268 00:16:38,880 --> 00:16:40,880 Speaker 1: But yeah, so that's that's kind of the lay of 269 00:16:40,880 --> 00:16:43,080 Speaker 1: the land. And look, there's no we're not dunking on 270 00:16:43,160 --> 00:16:45,320 Speaker 1: in too hard just yet. There is no denying this 271 00:16:45,440 --> 00:16:48,520 Speaker 1: can be a very stressful job. If you have met 272 00:16:48,520 --> 00:16:51,280 Speaker 1: a CEO, if you've worked with CEOs, if you yourself 273 00:16:51,400 --> 00:16:54,360 Speaker 1: or a CEO, then you know that you don't really 274 00:16:54,520 --> 00:16:58,480 Speaker 1: have off time. You're sort of always on call, right 275 00:16:58,520 --> 00:17:00,720 Speaker 1: and if someone from the board us to talk to 276 00:17:00,760 --> 00:17:04,000 Speaker 1: you and it's three am where you're at, you probably 277 00:17:04,000 --> 00:17:06,840 Speaker 1: still have to answer the phone. Oh yeah, we know 278 00:17:07,160 --> 00:17:10,240 Speaker 1: some of this from personal experience. I mean, even just 279 00:17:10,400 --> 00:17:13,280 Speaker 1: being in the orbit of a CEO, you know, you 280 00:17:13,359 --> 00:17:15,920 Speaker 1: still are held to that same standard, or even being 281 00:17:15,960 --> 00:17:18,359 Speaker 1: in the orbit of someone in the orbit of the CEO. 282 00:17:18,440 --> 00:17:20,919 Speaker 1: All that stuff kind of trickles down the higher in 283 00:17:20,960 --> 00:17:24,000 Speaker 1: the ranks that you get, where yeah, off time is 284 00:17:24,040 --> 00:17:27,560 Speaker 1: sort of a laugh. And so now what do they 285 00:17:27,600 --> 00:17:31,760 Speaker 1: get for it? Yes, they get prestige, Yes they have power, 286 00:17:31,800 --> 00:17:34,200 Speaker 1: and yes they are at the helm of the ship 287 00:17:34,320 --> 00:17:38,840 Speaker 1: as it were, but they also get paid. And it's 288 00:17:38,880 --> 00:17:43,440 Speaker 1: surprising most of the polls that I've found in this 289 00:17:43,520 --> 00:17:48,679 Speaker 1: and another research indicate that the average person in the 290 00:17:48,800 --> 00:17:55,240 Speaker 1: US vastly underestimates just how wide the wealth gap has become. 291 00:17:55,960 --> 00:17:59,000 Speaker 1: We're going to give you a few statistics. Not to 292 00:17:59,040 --> 00:18:02,680 Speaker 1: be overly dramatic. You might want to brace yourself, sit down, 293 00:18:03,040 --> 00:18:06,199 Speaker 1: you know, get a drink if you're so inclined. We 294 00:18:06,240 --> 00:18:09,439 Speaker 1: want to introduce you to something called the Economic Policy Institute. 295 00:18:09,840 --> 00:18:15,600 Speaker 1: The Economic Policy Institute estimates that since nineteen, the typical 296 00:18:15,760 --> 00:18:20,440 Speaker 1: worker compensation has risen about eighteen percent. Not bad, good 297 00:18:20,520 --> 00:18:24,960 Speaker 1: hustle for comparison, compensation for c e O s has 298 00:18:25,040 --> 00:18:31,600 Speaker 1: grown one thousand, three hundred and twenty two percent over 299 00:18:31,640 --> 00:18:35,679 Speaker 1: that same period. I didn't even know you could have 300 00:18:35,840 --> 00:18:38,320 Speaker 1: a percent like that. It feels like a Wonka number 301 00:18:38,359 --> 00:18:42,000 Speaker 1: to me. I thought, it's not that I'm confused. I'm 302 00:18:42,040 --> 00:18:46,040 Speaker 1: bad at math. Uh well, I think they're counting on 303 00:18:46,160 --> 00:18:49,920 Speaker 1: most of us do not be super into math. But yeah, 304 00:18:50,400 --> 00:18:54,480 Speaker 1: one thousand three. You can slice that a couple of 305 00:18:54,520 --> 00:18:59,239 Speaker 1: different ways because CEOs are not paid the way that 306 00:18:59,320 --> 00:19:02,080 Speaker 1: you know your hourly workers. And we'll get into that. 307 00:19:02,080 --> 00:19:04,680 Speaker 1: That's a big part of today's episode. But there was 308 00:19:04,680 --> 00:19:07,919 Speaker 1: another statistic that we wanted to share from the I P. S. 309 00:19:08,080 --> 00:19:11,280 Speaker 1: Or Institute for Policy Studies, They found that if you 310 00:19:11,320 --> 00:19:16,080 Speaker 1: look at SMP five hundred, companies pay their CEO more 311 00:19:16,119 --> 00:19:18,600 Speaker 1: than a hundred times what they pay their average worker. 312 00:19:18,960 --> 00:19:21,119 Speaker 1: What does this mean? That means if you're the average 313 00:19:21,119 --> 00:19:23,760 Speaker 1: employee of one of these places, you have to work 314 00:19:23,800 --> 00:19:29,600 Speaker 1: for one century, one hundred years at these companies to 315 00:19:29,680 --> 00:19:33,159 Speaker 1: earn what your CEO makes in one year. It seems doable. 316 00:19:33,760 --> 00:19:40,320 Speaker 1: Uh sorry, and that's just what That's what that makes me. 317 00:19:40,359 --> 00:19:43,879 Speaker 1: Do you know? It does it doesn't? It? Staggering is 318 00:19:43,920 --> 00:19:48,640 Speaker 1: what it is. And just for a little perspective, in CEOs, overall, 319 00:19:49,040 --> 00:19:51,960 Speaker 1: we're making three hundred and fifty one times as much 320 00:19:52,000 --> 00:19:56,000 Speaker 1: as a typical employee UM compared to that twenty nineteen 321 00:19:56,280 --> 00:20:00,000 Speaker 1: Policy Studies report UM talking about the SNP five hundred 322 00:20:00,000 --> 00:20:02,640 Speaker 1: companies where the CEOs are making over a hundred times UM. 323 00:20:02,720 --> 00:20:05,080 Speaker 1: The numbers get even more bleak when you look at 324 00:20:05,080 --> 00:20:06,840 Speaker 1: the bigger picture and you pull back and look at 325 00:20:06,840 --> 00:20:11,080 Speaker 1: all companies. Uh. For reference, that was a ratio of 326 00:20:11,160 --> 00:20:14,760 Speaker 1: sixty one to one, So sixty one times. So let's 327 00:20:14,760 --> 00:20:19,520 Speaker 1: do let's do a little imagineering everybody. What do you say, Uh, 328 00:20:19,560 --> 00:20:22,919 Speaker 1: maybe that's trademarked by Disney. I'm not sure. Sorry, sorry Disney. 329 00:20:23,160 --> 00:20:28,320 Speaker 1: Let's peer imagination. Let's do it. Let's go through the tunnel. Uh, 330 00:20:28,359 --> 00:20:35,119 Speaker 1: it's let's imagine it's your CEO. Congratulations, you did it man. Uh. 331 00:20:35,240 --> 00:20:37,080 Speaker 1: Let's say you were the CEO one of the top 332 00:20:37,119 --> 00:20:42,080 Speaker 1: three hundred and fifty companies, firms, conglomerates, whatever, Uh, one 333 00:20:42,080 --> 00:20:45,440 Speaker 1: of the top You'll be making an average of twenty 334 00:20:45,640 --> 00:20:51,040 Speaker 1: four point two million dollars a year. Now, that doesn't 335 00:20:51,080 --> 00:20:55,120 Speaker 1: mean twenty four point two million dollars gets inserted into 336 00:20:55,160 --> 00:20:58,880 Speaker 1: your checking account immediately. Every you know, every other week 337 00:20:58,920 --> 00:21:02,280 Speaker 1: you get paid or every month whatever. That means that 338 00:21:02,359 --> 00:21:05,400 Speaker 1: you do get a significant amount of money in your 339 00:21:05,400 --> 00:21:08,760 Speaker 1: bank account as a check. But you you don't get 340 00:21:08,760 --> 00:21:11,199 Speaker 1: all that money. Most of that is tied up in 341 00:21:11,240 --> 00:21:15,800 Speaker 1: the company itself, usually in equity, the worth of the 342 00:21:15,840 --> 00:21:20,120 Speaker 1: company stocks, stock options, things like that. I would say 343 00:21:20,119 --> 00:21:22,120 Speaker 1: it's a vast majority of the money that you get 344 00:21:22,119 --> 00:21:26,120 Speaker 1: compensated is in the stock. Yeah. Nowadays it's also good 345 00:21:26,160 --> 00:21:30,080 Speaker 1: for loyalty. Right in theory. Uh, we know, the economic 346 00:21:30,160 --> 00:21:33,840 Speaker 1: chaos of the past few years affected everybody one way 347 00:21:33,920 --> 00:21:38,200 Speaker 1: or another. But here's the thing, and it's not often 348 00:21:38,680 --> 00:21:42,000 Speaker 1: reported as widely as we think it should be. Not 349 00:21:42,119 --> 00:21:46,240 Speaker 1: everyone was affected. Adversely, folks, a lot of CEOs, a 350 00:21:46,280 --> 00:21:50,680 Speaker 1: lot of executive suite people had gangbuster years even as 351 00:21:50,720 --> 00:21:56,520 Speaker 1: their own companies were burning down. Boeing lost twelve billion 352 00:21:56,600 --> 00:22:01,280 Speaker 1: dollars and they laid off like around thirty thousand employees. 353 00:22:01,720 --> 00:22:04,920 Speaker 1: In the same year, their CEO made twenty one point 354 00:22:04,960 --> 00:22:10,160 Speaker 1: one million dollars. Hilton Hotel gave up almost of its 355 00:22:10,200 --> 00:22:14,760 Speaker 1: corporate staff. They lost seven hundred and twenty million dollars, 356 00:22:14,840 --> 00:22:18,120 Speaker 1: and again in the same year, they gave their CEO 357 00:22:18,760 --> 00:22:22,520 Speaker 1: fifty five point nine million dollars all in the same year. 358 00:22:22,600 --> 00:22:26,399 Speaker 1: It seems counterintuitive, so we have to ask what gives 359 00:22:26,600 --> 00:22:28,320 Speaker 1: you know what I mean? Like, a lot of employees 360 00:22:28,320 --> 00:22:31,800 Speaker 1: who have a bonus structure have that bonus structure based 361 00:22:31,840 --> 00:22:35,320 Speaker 1: on the overall company performance. So if your company isn't 362 00:22:35,359 --> 00:22:38,240 Speaker 1: doing well, then you are not getting that extra little 363 00:22:38,280 --> 00:22:41,119 Speaker 1: payoff at the end of the fiscal year. Why are 364 00:22:41,160 --> 00:22:43,359 Speaker 1: CEO is different? Why do they make so much money? 365 00:22:43,400 --> 00:22:45,600 Speaker 1: What does this tell us about the wealth gap? And 366 00:22:45,680 --> 00:22:48,720 Speaker 1: where does this lead us in the future. We're gonna 367 00:22:48,760 --> 00:22:52,719 Speaker 1: pause for work from our sponsors. Double check to make 368 00:22:52,760 --> 00:23:03,000 Speaker 1: sure we're not fired and dive in. Here's where it 369 00:23:03,040 --> 00:23:06,160 Speaker 1: gets crazy. So we asked a series of questions and 370 00:23:07,000 --> 00:23:09,159 Speaker 1: we're gonna have some a simple answer at the end, 371 00:23:09,240 --> 00:23:12,320 Speaker 1: and we're gonna start with a simple answer. Now first, 372 00:23:12,600 --> 00:23:15,880 Speaker 1: it doesn't look pretty. I I suggest we take these 373 00:23:15,960 --> 00:23:18,560 Speaker 1: questions one by one because we've got to play a 374 00:23:18,600 --> 00:23:22,680 Speaker 1: little bit of Devil's advocate. Uh. There's there's a lot 375 00:23:22,720 --> 00:23:27,919 Speaker 1: of literature out there, videos, interviews, documentaries, think pieces that 376 00:23:28,119 --> 00:23:32,119 Speaker 1: support the idea for the acceleration of CEO income and 377 00:23:32,160 --> 00:23:35,879 Speaker 1: they have you know, they often have a similar rationale, 378 00:23:35,920 --> 00:23:39,359 Speaker 1: wouldn't you say, I think so? Um. One of them 379 00:23:39,520 --> 00:23:43,680 Speaker 1: is the argument that these CEOs and the super rich 380 00:23:43,720 --> 00:23:45,680 Speaker 1: in general, we can even take it outside of CEOs, 381 00:23:45,760 --> 00:23:48,080 Speaker 1: is the idea of like the one the top, you know, 382 00:23:48,440 --> 00:23:52,040 Speaker 1: one percent or whatever. Um. They have paved the way 383 00:23:52,600 --> 00:23:57,240 Speaker 1: for the rest of us by testing things like cell 384 00:23:57,280 --> 00:23:59,639 Speaker 1: phones you know that at one point costs like a 385 00:23:59,680 --> 00:24:01,920 Speaker 1: thousand dollars and we're you know, out of the reach 386 00:24:01,960 --> 00:24:04,840 Speaker 1: of the average American or average you know, human being. Um. 387 00:24:04,960 --> 00:24:08,960 Speaker 1: Other other things, you know, computers for example, cam quarters whatever. 388 00:24:09,040 --> 00:24:11,639 Speaker 1: I'm I'm exclusively talking about technology, but the idea that 389 00:24:11,680 --> 00:24:13,919 Speaker 1: if it wasn't for them, that those things would not 390 00:24:13,960 --> 00:24:18,800 Speaker 1: have become viable and therefore become affordable and trickled down 391 00:24:18,840 --> 00:24:20,240 Speaker 1: to the rest of us. So that's that's one of 392 00:24:20,280 --> 00:24:23,119 Speaker 1: the arguments. And also just the idea that you know, 393 00:24:23,600 --> 00:24:26,440 Speaker 1: they're that free market concept again, which you're right, is 394 00:24:26,480 --> 00:24:31,280 Speaker 1: really deceptive and misleading. Um that it's a self regulating system, 395 00:24:31,320 --> 00:24:36,359 Speaker 1: that who are we to say that these CEOs aren't 396 00:24:36,359 --> 00:24:39,720 Speaker 1: providing a service that is commensurate with the amount of 397 00:24:39,720 --> 00:24:42,240 Speaker 1: money that they are paying, and the society values what 398 00:24:42,320 --> 00:24:44,760 Speaker 1: they're putting out into the world at a level that 399 00:24:44,840 --> 00:24:46,760 Speaker 1: is appropriate for the amount of money they're getting paid. 400 00:24:47,080 --> 00:24:51,399 Speaker 1: It's interesting. You can watch a video of Goldman Sachs 401 00:24:51,520 --> 00:24:54,879 Speaker 1: CEO Larry Blank fiend fine, I don't know how to 402 00:24:54,960 --> 00:24:56,960 Speaker 1: say his name, Sorry I don't. I don't know him, 403 00:24:57,000 --> 00:24:59,480 Speaker 1: but you can watch a video of him making this 404 00:24:59,640 --> 00:25:04,080 Speaker 1: argument and making a sports analogy of the absolute best 405 00:25:04,119 --> 00:25:07,560 Speaker 1: of the best end up in the NFL or the NBA, 406 00:25:08,080 --> 00:25:10,840 Speaker 1: you know, through talent and a certain amount of luck. 407 00:25:11,280 --> 00:25:14,359 Speaker 1: He sees c e O s as the same kind 408 00:25:14,400 --> 00:25:18,879 Speaker 1: of thing, like it's it's worth paying some star athlete 409 00:25:19,240 --> 00:25:22,000 Speaker 1: a ridiculous amount of money because it's going to get 410 00:25:22,000 --> 00:25:25,120 Speaker 1: people to watch your thing. It's gonna make you money. 411 00:25:25,160 --> 00:25:29,240 Speaker 1: It's worth paying you know, some CEO, whether because of 412 00:25:29,280 --> 00:25:32,560 Speaker 1: previous experience or because of you know, like you said, 413 00:25:32,560 --> 00:25:36,000 Speaker 1: the nepotism, the connections that are already existing within uh 414 00:25:37,200 --> 00:25:40,240 Speaker 1: an industry or something. It's really paying them. Yeah, it's 415 00:25:40,240 --> 00:25:42,880 Speaker 1: worth paying them a ton of money. Yeah, you've gotta 416 00:25:42,920 --> 00:25:46,280 Speaker 1: pay Lebron more. Right, it's an investment in the team. 417 00:25:46,400 --> 00:25:50,359 Speaker 1: And I first letched you know, that's that's very valid. 418 00:25:50,480 --> 00:25:54,000 Speaker 1: That's tough to argue with, right, because then if you 419 00:25:54,200 --> 00:25:57,120 Speaker 1: follow that train of thought, the idea is that ultimately 420 00:25:58,119 --> 00:26:01,080 Speaker 1: it's better for the company over all, meaning it's better 421 00:26:01,160 --> 00:26:04,399 Speaker 1: for the employees, all of them, for there to be 422 00:26:04,640 --> 00:26:07,600 Speaker 1: a Jordans at the very top well and their talent. 423 00:26:07,680 --> 00:26:10,240 Speaker 1: And then there's something to be said about experience, right, 424 00:26:10,320 --> 00:26:14,240 Speaker 1: I mean, like um, having wisdom in a field and 425 00:26:14,280 --> 00:26:17,159 Speaker 1: in running a business. It's the same kind of requirements 426 00:26:17,200 --> 00:26:21,560 Speaker 1: that you have to theoretically elected president. Right. You understand 427 00:26:21,760 --> 00:26:24,800 Speaker 1: the field how it functions, so when something when there's 428 00:26:24,840 --> 00:26:29,040 Speaker 1: a cog that breaks, you understand how to fix it. 429 00:26:29,400 --> 00:26:34,480 Speaker 1: And unfortunately, these proven track records and meeting goals or 430 00:26:34,520 --> 00:26:37,280 Speaker 1: in the worst case scenario, weathering hard times to keep 431 00:26:37,280 --> 00:26:41,880 Speaker 1: a company going. Uh, the meeting these goals can sometimes 432 00:26:41,880 --> 00:26:46,200 Speaker 1: spell disaster for other employees. I found a statement from 433 00:26:46,359 --> 00:26:51,560 Speaker 1: Senator Elizabeth Warren. She puts it pretty bluntly when she said, quote, 434 00:26:51,640 --> 00:26:55,920 Speaker 1: many of the CEOs have improved profitability by laying off workers. 435 00:26:56,320 --> 00:26:59,280 Speaker 1: A tiny handful of people who have shimmied all the 436 00:26:59,320 --> 00:27:01,520 Speaker 1: way up to the top of the greasy pole get 437 00:27:01,560 --> 00:27:05,240 Speaker 1: all the rewards, while everyone else gets left behind. I 438 00:27:05,280 --> 00:27:07,639 Speaker 1: don't know where greasy pole came from, but that's a 439 00:27:08,600 --> 00:27:12,560 Speaker 1: that's an evocative image. Uh. And this isn't always true, 440 00:27:12,600 --> 00:27:15,320 Speaker 1: of course, And whether or not you believe with you 441 00:27:15,840 --> 00:27:20,639 Speaker 1: jibe with Senator Warren's other political views. She's not making 442 00:27:20,640 --> 00:27:24,240 Speaker 1: this up. She's not just freestyling here like there. This 443 00:27:24,320 --> 00:27:28,440 Speaker 1: is a proven thing. And there's another criticism that rationale 444 00:27:28,480 --> 00:27:31,240 Speaker 1: even though yeah, I agree it can be valid. If 445 00:27:31,320 --> 00:27:36,120 Speaker 1: CEO compensation is indeed tied to performance, why do ceo 446 00:27:36,440 --> 00:27:40,280 Speaker 1: still make bank when companies don't meet those goals when 447 00:27:40,320 --> 00:27:46,080 Speaker 1: they don't perform, Well, I don't know, it feels like 448 00:27:46,160 --> 00:27:48,480 Speaker 1: it feels like I don't know it feels like a move, 449 00:27:48,760 --> 00:27:51,199 Speaker 1: doesn't it. There's a move there that maybe I'm just 450 00:27:51,240 --> 00:27:54,720 Speaker 1: not seeing. Yeah, and I think we may get close 451 00:27:54,800 --> 00:28:01,520 Speaker 1: to at least demystifying that a bit today. Uh, it 452 00:28:01,520 --> 00:28:03,600 Speaker 1: can make the whole thing sound like a pr move. 453 00:28:03,720 --> 00:28:06,320 Speaker 1: This is something we're talking about off air before he 454 00:28:06,359 --> 00:28:09,520 Speaker 1: started recording. You'll hear these You'll hear these stories that 455 00:28:09,560 --> 00:28:13,359 Speaker 1: are largely exceptions to the rule where you'll say, there'll 456 00:28:13,480 --> 00:28:17,480 Speaker 1: be a big tech company right like take Alphabet Alphabet. 457 00:28:17,600 --> 00:28:20,600 Speaker 1: The average employee, let's say they make a little over 458 00:28:20,920 --> 00:28:27,000 Speaker 1: two dollars a year, pretty great, not bad. But the 459 00:28:27,040 --> 00:28:30,600 Speaker 1: CEO has a salary of like one dollar and has 460 00:28:30,640 --> 00:28:33,200 Speaker 1: had that for a while. That sounds cool. It sounds 461 00:28:33,200 --> 00:28:35,720 Speaker 1: like someone is say I don't need the money. I 462 00:28:35,760 --> 00:28:38,760 Speaker 1: am going to be here because I believe in what 463 00:28:38,800 --> 00:28:42,560 Speaker 1: we're doing as an enterprise. But that's not the way 464 00:28:42,600 --> 00:28:45,600 Speaker 1: they get paid. As you pointed out, Matt, they're not 465 00:28:45,640 --> 00:28:48,760 Speaker 1: talking about the stock options they're getting, which in some 466 00:28:48,800 --> 00:28:55,120 Speaker 1: cases absolutely dwarf and he imagined salary. And The New 467 00:28:55,160 --> 00:28:57,480 Speaker 1: York Times talked about this too in a pretty and 468 00:28:57,520 --> 00:29:01,000 Speaker 1: a pretty fantastic article that I highly wreck amend. It's 469 00:29:01,040 --> 00:29:04,960 Speaker 1: called simply, our CEO is paid too much. This is 470 00:29:05,120 --> 00:29:10,040 Speaker 1: an op ed by Callie Holterman, and it's it's worth 471 00:29:10,040 --> 00:29:11,720 Speaker 1: a read if you want to get the lay of 472 00:29:11,760 --> 00:29:14,520 Speaker 1: the lands. But we we pulled a quote that I 473 00:29:14,560 --> 00:29:19,560 Speaker 1: think sums up the situation, the discrepancy in ceo pay, 474 00:29:19,760 --> 00:29:23,120 Speaker 1: the way CEOs are paid versus the way employees are paid. 475 00:29:23,640 --> 00:29:27,000 Speaker 1: In some cases, CEOs took less than they were entitled to. 476 00:29:27,280 --> 00:29:30,000 Speaker 1: Most top executives received the bulk of their pay and 477 00:29:30,080 --> 00:29:32,840 Speaker 1: shares which made decrease in value and often invest over 478 00:29:32,880 --> 00:29:35,800 Speaker 1: several years. And at many companies the stock price was 479 00:29:35,920 --> 00:29:38,840 Speaker 1: up despite the turbulence in the economy and regardless of 480 00:29:38,840 --> 00:29:41,280 Speaker 1: whether the company was profitable. Um, if I could just 481 00:29:41,280 --> 00:29:45,440 Speaker 1: add something really quickly too, these CEOs are nine times 482 00:29:45,440 --> 00:29:48,240 Speaker 1: out of ten, maybe ten times out of ten, people 483 00:29:48,280 --> 00:29:52,720 Speaker 1: that don't necessarily need the paycheck. Their investment wizards already 484 00:29:53,160 --> 00:29:57,320 Speaker 1: and they are parlaying these shares into their investment portfolios 485 00:29:57,960 --> 00:30:00,880 Speaker 1: that are already quite fat. Um. And we'll get into 486 00:30:00,920 --> 00:30:02,880 Speaker 1: what they do with that in a little bit. But um, 487 00:30:03,040 --> 00:30:05,560 Speaker 1: wouldn't you agree that the playing field is sort of 488 00:30:05,600 --> 00:30:09,000 Speaker 1: reserve for people that maybe don't even need the money 489 00:30:09,480 --> 00:30:13,600 Speaker 1: quite often there are there are uh quote unquote self 490 00:30:13,720 --> 00:30:18,200 Speaker 1: made ceo s. But you know, I mean, this is 491 00:30:18,240 --> 00:30:22,880 Speaker 1: not a meritocracy. Very few civilizations actually are. This is 492 00:30:22,920 --> 00:30:26,560 Speaker 1: a society that runs on nepotism, right, So it's also 493 00:30:26,600 --> 00:30:30,920 Speaker 1: not uncommon for a CEO to be kind of born 494 00:30:31,000 --> 00:30:34,880 Speaker 1: on third base, to have the opportunities that allow them, 495 00:30:35,000 --> 00:30:39,640 Speaker 1: through you know, personal even familial connections, to get into 496 00:30:39,640 --> 00:30:43,000 Speaker 1: those executive suites. That doesn't mean they're bad people. They're 497 00:30:43,080 --> 00:30:46,240 Speaker 1: rational actors. They're doing what most people would do given 498 00:30:46,240 --> 00:30:50,280 Speaker 1: that opportunity. Uh and they yeah, they're often not sweating 499 00:30:50,280 --> 00:30:53,880 Speaker 1: the light bill. Sometimes this does blow up in terms 500 00:30:53,960 --> 00:30:58,760 Speaker 1: of bankruptcy and crazy unethical shenanigans. But for the most part, yeah, 501 00:30:59,040 --> 00:31:01,160 Speaker 1: most part, they're pretty well off. I don't know if 502 00:31:01,160 --> 00:31:02,560 Speaker 1: there's the right time to bring this up, guys, But 503 00:31:02,600 --> 00:31:06,480 Speaker 1: in that same interview with with Lloyd from Golden Sacks, 504 00:31:07,360 --> 00:31:11,720 Speaker 1: he was discussing the importance of keeping a CEO. So imagine, 505 00:31:11,760 --> 00:31:14,680 Speaker 1: for like investor confidence, the idea that you keep a 506 00:31:14,760 --> 00:31:17,800 Speaker 1: CEO around for quite a while is a good thing. 507 00:31:18,120 --> 00:31:20,760 Speaker 1: You've got somebody running the ship. It's your captain. That 508 00:31:20,760 --> 00:31:24,520 Speaker 1: that captain is steering the ship. Correctly. Even if it's 509 00:31:24,520 --> 00:31:27,360 Speaker 1: not fully correctly, you've got a captain and you're keeping 510 00:31:27,400 --> 00:31:31,320 Speaker 1: him around, right. That's a part of the confidence that 511 00:31:31,400 --> 00:31:34,440 Speaker 1: investors have to put money in. And that's why you 512 00:31:34,480 --> 00:31:37,520 Speaker 1: want to keep paying that person more money. And you 513 00:31:37,560 --> 00:31:39,960 Speaker 1: can't pay him the same amount of money year over year, 514 00:31:40,360 --> 00:31:42,600 Speaker 1: and it's already such a big amount of money, that 515 00:31:42,840 --> 00:31:46,000 Speaker 1: number has to go up. Uh. And it's just it 516 00:31:46,000 --> 00:31:47,560 Speaker 1: goes up and up and up and up. And I'm 517 00:31:47,560 --> 00:31:50,400 Speaker 1: sure we'll get into that more. Whether it's what it 518 00:31:50,480 --> 00:31:54,040 Speaker 1: might it's as we see, stock options are by far 519 00:31:54,120 --> 00:31:57,480 Speaker 1: one of the most popular ways to increase that compensation 520 00:31:57,760 --> 00:32:01,040 Speaker 1: year over year. And it it's true like investors are 521 00:32:01,040 --> 00:32:02,920 Speaker 1: going to look at a company differently if it's gone 522 00:32:02,920 --> 00:32:07,640 Speaker 1: through five CEOs in four years. That doesn't sound predictable, right, 523 00:32:07,640 --> 00:32:10,080 Speaker 1: And that's what you're looking for. You're looking for predictability 524 00:32:10,080 --> 00:32:13,280 Speaker 1: of some sort. But what about the employees again, what 525 00:32:13,320 --> 00:32:16,640 Speaker 1: about the people who are actually doing the stuff right 526 00:32:16,880 --> 00:32:19,280 Speaker 1: that makes the CEO and this board of directors so 527 00:32:19,400 --> 00:32:24,560 Speaker 1: much money. Employees in general have no way to question 528 00:32:24,600 --> 00:32:29,440 Speaker 1: the compensation of a superior and federal agencies are able 529 00:32:29,480 --> 00:32:33,440 Speaker 1: to regulate how a CEO is compensated, right, especially when 530 00:32:33,440 --> 00:32:36,760 Speaker 1: you get into antitrust legislation. But they don't have a 531 00:32:36,880 --> 00:32:40,480 Speaker 1: say and how much a company can or cannot pay 532 00:32:40,560 --> 00:32:45,360 Speaker 1: their top people. And honestly, um, you know, I don't 533 00:32:45,400 --> 00:32:47,120 Speaker 1: know if there's a hot take, but I don't think 534 00:32:47,120 --> 00:32:49,640 Speaker 1: government should be able to do that. I don't think 535 00:32:49,640 --> 00:32:52,640 Speaker 1: they should be able to tell a company. I think 536 00:32:52,640 --> 00:32:55,080 Speaker 1: it's fine for government to set a minimum of how 537 00:32:55,160 --> 00:32:57,880 Speaker 1: much someone should be paid for a given role, but 538 00:32:58,000 --> 00:33:00,120 Speaker 1: I don't think it's right to set a maximum. I 539 00:33:00,160 --> 00:33:05,520 Speaker 1: think that gets that's dangerously overreaching. Um, Which don't mistake 540 00:33:05,560 --> 00:33:08,080 Speaker 1: me for don't mistake that for me saying abolish the 541 00:33:08,120 --> 00:33:10,760 Speaker 1: government or anything hyperbolic. But don't you guys think so 542 00:33:10,880 --> 00:33:13,520 Speaker 1: like it? It would be weird right for Uncle Sam 543 00:33:13,880 --> 00:33:17,360 Speaker 1: to say, like, hey, you can only pay CEOs a 544 00:33:17,440 --> 00:33:20,320 Speaker 1: million dollars. That that feels like it's not the rule 545 00:33:20,360 --> 00:33:22,760 Speaker 1: of government. I almost feel like it just needs to 546 00:33:22,760 --> 00:33:25,680 Speaker 1: be a consensus we all come to as maybe a planet, 547 00:33:26,560 --> 00:33:30,400 Speaker 1: no one needs to make more than some ridiculously high 548 00:33:30,440 --> 00:33:33,200 Speaker 1: amount of money, and then you know, if you've got 549 00:33:33,240 --> 00:33:36,080 Speaker 1: more money, it does feel like maybe there should be 550 00:33:36,120 --> 00:33:40,600 Speaker 1: just a rule we all agree upon. You reinvest that 551 00:33:40,760 --> 00:33:44,680 Speaker 1: excess money in you know, a company and its employees, 552 00:33:44,920 --> 00:33:48,720 Speaker 1: in you know, infrastructure of the company, or oh, I 553 00:33:48,720 --> 00:33:52,680 Speaker 1: don't know, maybe fixing the planet in some way. I 554 00:33:52,680 --> 00:33:56,720 Speaker 1: don't know. Look, maybe i'm a little whatever. Do you 555 00:33:56,760 --> 00:33:59,120 Speaker 1: call me what you want? I I think maybe there's 556 00:33:59,240 --> 00:34:02,240 Speaker 1: room for that, at least maybe there should be. Right on, man, 557 00:34:02,320 --> 00:34:04,400 Speaker 1: I'm with you on that one. It reminds me of 558 00:34:05,160 --> 00:34:08,560 Speaker 1: there was this fantastic so all great learning really occurs 559 00:34:08,560 --> 00:34:11,200 Speaker 1: through analogy and experience, right, And there was this fantastic 560 00:34:11,280 --> 00:34:14,880 Speaker 1: analogy that I believe was John Plice from Monty Python 561 00:34:15,000 --> 00:34:20,520 Speaker 1: made when he was talking about um billionaires, and he said, okay, well, 562 00:34:20,560 --> 00:34:23,600 Speaker 1: don't think of money, think of chocolate. If you came 563 00:34:23,640 --> 00:34:26,000 Speaker 1: to my house and I had like a little bit 564 00:34:26,000 --> 00:34:28,560 Speaker 1: of a like a candy bar or something, you would think, oh, 565 00:34:28,680 --> 00:34:32,840 Speaker 1: John quite quite enjoys his chocolate, his sweets. But and 566 00:34:32,920 --> 00:34:34,880 Speaker 1: you know, I might even give you, like, say, hey, 567 00:34:34,920 --> 00:34:37,040 Speaker 1: do you want some of this chocolate I'm eating? He's like, 568 00:34:37,040 --> 00:34:39,839 Speaker 1: but what if you came into my apartment and it 569 00:34:39,880 --> 00:34:44,279 Speaker 1: was just filled to this seiling with chocolate, like you 570 00:34:44,280 --> 00:34:48,480 Speaker 1: could barely walk anywhere? And I didn't. I not only 571 00:34:48,520 --> 00:34:50,960 Speaker 1: didn't think that was weird, but I was mad when 572 00:34:51,000 --> 00:34:55,200 Speaker 1: I heard that other people had chocolate. Like that's I 573 00:34:55,280 --> 00:34:59,880 Speaker 1: think that's an interesting way to phrase the the idea. 574 00:35:00,040 --> 00:35:02,359 Speaker 1: And you know this, whenever you're talking about people's money, 575 00:35:02,480 --> 00:35:05,719 Speaker 1: it can get very sensitive. You know, like one hot take, 576 00:35:06,040 --> 00:35:08,760 Speaker 1: what if everybody had a reset. What if no matter 577 00:35:08,880 --> 00:35:12,960 Speaker 1: how much money you made, it just went to taking 578 00:35:13,000 --> 00:35:15,560 Speaker 1: care of the planet when you were dead and your 579 00:35:15,640 --> 00:35:18,160 Speaker 1: kids all had to start on a level playing field. 580 00:35:18,600 --> 00:35:20,239 Speaker 1: I mean, there's a line that reminds me of from 581 00:35:20,280 --> 00:35:24,080 Speaker 1: There Will Be Blood where Daniel da Lewis's character Daniel Plainview, 582 00:35:24,080 --> 00:35:25,960 Speaker 1: who's like this, like you know, kind of robber baron, 583 00:35:26,080 --> 00:35:28,680 Speaker 1: like oil tycoon. He says something about I can't remember 584 00:35:28,680 --> 00:35:32,439 Speaker 1: exactly the wording, but that he doesn't want anyone else 585 00:35:32,440 --> 00:35:36,800 Speaker 1: to succeed like that is that is the driving force 586 00:35:36,920 --> 00:35:41,200 Speaker 1: in his entire life for why he does anything. And 587 00:35:41,200 --> 00:35:43,320 Speaker 1: and you know, one could argue in a free market 588 00:35:43,440 --> 00:35:48,360 Speaker 1: kind of way you quote figures there, but but um, 589 00:35:48,400 --> 00:35:51,359 Speaker 1: that should be your right, you know what I mean. 590 00:35:52,400 --> 00:35:54,920 Speaker 1: If you got you got there by sitting in a 591 00:35:54,920 --> 00:35:56,800 Speaker 1: hole in the ground and then then find an oil 592 00:35:56,880 --> 00:35:58,799 Speaker 1: or whatever, or if you're like Steve Jobs and you 593 00:35:58,800 --> 00:36:01,480 Speaker 1: figured out how to make iPhones, Like, why shouldn't you 594 00:36:01,520 --> 00:36:04,480 Speaker 1: be so great that you don't want anyone else to 595 00:36:04,760 --> 00:36:11,520 Speaker 1: match your greatness. There's no philosophically nor ethically sound way 596 00:36:11,560 --> 00:36:15,440 Speaker 1: to make it illegal for people to be pills. Some 597 00:36:16,040 --> 00:36:19,640 Speaker 1: like you can't legislate personality, and I don't think you should. 598 00:36:20,040 --> 00:36:22,480 Speaker 1: It's dystopian, but yeah, it's a really good point. And 599 00:36:22,480 --> 00:36:26,279 Speaker 1: then you know, the other thing is that there's a 600 00:36:26,320 --> 00:36:29,120 Speaker 1: dilemma because yes, it would be too much for a 601 00:36:29,120 --> 00:36:33,520 Speaker 1: governmental body to say you can only pay people so 602 00:36:33,600 --> 00:36:36,600 Speaker 1: much and we're not going to allow more. It would 603 00:36:36,640 --> 00:36:39,600 Speaker 1: be weird blanket statement. Uh, and a lot of folks 604 00:36:39,600 --> 00:36:41,520 Speaker 1: who have a problem with it. It's never gonna happen, 605 00:36:41,680 --> 00:36:45,080 Speaker 1: by the way, in the foreseeable future. But without some 606 00:36:45,360 --> 00:36:49,560 Speaker 1: kind of oversight, without some kind of mechanism for people 607 00:36:49,600 --> 00:36:54,520 Speaker 1: to question the current arrangement, CEO pay is realistically only 608 00:36:54,560 --> 00:36:58,120 Speaker 1: going to accelerate in the future. While I hope this 609 00:36:58,200 --> 00:37:00,359 Speaker 1: is the part that makes it a video while real 610 00:37:00,480 --> 00:37:04,400 Speaker 1: wages that's but left hand go down for everybody else, 611 00:37:04,680 --> 00:37:08,760 Speaker 1: we're like past the X now uh, and or past 612 00:37:08,800 --> 00:37:11,160 Speaker 1: the oh we haven't said this in a while. We're 613 00:37:11,200 --> 00:37:16,120 Speaker 1: past the inflection point. We are well past it. Who's 614 00:37:16,480 --> 00:37:22,160 Speaker 1: whose autobiography was called that inflection points? Was that Bush? 615 00:37:22,400 --> 00:37:25,560 Speaker 1: Maybe it was? Or was he decision points? Maybe as 616 00:37:25,600 --> 00:37:29,759 Speaker 1: several Bush decision decision points. Excuse me, but we went 617 00:37:29,880 --> 00:37:32,200 Speaker 1: we're we're laughing, folks, because the three of us went 618 00:37:32,239 --> 00:37:35,040 Speaker 1: through a phase. I think this is during the pandemic. 619 00:37:35,080 --> 00:37:38,520 Speaker 1: I don't remember where we all three realized that we 620 00:37:38,520 --> 00:37:42,280 Speaker 1: were just we had sometimes our group mind catches onto 621 00:37:42,320 --> 00:37:45,280 Speaker 1: a phrase or word, like when everybody was saying liminal. 622 00:37:45,719 --> 00:37:47,719 Speaker 1: I feel bad about that one. And then we had 623 00:37:47,760 --> 00:37:51,560 Speaker 1: the inflection point phase. But we're using it correctly, I 624 00:37:51,600 --> 00:37:56,200 Speaker 1: think right. I think so anyway, good job, inflection point 625 00:37:56,600 --> 00:37:59,719 Speaker 1: you served as well? Uh so, Like that's that's the 626 00:37:59,719 --> 00:38:06,080 Speaker 1: pro problem. CEO pay increasingly includes compensation based on stocks 627 00:38:06,120 --> 00:38:08,920 Speaker 1: based on the stock market instead of just salaries. This 628 00:38:08,960 --> 00:38:12,799 Speaker 1: means their pay is direction is directly tied to the 629 00:38:12,840 --> 00:38:16,640 Speaker 1: stock market. That means a good period for the stock 630 00:38:16,680 --> 00:38:21,800 Speaker 1: market overall can help propel CEO salaries in general upwards 631 00:38:22,360 --> 00:38:25,360 Speaker 1: kind of regardless of the performance on a day to 632 00:38:25,440 --> 00:38:28,359 Speaker 1: day basis of a company. And that that leads to 633 00:38:28,400 --> 00:38:32,680 Speaker 1: the other the other disturbing question, what does this tell 634 00:38:32,760 --> 00:38:36,719 Speaker 1: us about the wealth gap? I think we can all 635 00:38:36,760 --> 00:38:41,520 Speaker 1: agree this tells us a great deal about the dangers ahead. Uh. 636 00:38:41,560 --> 00:38:44,200 Speaker 1: This is where conspiracies come into play. And Nola love 637 00:38:44,239 --> 00:38:47,920 Speaker 1: that you pointed out. It's more than just ceo s. 638 00:38:48,080 --> 00:38:51,640 Speaker 1: They're just an easy example because of some of the 639 00:38:51,800 --> 00:38:55,600 Speaker 1: laws that have passed quite recently that give the public 640 00:38:55,640 --> 00:39:01,040 Speaker 1: a window into how the financial and how the financial 641 00:39:01,520 --> 00:39:06,359 Speaker 1: sausage of inequality is made. Like think past the scandalous 642 00:39:06,400 --> 00:39:11,759 Speaker 1: headlines h CEOs are overpaid, revolution in the streets. What 643 00:39:11,920 --> 00:39:14,600 Speaker 1: happens to that money after they get it. Let's say 644 00:39:14,600 --> 00:39:17,000 Speaker 1: they do cash out the stock options they're sitting pretty. 645 00:39:17,239 --> 00:39:20,439 Speaker 1: It doesn't just stay in a checking account. I think 646 00:39:20,600 --> 00:39:25,520 Speaker 1: very few people have actually made some Uncle Scrooge esque 647 00:39:25,560 --> 00:39:29,640 Speaker 1: like deep pool of gold, coins and treasure. As a 648 00:39:29,680 --> 00:39:33,200 Speaker 1: matter of fact, years ago, several years ago, Uh, we 649 00:39:33,480 --> 00:39:36,840 Speaker 1: looked at the physics of that, and you will injure yourself. 650 00:39:36,880 --> 00:39:39,520 Speaker 1: Seriously if you try to if you try to dive in, 651 00:39:39,920 --> 00:39:44,240 Speaker 1: don't do it. At best, you will break bones. Um, 652 00:39:44,400 --> 00:39:47,399 Speaker 1: the money they make goes places. We have to talk 653 00:39:47,400 --> 00:39:50,520 Speaker 1: about feedback loops. That is what is missing from a 654 00:39:50,560 --> 00:39:54,719 Speaker 1: lot of the conversations. I was surprised to hear this 655 00:39:55,000 --> 00:39:59,920 Speaker 1: from a guy named Charlie Munger, CEO for a top 656 00:40:00,000 --> 00:40:04,160 Speaker 1: time of Berkshire Hathaway. He calls them daisy chains. But 657 00:40:04,239 --> 00:40:07,319 Speaker 1: we're talking about the same thing, so let's just use 658 00:40:07,360 --> 00:40:10,719 Speaker 1: the phrase feedback loop. Even though Charlie said daisy chain, 659 00:40:10,760 --> 00:40:13,319 Speaker 1: we're talking about the same thing. Let's say you are 660 00:40:13,440 --> 00:40:18,240 Speaker 1: a powerful, powerful ceo, You're a tech tycoon. Paul Mission 661 00:40:18,280 --> 00:40:23,279 Speaker 1: Control has gotten out of the podcasting game. He invented 662 00:40:23,640 --> 00:40:26,879 Speaker 1: the next iPhone, whatever that might be, and he says, 663 00:40:27,040 --> 00:40:29,520 Speaker 1: you know, I'm doing pretty well, but I'm getting tired 664 00:40:29,560 --> 00:40:32,799 Speaker 1: of all these pesky politicians and these activists. I want 665 00:40:32,840 --> 00:40:35,960 Speaker 1: to use the money I've already made to prevent some 666 00:40:36,080 --> 00:40:39,319 Speaker 1: legislation going through. Or I want to use the money 667 00:40:39,360 --> 00:40:43,440 Speaker 1: I've made to grease the wheels and make sure the 668 00:40:43,560 --> 00:40:47,040 Speaker 1: policies that I want to see do become law. Then boom, 669 00:40:47,120 --> 00:40:50,719 Speaker 1: you're off to the racist campaign donations, super packs. The 670 00:40:51,160 --> 00:40:54,560 Speaker 1: the avenues through which you can move this influence are 671 00:40:55,120 --> 00:40:58,719 Speaker 1: numerous and very effective. You just put your thumb on 672 00:40:58,760 --> 00:41:02,120 Speaker 1: the scale of politics, and then you are using your 673 00:41:02,160 --> 00:41:05,000 Speaker 1: money to make sure that the laws enable you to 674 00:41:05,080 --> 00:41:07,880 Speaker 1: make even more money in the coming years, and then 675 00:41:07,920 --> 00:41:10,560 Speaker 1: you put that money back into the system. I mean, 676 00:41:10,600 --> 00:41:14,560 Speaker 1: again hashtag not all ceo s, but I would argue 677 00:41:14,560 --> 00:41:17,359 Speaker 1: this is more common than a lot of people assume. Yeah, 678 00:41:17,440 --> 00:41:20,120 Speaker 1: And and again, like you said, it's not just the CEOs. 679 00:41:20,239 --> 00:41:24,479 Speaker 1: It's probably the the top paid executives at a firm, 680 00:41:24,840 --> 00:41:28,760 Speaker 1: and that can be between you know, one and several 681 00:41:28,800 --> 00:41:32,040 Speaker 1: dozen people who all get to kind of do that 682 00:41:32,160 --> 00:41:38,440 Speaker 1: and all ensure their own continued wealth accumulation. Let's say. 683 00:41:38,800 --> 00:41:42,080 Speaker 1: You know, it reminds me of in some ways the 684 00:41:42,120 --> 00:41:46,640 Speaker 1: way corporations work and regulatory bodies work, where you have 685 00:41:46,719 --> 00:41:51,840 Speaker 1: these regulatory bodies like the FDA, for example, where the 686 00:41:51,880 --> 00:41:56,319 Speaker 1: officials that work for that body are often I mean, 687 00:41:56,840 --> 00:41:59,239 Speaker 1: I don't want to mismerge anybody reputation here, but it 688 00:41:59,239 --> 00:42:04,640 Speaker 1: would seem sometimes make calls that are beneficial to the 689 00:42:04,680 --> 00:42:07,879 Speaker 1: company that they are regulating because they know that they 690 00:42:07,880 --> 00:42:11,520 Speaker 1: may one day jump ship from government work and get 691 00:42:11,520 --> 00:42:15,320 Speaker 1: a cushy job with said company, which is very similar 692 00:42:15,360 --> 00:42:18,440 Speaker 1: to what can happen with a board uh and a 693 00:42:18,560 --> 00:42:21,160 Speaker 1: CEO and that relationship, but can be tainted in a 694 00:42:21,200 --> 00:42:24,440 Speaker 1: similar way. And you guys, you know, Aside from those 695 00:42:24,480 --> 00:42:27,719 Speaker 1: actions that can be taken by executives, there's this thing 696 00:42:27,760 --> 00:42:32,240 Speaker 1: that Vox and several other outlets outline uh in articles 697 00:42:32,239 --> 00:42:34,720 Speaker 1: about this thing, and they're basically studies that you've already 698 00:42:34,719 --> 00:42:38,960 Speaker 1: mentioned been where just over those years, go back to 699 00:42:38,960 --> 00:42:43,480 Speaker 1: the seventies, there was this trend where big firms, especially 700 00:42:43,520 --> 00:42:47,080 Speaker 1: top firms, would always say that they pay above average, 701 00:42:47,360 --> 00:42:50,480 Speaker 1: so they're going to compensate which their CEO, the incoming 702 00:42:50,520 --> 00:42:54,359 Speaker 1: new CEO, with an above average salary and options, right, 703 00:42:54,920 --> 00:42:58,720 Speaker 1: And every time that that occurs, it's just this ladder 704 00:42:59,320 --> 00:43:01,680 Speaker 1: that gets created and it goes up and up and up. 705 00:43:01,680 --> 00:43:04,279 Speaker 1: And if that's been occurring since the nineteen seventies, you 706 00:43:04,280 --> 00:43:08,319 Speaker 1: can only imagine that's how the CEO pay has gone 707 00:43:08,360 --> 00:43:12,279 Speaker 1: up just naturally because of that trend. Because you've got 708 00:43:12,280 --> 00:43:16,200 Speaker 1: to get that shark that's out there, right, that star. 709 00:43:16,719 --> 00:43:19,480 Speaker 1: You gotta attract that person somehow, and the way you 710 00:43:19,520 --> 00:43:22,960 Speaker 1: do that is by offering more than your competitors, and 711 00:43:23,000 --> 00:43:24,919 Speaker 1: then the next person in the line has to offer 712 00:43:24,960 --> 00:43:28,920 Speaker 1: more than that. Yes, another feedback loop, and some of 713 00:43:28,960 --> 00:43:32,000 Speaker 1: these things might sound a little too extreme to happen 714 00:43:32,040 --> 00:43:35,760 Speaker 1: incredibly often, but we assure you they do. We're gonna 715 00:43:35,800 --> 00:43:38,600 Speaker 1: pause for word from our sponsor. We'll be back with 716 00:43:38,680 --> 00:43:41,000 Speaker 1: one more example. We're also going to talk about what 717 00:43:41,080 --> 00:43:53,040 Speaker 1: this means for the future. We've returned. Okay, who chooses 718 00:43:53,120 --> 00:43:57,120 Speaker 1: the CEO? If you work at any number of fast 719 00:43:57,120 --> 00:44:00,719 Speaker 1: food restaurants, for example, many of whom are owned by 720 00:44:00,760 --> 00:44:04,319 Speaker 1: larger corporations like yum Brands, It's not as if your 721 00:44:04,320 --> 00:44:06,760 Speaker 1: manager is going to get you together on the floor 722 00:44:06,840 --> 00:44:09,759 Speaker 1: one day before opening and saying, all right, let's vote 723 00:44:09,760 --> 00:44:12,160 Speaker 1: on the CEO. That's not up to you. That's not 724 00:44:12,239 --> 00:44:14,680 Speaker 1: up to most employees. That is up to the board 725 00:44:14,680 --> 00:44:18,319 Speaker 1: of directors. So imagine the board of directors has elected you, 726 00:44:18,440 --> 00:44:22,440 Speaker 1: the CEO chosen you, and now you make sure that 727 00:44:22,480 --> 00:44:25,840 Speaker 1: one of your first moves is to increase salary and 728 00:44:25,880 --> 00:44:30,279 Speaker 1: compensation across the board of directors the same folks who 729 00:44:30,400 --> 00:44:33,080 Speaker 1: hired you, and they're gonna think this person is great. 730 00:44:33,120 --> 00:44:36,040 Speaker 1: They've really got their head on their shoulders. Uh. This 731 00:44:36,120 --> 00:44:40,680 Speaker 1: is what Charlie Munger was explaining as well. Uh. He said, 732 00:44:40,920 --> 00:44:44,200 Speaker 1: they're gonna keep that person as CEO, and they're gonna 733 00:44:44,200 --> 00:44:46,600 Speaker 1: recommend more pay for that person. And that person is 734 00:44:46,640 --> 00:44:50,200 Speaker 1: going to turn around and do the same feedback loops. Maybe, Yes, 735 00:44:50,360 --> 00:44:56,280 Speaker 1: everybody's winning except you know, the employees. Yeah, because these 736 00:44:56,440 --> 00:45:01,600 Speaker 1: feedback loops, UM, they have real world ramifications. They can 737 00:45:01,640 --> 00:45:05,600 Speaker 1: be used in ways that can you know, rob regular 738 00:45:05,640 --> 00:45:08,879 Speaker 1: employees of certain rights. They can be used to make 739 00:45:08,920 --> 00:45:12,160 Speaker 1: it harder to unionize. They can be used to fight 740 00:45:12,200 --> 00:45:16,440 Speaker 1: back against UM efforts to raise the minimum wage and 741 00:45:16,480 --> 00:45:20,719 Speaker 1: all of that good stuff. Uh. There's an economist UM 742 00:45:20,960 --> 00:45:25,120 Speaker 1: by the name of Anthony Davies UM who is a 743 00:45:25,160 --> 00:45:28,480 Speaker 1: senior affiliated scholar with I believe that George Mason University 744 00:45:28,520 --> 00:45:31,680 Speaker 1: and other institutions as well. But he makes the point 745 00:45:31,719 --> 00:45:35,160 Speaker 1: that this what you're describing here is like basically plunder 746 00:45:35,600 --> 00:45:38,719 Speaker 1: versus profit. Like this is someone that is taking their 747 00:45:38,760 --> 00:45:43,000 Speaker 1: influence uh and then reinvesting it quote unquote in a 748 00:45:43,040 --> 00:45:46,560 Speaker 1: way that takes things away from people who are powerless, 749 00:45:46,600 --> 00:45:50,400 Speaker 1: as opposed to being rewarded for providing services and opportunities 750 00:45:50,480 --> 00:45:53,680 Speaker 1: that are for the better of all or society or whatever. 751 00:45:53,960 --> 00:45:58,560 Speaker 1: This is the nasty flip side of that. Yeah, well said. 752 00:45:58,640 --> 00:46:01,800 Speaker 1: And in many cases, to be clear, this is not illegal. 753 00:46:02,040 --> 00:46:04,839 Speaker 1: You could call it unethical all the livelong day, any 754 00:46:04,880 --> 00:46:08,560 Speaker 1: more than lobbying is. Right, very much legal, right right. 755 00:46:08,719 --> 00:46:11,239 Speaker 1: Check out our two part episode on lobbying and get 756 00:46:11,280 --> 00:46:15,799 Speaker 1: ready to be depressed, guys. Just on this topic. I 757 00:46:15,800 --> 00:46:19,200 Speaker 1: want to really a quick story that I heard. Gosh 758 00:46:19,200 --> 00:46:24,800 Speaker 1: it was from and it was Mr Buffett, Warren Buffett. 759 00:46:25,200 --> 00:46:27,279 Speaker 1: It's a story about Coca Cola. Do you do you 760 00:46:27,320 --> 00:46:30,160 Speaker 1: guys know this at all? He uh, He owned like 761 00:46:30,160 --> 00:46:32,520 Speaker 1: four hundred million shares of Coca Cola stock, and he 762 00:46:32,560 --> 00:46:35,080 Speaker 1: was in that position where he's like an investor that 763 00:46:35,160 --> 00:46:37,720 Speaker 1: isn't necessarily on the board, but he gets to vote 764 00:46:37,719 --> 00:46:40,920 Speaker 1: in certain things because he owns so much of that stock. 765 00:46:41,719 --> 00:46:46,520 Speaker 1: And the compensation group or the you know, the compensation 766 00:46:46,760 --> 00:46:49,560 Speaker 1: board as part of the board of directors came through 767 00:46:49,880 --> 00:46:52,480 Speaker 1: and put forward what they were gonna pay their executives 768 00:46:52,880 --> 00:46:57,920 Speaker 1: that year in and all Warren Buffett did was abstain 769 00:46:58,160 --> 00:47:01,839 Speaker 1: from voting from the yes or no vote of this 770 00:47:01,880 --> 00:47:06,560 Speaker 1: compensation package. And it sent ripples throughout the entire company. 771 00:47:06,719 --> 00:47:10,239 Speaker 1: And they ended up changing that compensation package and they 772 00:47:10,239 --> 00:47:13,080 Speaker 1: reduced it by millions and millions and millions of dollars. 773 00:47:13,880 --> 00:47:16,520 Speaker 1: And he made this really interesting point that I had 774 00:47:16,560 --> 00:47:19,480 Speaker 1: never thought of. His son, by the way, was on 775 00:47:19,520 --> 00:47:24,200 Speaker 1: the board of coke at the time. Anyway, he said 776 00:47:24,239 --> 00:47:29,160 Speaker 1: that almost never is a no vote put forward in 777 00:47:29,200 --> 00:47:33,960 Speaker 1: those compensation talks in boards. Almost never do they say no, 778 00:47:34,120 --> 00:47:38,319 Speaker 1: we shouldn't pay our CEO and executives that much money. Uh, 779 00:47:38,360 --> 00:47:41,280 Speaker 1: it's just kind of accepted. He said. It's like burping 780 00:47:41,320 --> 00:47:43,600 Speaker 1: at the dinner table. You just try not to do it. 781 00:47:43,600 --> 00:47:46,200 Speaker 1: It's just something you don't do. Yeah, and it makes sense. 782 00:47:46,239 --> 00:47:48,920 Speaker 1: It would be unusual because it might also make your 783 00:47:48,960 --> 00:47:52,279 Speaker 1: company and your board look bad right, like they're not 784 00:47:52,400 --> 00:47:54,879 Speaker 1: gonna play ball with you. It may be seen as 785 00:47:55,040 --> 00:48:00,319 Speaker 1: unnecessarily as some unnecessary antagonism at the beginning of a 786 00:48:00,440 --> 00:48:04,279 Speaker 1: relationship or at the inflection point of relationship. Last time, 787 00:48:04,440 --> 00:48:08,319 Speaker 1: I'm sorry, but this this for the record, Everything that 788 00:48:08,360 --> 00:48:12,880 Speaker 1: matt Ol and I are describing is exactly why even 789 00:48:12,920 --> 00:48:17,480 Speaker 1: even very experienced executives like the guy who was in 790 00:48:17,560 --> 00:48:20,919 Speaker 1: charge of Berkshire Hathaway, don't think directors should be paid 791 00:48:20,960 --> 00:48:22,799 Speaker 1: at all. They think it should be more like being 792 00:48:23,400 --> 00:48:26,800 Speaker 1: a member of the board of trustees at a college 793 00:48:26,880 --> 00:48:31,000 Speaker 1: or university. And some people think that folks like Charlie 794 00:48:31,040 --> 00:48:34,440 Speaker 1: are wright. But the big point we have to emphasize 795 00:48:34,440 --> 00:48:37,920 Speaker 1: again lest you think we're un fairly dunking on CEO s. 796 00:48:38,200 --> 00:48:41,560 Speaker 1: These feedback loops happen in boardrooms. Sure, they happen in 797 00:48:41,600 --> 00:48:44,840 Speaker 1: the military industrial complex, as no mentioned to happen in 798 00:48:44,840 --> 00:48:49,920 Speaker 1: congressional conversations. They're probably happening in the White House, regardless 799 00:48:49,960 --> 00:48:53,680 Speaker 1: of which administration is in power. This is the way 800 00:48:53,760 --> 00:48:58,279 Speaker 1: things are. The halves of society are cleaning house, they're 801 00:48:58,320 --> 00:49:01,359 Speaker 1: cleaning up, and they're using these feed back loops, again 802 00:49:01,480 --> 00:49:04,919 Speaker 1: not always in an illegal way to consolidate wealth, while 803 00:49:04,960 --> 00:49:08,400 Speaker 1: the rest of the country, regardless of what they might believe, 804 00:49:08,880 --> 00:49:12,440 Speaker 1: are being fleeced. And now the next logical question. If 805 00:49:12,440 --> 00:49:14,319 Speaker 1: you're listening to this and you're fired up and you're 806 00:49:14,320 --> 00:49:18,880 Speaker 1: thinking revolution, well why don't workers fight back up against this? 807 00:49:19,520 --> 00:49:22,640 Speaker 1: Many try, but it is candidly an uphill battle. And 808 00:49:22,680 --> 00:49:25,120 Speaker 1: I read something really interesting. I bet you guys have 809 00:49:25,200 --> 00:49:27,359 Speaker 1: heard this before, but I wanted to share it with you. 810 00:49:27,600 --> 00:49:29,719 Speaker 1: I don't think we talked about this on air. So 811 00:49:30,000 --> 00:49:35,239 Speaker 1: I found this theory that used this idea to explain 812 00:49:35,480 --> 00:49:40,440 Speaker 1: the motives behind the fight to keep privatized healthcare in 813 00:49:40,480 --> 00:49:43,879 Speaker 1: the US like past, all the like pr past, all 814 00:49:43,880 --> 00:49:49,880 Speaker 1: the you know, fake uh death panel smear campaigns. Privatized insurance, 815 00:49:49,880 --> 00:49:53,560 Speaker 1: by the way, does pretty much have death panels, so 816 00:49:53,640 --> 00:49:57,720 Speaker 1: it's incredibly hilarious to hear them accusing, like raising fears 817 00:49:57,760 --> 00:50:02,160 Speaker 1: that a government would do what they doing. Uh So, anyhow, 818 00:50:02,400 --> 00:50:04,640 Speaker 1: the gist is like this, so if you look at 819 00:50:04,680 --> 00:50:08,280 Speaker 1: polls and you can make the polls somewhat a political 820 00:50:08,600 --> 00:50:13,120 Speaker 1: like if people hear about the idea of public healthcare, 821 00:50:13,239 --> 00:50:16,520 Speaker 1: non privatized healthcare, and they don't hear it attached to 822 00:50:16,600 --> 00:50:20,480 Speaker 1: a politician. There's actually a lot of widespread support in 823 00:50:20,480 --> 00:50:24,360 Speaker 1: the US for a first world approach to healthcare, but 824 00:50:24,480 --> 00:50:28,560 Speaker 1: private industry will fight tooth and nail against it. This 825 00:50:28,640 --> 00:50:31,920 Speaker 1: is the This is the theory again, not necessarily what 826 00:50:31,960 --> 00:50:34,880 Speaker 1: we believe. They'll fight tooth and nail against it because 827 00:50:34,920 --> 00:50:39,399 Speaker 1: privatized healthcare one means a ton of people receive health 828 00:50:39,440 --> 00:50:43,560 Speaker 1: insurance from their employer, which means to people will stay 829 00:50:43,560 --> 00:50:46,760 Speaker 1: at jobs not because they're good career choices, but because 830 00:50:46,800 --> 00:50:50,520 Speaker 1: that job is often the only avenue to semi affordable 831 00:50:50,640 --> 00:50:55,200 Speaker 1: healthcare for themselves or their families. Like, what what do 832 00:50:55,239 --> 00:50:58,480 Speaker 1: you think about that? Is that too much of a reach? I? 833 00:50:58,480 --> 00:51:00,320 Speaker 1: I don't know if it's big enough to be stem 834 00:51:00,360 --> 00:51:03,520 Speaker 1: why but it's it feels like it has some disturbing 835 00:51:03,600 --> 00:51:06,280 Speaker 1: sand I mean, I think you could get into age ranges. 836 00:51:06,520 --> 00:51:10,480 Speaker 1: They're like why people stay at companies for longer than 837 00:51:10,680 --> 00:51:13,960 Speaker 1: maybe they would want to or or even should for 838 00:51:13,960 --> 00:51:17,279 Speaker 1: for their own you know well being. Um, I can 839 00:51:17,320 --> 00:51:19,719 Speaker 1: totally imagine that, especially if they're as you said, the 840 00:51:19,760 --> 00:51:22,439 Speaker 1: families is the key point there, especially if you've got 841 00:51:22,480 --> 00:51:26,080 Speaker 1: a loved one, a family member that does need maybe 842 00:51:26,120 --> 00:51:29,759 Speaker 1: more healthcare support than you, even the employee need, You 843 00:51:29,760 --> 00:51:32,920 Speaker 1: would make that decision to stay, as anybody who got 844 00:51:32,960 --> 00:51:36,320 Speaker 1: a Cobra bill can tell you. Right, you see the difference. 845 00:51:36,800 --> 00:51:40,600 Speaker 1: You guys know Cobra insurance, Right? You remember that man? 846 00:51:40,719 --> 00:51:45,000 Speaker 1: That stuff is bananas, nuts and bananas. This I think 847 00:51:45,040 --> 00:51:47,960 Speaker 1: takes us to one of our Oh. By the way, 848 00:51:48,120 --> 00:51:53,200 Speaker 1: the healthcare industry in the US is the largest overall employer, 849 00:51:53,760 --> 00:51:55,840 Speaker 1: So there's a lot of vested interest on that into 850 00:51:56,200 --> 00:52:00,640 Speaker 1: story for another day perhaps. But does that include insurance? Uh? 851 00:52:00,680 --> 00:52:03,160 Speaker 1: You know what, I believe it does. I believe it 852 00:52:03,200 --> 00:52:05,200 Speaker 1: includes health insurance. So it would have to write for 853 00:52:05,239 --> 00:52:09,080 Speaker 1: it to be over all the largest employer. I think yeah, 854 00:52:09,080 --> 00:52:11,960 Speaker 1: I would have to logically But for the last question, 855 00:52:12,840 --> 00:52:17,560 Speaker 1: what can this massive CEO compensation phenomenon tell us about 856 00:52:17,600 --> 00:52:20,080 Speaker 1: the future of inequality? Whether you think it's a it's 857 00:52:20,080 --> 00:52:23,560 Speaker 1: a massive resource extraction heist, or whether you think these 858 00:52:23,560 --> 00:52:27,280 Speaker 1: are people who are just you know, uh Lebron James style, 859 00:52:27,440 --> 00:52:31,120 Speaker 1: Kobe style, being paid what they're worth and that they're 860 00:52:31,280 --> 00:52:33,719 Speaker 1: just happened to be superstars in their field. Well, this 861 00:52:33,760 --> 00:52:37,279 Speaker 1: shows us the future anyway you slice it does not 862 00:52:37,400 --> 00:52:40,799 Speaker 1: look good for the vast majority of people in the 863 00:52:40,800 --> 00:52:44,920 Speaker 1: working world. Especially going back to e p I Economic 864 00:52:44,960 --> 00:52:49,120 Speaker 1: Policy Institute, which we mentioned earlier, they said, quote, increasing 865 00:52:49,200 --> 00:52:52,480 Speaker 1: CEO pay is not actually linked to an increase in 866 00:52:52,560 --> 00:52:56,640 Speaker 1: the value of the CEO's work. Instead, it's more likely 867 00:52:56,719 --> 00:53:00,320 Speaker 1: to reflect their close ties with the corporate board members 868 00:53:00,360 --> 00:53:03,640 Speaker 1: who set their pay. So how much does performance really 869 00:53:03,719 --> 00:53:08,040 Speaker 1: impact what's happening here? I mean, I think that explains 870 00:53:08,120 --> 00:53:13,319 Speaker 1: why these processes can explain why compensation rose even while 871 00:53:13,360 --> 00:53:16,759 Speaker 1: companies were burning down in the pandemic. Well, you could 872 00:53:16,840 --> 00:53:20,239 Speaker 1: argue earlier than there are certain people could argue that 873 00:53:20,360 --> 00:53:23,440 Speaker 1: they kept the ship afloat and then they made smart decisions, 874 00:53:23,480 --> 00:53:26,160 Speaker 1: They made the hard calls that no one else could 875 00:53:26,400 --> 00:53:30,600 Speaker 1: or wanted to make and therefore should be you know, compensated. 876 00:53:30,920 --> 00:53:33,400 Speaker 1: Because again, I mean, when you weigh the amount of 877 00:53:33,600 --> 00:53:37,160 Speaker 1: money a company of that size takes in versus how 878 00:53:37,239 --> 00:53:39,719 Speaker 1: much money the CEO is getting paid, I mean, it's 879 00:53:39,840 --> 00:53:45,480 Speaker 1: it's not that out of whack, right, you know. I'm sorry, 880 00:53:45,560 --> 00:53:49,280 Speaker 1: I'm being facetious, but I mean I'm not entirely, not entirely. 881 00:53:49,480 --> 00:53:51,880 Speaker 1: I mean if a company is like a multibillion dollar 882 00:53:52,000 --> 00:53:55,640 Speaker 1: company and the CEO has taken home twenty million dollars, 883 00:53:55,719 --> 00:53:59,200 Speaker 1: and you know, one could credit the success of that company, 884 00:53:59,400 --> 00:54:02,360 Speaker 1: you know, also the failure to that CEO. Is it 885 00:54:02,480 --> 00:54:04,719 Speaker 1: really that out of line for that CEO to take 886 00:54:04,719 --> 00:54:07,200 Speaker 1: home twenty five million dollars, especially if they kept a 887 00:54:07,200 --> 00:54:10,359 Speaker 1: company afloat during really difficult times while other companies were 888 00:54:10,400 --> 00:54:12,279 Speaker 1: like failing. I don't want to say some of the 889 00:54:12,280 --> 00:54:14,440 Speaker 1: things that I'm thinking, you guys, but it gets back 890 00:54:14,480 --> 00:54:17,200 Speaker 1: to some of these concepts that we've spoken about that 891 00:54:17,280 --> 00:54:19,800 Speaker 1: are just part of the nature of capitalism. And again, 892 00:54:19,880 --> 00:54:22,040 Speaker 1: I think it's the best system that we've got. I 893 00:54:22,120 --> 00:54:25,000 Speaker 1: just know there are some serious flaws, um, but you 894 00:54:25,000 --> 00:54:29,000 Speaker 1: think about the potential trajectory for any company that you 895 00:54:29,080 --> 00:54:32,759 Speaker 1: could be a CEO of especially if it's privatized, right, 896 00:54:33,239 --> 00:54:36,359 Speaker 1: it can grow and grow until the point where it's 897 00:54:36,400 --> 00:54:38,759 Speaker 1: probably going to go public, or it's going to get 898 00:54:38,880 --> 00:54:43,399 Speaker 1: ingested into another probably bigger public company, or it could 899 00:54:43,400 --> 00:54:47,200 Speaker 1: go bust. Those are like pretty much the three trajectories 900 00:54:47,280 --> 00:54:49,319 Speaker 1: that you can have. Like that, you could steer your 901 00:54:49,320 --> 00:54:52,680 Speaker 1: ship towards um and when you think about it that way, 902 00:54:53,920 --> 00:54:56,120 Speaker 1: I don't know. You if you get the helm, then 903 00:54:56,120 --> 00:54:58,560 Speaker 1: you really just have to steer until you meet one 904 00:54:58,560 --> 00:55:02,080 Speaker 1: of those ends. And if you are like at the 905 00:55:02,120 --> 00:55:05,160 Speaker 1: top in the company fails, you're going to get a 906 00:55:05,200 --> 00:55:09,239 Speaker 1: parachute essentially, as we've kind of noted if you know, 907 00:55:09,280 --> 00:55:11,879 Speaker 1: if not, you're gonna like make a ton of money. 908 00:55:11,880 --> 00:55:13,520 Speaker 1: I don't know, guys, we should we should all just 909 00:55:13,600 --> 00:55:15,879 Speaker 1: quit what we're doing and like do everything we can 910 00:55:15,920 --> 00:55:19,120 Speaker 1: to become a CEO. You know, I was thinking about that, 911 00:55:19,160 --> 00:55:22,040 Speaker 1: but I think I'm more down to be a consultant. 912 00:55:22,440 --> 00:55:25,920 Speaker 1: I like the idea because a consultant is your cameo friend, 913 00:55:26,160 --> 00:55:29,040 Speaker 1: you know, And I'm a very good cameo friend in society. 914 00:55:29,120 --> 00:55:32,600 Speaker 1: I dropped by once a season in someone's life. We 915 00:55:32,680 --> 00:55:35,319 Speaker 1: have a great time and then I'll see them, you know, 916 00:55:35,440 --> 00:55:38,560 Speaker 1: next year or whatever. I like. I like the idea 917 00:55:38,560 --> 00:55:41,320 Speaker 1: of being I can maybe we can just be start 918 00:55:41,320 --> 00:55:46,600 Speaker 1: off as a CEO consultancy. Ben, do you remember Silicon Valley, 919 00:55:46,800 --> 00:55:49,640 Speaker 1: the show Silicon Valley in Rio, there's the there's the 920 00:55:49,960 --> 00:55:54,719 Speaker 1: character who's like the religious guru that follows the main 921 00:55:55,080 --> 00:55:58,640 Speaker 1: guy around the main CEO. UM, I could totally see 922 00:55:58,680 --> 00:56:02,280 Speaker 1: you being that guy at the advisor in the shucks 923 00:56:02,360 --> 00:56:07,440 Speaker 1: thanks man, like wi whispering stuff. Maybe that's maybe that 924 00:56:07,480 --> 00:56:10,160 Speaker 1: would uh, if we could all do something like that, 925 00:56:10,200 --> 00:56:13,000 Speaker 1: maybe we would be able to afford rent in San Francisco, 926 00:56:13,520 --> 00:56:19,000 Speaker 1: getting getting we're podcasters. But uh, but there's there is 927 00:56:19,080 --> 00:56:24,120 Speaker 1: some troubling stuff from Pew research about what this means. Um. 928 00:56:24,160 --> 00:56:26,200 Speaker 1: You know, like we said, it's bigger than the CEOs. 929 00:56:26,600 --> 00:56:31,240 Speaker 1: Income growth will continue to increase at a breakneck pace 930 00:56:31,800 --> 00:56:35,200 Speaker 1: for those at the top of modern society. We don't 931 00:56:35,239 --> 00:56:37,600 Speaker 1: have to get too much into the details, but just 932 00:56:37,719 --> 00:56:40,839 Speaker 1: know that what you would call upper income families were 933 00:56:40,880 --> 00:56:44,839 Speaker 1: the only tier financial tier in society that we're able 934 00:56:44,880 --> 00:56:47,360 Speaker 1: to build on their wealth. From two thousand one to 935 00:56:48,920 --> 00:56:54,720 Speaker 1: and then back in three, upper income families had three 936 00:56:54,760 --> 00:56:58,480 Speaker 1: point four times as much wealth as the middle class, 937 00:56:59,080 --> 00:57:02,560 Speaker 1: and the middle class is quickly becoming the stuff of 938 00:57:02,680 --> 00:57:05,600 Speaker 1: legend and myth. Check out our episode on that. But 939 00:57:05,840 --> 00:57:10,160 Speaker 1: by that number more than double. Now those same families 940 00:57:10,200 --> 00:57:14,319 Speaker 1: have seven point four times as much wealth as your 941 00:57:14,400 --> 00:57:19,080 Speaker 1: average John and Jane uh et cetera American. Well, another 942 00:57:19,120 --> 00:57:22,280 Speaker 1: thing that that economists I decided earlier Anthony Davis pointed 943 00:57:22,280 --> 00:57:27,840 Speaker 1: out is that poverty and wealth inequality are not the 944 00:57:27,920 --> 00:57:32,280 Speaker 1: same thing. And I do kind of see his point there. Um, 945 00:57:32,560 --> 00:57:35,400 Speaker 1: the he he argues, of the middle class is disappearing, 946 00:57:35,800 --> 00:57:38,880 Speaker 1: but that it's being subsumed into the upper class, and 947 00:57:38,880 --> 00:57:43,360 Speaker 1: that overall, like people are you know, doing better than 948 00:57:43,720 --> 00:57:46,320 Speaker 1: in years past. What do you think about that? Well, 949 00:57:46,520 --> 00:57:50,720 Speaker 1: that is that is certainly an interesting and opinionated argument 950 00:57:50,880 --> 00:57:54,040 Speaker 1: for me. Um, I would I would respond by saying 951 00:57:54,120 --> 00:57:57,720 Speaker 1: that the middle class, Yeah, part of it is being 952 00:57:58,120 --> 00:58:01,240 Speaker 1: subsumed into the upper US, but a great deal of 953 00:58:01,240 --> 00:58:03,600 Speaker 1: it is also being subsumed into what you will call 954 00:58:03,640 --> 00:58:07,000 Speaker 1: the lower or the working class. One of the problems 955 00:58:07,040 --> 00:58:10,960 Speaker 1: with that is arriving at a definition of middle class. 956 00:58:10,960 --> 00:58:13,600 Speaker 1: Like we said in our previous episode, the vast majority 957 00:58:13,640 --> 00:58:17,080 Speaker 1: of people in the US describe themselves as middle class, 958 00:58:17,120 --> 00:58:22,320 Speaker 1: including like low level millionaires, and including people that statistically 959 00:58:22,560 --> 00:58:27,200 Speaker 1: and for all other purposes are considered lower class. It's 960 00:58:27,280 --> 00:58:29,040 Speaker 1: kind of always been the issue, though, hadn't it. Like 961 00:58:29,120 --> 00:58:31,920 Speaker 1: the idea of what the middle classes and defining in 962 00:58:32,120 --> 00:58:35,280 Speaker 1: sort of depends on who's talking, right, Yeah, yeah, just so, 963 00:58:35,440 --> 00:58:38,440 Speaker 1: and this like the so, these questions are still up 964 00:58:38,440 --> 00:58:41,080 Speaker 1: for debate, but we know that something big is happening, 965 00:58:41,120 --> 00:58:44,680 Speaker 1: we know it's continuing to happen, and people aren't sure 966 00:58:44,680 --> 00:58:47,920 Speaker 1: what the fallout is going to be. We said we 967 00:58:47,960 --> 00:58:51,880 Speaker 1: could wrap today's episode up with one simple final answer. 968 00:58:52,080 --> 00:58:54,800 Speaker 1: I don't know if it's the answer everybody wants, but 969 00:58:55,520 --> 00:58:58,240 Speaker 1: why do c e O s make so much money? 970 00:58:58,880 --> 00:59:02,320 Speaker 1: It's because they can and unless things change in a 971 00:59:02,360 --> 00:59:05,400 Speaker 1: big way, that's going to be continue to be the case. 972 00:59:05,480 --> 00:59:07,680 Speaker 1: Whether you think that's a good thing or a bad thing, 973 00:59:08,600 --> 00:59:12,120 Speaker 1: that is your perspective. But that is, this is what's 974 00:59:12,160 --> 00:59:15,480 Speaker 1: going to happen. And there are strong arguments back and forth. 975 00:59:16,160 --> 00:59:18,600 Speaker 1: I'd love to hear. I'd love to hear what are 976 00:59:18,600 --> 00:59:22,280 Speaker 1: where a fellow listeners think? I I honestly been I 977 00:59:22,320 --> 00:59:26,240 Speaker 1: agree with you there with the answer. I think there's 978 00:59:26,280 --> 00:59:29,240 Speaker 1: a little thing on the side there. That's also it's 979 00:59:29,280 --> 00:59:32,360 Speaker 1: because we kind of decided that they should get paid 980 00:59:32,840 --> 00:59:34,920 Speaker 1: a ton of money. And when I say we, I 981 00:59:34,960 --> 00:59:38,360 Speaker 1: don't mean you know, us in this room right now, 982 00:59:38,560 --> 00:59:41,640 Speaker 1: this virtual room and and you listening, but like as 983 00:59:41,640 --> 00:59:44,600 Speaker 1: a society, as a you know, as a whole, we 984 00:59:44,680 --> 00:59:47,960 Speaker 1: decided that the people who run these giant companies that 985 00:59:48,080 --> 00:59:51,760 Speaker 1: provide a lot of jobs for people, that make investors 986 00:59:51,840 --> 00:59:55,680 Speaker 1: a ton of money should get paid a lot. It's 987 00:59:55,720 --> 00:59:57,880 Speaker 1: just I think that number has been going up and 988 00:59:57,920 --> 00:59:59,000 Speaker 1: up and up and up and up and up and 989 00:59:59,080 --> 01:00:01,040 Speaker 1: up because of what we just ribed in this episode. 990 01:00:01,280 --> 01:00:03,760 Speaker 1: But isn't that oftentimes we don't vote, like you know, 991 01:00:03,840 --> 01:00:07,120 Speaker 1: we vote for elected office, but we kind of vote 992 01:00:07,160 --> 01:00:11,440 Speaker 1: with our dollar, right like by where we're funneling our 993 01:00:11,560 --> 01:00:14,880 Speaker 1: disposable income or indisposable income, you know what I mean, 994 01:00:14,920 --> 01:00:16,840 Speaker 1: only depending on who you are. I mean that that 995 01:00:16,880 --> 01:00:18,880 Speaker 1: economist that I keeps I'm only doing this as a 996 01:00:18,920 --> 01:00:21,280 Speaker 1: devil's advocate thing. I'm on the fence as well. I 997 01:00:21,320 --> 01:00:23,000 Speaker 1: just think he makes some interesting points and he's clearly 998 01:00:23,040 --> 01:00:26,440 Speaker 1: a you know, smart guy. Um, he's not entirely biased, 999 01:00:26,480 --> 01:00:28,840 Speaker 1: but he made the point of like if you're in 1000 01:00:28,840 --> 01:00:31,280 Speaker 1: a room, pull the audience and ask how many people 1001 01:00:31,280 --> 01:00:33,760 Speaker 1: have fifty dollars in their bank account, you probably won't 1002 01:00:33,800 --> 01:00:35,400 Speaker 1: get that many hands raised, But if you ask how 1003 01:00:35,440 --> 01:00:37,960 Speaker 1: many people have iPhones, you probably get, like, you know, 1004 01:00:38,000 --> 01:00:41,200 Speaker 1: almost everybody raising their hand. So you could argue that 1005 01:00:41,240 --> 01:00:45,840 Speaker 1: like it's an exchange. You know, they've chosen to exchange 1006 01:00:45,880 --> 01:00:49,000 Speaker 1: their money for those goods and and are rewarding the 1007 01:00:49,040 --> 01:00:53,320 Speaker 1: CEO who was responsible for making that technology available to 1008 01:00:53,400 --> 01:00:56,560 Speaker 1: the culture into like the masses. It's I mean, I 1009 01:00:57,240 --> 01:01:00,720 Speaker 1: wholeheartedly disagree with that, but that's my Again, that's just 1010 01:01:00,800 --> 01:01:05,240 Speaker 1: my opinion. I myself and not an economist. Um, I 1011 01:01:05,240 --> 01:01:08,520 Speaker 1: I think it's I don't know if I wholeheartedly disagree, 1012 01:01:08,560 --> 01:01:14,000 Speaker 1: but it's misleading, I think. So. I think that's yeah, well, 1013 01:01:14,000 --> 01:01:16,720 Speaker 1: I think it can be misleading. And it's it's also 1014 01:01:16,800 --> 01:01:20,200 Speaker 1: one single scenario, you know, It's like, um, you need 1015 01:01:20,280 --> 01:01:22,800 Speaker 1: more context, you need a larger sample size than a 1016 01:01:22,880 --> 01:01:26,520 Speaker 1: room full of people and and and people being into tech. 1017 01:01:27,160 --> 01:01:28,720 Speaker 1: It's just in that in that video of that you're 1018 01:01:28,720 --> 01:01:31,480 Speaker 1: referencing there all he gives the example of the computer 1019 01:01:32,000 --> 01:01:34,480 Speaker 1: and how the first computer was a million dollars and 1020 01:01:34,480 --> 01:01:39,040 Speaker 1: it was giant and unwieldy. Unless enough very wealthy corporations 1021 01:01:39,080 --> 01:01:41,840 Speaker 1: and individuals bought those computers, that we wouldn't have the 1022 01:01:41,880 --> 01:01:46,240 Speaker 1: innovations that caused that computer to be affordable to everybody. 1023 01:01:46,280 --> 01:01:51,240 Speaker 1: But I, as Ben says, it's not a complete argument 1024 01:01:51,280 --> 01:01:54,160 Speaker 1: because people with money invested in a thing doesn't mean 1025 01:01:54,160 --> 01:01:58,960 Speaker 1: the innovation occurred necessarily. It's a part of it. Though. Well, yeah, 1026 01:01:59,000 --> 01:02:02,240 Speaker 1: there's an argument for economy of scale. In response, then, 1027 01:02:02,560 --> 01:02:06,200 Speaker 1: and with a great deal of respect, I would uh, 1028 01:02:06,240 --> 01:02:09,959 Speaker 1: I would question, I would ask that economists to use 1029 01:02:10,160 --> 01:02:16,560 Speaker 1: this framework to explain price gouging on insulin, which, according 1030 01:02:16,640 --> 01:02:20,960 Speaker 1: to his his example, shouldn't be something that happens, right, 1031 01:02:21,640 --> 01:02:25,000 Speaker 1: Why did the average price of insulin rise to four 1032 01:02:25,080 --> 01:02:29,960 Speaker 1: hundred and fifty dollars per month in that would be 1033 01:02:30,000 --> 01:02:33,919 Speaker 1: considered plunder versus profit? I mean, again, it's a gray 1034 01:02:33,960 --> 01:02:36,080 Speaker 1: area like where does one start and the other begin? 1035 01:02:36,600 --> 01:02:39,880 Speaker 1: You know? Um, I think these are all really valid 1036 01:02:39,920 --> 01:02:41,880 Speaker 1: points and it's not one to one, and it is 1037 01:02:41,920 --> 01:02:45,480 Speaker 1: an interesting gray area as to like the morals of 1038 01:02:45,520 --> 01:02:49,280 Speaker 1: it all, you know. And so now to sum it up, 1039 01:02:49,920 --> 01:02:52,280 Speaker 1: why does c e O s make so much money? Again? 1040 01:02:52,560 --> 01:02:56,080 Speaker 1: Because they can't, sure can and they sure do yeah, 1041 01:02:56,280 --> 01:02:59,200 Speaker 1: and and uh, whether or not you feel that is 1042 01:02:59,240 --> 01:03:01,720 Speaker 1: a good or bad thing, it is uh that that 1043 01:03:01,800 --> 01:03:05,600 Speaker 1: depends upon your own personal Dare I say philosophical framework 1044 01:03:05,960 --> 01:03:08,080 Speaker 1: right on how the world should be and how people 1045 01:03:08,080 --> 01:03:11,000 Speaker 1: should be able to live within it. With that mind, 1046 01:03:11,320 --> 01:03:15,640 Speaker 1: we would love to hear your thoughts. What what do 1047 01:03:15,680 --> 01:03:20,520 Speaker 1: you think our CEO is unnecessarily vilified? Is acceleration of 1048 01:03:20,560 --> 01:03:23,880 Speaker 1: wealth inequality a very bad thing, a very good thing, 1049 01:03:24,360 --> 01:03:27,680 Speaker 1: or just a thing that people are putting values upon, 1050 01:03:28,200 --> 01:03:31,320 Speaker 1: because as you said, you know the like the standard 1051 01:03:31,320 --> 01:03:34,840 Speaker 1: of living has risen for a lot of people over time, 1052 01:03:35,440 --> 01:03:38,080 Speaker 1: So what what do you make of it? As as 1053 01:03:38,280 --> 01:03:41,800 Speaker 1: they would say, in as some of our Australian friends 1054 01:03:41,800 --> 01:03:43,840 Speaker 1: would say, what do you reckon? We want to hear 1055 01:03:43,880 --> 01:03:46,520 Speaker 1: from you. We try to be easy to find online. Yep. 1056 01:03:46,600 --> 01:03:48,840 Speaker 1: Be sure that you can find us under the handle 1057 01:03:48,880 --> 01:03:51,680 Speaker 1: Conspiracy Stuff on Facebook where we have a Facebook group 1058 01:03:51,680 --> 01:03:55,280 Speaker 1: called Here's where it Gets Crazy um, and on Twitter 1059 01:03:55,480 --> 01:03:58,120 Speaker 1: and also on YouTube we have video clips coming out 1060 01:03:58,160 --> 01:04:01,120 Speaker 1: every single week. If you want to find out. On Instagram, 1061 01:04:01,200 --> 01:04:03,440 Speaker 1: you can check us out under the handle at Conspiracy 1062 01:04:03,480 --> 01:04:07,480 Speaker 1: Stuff show. Hey are you listening? To this on a device, 1063 01:04:08,160 --> 01:04:12,800 Speaker 1: maybe on your laptop. Is it Apple Podcasts? Really it is? 1064 01:04:12,800 --> 01:04:16,200 Speaker 1: Is it Spotify? What is it? I'm just I'm not 1065 01:04:16,240 --> 01:04:19,000 Speaker 1: really asking you the question. If you're listening to this 1066 01:04:19,360 --> 01:04:21,920 Speaker 1: and you have the time, we ask that you please 1067 01:04:22,040 --> 01:04:25,640 Speaker 1: review the show. Just review it, say a little something 1068 01:04:25,680 --> 01:04:27,840 Speaker 1: in there, be funny, whatever you want to do. Just 1069 01:04:27,920 --> 01:04:31,000 Speaker 1: review it. It really really helps us, especially if you 1070 01:04:31,000 --> 01:04:32,840 Speaker 1: give it a good one. But I'm not telling you 1071 01:04:32,880 --> 01:04:35,040 Speaker 1: to do that. I'm just saying it would be cool 1072 01:04:35,080 --> 01:04:38,200 Speaker 1: if you did. Oh anyway, Hey, you know what you 1073 01:04:38,240 --> 01:04:40,400 Speaker 1: can also do. You can give us a phone call. 1074 01:04:40,760 --> 01:04:43,600 Speaker 1: That's right. All you have to do is pick up 1075 01:04:43,600 --> 01:04:46,880 Speaker 1: your device of choice and drop us a line. Say 1076 01:04:46,920 --> 01:04:51,040 Speaker 1: it with me. One eight three three st d w 1077 01:04:50,400 --> 01:04:54,600 Speaker 1: y three minutes you'll hear a message telling you you're 1078 01:04:54,640 --> 01:04:56,840 Speaker 1: in the right place, and then those three minutes are 1079 01:04:57,120 --> 01:05:01,000 Speaker 1: entirely yours. Go wild, get weird with that, give yourself 1080 01:05:01,040 --> 01:05:03,920 Speaker 1: a cool nickname, let us know what's on your mind. 1081 01:05:04,480 --> 01:05:06,800 Speaker 1: Second most important thing to do in that call is 1082 01:05:07,360 --> 01:05:09,120 Speaker 1: tell us if it's okay to use your name and 1083 01:05:09,200 --> 01:05:12,920 Speaker 1: voice on the air. And the most important thing to 1084 01:05:12,960 --> 01:05:15,640 Speaker 1: remember is not to sense to yourself if you have 1085 01:05:15,720 --> 01:05:18,480 Speaker 1: a If you have a story that needs more than 1086 01:05:18,560 --> 01:05:21,600 Speaker 1: three minutes, then don't feel like I got a call 1087 01:05:21,720 --> 01:05:24,400 Speaker 1: five times. All you have to do is write us 1088 01:05:24,440 --> 01:05:27,480 Speaker 1: an email. Write it out in full. We love emails. 1089 01:05:27,600 --> 01:05:29,840 Speaker 1: We read every single one we get. It also gives 1090 01:05:29,840 --> 01:05:32,200 Speaker 1: you the ability to throw in some links, throw in 1091 01:05:32,240 --> 01:05:35,880 Speaker 1: some pictures, and then boom, we're on the case. We'll 1092 01:05:35,920 --> 01:05:38,040 Speaker 1: dive into those rabbit holes. All you have to do 1093 01:05:38,520 --> 01:05:41,520 Speaker 1: is shoot us a line over our address where we 1094 01:05:41,600 --> 01:06:03,560 Speaker 1: are conspiracy at i heeart radio dot com. Stuff they 1095 01:06:03,600 --> 01:06:05,520 Speaker 1: don't want you to know is a production of I 1096 01:06:05,640 --> 01:06:08,760 Speaker 1: Heart Radio. For more podcasts for my heart Radio, visit 1097 01:06:08,760 --> 01:06:11,560 Speaker 1: the i heart Radio app, Apple Podcasts, or wherever you 1098 01:06:11,600 --> 01:06:12,760 Speaker 1: listen to your favorite shows.