1
00:00:01,120 --> 00:00:05,320
Speaker 1: At PwC, we don't just deliver ideas, we make them

2
00:00:05,360 --> 00:00:08,480
work with the expertise and tech. You need to outthink

3
00:00:08,519 --> 00:00:12,480
and outperform, and we work with you alongside you from

4
00:00:12,599 --> 00:00:16,199
start to finish, so you can stay ahead, so you

5
00:00:16,199 --> 00:00:20,079
can protect what you've built, so you can create new value.

6
00:00:20,519 --> 00:00:25,760
We build for what's next, so you can get there now, PwC,

7
00:00:26,280 --> 00:00:30,640
so you can. So.

8
00:00:30,800 --> 00:00:32,479
Speaker 2: I hurt my hip at the gym and ended up

9
00:00:32,479 --> 00:00:35,200
with Phi Urgent Care. They really took care of me.

10
00:00:35,640 --> 00:00:36,640
Speaker 3: They referred me to one of.

11
00:00:36,560 --> 00:00:40,280
Speaker 2: Their physios and while working on my core, the physio

12
00:00:40,320 --> 00:00:43,399
nottised I was walking a little oddly, so she refers

13
00:00:43,439 --> 00:00:45,759
me to a VHI podiatrist and.

14
00:00:45,679 --> 00:00:47,280
Speaker 3: He was able to help me correct my gait.

15
00:00:48,240 --> 00:00:50,359
Speaker 4: So, yeah, it was really great how Vhi was able

16
00:00:50,399 --> 00:00:51,479
to connect all the dots.

17
00:00:54,600 --> 00:00:57,880
Speaker 1: VHI because your health means everything.

18
00:01:01,640 --> 00:01:04,560
Speaker 5: That's the Clear Mobile parate. He knows a good thing

19
00:01:04,599 --> 00:01:08,920
when he hears it because it's only twelve ninety nine, Yes,

20
00:01:09,239 --> 00:01:14,599
only twelve ninety nine for unlimited five G data and calls. Yes,

21
00:01:14,840 --> 00:01:17,359
yes there are texts, and that's why he's our top

22
00:01:17,359 --> 00:01:21,400
salesperson at Paris or Brave ninety nine. Clear Mobile Keep

23
00:01:21,439 --> 00:01:25,159
It Clear powered by Vodaphone or Brave ninety nine activation

24
00:01:25,200 --> 00:01:27,599
for twelve or A ninety nine nineteen gigabytes UK and

25
00:01:27,680 --> 00:01:29,879
EU roaming data. For terms, see Clear Mobile dot.

26
00:01:29,719 --> 00:01:35,959
Speaker 2: A emining a live Man like this man letting butterfly,

27
00:01:36,079 --> 00:01:38,239
flapping his wing big down in the forest. Man, it

28
00:01:38,319 --> 00:01:41,680
gonna cause a tree fall, letting five thousand miles away. Man,

29
00:01:42,159 --> 00:01:50,040
nobody see nobody else. You don't need no man don't

30
00:01:50,480 --> 00:01:55,760
like you, and you got back. That's win. Man got

31
00:01:55,760 --> 00:01:56,799
black a name on the pane.

32
00:02:06,239 --> 00:02:08,759
Speaker 3: All right, we'll held Welcome to Jay Burden show. How

33
00:02:08,840 --> 00:02:09,120
you doing?

34
00:02:09,120 --> 00:02:10,199
Speaker 4: Man, Great to be with you.

35
00:02:10,280 --> 00:02:13,919
Speaker 3: Man, Yeah, I'm glad to have you on. It's funny.

36
00:02:14,120 --> 00:02:16,800
I think I've got your ad copy on the Good

37
00:02:16,800 --> 00:02:19,599
Old Boys memorized at this point. I mean, I'd probably

38
00:02:19,639 --> 00:02:21,400
have it better if Bog Beef could ever get through

39
00:02:21,439 --> 00:02:26,039
the whole thing without dripping over his words. But nonetheless, Man,

40
00:02:26,280 --> 00:02:29,080
I'm glad to have you on. Obviously I'm familiar with

41
00:02:29,120 --> 00:02:31,159
who you are and what you do, but my audience

42
00:02:31,240 --> 00:02:34,199
might not be. So what do you do? Man? Yeah?

43
00:02:34,240 --> 00:02:37,199
Speaker 6: Absolutely, Well, first I'll just know it's funny. I promised

44
00:02:37,240 --> 00:02:39,199
them new copy for the New Year, Like, I was

45
00:02:39,240 --> 00:02:41,479
gonna take Christmas break and write some new jokes and

46
00:02:41,479 --> 00:02:44,560
stuff like that, and then I just couldn't come up

47
00:02:44,599 --> 00:02:46,960
with anything that I liked better than what we already had.

48
00:02:47,000 --> 00:02:49,000
I think it's kind of become like iconics. I think

49
00:02:49,000 --> 00:02:49,759
I'm gonna stick with it.

50
00:02:50,479 --> 00:02:51,319
Speaker 4: My names Will Hild.

51
00:02:51,319 --> 00:02:54,159
Speaker 6: I'm the executive director of a group called Consumers Research.

52
00:02:54,479 --> 00:02:58,120
Were the nation's oldest consumer protection organization, dating back to

53
00:02:58,280 --> 00:03:01,520
nineteen twenty nine when we began options, but I came

54
00:03:01,560 --> 00:03:04,520
on about I guess six years ago now, and with

55
00:03:04,639 --> 00:03:07,800
the focus of retooling and regrowing the organization to focus

56
00:03:07,879 --> 00:03:11,319
on woke capitalism and ESG. We can get into what

57
00:03:11,759 --> 00:03:14,199
those things are and what that means, but just sort

58
00:03:14,199 --> 00:03:18,199
of noticing that more and more of the quality and

59
00:03:18,319 --> 00:03:21,319
of goods and services provided in the market we're being

60
00:03:21,360 --> 00:03:25,360
dictated or mitigated by this ESG phenomenon, determined by that,

61
00:03:25,439 --> 00:03:27,199
and sort of going at that and saying, hey, we

62
00:03:27,240 --> 00:03:30,000
need to be focusing on corporate America, on providing goods

63
00:03:30,039 --> 00:03:34,080
and services, not on becoming a you know, political utility

64
00:03:34,080 --> 00:03:36,719
for the Democratic Party.

65
00:03:37,520 --> 00:03:45,280
Speaker 3: Yeah. So when we're obviously you oftentimes discuss ESG and

66
00:03:45,759 --> 00:03:48,159
it's sort of a frustrating issue to talk about because

67
00:03:48,280 --> 00:03:54,120
there actually is something really threatening in that conversation. But oftentimes,

68
00:03:54,240 --> 00:03:56,439
you know, you get to talking about Blackrock and Larry

69
00:03:56,439 --> 00:03:58,639
Fink and you get the kind of you know, maximal

70
00:03:58,759 --> 00:04:02,319
tinfoil hat level of conversation where it's like, look like,

71
00:04:02,639 --> 00:04:04,800
I'm sure he's not a great guy. But starting off

72
00:04:04,840 --> 00:04:07,520
with he can unzip his face and reveal a lizard

73
00:04:07,520 --> 00:04:11,280
person underneath is, while technically true, may not be the

74
00:04:11,319 --> 00:04:14,560
best start to a discussion. So if you could, could

75
00:04:14,560 --> 00:04:17,519
you give the kind of the kind of reasonable take

76
00:04:17,639 --> 00:04:20,879
on ESG, why it's a problem, then how that index

77
00:04:20,959 --> 00:04:22,680
is with your work and consumer protection?

78
00:04:23,079 --> 00:04:24,279
Speaker 4: Absolutely? Absolutely well.

79
00:04:24,279 --> 00:04:27,439
Speaker 6: First, I always want to start off by defining ESG,

80
00:04:27,560 --> 00:04:33,120
because part of the tactic itself by the left is

81
00:04:33,160 --> 00:04:36,519
sort of it's a mat and Bailey. So they the

82
00:04:36,600 --> 00:04:38,959
definition of ESG as it exists in the world or

83
00:04:39,000 --> 00:04:42,399
the phenomenon is much broader than things with the term

84
00:04:42,720 --> 00:04:45,560
ESG on the label, And so when you start attacking

85
00:04:45,720 --> 00:04:48,680
ESG the phenomenon, they will run to what's your problem

86
00:04:48,720 --> 00:04:52,120
with ESG? Finds So imagine for a second you have

87
00:04:52,279 --> 00:04:55,560
like a Venn diagram circle like a huge circle and

88
00:04:55,680 --> 00:04:58,240
relabeling that the entire.

89
00:04:58,120 --> 00:04:59,480
Speaker 4: Phenomenon of ESG.

90
00:04:59,600 --> 00:05:04,560
Speaker 6: Okay and I would define ESG as financial services companies

91
00:05:04,639 --> 00:05:07,639
using their market share to push a far left progressive agenda,

92
00:05:07,759 --> 00:05:11,240
So that circle would encompass everything financial services companies are

93
00:05:11,240 --> 00:05:12,360
doing to.

94
00:05:12,360 --> 00:05:13,120
Speaker 4: Move that forward.

95
00:05:13,639 --> 00:05:17,319
Speaker 6: Inside that massive circle would be a tiny little circle,

96
00:05:17,600 --> 00:05:21,439
and that little circle would be funds labeled ESG, meaning

97
00:05:21,519 --> 00:05:25,240
funds that make investment decisions. They buy some things and

98
00:05:25,279 --> 00:05:28,279
they sell other things based on ESG scores, And so

99
00:05:28,319 --> 00:05:30,800
people hear ESG scores and they think, oh, well, companies

100
00:05:30,839 --> 00:05:33,439
just doing this because if they have a high HG score,

101
00:05:33,759 --> 00:05:36,160
then these ESG funds will put more money in them.

102
00:05:36,399 --> 00:05:38,680
Speaker 4: I wish that were the case. I actually support people's

103
00:05:38,759 --> 00:05:40,040
right to support.

104
00:05:39,639 --> 00:05:44,160
Speaker 6: Whatever values they want with their own investment dollars, ANDESG

105
00:05:44,399 --> 00:05:47,279
the funds is an example of that. I think their

106
00:05:47,439 --> 00:05:50,480
values are stupid and a bad idea, but that's at

107
00:05:50,600 --> 00:05:54,360
least them using their money to make decisions for their money,

108
00:05:54,680 --> 00:05:59,639
whereas the entire phenomenon of ESG is much much broader

109
00:06:00,040 --> 00:06:02,959
and much much more nefarious, and much more detached from

110
00:06:02,959 --> 00:06:06,079
people willingly deciding that they want to put you know,

111
00:06:06,120 --> 00:06:08,800
have their money with skin in the game to push

112
00:06:08,800 --> 00:06:10,800
those values forward. So let me give you an example

113
00:06:10,800 --> 00:06:13,360
of that and why black Rock is such a good

114
00:06:13,360 --> 00:06:17,759
poster child for doing that. There has been a move

115
00:06:17,839 --> 00:06:21,480
over the last twenty to twenty five years from what

116
00:06:21,519 --> 00:06:26,079
they call active management to passive management funds. Active management

117
00:06:26,120 --> 00:06:28,120
funds are what we think of like with like the

118
00:06:28,160 --> 00:06:32,199
movie Wall Street with Gordon Gecko saying, you know, you know,

119
00:06:32,360 --> 00:06:34,680
he's on the phone. You sell this, buy this, that

120
00:06:34,759 --> 00:06:37,839
kind of thing. Those are people given money by you know,

121
00:06:37,920 --> 00:06:40,839
individuals trusting their money and a fund manager, and that

122
00:06:40,879 --> 00:06:43,800
fund manager than making decisions about where to allocate the

123
00:06:43,839 --> 00:06:47,240
money into different companies that has been dying because the

124
00:06:47,279 --> 00:06:51,439
amount of fees you have to pay that person when

125
00:06:51,480 --> 00:06:53,959
you encompass those into your total returns is usually lower

126
00:06:53,959 --> 00:06:56,360
than the overall market. So the idea is you'd be

127
00:06:56,399 --> 00:06:59,279
better off just putting your money into a large, wide

128
00:06:59,360 --> 00:07:02,319
ranging pass get usually the S and P five hundred

129
00:07:02,360 --> 00:07:05,079
or the dowdo Industrial something like that. You'd be better

130
00:07:05,120 --> 00:07:07,639
off than paying somebody who may beat the market, but

131
00:07:07,680 --> 00:07:09,160
you have to pay them such high fees to do

132
00:07:09,240 --> 00:07:13,720
so that on net you're worse off. There have been

133
00:07:13,759 --> 00:07:16,160
a number of companies that have specialized in this. One

134
00:07:16,199 --> 00:07:18,319
of them is black Rocket's the largest, but there are others,

135
00:07:18,439 --> 00:07:23,439
State Street, Vanguard, I think, Northern Trust. There's a whole

136
00:07:23,439 --> 00:07:25,240
host of them, but there are some a few big

137
00:07:25,279 --> 00:07:32,160
dogs like Vanguard, State Street, and black Rock. Because they

138
00:07:32,279 --> 00:07:36,560
end up with tons and tons of money in these funds,

139
00:07:37,720 --> 00:07:40,680
they end up owning large shares of each individual company,

140
00:07:41,160 --> 00:07:44,560
so unlike an active manager, when they don't like a company,

141
00:07:44,560 --> 00:07:46,720
they just sell it. They don't usually unless they're an

142
00:07:46,720 --> 00:07:49,959
activist fund, try and replace the management. But with a

143
00:07:50,000 --> 00:07:53,439
passive fund, the shares that are owned in that fund

144
00:07:53,439 --> 00:07:55,839
are set are set list. They can't change them. There

145
00:07:55,879 --> 00:07:58,199
is no real fund manager. There's just a list of

146
00:07:58,240 --> 00:07:59,839
things that when you give money to the fund, that's

147
00:07:59,839 --> 00:08:02,720
what they go buy on your behalf. And companies like

148
00:08:02,759 --> 00:08:05,560
Blackrock end up overseeing all the shares that are in

149
00:08:05,600 --> 00:08:08,240
those funds as stewards, and that means they have to

150
00:08:08,319 --> 00:08:11,079
vote on things like re electing or not re electing

151
00:08:11,079 --> 00:08:12,439
the board of directors.

152
00:08:12,560 --> 00:08:15,879
Speaker 4: Approving or not approving the compensation packages for the executives.

153
00:08:16,439 --> 00:08:19,000
Speaker 6: Was you can imagine that gives them a ton of

154
00:08:19,040 --> 00:08:22,439
power over those corporations. If you have eight to ten

155
00:08:22,519 --> 00:08:25,279
to fifteen to twenty percent of the shares outstanding in

156
00:08:25,319 --> 00:08:27,759
your portfolio or amongst a small group of companies like

157
00:08:27,879 --> 00:08:31,160
take State Street, Vanguard, and Blackrock. Add them together, I

158
00:08:31,160 --> 00:08:34,000
think they own twenty five percent or more control twenty

159
00:08:34,000 --> 00:08:36,240
five percent or more of like ninety percent of S

160
00:08:36,279 --> 00:08:38,840
and P five hundred. So those three firms have a

161
00:08:38,960 --> 00:08:41,679
huge amount of power when it comes to sort of

162
00:08:41,720 --> 00:08:45,720
setting the rules and the guidelines and the incentives for

163
00:08:46,039 --> 00:08:48,960
corporate America. And that when I talk about the huge

164
00:08:48,960 --> 00:08:52,039
circle of ESG, that's where most of the juice is.

165
00:08:52,080 --> 00:08:54,639
That's where most of the power of ESG. It comes

166
00:08:54,679 --> 00:08:58,080
from those types of interactions, not the you know funds

167
00:08:58,159 --> 00:09:00,879
labeled you know ESG investments in your thinking, Oh well,

168
00:09:01,200 --> 00:09:03,159
you're selling Exon and buying win farms.

169
00:09:03,200 --> 00:09:05,440
Speaker 4: I think that'd be great. Actually, that would get people.

170
00:09:05,279 --> 00:09:08,360
Speaker 6: Who don't believe in the business of Exon out of

171
00:09:08,519 --> 00:09:11,279
owning Exon. The problem is you have tons and tons

172
00:09:11,279 --> 00:09:14,039
of people now like Larry, who do not like the

173
00:09:14,080 --> 00:09:16,879
way Exon operates, even though it does a good job.

174
00:09:16,960 --> 00:09:19,919
But they control those shares anyway, and so they push

175
00:09:20,000 --> 00:09:21,679
the companies to do things that were not in their

176
00:09:21,679 --> 00:09:24,120
best interest and not in their ultimate shareholders' best interest.

177
00:09:24,440 --> 00:09:27,080
It's always important to remind people Larry Fink, it's not

178
00:09:27,159 --> 00:09:29,639
Larry Fink's money, it's not State Streets money, it's not

179
00:09:29,679 --> 00:09:32,080
Vanguard's money. It's a whole bunch of other people's money.

180
00:09:32,720 --> 00:09:35,440
And it's sort of this principal agent problem. So, I know,

181
00:09:35,519 --> 00:09:37,559
that's a fire hose of information. I'll stop there. Maybe

182
00:09:37,559 --> 00:09:39,679
we can dive into specific part.

183
00:09:40,720 --> 00:09:45,240
Speaker 3: Yeah, so let's talk about that that mechanism you've said

184
00:09:45,320 --> 00:09:50,000
that most often actively managed funds don't attack the management, right,

185
00:09:50,039 --> 00:09:52,879
they simply sell their position and find some other company

186
00:09:52,960 --> 00:09:55,240
to invest in. So how does that work? And how

187
00:09:55,279 --> 00:09:59,000
does owning twenty five percent or you know, some large

188
00:09:59,039 --> 00:10:03,840
percentage of the outstanding stock allow firms like black Rock

189
00:10:03,879 --> 00:10:06,159
and State Street to enact their control. Like what does

190
00:10:06,200 --> 00:10:06,679
that look like?

191
00:10:06,960 --> 00:10:09,039
Speaker 4: Mm hmm, that's a that's a great, great question.

192
00:10:09,120 --> 00:10:13,360
Speaker 6: So when when you have an active fund, that's you know,

193
00:10:13,399 --> 00:10:15,960
sometimes active funds in the old days you were sort

194
00:10:15,960 --> 00:10:18,960
of just trusting the person themselves. So again that would

195
00:10:19,000 --> 00:10:20,840
be like the Gordon Getcko example. You're saying, oh, I

196
00:10:20,840 --> 00:10:23,960
found a hot fund manager. He's really good at stock picking,

197
00:10:24,000 --> 00:10:25,480
and so I'm just gonna give him money because he

198
00:10:25,600 --> 00:10:27,240
just he sees things that other people don't see.

199
00:10:27,240 --> 00:10:29,159
Speaker 4: Warren Buffet would be another great example of this.

200
00:10:30,480 --> 00:10:32,679
Speaker 6: Then there are other ones that are sort of based

201
00:10:32,679 --> 00:10:35,320
on rules, so they'll they'll say, like, we're going to

202
00:10:35,440 --> 00:10:39,159
sell things that you know have a low dividend. We're

203
00:10:39,159 --> 00:10:41,679
going to buy things that have an increasing dividend. So

204
00:10:41,759 --> 00:10:43,720
you're still trusting someone to make the decisions, but you

205
00:10:43,759 --> 00:10:46,200
have a general understanding of what their strategy is. So

206
00:10:46,240 --> 00:10:48,840
you're kind of choosing both a fund manager and a strategy,

207
00:10:49,240 --> 00:10:52,080
and an ESG funds labeled that way, that's sort of

208
00:10:52,080 --> 00:10:54,480
what you're buying. You're saying, they're saying, we've come up

209
00:10:54,519 --> 00:10:56,600
with some sort of internal ESG score. To be clear,

210
00:10:56,759 --> 00:10:59,799
there is no one ESG score. This is like this

211
00:10:59,879 --> 00:11:03,840
is like there's no one type of valuing a company.

212
00:11:04,000 --> 00:11:07,519
You're picking a rubric when you pick a fund. You're

213
00:11:07,519 --> 00:11:10,840
picking a person saying, hey, I have my conception of

214
00:11:10,840 --> 00:11:12,679
what ESG should be, and this is how we apply

215
00:11:12,759 --> 00:11:16,159
it when we buy and sell investments. But generally speaking,

216
00:11:16,240 --> 00:11:18,200
that means they're going to be moving out of things

217
00:11:18,799 --> 00:11:24,799
that are carbon intensive manufacturing and they're going to be

218
00:11:24,799 --> 00:11:28,080
moving into things like either green so called green energy,

219
00:11:28,120 --> 00:11:29,879
which is not green at all. We can talk about that,

220
00:11:29,919 --> 00:11:32,399
but at least has the impro moter of being green,

221
00:11:32,519 --> 00:11:35,320
like solar panels and wind farms, and away from things

222
00:11:35,360 --> 00:11:38,000
like like again like Exxon Chevron, that.

223
00:11:38,000 --> 00:11:38,399
Speaker 3: Kind of thing.

224
00:11:40,200 --> 00:11:43,240
Speaker 6: When you're talking about the passive funds again, they do

225
00:11:43,279 --> 00:11:46,080
not buy and sell shares based on their own decision making.

226
00:11:46,080 --> 00:11:48,279
There's a set list and they just end up owning

227
00:11:48,320 --> 00:11:50,440
whatever in that list. More money comes into the fund,

228
00:11:50,480 --> 00:11:52,519
they end up owning more of the shares of all

229
00:11:52,519 --> 00:11:56,279
those companies. And so the way that they have exercised

230
00:11:56,279 --> 00:11:59,080
power isn't with the threat to sell the shares and

231
00:11:59,559 --> 00:12:02,559
you know, sink the stock price. It's actually worse than that.

232
00:12:03,200 --> 00:12:05,679
They do what they call corporate engagement, and that is

233
00:12:05,720 --> 00:12:08,879
really just a euphemism for hassling management and using a

234
00:12:08,960 --> 00:12:11,759
carot and stick approach to try and cajole them into

235
00:12:11,919 --> 00:12:14,960
doing the left's bidding. So what that might look like

236
00:12:15,159 --> 00:12:19,159
is you have a department at Blackrock called stewardship. I

237
00:12:19,240 --> 00:12:22,360
think Sandy Boss is still the head of that. She's

238
00:12:22,399 --> 00:12:27,039
a UK employee of black Rock. But in any case,

239
00:12:28,000 --> 00:12:32,279
these fund managers have usually a stewardship department, and that

240
00:12:32,320 --> 00:12:35,120
person is in charge of doing this corporate engagement. Ostensibly,

241
00:12:35,559 --> 00:12:38,000
they're there to make sure that the companies that they

242
00:12:38,279 --> 00:12:40,639
own a lot of shares in are being run well.

243
00:12:40,840 --> 00:12:42,559
But of course the definition of what you mean by

244
00:12:42,600 --> 00:12:45,279
well can be used to inject a whole bunch of

245
00:12:45,279 --> 00:12:48,159
personal politics of these companies into that situation. And so

246
00:12:48,279 --> 00:12:51,799
they'll set up meetings with and I keep using his example,

247
00:12:51,840 --> 00:12:55,159
but just will carry the analogy through Exon's executive team,

248
00:12:55,200 --> 00:12:59,320
for example, and Exon's investor relations team will sit down

249
00:12:59,440 --> 00:13:04,759
sometimes sometimes annually with these passive managed fund companies, and

250
00:13:04,799 --> 00:13:08,240
they these fun companies will basically say, listen, we control

251
00:13:08,320 --> 00:13:11,320
eight to you, whatever it is percentage the shares of

252
00:13:11,360 --> 00:13:15,320
your companies. Here's what we would like to see before

253
00:13:15,360 --> 00:13:18,720
we would vote yes on your compensation packages. Or here's

254
00:13:18,720 --> 00:13:21,559
what we'd like to see included in the rubiks by

255
00:13:21,600 --> 00:13:26,440
which you renumerate your executives. So, in other words, we

256
00:13:26,480 --> 00:13:29,600
don't think the criteria you're using to compensate your executives

257
00:13:29,679 --> 00:13:31,919
right now is proper. We want you to add in

258
00:13:31,960 --> 00:13:35,240
things like a net zero ambition or getting out of

259
00:13:35,240 --> 00:13:37,399
coal and gas entirely by a certain year or something

260
00:13:37,440 --> 00:13:39,559
like that, and how far along you are in that progress.

261
00:13:40,000 --> 00:13:42,200
That sounds like a crazy thing to tell Exon to do,

262
00:13:42,320 --> 00:13:44,840
it would blow up the company. But that is literally

263
00:13:44,879 --> 00:13:47,720
the kinds of things they have asked of these of

264
00:13:47,759 --> 00:13:51,799
these executives. In fact, Exon adopted a quote unquote net

265
00:13:51,879 --> 00:13:54,519
zero twenty fifty ambition a few years ago that I

266
00:13:54,919 --> 00:13:56,919
fought them on. I think Exon is generally speaking very

267
00:13:56,919 --> 00:13:59,879
well managed company, but adopting that was a huge mistake.

268
00:14:00,000 --> 00:14:01,559
Speaker 4: It's not being used against them.

269
00:14:01,919 --> 00:14:07,320
Speaker 6: So what will happen is these executives will either go

270
00:14:07,399 --> 00:14:10,360
along with it or they will risk the fact that

271
00:14:10,799 --> 00:14:14,320
at the next board election, you know, annually these these

272
00:14:14,399 --> 00:14:17,600
boards are re elected and these compensation packages are voted on.

273
00:14:18,600 --> 00:14:20,720
Black Rocks, State Street and Vanguard and all the others

274
00:14:21,039 --> 00:14:25,159
may vote against the board or vote against the compensation packages.

275
00:14:25,240 --> 00:14:27,320
So that's the carot and stick that they have to

276
00:14:27,360 --> 00:14:29,399
hold they hold on to. In addition to that's sort

277
00:14:29,399 --> 00:14:31,000
of the you know, do what we say or will

278
00:14:31,039 --> 00:14:34,120
hurt you side of things. A lot of the DEI

279
00:14:34,399 --> 00:14:37,559
I think is actually there. You know, we both fans

280
00:14:37,559 --> 00:14:41,080
of good old boys, and their focus on the patriotage pill.

281
00:14:41,759 --> 00:14:43,559
I think a lot of the DEI is actually there

282
00:14:43,559 --> 00:14:46,440
as an excuse for Larry Thinking others to put their

283
00:14:46,480 --> 00:14:48,919
favored candidates on the boards and have an excuse for

284
00:14:48,960 --> 00:14:51,320
doing so, so you can say, oh, your board doesn't

285
00:14:51,360 --> 00:14:53,720
have enough women or black people or gay people or

286
00:14:53,720 --> 00:14:56,120
something like that, and then use that as an excuse

287
00:14:56,159 --> 00:14:59,120
to force them to take on somebody that's that's loyal

288
00:14:59,159 --> 00:15:02,519
to you at these asset managers. So it's actually a

289
00:15:02,600 --> 00:15:05,240
very smart way to build a base of power within

290
00:15:05,279 --> 00:15:08,840
corporate America where just holding one large company like black Rock,

291
00:15:09,159 --> 00:15:12,159
you can influence all of corporate America. And again with

292
00:15:12,240 --> 00:15:15,159
other people's money. You're in this weird middleman position where

293
00:15:15,320 --> 00:15:17,679
it's not your money, but you hold the authority of

294
00:15:17,720 --> 00:15:20,639
the of assets, and so you're able to sort of

295
00:15:20,639 --> 00:15:23,519
push for a political agenda and create a patron's network

296
00:15:23,519 --> 00:15:25,639
within corporate America that answers to you.

297
00:15:25,720 --> 00:15:26,080
Speaker 4: Roughly.

298
00:15:28,200 --> 00:15:33,120
Speaker 3: Yeah, and that is you mentioned earlier, the principal agent problem,

299
00:15:33,679 --> 00:15:37,200
and this obviously smacks very much of James Burnham's The

300
00:15:37,240 --> 00:15:42,000
managerial Revolution, right, the idea that ownership is no longer

301
00:15:42,480 --> 00:15:47,279
really connected to authority. This has been delegated to managers, right,

302
00:15:47,360 --> 00:15:51,159
asset managers quite literally in this case, but also right

303
00:15:52,679 --> 00:15:55,440
one hundred years ago, you could go to Ford Motor Company,

304
00:15:55,919 --> 00:15:57,960
ask to see the guy in charge, and there'd be

305
00:15:58,000 --> 00:16:00,559
a guy named Ford there, right, some one who is

306
00:16:00,600 --> 00:16:04,360
in seat of a monarchical fashion, either the guy or

307
00:16:04,440 --> 00:16:07,320
connected to the guy who started. You know, as millennials

308
00:16:07,360 --> 00:16:10,759
would say the thing. Whereas once you have you know,

309
00:16:10,840 --> 00:16:14,200
wide proliferation of joint stock ownership. You know, everyone, if

310
00:16:14,200 --> 00:16:18,200
you're not stupid, effectively is involved in the market to

311
00:16:18,200 --> 00:16:20,759
one degree or another. You simply have to to keep

312
00:16:20,799 --> 00:16:25,440
pace with inflation. Well, that means you kind of own

313
00:16:25,799 --> 00:16:28,519
a little bit of Ford through planning you got at

314
00:16:28,559 --> 00:16:30,840
your job right. You probably aren't really checking it all

315
00:16:30,879 --> 00:16:34,759
the time, but you do. But you know, your fraction

316
00:16:34,840 --> 00:16:37,279
of a fraction of a fraction of Ford has really

317
00:16:37,320 --> 00:16:41,759
no power to it. But because those are managed by managers,

318
00:16:41,840 --> 00:16:45,480
go figure, right, they get to sort of on your

319
00:16:45,559 --> 00:16:50,840
behalf control all of these companies. And look, I'm guessing

320
00:16:50,879 --> 00:16:53,519
that there is some kind of standard. This is what

321
00:16:53,519 --> 00:16:55,600
we call, by the way, will a leading question in

322
00:16:55,639 --> 00:16:58,200
the business. I'm guessing there's some kind of standard for

323
00:16:58,480 --> 00:17:02,639
those managers, right one, in whose interest are they supposed

324
00:17:02,679 --> 00:17:06,240
to operate? And how well do we see them sticking

325
00:17:06,319 --> 00:17:09,480
to that? I realized this might be I legally a

326
00:17:09,559 --> 00:17:13,480
questionable thing. So you can just like, what have critics said?

327
00:17:13,319 --> 00:17:14,279
Could we could put it ou later?

328
00:17:14,359 --> 00:17:14,559
Speaker 2: Yeah?

329
00:17:14,599 --> 00:17:17,240
Speaker 6: Absolute, Well no, I've I've sort of already crossed that rubicon.

330
00:17:17,279 --> 00:17:19,880
If I'm gonna get sued for defamation from saying Blackrock

331
00:17:19,920 --> 00:17:22,000
breaks the law, then they can already come for me.

332
00:17:22,079 --> 00:17:25,480
So I'll say black Rock breaks their fiduciary duty routinely,

333
00:17:26,200 --> 00:17:29,279
and so do the others Vanguard, State Street when they

334
00:17:29,279 --> 00:17:31,839
push these sort of political agendas that are not tied

335
00:17:31,880 --> 00:17:35,240
to any kind of pecuniary sort of the keyword meaning

336
00:17:35,480 --> 00:17:39,000
related to money, related to returns for shareholders, these kind

337
00:17:39,039 --> 00:17:42,440
of non pecuniary issues. And you're one hundred percent right.

338
00:17:42,519 --> 00:17:44,759
So these managers are supposed to be governed by something

339
00:17:44,799 --> 00:17:48,279
called their fiduciary duty. And this is not just a

340
00:17:48,319 --> 00:17:52,119
catch phrase or a corporate buzzword. It is a legally identified,

341
00:17:52,200 --> 00:17:56,319
like legally defined responsibility that actually predates our own country.

342
00:17:56,519 --> 00:17:59,240
This was something that was developed under British common law

343
00:17:59,279 --> 00:18:02,720
about five hundred years ago. So these are this is

344
00:18:02,720 --> 00:18:08,599
a long standing legal duty that groups like Black Rock

345
00:18:08,680 --> 00:18:11,039
have when they're managing other people's money. Now the problem is,

346
00:18:11,079 --> 00:18:13,400
and this kind of goes back, well, not goes back,

347
00:18:13,599 --> 00:18:17,119
This goes gets to a more philosophical issue that we're

348
00:18:17,200 --> 00:18:19,599
running into. I mean, basically goes back to James Burnham's

349
00:18:19,599 --> 00:18:22,799
The Manager Revolution, which is to say that they have

350
00:18:22,880 --> 00:18:27,039
a legal burden that they're not following is only one

351
00:18:27,079 --> 00:18:29,279
step in the process, because then it gets a question

352
00:18:29,359 --> 00:18:32,640
of enforcement and who decides when they're violating it?

353
00:18:33,000 --> 00:18:34,079
Speaker 4: Right, And the.

354
00:18:34,039 --> 00:18:36,559
Speaker 6: Issue is you've got two parts to their fiduciary d

355
00:18:36,839 --> 00:18:41,000
Fiduciary duty includes a duty of loyalty, meaning you're not embezzling,

356
00:18:41,160 --> 00:18:44,680
you're not taking opportunities for the person you have a fiduciary.

357
00:18:44,720 --> 00:18:48,759
You know, you're not like front running them. For example,

358
00:18:48,839 --> 00:18:50,359
if they ask you to buy a stock, you don't

359
00:18:50,359 --> 00:18:52,160
go buy it out from under them first and then

360
00:18:52,160 --> 00:18:53,359
sell it to them at a higher price.

361
00:18:53,519 --> 00:18:55,440
Speaker 4: That would be a direct conflict of interest. That would

362
00:18:55,480 --> 00:18:56,799
be a violation of the duty of loyalty.

363
00:18:57,119 --> 00:18:59,359
Speaker 6: But there's also a duty of care in other words,

364
00:19:00,119 --> 00:19:03,319
sort of my wife's in obgyn for example. So the

365
00:19:03,319 --> 00:19:06,319
doctor example comes to mind, doctors have a duty of

366
00:19:06,359 --> 00:19:09,359
care not to do surgeries drunk. It doesn't really matter

367
00:19:10,319 --> 00:19:12,400
if they can do the surgery drunk or not.

368
00:19:13,839 --> 00:19:14,519
Speaker 4: They shouldn't.

369
00:19:14,559 --> 00:19:17,599
Speaker 6: They just shouldn't be drunk because that violates we all

370
00:19:17,680 --> 00:19:20,759
understand from a hippocratic go standpoint, that violates their duty

371
00:19:20,759 --> 00:19:23,160
of care when they're engaging in the in the in

372
00:19:23,200 --> 00:19:26,359
medical treatment of any kind, to be inebriated is a

373
00:19:26,440 --> 00:19:31,240
violation of that. In the financial services world, there is

374
00:19:31,279 --> 00:19:33,920
a duty of care now depends what kind of you know,

375
00:19:33,960 --> 00:19:37,160
services you're providing. If you're providing research services, obviously there's

376
00:19:37,519 --> 00:19:40,680
there's requirements that you actually do due diligence and that

377
00:19:40,759 --> 00:19:44,559
kind of thing. Now, again, these passive investment firms are

378
00:19:44,559 --> 00:19:47,240
not making investment decisions for you. They're not saying, you know,

379
00:19:47,279 --> 00:19:50,240
buy this, sell that. But when they start voting your

380
00:19:50,279 --> 00:19:53,720
shares or using those shares to influence or control the

381
00:19:53,759 --> 00:19:57,440
company in the form of corporate engagement, they are making

382
00:19:57,640 --> 00:20:02,119
decisions around things that could infect act excuse me, effect

383
00:20:02,839 --> 00:20:05,039
up or down the stock price. And so if they

384
00:20:05,039 --> 00:20:08,319
are making those decisions based on i think the technical terms,

385
00:20:08,400 --> 00:20:12,519
wild ass guesses or just their own politics, they're violating

386
00:20:12,519 --> 00:20:15,400
that duty of care. And that's what Blackrock and others

387
00:20:15,480 --> 00:20:19,240
have done in this situation. And lest you think I'm

388
00:20:19,359 --> 00:20:21,720
you know, you know, watch out here, will you're gonna

389
00:20:21,720 --> 00:20:25,240
get like the long arm of Larry Fink's defamation lawyers

390
00:20:25,240 --> 00:20:28,559
coming out at you. That's actually already been determined in

391
00:20:28,640 --> 00:20:31,680
a court of law. There was a case that played

392
00:20:31,680 --> 00:20:35,000
out over the last couple of years where they stick

393
00:20:35,039 --> 00:20:39,200
with me. It is a little complicated, but employers who

394
00:20:39,200 --> 00:20:41,599
have four oh one K pension plans also owe a

395
00:20:41,680 --> 00:20:43,880
duty of care to their employees on who they decide

396
00:20:43,920 --> 00:20:47,119
to manage the plan. So if your employer, for example,

397
00:20:47,279 --> 00:20:51,319
chooses their drunk uncle to manage your investments and he

398
00:20:51,519 --> 00:20:53,920
blows it all at the racetrack, you can sue the

399
00:20:53,920 --> 00:20:57,559
employer for having chosen someone they knew they negligently chose right.

400
00:20:57,599 --> 00:20:59,559
They knew their uncle was a drunk and had no

401
00:20:59,559 --> 00:21:04,240
expertise east and they hired him anyway. A union of

402
00:21:04,480 --> 00:21:08,400
or a group of American Airlines employees sued American Airlines

403
00:21:08,440 --> 00:21:12,680
executives for using Blackrock to manage their investment firms, even

404
00:21:12,880 --> 00:21:15,960
investment funds, even though they knew that they were using

405
00:21:16,039 --> 00:21:18,200
the funds to push EESG, which was going to hurt

406
00:21:18,480 --> 00:21:22,440
the returns on the fund, and the court actually found

407
00:21:22,920 --> 00:21:27,799
that that was true. American Airlines executives were negligent in

408
00:21:28,000 --> 00:21:31,839
allowing Blackrock to manage the pension funds of these employees.

409
00:21:32,200 --> 00:21:34,680
They were doing ESG, they were bragging about it, and

410
00:21:34,759 --> 00:21:37,720
they court agreed that this was a violation of both

411
00:21:37,759 --> 00:21:41,640
Blackrocks duty of fuduciary duty and of the American Airlines

412
00:21:41,640 --> 00:21:45,359
executives duty to fire Blackrock. However, and this is the problem.

413
00:21:45,359 --> 00:21:49,000
This is where we get into the issue of managerialism.

414
00:21:49,480 --> 00:21:52,480
The court could not find damages and the reason for

415
00:21:52,559 --> 00:21:56,200
that is when you engage in ESG, you draw down

416
00:21:56,240 --> 00:22:00,920
the value of everyone shares. So normally, if you're someone

417
00:22:01,039 --> 00:22:03,720
like if you gave the money to someone's drunk uncle

418
00:22:03,759 --> 00:22:05,839
and they blew it at the racetrack, you would measure

419
00:22:05,880 --> 00:22:08,519
the returns that someone could have made over that period

420
00:22:08,559 --> 00:22:11,000
of time in the stock market versus what the drunk

421
00:22:11,079 --> 00:22:14,400
unk hole got you, because they're two separate things. The

422
00:22:14,440 --> 00:22:17,480
problem is when Blackrock goes in or any other investment

423
00:22:17,519 --> 00:22:21,240
fund and they bully these companies into doing stupid things,

424
00:22:21,680 --> 00:22:24,559
it doesn't just affect the shares that Blackrock holds as

425
00:22:24,559 --> 00:22:27,599
a fiduciary. It affects one hundred percent of the shares

426
00:22:27,599 --> 00:22:30,039
of those companies, so there's not really anything you can

427
00:22:30,079 --> 00:22:32,759
measure it against. So it becomes very difficult for them

428
00:22:32,799 --> 00:22:34,920
to figure out how much it costs the employees of

429
00:22:34,920 --> 00:22:37,240
American Airlines for them to have their four to one

430
00:22:37,319 --> 00:22:40,319
k's mismanaged in this way. So these are kind of

431
00:22:40,319 --> 00:22:41,480
the issues that have to be.

432
00:22:43,000 --> 00:22:43,480
Speaker 4: Overcome.

433
00:22:43,519 --> 00:22:45,279
Speaker 6: And you know, it's sort of like in the movies

434
00:22:45,359 --> 00:22:47,559
when they'll off handily say you know, it's like a

435
00:22:47,559 --> 00:22:49,440
crime show or movie, and they'll say, well, so and

436
00:22:49,480 --> 00:22:52,079
so got off on a technicality, and you're supposed to

437
00:22:52,079 --> 00:22:53,519
take that to mean that there's just sort of some

438
00:22:54,079 --> 00:22:57,599
nuance of law that allowed a perfectly obviously guilty person

439
00:22:57,680 --> 00:23:01,400
to go free or unpunished. That's sort of situation. It's

440
00:23:01,440 --> 00:23:04,640
not that it's not clear to courts that have adjudicated

441
00:23:04,680 --> 00:23:07,039
it that they're violating the produciary duty. It's that they

442
00:23:07,039 --> 00:23:10,680
can't figure out a legally be recognizable way to assign

443
00:23:10,759 --> 00:23:13,480
damages to that. Now, I will say there is a

444
00:23:13,640 --> 00:23:15,839
case making its way through the Fifth Circuit right now,

445
00:23:15,880 --> 00:23:19,599
brought by the Attorney General of Texas and eleven other states.

446
00:23:19,960 --> 00:23:26,160
That's suing State Street, Vanguard and Blackrock for a different

447
00:23:26,160 --> 00:23:29,920
claim related to their activities, which is, take everything I

448
00:23:29,960 --> 00:23:33,440
just told you about ESG, now amplify it by coordinating

449
00:23:33,480 --> 00:23:37,200
your activities. So instead of just Blackrock calling these executives

450
00:23:37,240 --> 00:23:40,480
up and threatening them, you have State Street, Vanguard and

451
00:23:40,559 --> 00:23:43,920
Black Rock acting in concert together to threaten these companies.

452
00:23:43,920 --> 00:23:44,640
Speaker 4: And that's what happened.

453
00:23:44,680 --> 00:23:47,079
Speaker 6: That's what's happened in a lot of industries, but specifically

454
00:23:47,160 --> 00:23:49,200
in this case, it's talking about what happened in the

455
00:23:49,200 --> 00:23:52,200
coal industry where in the lead up to I mean

456
00:23:52,240 --> 00:23:54,319
they were doing they didn't know the Ukraine War was coming,

457
00:23:54,359 --> 00:23:56,079
but the relevant period in the lead up to the

458
00:23:56,200 --> 00:24:01,039
Ukrainian War, these companies were encouraging, let's say I'm doing

459
00:24:01,079 --> 00:24:05,319
air quotes for those listening by audio, coal executives to

460
00:24:05,480 --> 00:24:08,480
decrease their production of coal. And the reason for doing

461
00:24:08,519 --> 00:24:10,799
this wasn't some sort of like, oh, you need to

462
00:24:10,799 --> 00:24:13,480
like slow down, you're overproducing because it's bad for the company.

463
00:24:13,759 --> 00:24:17,599
It was purely ideologically driven in the idea that they

464
00:24:17,599 --> 00:24:22,519
were going to, you know, basically ultimately reduce the amount

465
00:24:22,559 --> 00:24:25,000
of coal produced to nothing. Now in the interim, this

466
00:24:25,279 --> 00:24:30,400
raises the price of coal precipitously. And after you know,

467
00:24:30,640 --> 00:24:33,599
Ukraine War started and Germany had to switch from Russian

468
00:24:33,680 --> 00:24:36,720
natural gas to coal most Europe did. The price of

469
00:24:36,759 --> 00:24:39,599
coal went up like I think four x over a

470
00:24:39,680 --> 00:24:41,640
very short period of time. And a big reason for

471
00:24:41,680 --> 00:24:43,960
that is because these companies had not been able to

472
00:24:43,960 --> 00:24:46,519
invest in the production because they had these owners of

473
00:24:46,559 --> 00:24:48,839
the shares or controllers of their shares pressuring them to

474
00:24:48,839 --> 00:24:49,079
do so.

475
00:24:49,279 --> 00:24:49,440
Speaker 4: Well.

476
00:24:49,480 --> 00:24:55,799
Speaker 6: That is like a textbook antitrust violation. So you didn't

477
00:24:55,799 --> 00:24:57,920
really asked this question, but in terms of how we

478
00:24:58,319 --> 00:25:00,920
how we come at this from you know, we have

479
00:25:01,039 --> 00:25:05,519
this sort of cartel of managers protecting each other. Uh,

480
00:25:06,160 --> 00:25:08,279
you kind of have to figure out those types of

481
00:25:08,279 --> 00:25:11,920
of of problems because it's it's sort of again I

482
00:25:11,920 --> 00:25:16,759
go back to James Burnham the managerial revolution. You have

483
00:25:17,519 --> 00:25:20,279
a class of people. Now they're not the owners in

484
00:25:20,319 --> 00:25:22,519
the way that you described. They're not Henry Ford, and

485
00:25:22,559 --> 00:25:25,920
they're not the proletariat because they're not worker. You know,

486
00:25:25,960 --> 00:25:28,559
they're not workers on an assembly line. In fact, technically,

487
00:25:28,640 --> 00:25:32,279
as you noted, the average American is now sort of

488
00:25:32,319 --> 00:25:35,039
the owner in a Marxist sense, and yet they're being

489
00:25:35,119 --> 00:25:38,240
lorded over by this third group of people, the managers,

490
00:25:38,440 --> 00:25:40,799
and the managers seem to have more power than either

491
00:25:40,839 --> 00:25:43,359
the worker or the actual sharehold or the owner of

492
00:25:43,519 --> 00:25:47,039
capital because of these weird eccentricities of our common law.

493
00:25:49,279 --> 00:25:55,680
Speaker 3: Several things there, Uh, one you've mentioned obviously because they're

494
00:25:55,880 --> 00:25:59,400
you know, particularly pertinent examples, these kind of big industrial concerns.

495
00:25:59,799 --> 00:26:04,119
But oftentimes when you hear about people complaining about ESG,

496
00:26:04,759 --> 00:26:07,440
it's something closer to home. It's an entertainment, it's in

497
00:26:07,519 --> 00:26:09,920
other industries like that. So if you could, could you

498
00:26:09,960 --> 00:26:14,680
provide other examples of ESG which feels kind of more

499
00:26:14,720 --> 00:26:18,720
relevant to someone who isn't necessarily a co worker or

500
00:26:18,759 --> 00:26:19,839
an executive at Exxon.

501
00:26:20,400 --> 00:26:20,640
Speaker 4: Yeah.

502
00:26:20,680 --> 00:26:25,279
Speaker 6: I think that's a good point, which is from an

503
00:26:25,319 --> 00:26:27,920
economic destruction standpoint. I tend to focus on the net

504
00:26:28,000 --> 00:26:30,839
zero stuff, but that's not what most people see. They

505
00:26:30,880 --> 00:26:32,839
may see, you know, the prices of goods and services

506
00:26:32,839 --> 00:26:35,359
going up, but not realize what that's attached to. But

507
00:26:35,480 --> 00:26:41,279
I actually think, to your point, the more offensive effects

508
00:26:41,279 --> 00:26:43,640
of ESG, or the day to day effects, And I'll

509
00:26:43,680 --> 00:26:48,279
take the recent example of cracker barrel. I can't prove this,

510
00:26:48,440 --> 00:26:50,839
there's no way anyone. Well, I guess you could crack

511
00:26:50,920 --> 00:26:54,200
their emails and see if someone said it explicitly. But

512
00:26:55,200 --> 00:26:58,240
back in twenty seventeen, Larry Fink was giving an interview

513
00:26:58,279 --> 00:27:01,559
with a format called deal Book. It's New York Times

514
00:27:01,640 --> 00:27:06,839
is like a business section sort of video style thing,

515
00:27:07,519 --> 00:27:11,559
and he bragged he was asked about, you know, more

516
00:27:11,759 --> 00:27:15,559
representation in corporate America for you know, non whites, non males,

517
00:27:15,559 --> 00:27:18,319
that kind of thing, And that's where this infamous clip

518
00:27:18,359 --> 00:27:21,079
comes from, where he brags about how that at Blackrock

519
00:27:21,160 --> 00:27:23,039
we believe for behaviors to change, they're going to have

520
00:27:23,079 --> 00:27:26,000
to be forced to change, and at Blackrock we're forcing

521
00:27:26,000 --> 00:27:28,559
behaviors to change. People usually cut the clip right there,

522
00:27:28,839 --> 00:27:30,160
but if you listen to the whole thing and you

523
00:27:30,200 --> 00:27:32,319
listen to context of the question he was asked, he's

524
00:27:32,359 --> 00:27:37,079
talking specifically about forcing race and sex based quotas across

525
00:27:37,119 --> 00:27:39,480
the boards of every company that they're and the executives

526
00:27:39,480 --> 00:27:40,759
of every company that they're invested.

527
00:27:41,039 --> 00:27:42,279
Speaker 4: That those are his words, not mine.

528
00:27:43,640 --> 00:27:46,519
Speaker 6: And the reason that's so deleterious the products of services

529
00:27:46,559 --> 00:27:49,920
that you are by, or your listeners by, is because

530
00:27:49,920 --> 00:27:52,839
when you start selecting for things other than competence and skill,

531
00:27:53,200 --> 00:27:55,200
you get less competence and skill. And that could be

532
00:27:55,240 --> 00:27:58,720
anything they've chosen, race and sex. But if you wanted

533
00:27:58,720 --> 00:28:01,920
to increase the percent of left handers and you started

534
00:28:02,000 --> 00:28:04,319
hiring people based on whether they were left handed or not,

535
00:28:05,480 --> 00:28:07,960
you would start to get more left handedness and less

536
00:28:08,000 --> 00:28:11,279
skill and competence. Because anytimes you filter for something else

537
00:28:11,400 --> 00:28:13,839
you get less of. You get more of the other

538
00:28:13,880 --> 00:28:17,519
thing and less of less skill and competence. Take Cracker Bear,

539
00:28:17,559 --> 00:28:21,960
for example, the woman that became the CEO to me

540
00:28:22,319 --> 00:28:25,160
at least looks like she may have been a DEI higher.

541
00:28:25,359 --> 00:28:26,200
Speaker 4: She had no.

542
00:28:26,279 --> 00:28:30,480
Speaker 6: Cultural fit with a very cultural niche product. In other words,

543
00:28:30,880 --> 00:28:33,400
the reason cracker Barrel is so great is because it

544
00:28:33,519 --> 00:28:38,240
really nails a sort of similar acrum of a particular thing.

545
00:28:38,279 --> 00:28:43,119
I am a native of Tennessee. It was Cracker Barrel

546
00:28:43,160 --> 00:28:45,200
was started in Lemanon, Tennessee, not far from where I

547
00:28:45,240 --> 00:28:47,799
was born in Knoxville, And so for me that like

548
00:28:47,920 --> 00:28:50,880
it typifies home in a certain way, I just understand

549
00:28:50,920 --> 00:28:53,200
it's faking since it like when I stop on a

550
00:28:53,400 --> 00:28:56,200
you know, I ninety five in Maryland, I'm not actually

551
00:28:56,440 --> 00:29:00,599
going back to Tennessee. But they've kind of created created that,

552
00:29:00,920 --> 00:29:05,000
And then they hired this woman whose previous job was running

553
00:29:05,279 --> 00:29:08,359
young brands, which is Taco Bell and KFC, which are

554
00:29:08,400 --> 00:29:13,039
some of the most deracinated sterilized brands over the last

555
00:29:13,039 --> 00:29:15,319
ten to fifteen years. They basically don't stand for anything

556
00:29:15,319 --> 00:29:21,000
except flat logos and streamlined food. But she fit the

557
00:29:21,039 --> 00:29:24,400
democratic profile that they say, people like Larry Finks say

558
00:29:24,400 --> 00:29:27,160
they're looking for, right, They're getting a woman to run

559
00:29:27,240 --> 00:29:30,119
the company. And I think that, rather than someone who's

560
00:29:30,119 --> 00:29:32,559
necessarily qualified to run that specific a good match.

561
00:29:32,319 --> 00:29:33,400
Speaker 4: For that specific company.

562
00:29:33,759 --> 00:29:35,839
Speaker 6: And so when you look at the changes that she made,

563
00:29:36,480 --> 00:29:38,880
they're all along the lines not just of the woke

564
00:29:38,920 --> 00:29:41,519
stuff she did push in the LGBTQ stuff, she's trans

565
00:29:41,559 --> 00:29:45,240
stuff like all that came out through Robbie Starbucks's good investigation.

566
00:29:45,880 --> 00:29:48,200
But it also affects the product in the sense that

567
00:29:48,240 --> 00:29:50,799
she doesn't know how to do anything other than this

568
00:29:50,880 --> 00:29:54,799
sort of like stripped down minimalist, you know, change the logo,

569
00:29:55,920 --> 00:30:00,559
lowest common denominator, mass appeal product. And I think that's

570
00:30:00,599 --> 00:30:04,440
an indication of the downstream effects. When you start choosing

571
00:30:04,440 --> 00:30:07,799
people based on DEI you get mediocrity, you get same this.

572
00:30:08,079 --> 00:30:11,160
You don't get you know, innovators and thinkers and people

573
00:30:11,200 --> 00:30:14,359
making unique products that fit niche brands. You get just

574
00:30:14,400 --> 00:30:18,799
sort of Bayesium writ Large, And there's a whole other

575
00:30:19,519 --> 00:30:23,039
run of examples like that. You had Boeing went heavy

576
00:30:23,240 --> 00:30:25,359
into DEI and the run up to having you know,

577
00:30:25,440 --> 00:30:29,559
doors fall off their airplanes and that kind of thing. Uh, Basically,

578
00:30:29,839 --> 00:30:32,240
you know, any company that adopts DEI is going to

579
00:30:32,279 --> 00:30:37,759
start having quality control issues because part of DEI is

580
00:30:37,799 --> 00:30:42,599
insulating people of certain identity groups from feedback, whether that's

581
00:30:42,599 --> 00:30:45,000
feedback and hiring, meaning you're not qualified for this job,

582
00:30:45,440 --> 00:30:47,160
but we're going to hire you anyway because you meet

583
00:30:47,480 --> 00:30:50,039
a certain demographic profile that we're trying to hit quotas

584
00:30:50,039 --> 00:30:52,559
for or once you're on the job, we don't want

585
00:30:52,559 --> 00:30:54,960
to lose you because we're we're trying to keep those

586
00:30:55,000 --> 00:30:58,079
quotas in place, and so certain people are gonna be

587
00:30:58,119 --> 00:31:00,279
able to perform at a lower level and maintain their

588
00:31:00,279 --> 00:31:04,519
positions because of that. So it's happening writ Large any time.

589
00:31:04,680 --> 00:31:08,519
But of course, one of the things that corporate America

590
00:31:08,519 --> 00:31:10,799
will do is they will sort of say, I'll give

591
00:31:10,839 --> 00:31:15,680
you an example, when Silicon Valley Bank went under, right,

592
00:31:16,240 --> 00:31:19,319
people may remember this caused sort of a short term momentary,

593
00:31:19,359 --> 00:31:21,279
are we going to have a nineteen twenty nine style

594
00:31:21,720 --> 00:31:25,759
bank run situation? Because so many Silicon Valley billionaires had

595
00:31:25,759 --> 00:31:29,119
their money in this thing and when you looked as

596
00:31:29,200 --> 00:31:31,480
people looked at the company and what you know, in

597
00:31:31,480 --> 00:31:33,200
the lead up to the crash, there were sort of

598
00:31:33,240 --> 00:31:36,279
two ways you could explain what happened. Well, one is

599
00:31:36,359 --> 00:31:39,160
they got way overweight treasuries and then we had sort

600
00:31:39,200 --> 00:31:41,519
of a historic decline. And the value of treasuries is

601
00:31:42,319 --> 00:31:47,480
you know, treasuries, bond yields and bond prices are inversely correlated.

602
00:31:47,480 --> 00:31:49,480
So if you own a bond at two percent and

603
00:31:49,480 --> 00:31:51,640
that type of bond goes to five percent, well you've

604
00:31:51,680 --> 00:31:53,440
lost a ton of money. And that's what happened with

605
00:31:53,519 --> 00:31:56,680
US treasuries, and Silicon Valley Bank had a ton of those,

606
00:31:57,039 --> 00:32:00,720
and so basically they became insolvent if they to liquidate that.

607
00:32:00,759 --> 00:32:02,359
So it's people as there was a run on the bank,

608
00:32:02,400 --> 00:32:03,920
they had started had to sell in those treasuries at

609
00:32:03,960 --> 00:32:05,839
a discount, and they didn't have enough money, and so

610
00:32:06,079 --> 00:32:06,960
Federal Reserve.

611
00:32:06,720 --> 00:32:07,200
Speaker 4: Had to step in.

612
00:32:07,279 --> 00:32:11,640
Speaker 6: Fdic all that souff well in interviews or I'd say,

613
00:32:11,759 --> 00:32:15,880
in research, it came out that, uh, their risk management officer,

614
00:32:15,920 --> 00:32:17,960
the person who's supposed to be looking at those sort

615
00:32:18,000 --> 00:32:19,960
of hey, what if this happened, would we have enough

616
00:32:20,000 --> 00:32:22,599
money on hand to pay all the depositors out? That

617
00:32:22,640 --> 00:32:26,119
person had been on a six month sabbatical to plan

618
00:32:26,359 --> 00:32:29,599
a lesbian pride parade I think in the United Kingdom,

619
00:32:30,440 --> 00:32:33,519
and so had not even been at their job during

620
00:32:33,559 --> 00:32:36,200
that period of time. And when I would do interviews

621
00:32:36,200 --> 00:32:38,519
about how this was an example of how wokeness and

622
00:32:38,880 --> 00:32:43,160
esg were you know, herting corporates, I would get the pushback,

623
00:32:43,160 --> 00:32:45,039
mostly from left wing journalists, but even some right wing

624
00:32:45,000 --> 00:32:46,799
would say, hey, what do you mean this is like

625
00:32:46,839 --> 00:32:49,160
that's that's just a coincidence that had nothing to do.

626
00:32:49,279 --> 00:32:52,599
Like what crushed them was this interest rate issue? You

627
00:32:52,599 --> 00:32:55,759
know this once in a you know, blue moon decline

628
00:32:55,799 --> 00:32:59,119
in treasury prices, and see it's an issue between like

629
00:32:59,319 --> 00:33:03,799
first and order effects. Correct, Yes, it is true that

630
00:33:03,880 --> 00:33:07,920
the first order cause of Silicon Valley Bank going out

631
00:33:08,279 --> 00:33:11,680
was that treasuries declined, But the second order effect of this,

632
00:33:11,759 --> 00:33:15,079
you know, the cause behind the cause was that they

633
00:33:15,079 --> 00:33:18,000
were focused so much on woke issues instead of making

634
00:33:18,039 --> 00:33:21,599
sure that they had their bank balance sheet solidified and

635
00:33:21,640 --> 00:33:24,319
ready for you know, all weather situation, which is what

636
00:33:24,319 --> 00:33:26,680
they're supposed to be doing. And so I would say

637
00:33:26,680 --> 00:33:29,359
corporate America is in the same situation. You can look

638
00:33:29,440 --> 00:33:31,240
at a building that burned down and say, well, it's

639
00:33:31,279 --> 00:33:34,240
because the fire alarm didn't work. But then you can

640
00:33:34,279 --> 00:33:36,960
find out that the fire alarm didn't work because they've

641
00:33:37,000 --> 00:33:39,799
been hiring based on DEI and not competence, and so

642
00:33:39,839 --> 00:33:41,920
no one was replacing the broken fire alarm, if that

643
00:33:41,960 --> 00:33:45,039
makes sense. And that's sort of happening at large corporate America,

644
00:33:45,079 --> 00:33:47,559
and so the goods and services are sort of declining

645
00:33:47,599 --> 00:33:48,599
in quality for that reason.

646
00:33:49,519 --> 00:33:52,640
Speaker 3: Well, I mean you see this in kind of typically

647
00:33:53,240 --> 00:34:00,759
corrupt blue cities. New Orleans comes to mind, where okay, yeah,

648
00:34:01,079 --> 00:34:03,480
New Orleans, well, I guess I was gonna say, is

649
00:34:03,519 --> 00:34:06,559
a shithole because of but a large part of the reason,

650
00:34:07,440 --> 00:34:09,480
one of many reasons, I'll put it that way. We

651
00:34:09,559 --> 00:34:12,920
see's Hurricane Katrina, and you can say, oh, well, I

652
00:34:12,920 --> 00:34:15,360
blame the hurricane, and it's like, well, yes, of course

653
00:34:15,400 --> 00:34:16,679
the hurricane is the problem.

654
00:34:17,000 --> 00:34:17,519
Speaker 4: You know, like the.

655
00:34:19,119 --> 00:34:22,119
Speaker 3: Kind of like the first cause for a large number

656
00:34:22,159 --> 00:34:26,960
of these issues. But also the guy you paid to

657
00:34:27,039 --> 00:34:30,639
keep the pumps working never showed up, so the pumps

658
00:34:30,639 --> 00:34:33,239
didn't turn on because then been worked on in a decade.

659
00:34:33,960 --> 00:34:38,480
And it's like, well, okay, like that's also a relevant factor, right,

660
00:34:38,679 --> 00:34:42,960
It's a both and sort of thing. I'm curious because

661
00:34:43,000 --> 00:34:46,400
you mentioned hiring earlier. Have you read this piece was

662
00:34:46,440 --> 00:34:48,000
in compact the Lost Generation?

663
00:34:48,960 --> 00:34:51,440
Speaker 4: Yeah, big fan Yeah, And.

664
00:34:52,000 --> 00:34:55,159
Speaker 3: Dave Green, the distributist, wrote a great response to it

665
00:34:55,159 --> 00:34:57,320
came out today. You can find it on his substack

666
00:34:58,079 --> 00:35:01,559
for those interested. But a lot of this was chronicling

667
00:35:01,760 --> 00:35:05,760
the difficulties that particularly young white men have had in

668
00:35:05,800 --> 00:35:09,719
the job market after the great Awokening, right, the kind

669
00:35:09,719 --> 00:35:13,320
of mid Obama years. And so I'm curious, right, if

670
00:35:13,360 --> 00:35:18,440
we hear about this push for diversity at the executive level,

671
00:35:18,559 --> 00:35:22,239
idea that we need to be hiring more people of color,

672
00:35:22,280 --> 00:35:26,800
more women, more you know, sexual minorities, is there a

673
00:35:27,760 --> 00:35:31,760
one Is there any relationship between the broader hiring issues

674
00:35:31,760 --> 00:35:35,360
that certain demographics are facing, and if so, is this

675
00:35:35,719 --> 00:35:38,320
one of those first or second order effects? Is it

676
00:35:38,400 --> 00:35:41,000
black Rock saying no, we want more diversity all the

677
00:35:41,039 --> 00:35:44,559
way down to the ground level like company wide. Or

678
00:35:44,599 --> 00:35:47,599
are they simply saying we want more at the executive

679
00:35:47,679 --> 00:35:51,280
level and those very woke privilege to use their term

680
00:35:51,360 --> 00:35:54,840
executives are saying, well, I'm going to replicate this more

681
00:35:54,880 --> 00:35:56,960
of me so there will be more people like me.

682
00:35:57,400 --> 00:35:59,000
Or is it kind of a mix. I realized I

683
00:35:59,000 --> 00:36:00,800
threw a bunch at you there, but I'm curious to

684
00:36:00,800 --> 00:36:01,519
get your thoughts.

685
00:36:01,320 --> 00:36:02,960
Speaker 6: So I'm glad you brought it up that way because

686
00:36:03,000 --> 00:36:07,760
I think you're exactly right. It's it's a self reiterating

687
00:36:07,800 --> 00:36:11,320
feedback loop, so it's both, but they feed on each other.

688
00:36:11,480 --> 00:36:14,239
So I mentioned before that, you know, one of the

689
00:36:14,239 --> 00:36:17,400
motivations that potentially could be behind companies like black Rock

690
00:36:17,440 --> 00:36:20,320
pushing this kind of stuff is that because you know,

691
00:36:21,119 --> 00:36:24,320
executives and board of director members who are you know,

692
00:36:24,360 --> 00:36:26,480
earn their spot by being really good at their job

693
00:36:26,719 --> 00:36:29,880
or having the requisite skills, They don't really, I mean,

694
00:36:29,880 --> 00:36:32,559
they do rely on these asset managers to to to

695
00:36:32,639 --> 00:36:34,559
re elect them in the sense, in the literal sense,

696
00:36:34,880 --> 00:36:37,000
but that's not the reason that they were able to

697
00:36:37,039 --> 00:36:38,920
climb to where they are. They're competent, they know what

698
00:36:38,920 --> 00:36:42,199
they're doing, they have to quote liambescent, a special set

699
00:36:42,199 --> 00:36:46,119
of skills that has allowed them uh to to to

700
00:36:46,159 --> 00:36:49,119
get there. When you are chosen because of your race

701
00:36:49,199 --> 00:36:53,440
or sex explicitly in your politics, let's be honest, they're not.

702
00:36:53,559 --> 00:36:55,880
You know, they wouldn't put Clarence Thomas on any boards.

703
00:36:58,400 --> 00:37:03,639
You owe your job to your patron right. You can't

704
00:37:03,679 --> 00:37:06,400
just go get another job somewhere else without that person's help.

705
00:37:06,559 --> 00:37:08,800
Somebody who's really good at oil drilling is always going

706
00:37:08,880 --> 00:37:11,239
to be employable, even if they got fired unfairly from exon.

707
00:37:11,519 --> 00:37:13,079
They would go work at Chevron, or they would go

708
00:37:13,079 --> 00:37:15,360
work at bpaid because they're really really good at their job.

709
00:37:16,000 --> 00:37:18,559
Somebody who's just there because they're part of a political

710
00:37:18,559 --> 00:37:21,679
patronage system is dependent on the patron and that's not

711
00:37:21,920 --> 00:37:24,719
a defect, that's a feature of what they're trying to

712
00:37:24,760 --> 00:37:29,199
create once there. Though, I've always said that DEI departments

713
00:37:29,639 --> 00:37:33,119
are cancerous, not just in the pejorative sense, like we

714
00:37:33,199 --> 00:37:35,639
hate them they're bad, but also in the technical sense.

715
00:37:36,079 --> 00:37:37,960
A cancer cell. Part of what makes a cancer cell

716
00:37:38,039 --> 00:37:40,800
cancer cell is that it doesn't actually serve a purpose

717
00:37:40,840 --> 00:37:45,440
within the body. Its mission becomes simply to grow itself.

718
00:37:45,480 --> 00:37:48,000
To multiply itself and to gain more and more dominion

719
00:37:48,039 --> 00:37:50,119
over the host body until it kills the host. Not

720
00:37:50,199 --> 00:37:53,119
meaning to kill those just a natural side effect of

721
00:37:53,159 --> 00:37:57,039
the fact that it's on inexorable growth trajectory. And if

722
00:37:57,079 --> 00:38:00,000
you look at these DEI departments, that's exactly how they act.

723
00:38:00,519 --> 00:38:04,199
When you look at the way that they score how

724
00:38:04,239 --> 00:38:07,239
well they've done as a DEI department, It's not we

725
00:38:07,280 --> 00:38:10,159
added this much money to the bottom line of the company.

726
00:38:10,360 --> 00:38:15,280
We found talent in some faraway place that no one

727
00:38:15,320 --> 00:38:17,800
else could find because they're just too racist or whatever,

728
00:38:18,000 --> 00:38:23,079
and that person invented the next you know, better mousetrap

729
00:38:23,159 --> 00:38:26,800
or whatever proverbial, you know, improvement for society. That's not

730
00:38:26,920 --> 00:38:30,239
how they advertise what they did. They will advertise what

731
00:38:30,280 --> 00:38:32,760
they did by how much of the company now fits

732
00:38:32,800 --> 00:38:36,360
the democratic profile that's their preference, meaning how much they

733
00:38:36,400 --> 00:38:41,239
grew usually non whites, non males, And then how many

734
00:38:41,960 --> 00:38:45,559
areas of the company DEI is now injected into. And

735
00:38:45,559 --> 00:38:47,800
one of the things they'll brag about is that constantly

736
00:38:47,800 --> 00:38:50,119
you'll hear this in corporate speak in.

737
00:38:52,119 --> 00:38:52,880
Speaker 4: Or are you used to.

738
00:38:52,960 --> 00:38:56,039
Speaker 6: It's obviously gone away significantly since the election, but you

739
00:38:56,119 --> 00:38:59,360
used to hear them brag about we've integrated DEI into

740
00:38:59,400 --> 00:39:02,760
everything we do or DEI is the core of everything

741
00:39:02,800 --> 00:39:06,760
we do. Right, that's not I mean, that should be

742
00:39:07,119 --> 00:39:10,400
an offensive statement to shareholder. It's an aggressive statement towards

743
00:39:10,400 --> 00:39:13,800
shareholders and consumers because what should be the foundation of

744
00:39:13,840 --> 00:39:15,320
anything the company's doing.

745
00:39:15,159 --> 00:39:15,920
Speaker 4: Is not DEI.

746
00:39:16,280 --> 00:39:19,360
Speaker 6: It should be either serving a customer base or which

747
00:39:19,440 --> 00:39:21,800
really the best way to frame it is, it should

748
00:39:21,800 --> 00:39:24,400
be making money for shareholders by serving their customers. If

749
00:39:24,400 --> 00:39:26,320
it's not related to that, they shouldn't be doing it.

750
00:39:26,679 --> 00:39:30,039
But DEI again acts as a is a cancer in

751
00:39:30,079 --> 00:39:33,079
the technical sense. Its only point is to grow its

752
00:39:33,079 --> 00:39:37,000
size and dominion. And I may have forgotten the second

753
00:39:37,000 --> 00:39:39,239
part of your question, so I'll stop there. But I

754
00:39:39,239 --> 00:39:41,840
think that is a really important thing to note, because

755
00:39:41,880 --> 00:39:45,280
once you get a DEI department going, those people want

756
00:39:45,320 --> 00:39:48,119
to constantly hire more people based on DEI. And one

757
00:39:48,119 --> 00:39:50,800
of the reasons why sometimes I think conservatives I'll just

758
00:39:51,079 --> 00:39:56,239
say this to stop, is that conservatives offense like the

759
00:39:56,320 --> 00:40:00,360
point to like a non wide or non male person

760
00:40:00,400 --> 00:40:02,760
that's been it's conservative and say, well, why don't you

761
00:40:02,800 --> 00:40:05,719
want like Stacey Dash to be your company or something

762
00:40:05,760 --> 00:40:08,400
like that, and it's like, yeah, because that's not they're

763
00:40:08,440 --> 00:40:11,320
not actually selecting for race and sex like that is

764
00:40:11,320 --> 00:40:13,880
what they're doing, but that's not the purpose behind it.

765
00:40:13,880 --> 00:40:16,119
The purpose is to be able to have an excuse

766
00:40:16,440 --> 00:40:19,719
to hire people within their political coalition and put them

767
00:40:19,719 --> 00:40:23,000
in positions of power and influence and race and sex

768
00:40:23,119 --> 00:40:24,280
acts as.

769
00:40:23,960 --> 00:40:30,480
Speaker 7: A uniform, so to speak for and an excuse so

770
00:40:30,519 --> 00:40:32,320
they can say, if they just said, listen, we just

771
00:40:32,360 --> 00:40:35,039
need more Democrats in charge of every company.

772
00:40:35,079 --> 00:40:37,480
Speaker 6: Every company needs to be an arm of the Democratic Party.

773
00:40:38,199 --> 00:40:40,599
You know, we're going to get rid of any executive

774
00:40:40,679 --> 00:40:42,719
or any board of director is not a Democrat. They

775
00:40:42,760 --> 00:40:45,159
would not be able to get away with that. The

776
00:40:45,199 --> 00:40:48,599
DEI thing gives them a fig leaf that they're attempting

777
00:40:48,639 --> 00:40:52,239
some other greater good. But what's really happening is their

778
00:40:52,840 --> 00:40:55,639
their unstated purpose is to just become a political utility

779
00:40:55,679 --> 00:40:57,559
for the Democratic Party. And so when people self, so

780
00:40:57,840 --> 00:41:00,760
when people take off the uniform, would be aware the uniform,

781
00:41:01,320 --> 00:41:03,320
raise their hand and say I'm actually not part of

782
00:41:03,360 --> 00:41:05,519
your army. In other words like i'm black, or i'm

783
00:41:05,519 --> 00:41:07,960
a woman or whatever, but I'm not a Democrat. And

784
00:41:08,000 --> 00:41:11,039
then they're shocked when like they don't apply the same

785
00:41:11,119 --> 00:41:15,119
patronage or dei rules to that person. You shouldn't be confused.

786
00:41:15,400 --> 00:41:17,519
You've just self selected out of the whole purpose of

787
00:41:17,519 --> 00:41:19,480
what they're doing. So why would they Why would they

788
00:41:19,480 --> 00:41:21,079
pick you for something? But that kind of the reason

789
00:41:21,119 --> 00:41:23,920
I mentioned that is it sort of helps people understand

790
00:41:24,280 --> 00:41:29,119
why this is a crisis of managerialisms or managers in revolt,

791
00:41:29,639 --> 00:41:33,320
rather than just some sort of you know, general societal

792
00:41:33,360 --> 00:41:36,079
obsession with increasing the number of black people or women,

793
00:41:36,119 --> 00:41:39,679
or if that was really the motivation behind it, they

794
00:41:39,719 --> 00:41:44,719
would not select out conservatives, women or blacks or gays

795
00:41:44,800 --> 00:41:47,679
or whatever when they when they make these types of selections,

796
00:41:47,719 --> 00:41:48,679
that's not the purpose behind it.

797
00:41:48,719 --> 00:41:49,800
Speaker 4: That's just a fig leaf they use.

798
00:41:50,960 --> 00:41:54,320
Speaker 3: Yeah, so several things they're one I think probably the

799
00:41:54,360 --> 00:41:59,159
best analysis is Spandrel's essay on Bioleninism, where he talks

800
00:41:59,159 --> 00:42:02,360
about exactly this process, that it's actually an advantage to

801
00:42:02,360 --> 00:42:05,280
have an incompetent person in a position of power under you,

802
00:42:05,559 --> 00:42:09,719
because they understand that on a fair field, they wouldn't

803
00:42:09,800 --> 00:42:12,719
have this great job, they wouldn't have the corner office.

804
00:42:13,679 --> 00:42:16,079
So they realize very quickly, I need to do what

805
00:42:16,119 --> 00:42:20,159
he wants because he's Z's the reason I'm here, right,

806
00:42:20,199 --> 00:42:24,519
they understand that relationship implicitly. I mean also to that point,

807
00:42:24,559 --> 00:42:26,559
you know, when we're talking about you know, this is

808
00:42:26,599 --> 00:42:30,039
a political proxy. I mean, look, man, like you see

809
00:42:30,039 --> 00:42:35,639
this with the traders, right when you know Joe bidenopolists

810
00:42:35,639 --> 00:42:37,679
said and I can't remember the front half of the

811
00:42:37,719 --> 00:42:39,519
sentence where he basically said, you know, if you're not

812
00:42:39,599 --> 00:42:43,880
voting for me, you ain't black. He's not wrong, And

813
00:42:43,960 --> 00:42:48,199
conservatives mocked him for you know, having poor biology, but

814
00:42:48,840 --> 00:42:52,280
that's not the point that he's making. He's talking about

815
00:42:52,440 --> 00:42:56,280
capital B political identity black, which has a whole number

816
00:42:56,280 --> 00:42:58,719
of different features to it, you know, certain attitudes towards

817
00:42:58,760 --> 00:43:01,519
law enforcement, and you know, have a certain voting pattern

818
00:43:01,559 --> 00:43:04,880
associated with it. That's what he's talking about. He's right,

819
00:43:05,199 --> 00:43:07,920
you're the idiot. And now look I realized Joe Biden

820
00:43:08,000 --> 00:43:09,559
literally is an idiot. You know, there's not a lot

821
00:43:09,599 --> 00:43:12,920
going out upstairs. But functionally that is a more true

822
00:43:13,000 --> 00:43:15,960
statement than you know, Oh well Clarence Thomas is black.

823
00:43:16,000 --> 00:43:18,360
It's like, well, yes, and right, that's not the context

824
00:43:18,360 --> 00:43:22,079
in which we're talking. And so similarly, right, like that's

825
00:43:22,119 --> 00:43:25,000
exactly what this is. This is a massive patronage network.

826
00:43:25,400 --> 00:43:28,679
And look, one of the other interesting things, and you mentioned,

827
00:43:29,119 --> 00:43:31,519
you know, the purpose of cancer versus the purpose of

828
00:43:31,559 --> 00:43:34,639
a should we say, a useful cell with an organism, right,

829
00:43:34,679 --> 00:43:37,480
Eventually this thing is also parasitic in the sense that

830
00:43:37,559 --> 00:43:40,800
it becomes the purpose of the institution. This is something

831
00:43:40,800 --> 00:43:43,039
that I see conservatives struggle with a lot, is that

832
00:43:43,079 --> 00:43:46,039
they will read the box. They'll say, oh, well, this

833
00:43:46,119 --> 00:43:49,400
is a company for making shoes. Why don't they just

834
00:43:49,440 --> 00:43:53,039
shut up and make sneakers because Republicans buy Nikes. Two

835
00:43:53,480 --> 00:43:55,519
It's like, well, yeah, that's the stated purpose of this

836
00:43:55,679 --> 00:43:59,760
organization the revealed preference. What it actually does is completely different.

837
00:44:00,199 --> 00:44:03,719
And look, obviously I'm a professional internet dweller now, so

838
00:44:03,760 --> 00:44:06,039
I don't really have a real job, but my last

839
00:44:06,079 --> 00:44:09,119
corporate job, right when I had an office and you know,

840
00:44:09,159 --> 00:44:12,320
all these sort of different organs in it. It was

841
00:44:12,400 --> 00:44:15,119
really interesting because as the company started to circle the drain,

842
00:44:15,760 --> 00:44:19,079
what do they bring in a huge DEI push like

843
00:44:19,159 --> 00:44:21,440
that's going to be the thing that saves us. And

844
00:44:21,480 --> 00:44:23,400
so there's a weird degree to which it has kind

845
00:44:23,440 --> 00:44:27,719
of wormed into the sort of best practices the way

846
00:44:27,760 --> 00:44:30,679
that you're supposed to run a successful business. And so

847
00:44:30,840 --> 00:44:34,920
in times of crisis when they're casting around for solutions,

848
00:44:34,960 --> 00:44:37,880
in many cases, that's the first thing that they reach for,

849
00:44:38,119 --> 00:44:41,119
because that is what every accrediting institution, that is what

850
00:44:41,159 --> 00:44:44,360
the press, that is what in many cases the shareholders

851
00:44:44,400 --> 00:44:47,880
are saying you should do. This is part of being

852
00:44:48,039 --> 00:44:51,239
a good manager, a good VP. And one of my

853
00:44:51,280 --> 00:44:53,119
friends who will probably hear this and tell me to

854
00:44:53,119 --> 00:44:57,719
stop talking about him, he is a stricken company and

855
00:44:58,400 --> 00:45:02,320
he keeps telling me. It's kind of increasingly despondent messages.

856
00:45:02,840 --> 00:45:07,320
The how often this phrase we're not doing well, but

857
00:45:07,400 --> 00:45:10,840
we're doing good is coming up in meetings. The idea

858
00:45:10,880 --> 00:45:12,880
that we've just given up on, the idea of being

859
00:45:12,960 --> 00:45:16,320
a functional company, that's completely out the window. But in

860
00:45:16,400 --> 00:45:19,199
these like last remated years, before this thing just you know,

861
00:45:19,320 --> 00:45:23,639
impacts the surface, that just explodes into flames, we'll make

862
00:45:23,679 --> 00:45:25,519
sure that we've sure got a lot of homos on

863
00:45:25,599 --> 00:45:27,920
staff like that. That'll be the thing that you know,

864
00:45:27,960 --> 00:45:31,440
defines our company. And yeah, I really that wasn't the

865
00:45:31,480 --> 00:45:34,480
most organized response, But it is interesting the degree to

866
00:45:34,559 --> 00:45:39,360
which the DEI effectively the ESG right because it's not

867
00:45:39,440 --> 00:45:41,800
just diversity, it's also the climate stuff. It's also the

868
00:45:41,840 --> 00:45:46,639
other things become the purpose of these institutions. Obviously, even

869
00:45:46,679 --> 00:45:49,320
Black Rock as an example, right, that is on the

870
00:45:49,440 --> 00:45:53,639
tin it's a asset manager. They're supposed to grow money,

871
00:45:53,880 --> 00:45:56,559
you know, within certain bands. But now it's like they

872
00:45:56,639 --> 00:45:59,440
still do that, right, that's a thing that they you know, operate,

873
00:45:59,840 --> 00:46:02,960
but the purpose is no longer their stated purpose. It's

874
00:46:03,000 --> 00:46:06,119
their revealed purpose. And I think that's an interesting gap

875
00:46:06,159 --> 00:46:10,519
that oftentimes conservative struggle with because again, on a technical basis,

876
00:46:10,519 --> 00:46:12,800
they're right, that is what this thing is supposed to do.

877
00:46:13,599 --> 00:46:16,920
But you coming up with the rules of the game,

878
00:46:17,400 --> 00:46:19,880
you know, midway through and saying, oh, you're you're violating them,

879
00:46:19,880 --> 00:46:24,559
you're cheating. They don't care. Obviously they don't care. And

880
00:46:24,599 --> 00:46:26,840
I think that that is sort of a trap that

881
00:46:27,079 --> 00:46:29,559
you know, critics often fall into, if you see what

882
00:46:29,559 --> 00:46:30,480
I'm getting at.

883
00:46:30,679 --> 00:46:33,679
Speaker 6: Yeah, I mean we've done the same thing with journalism,

884
00:46:33,840 --> 00:46:37,599
where you know, someone will find out a journalist, you know,

885
00:46:37,639 --> 00:46:41,239
like that time they caught that and I noticed nothing

886
00:46:41,280 --> 00:46:44,320
ever came of that, But wasn't didn't they catch somebody

887
00:46:44,320 --> 00:46:48,280
from NBC? Like following the jurors home from the Rittenhouse

888
00:46:48,360 --> 00:46:51,079
trial or something like that, and you'll see these pieces

889
00:46:51,119 --> 00:46:55,559
where it's like that's not within the journalism rules of

890
00:46:55,599 --> 00:46:57,880
ethics or something like that. It's a little bit like

891
00:46:57,960 --> 00:47:01,519
you've caught a double agent inside the CIA or something

892
00:47:01,559 --> 00:47:03,559
like that. And you start lecturing like, you know, this

893
00:47:03,800 --> 00:47:05,920
violates the rule book at the CIA. What do you

894
00:47:06,000 --> 00:47:08,000
have to say for yourself? It's like, yeah, no kidding,

895
00:47:08,039 --> 00:47:10,719
they're not on your team, like they why would they? Yeah,

896
00:47:11,079 --> 00:47:14,639
you find Yeah, they're literally they're literally there to to

897
00:47:14,760 --> 00:47:15,320
like hurt you.

898
00:47:15,400 --> 00:47:16,320
Speaker 4: Why would they care what?

899
00:47:16,480 --> 00:47:18,440
Speaker 6: And it's the same thing within a lot of these

900
00:47:18,679 --> 00:47:21,280
whether it's you know, journalists who are obviously just far

901
00:47:21,440 --> 00:47:24,440
left of part checks or you know inside corporate America.

902
00:47:24,840 --> 00:47:27,320
And I would say, what's probably happening at your friend's

903
00:47:27,360 --> 00:47:31,079
company is and this is where sort of the patronage network,

904
00:47:31,199 --> 00:47:33,840
you know, goes from like you know, you know they

905
00:47:33,880 --> 00:47:36,960
have like you know, there's a macroeconomics and microeconomics. This

906
00:47:37,039 --> 00:47:39,880
is where it goes from like micro patronage to macro

907
00:47:40,039 --> 00:47:43,239
patronage system. Right if you have a company, if let's

908
00:47:43,239 --> 00:47:45,519
say you're the executives at one of these companies, and

909
00:47:45,599 --> 00:47:47,719
you just think you're doomed. You're well, I don't want

910
00:47:47,719 --> 00:47:50,039
to name anybody because I'll I'll get attacked for beating

911
00:47:50,280 --> 00:47:53,039
down on some poor company that's that's in trouble. But like,

912
00:47:53,280 --> 00:47:55,519
imagine a brick and mortar store that sells something that's

913
00:47:55,519 --> 00:47:57,320
easier to get on Amazon. That shouldn't be a hard

914
00:47:57,360 --> 00:47:59,920
thing to imagine, right, Yeah, like the.

915
00:48:00,119 --> 00:48:01,880
Speaker 3: Last remaining radio shack or something.

916
00:48:01,960 --> 00:48:04,719
Speaker 6: Yeah, you're running radio shack, Like, what exactly are you

917
00:48:04,800 --> 00:48:07,880
gonna do? You probably don't have enough money to the

918
00:48:08,880 --> 00:48:11,360
horses left the barn. Maybe if you'd started right at

919
00:48:11,360 --> 00:48:13,119
the beginning, you could try and come up with some

920
00:48:13,239 --> 00:48:15,639
sort of you know, same day delivery thing to compete

921
00:48:15,679 --> 00:48:18,599
with Amazon. Or you could have you know, only hired

922
00:48:18,960 --> 00:48:21,000
like full on autists to work at the store so

923
00:48:21,079 --> 00:48:22,639
that you can come in here and you can build

924
00:48:22,639 --> 00:48:24,360
anything because we can tell you how, kind of like

925
00:48:24,440 --> 00:48:27,239
the old home depot model before they ruined themselves. But

926
00:48:27,519 --> 00:48:29,880
in any case, it's too late. You know you're sunk.

927
00:48:29,960 --> 00:48:32,239
You're just riding it out. You're collecting a paycheck. Right

928
00:48:32,719 --> 00:48:34,840
if you're one of the executives at that company, and

929
00:48:34,920 --> 00:48:38,639
you know the writings on the Wall, Why wouldn't you

930
00:48:38,880 --> 00:48:42,000
just virtue signal with your remaining days as hard as

931
00:48:42,079 --> 00:48:46,760
humanly possible and gain yourself cachet with the New York

932
00:48:46,800 --> 00:48:50,960
Times or Washington Post or with some other you know,

933
00:48:51,119 --> 00:48:53,920
left wing institution, or Larry Fink for that matter. I mean,

934
00:48:54,199 --> 00:48:56,800
if Larry Finks out here running around saying, you know,

935
00:48:56,880 --> 00:48:59,079
he only wants to put people of a certain stripe

936
00:48:59,599 --> 00:49:03,880
on boards, and you are able to signal to him, hey,

937
00:49:04,360 --> 00:49:06,039
I may not be a black guy or a gay

938
00:49:06,079 --> 00:49:09,400
guy or a chick, but I will will work harder

939
00:49:09,480 --> 00:49:12,119
on this at Radio Shack than you've ever seen. Right,

940
00:49:12,719 --> 00:49:15,400
then maybe you could catch his attention and he puts

941
00:49:15,440 --> 00:49:17,639
you on some board of some company that's not failing,

942
00:49:17,760 --> 00:49:19,760
or at least not as far along in failing.

943
00:49:19,880 --> 00:49:20,000
Speaker 5: Right.

944
00:49:20,440 --> 00:49:23,360
Speaker 6: So that's what's a competitive patronage is it's a good

945
00:49:23,519 --> 00:49:26,159
company level to like, I'm not thinking any more about me,

946
00:49:26,719 --> 00:49:28,800
the guy who runs Radio Shack. I'm just thinking about me,

947
00:49:28,960 --> 00:49:30,920
the guy who could go anywhere is and I need

948
00:49:30,960 --> 00:49:32,119
to get off the sinking ship.

949
00:49:32,679 --> 00:49:34,960
Speaker 3: Oh one hundred percent. And again, this is what we

950
00:49:35,119 --> 00:49:38,440
call a principal agent problem, right where the people in

951
00:49:38,599 --> 00:49:40,960
charge of doing the thing have a different set of

952
00:49:41,000 --> 00:49:45,239
incentives than you, the guy who's ostensibly in charge of them.

953
00:49:45,719 --> 00:49:45,840
Speaker 1: Right.

954
00:49:45,920 --> 00:49:48,239
Speaker 3: Obviously, again with this first ownership, this is a you know,

955
00:49:48,320 --> 00:49:51,719
difficult problem just to point out who owns anything. But

956
00:49:51,840 --> 00:49:55,199
again right, like, this is the same pattern we see everywhere.

957
00:49:55,840 --> 00:49:58,679
So you've mentioned a couple court cases attacking you know,

958
00:49:58,800 --> 00:50:04,519
Blackrock and others, but for using ESG to manage corporate funds,

959
00:50:04,800 --> 00:50:10,559
but also for seems to be anti trust violations. What

960
00:50:10,760 --> 00:50:12,760
is the fight against ESG looking like?

961
00:50:13,159 --> 00:50:13,199
Speaker 1: Like?

962
00:50:13,599 --> 00:50:16,800
Speaker 3: How organized is this? Who is going after it? And

963
00:50:17,119 --> 00:50:19,639
I know you mentioned, you know that this has become

964
00:50:20,679 --> 00:50:24,079
less vocal in the kind of Trump two point zero admin.

965
00:50:24,519 --> 00:50:27,440
But has this actually stopped happening or are we just

966
00:50:27,599 --> 00:50:29,360
changing our terms to do the same thing.

967
00:50:30,719 --> 00:50:33,000
Speaker 6: Yeah, So, as far as where we are in the

968
00:50:33,079 --> 00:50:37,679
fight right now, I neither want to give people too

969
00:50:37,760 --> 00:50:44,000
much confidence nor doom pill them. So they are no

970
00:50:44,199 --> 00:50:46,719
doubt on their back heels. If you look at where

971
00:50:46,760 --> 00:50:52,079
they were in you know, twenty twenty two, you know,

972
00:50:52,639 --> 00:50:57,320
thousand year ESG Reich was was was here. Groups like

973
00:50:57,400 --> 00:50:59,559
as you sow, which are one of the big environmentalists,

974
00:51:02,679 --> 00:51:08,519
shareholder activists, nonprofits. We're saying you know, we're in charge now,

975
00:51:08,760 --> 00:51:10,559
we run corporate America. I mean, this was that kind

976
00:51:10,559 --> 00:51:12,559
of language is like being put into their you know,

977
00:51:12,840 --> 00:51:16,800
annual reports to their donors that is gone. And if

978
00:51:16,840 --> 00:51:19,800
you look at to the extent they're talking at all,

979
00:51:20,280 --> 00:51:24,840
they're talking about the retrenchment of ESG, the companies abandoning

980
00:51:24,920 --> 00:51:27,880
net zero pledges, the companies changing the name of their

981
00:51:27,920 --> 00:51:32,639
DEI departments, and there's this sort of morose, you know,

982
00:51:32,719 --> 00:51:36,760
the party's over type of tone to the things that

983
00:51:36,800 --> 00:51:42,199
they're saying. That said, I I do an annual ESG

984
00:51:42,400 --> 00:51:47,320
conference for for some folks that got recorded I think

985
00:51:47,400 --> 00:51:50,719
by staff of the hotel and leaked to The Atlantic

986
00:51:50,840 --> 00:51:54,360
earlier this year, and it's a great peace. I forget

987
00:51:54,400 --> 00:51:56,159
what the title is, which is really bad on me.

988
00:51:56,280 --> 00:51:58,519
I should know that offhand. But if you google consumers

989
00:51:58,559 --> 00:52:01,800
Research in Atlantic, it'll it'll pop up. What's interesting about

990
00:52:01,840 --> 00:52:04,320
it to me at least, wasn't just the you know,

991
00:52:04,639 --> 00:52:08,440
fact that we were worth committing wiretapping crimes against. But

992
00:52:08,559 --> 00:52:12,760
at the end it quoted some people in the ESG

993
00:52:12,880 --> 00:52:17,000
movement anonymously and it asked them, you know, way, where

994
00:52:17,079 --> 00:52:19,119
do you know? It seems like, yes, she's dead, like,

995
00:52:20,239 --> 00:52:22,559
where do you think this stands? And what the person

996
00:52:22,679 --> 00:52:26,440
said was I'm telling all of my people, which that

997
00:52:26,599 --> 00:52:28,599
statement in of itself says a lot right there. Right,

998
00:52:28,719 --> 00:52:31,639
this is a network, this is a ESG industrial complex.

999
00:52:32,519 --> 00:52:35,800
I'm telling all of my people just to lay low

1000
00:52:36,920 --> 00:52:41,559
and try not to get kicked out. So basically they

1001
00:52:41,679 --> 00:52:44,280
understand they now is not the time to put their

1002
00:52:44,280 --> 00:52:46,719
head above the parapet You have groups like us, you

1003
00:52:46,880 --> 00:52:50,400
have obviously the administration, a lot of states have become

1004
00:52:50,440 --> 00:52:54,440
activated against this. But that doesn't mean these people are

1005
00:52:54,480 --> 00:52:57,960
self deleting from these companies. They still want their jobs,

1006
00:52:57,960 --> 00:53:00,639
they still want their sinecures. They still for the ones

1007
00:53:00,679 --> 00:53:04,159
that are true believers, you know, want to wait maybe

1008
00:53:04,239 --> 00:53:07,840
till the political wind shift and you know, regain their

1009
00:53:08,480 --> 00:53:09,639
corporate dominance.

1010
00:53:09,320 --> 00:53:10,480
Speaker 4: Utopia that they thought they had.

1011
00:53:11,480 --> 00:53:16,280
Speaker 6: So what it's gonna take, unfortunately is I tell my staff,

1012
00:53:16,559 --> 00:53:19,280
last easy day was yesterday because when we started this,

1013
00:53:20,000 --> 00:53:21,880
they were doing all these things, and they were bragging

1014
00:53:21,920 --> 00:53:24,280
about doing all these things. Well they're no longer bragging

1015
00:53:24,320 --> 00:53:26,000
about doing all these things. So we can't just go

1016
00:53:26,039 --> 00:53:29,239
to their website and say, aha, you're you know, discriminating

1017
00:53:29,280 --> 00:53:30,960
based on racist X. I mean some of them still are.

1018
00:53:31,119 --> 00:53:33,280
I think Microsoft basically told everyone to pound sand. They're

1019
00:53:33,280 --> 00:53:36,280
just gonna do it anyway. But more or less a

1020
00:53:36,320 --> 00:53:38,639
lot of them have changed the Department of Belonging or

1021
00:53:38,639 --> 00:53:41,679
they've dropped the E and just become Department of Diversity

1022
00:53:41,719 --> 00:53:44,880
and Inclusion because for complex reasons. I won't they're too

1023
00:53:44,920 --> 00:53:46,880
tedious to bore you with. Equity is actually the most

1024
00:53:46,920 --> 00:53:53,519
legally objectionable term in DEI. But if you are in

1025
00:53:53,639 --> 00:53:56,519
the business, like I said, if if you're a cancer cell, right,

1026
00:53:57,000 --> 00:53:59,000
you don't just suddenly become like a kidney cell.

1027
00:53:59,280 --> 00:53:59,400
Speaker 1: Oh.

1028
00:53:59,440 --> 00:54:03,000
Speaker 6: I I've never been able to actually perform valuable service

1029
00:54:03,079 --> 00:54:05,360
for this company, But I guess now that I'm being

1030
00:54:05,440 --> 00:54:07,639
told that I have to, I'll just figure out a way.

1031
00:54:07,800 --> 00:54:09,760
These people don't know how to. They're in competence, or

1032
00:54:09,760 --> 00:54:12,000
I should say they're competent at one thing. They're not

1033
00:54:12,159 --> 00:54:14,880
competent at, you know, making new airplanes or you know,

1034
00:54:15,079 --> 00:54:16,719
making sure the bolts are on so the doors don't

1035
00:54:16,719 --> 00:54:19,639
fall out. But they are good at being cancer ourselves,

1036
00:54:19,840 --> 00:54:21,519
and that's all they know how to do. And so

1037
00:54:22,960 --> 00:54:25,599
we're gonna have to be chiseling these people out We're

1038
00:54:25,639 --> 00:54:27,599
gonna have to be looking for the behaviors and not

1039
00:54:27,800 --> 00:54:30,960
just the bragging about the activities. And it's gonna take

1040
00:54:31,159 --> 00:54:35,199
I think, a lot of state and federal actions and

1041
00:54:35,880 --> 00:54:41,360
hopefully groups like ourselves to really apply a price. And

1042
00:54:41,480 --> 00:54:44,119
we started off talking about the American Airlines case and

1043
00:54:44,119 --> 00:54:46,199
how they weren't able to find damages in that situation.

1044
00:54:46,719 --> 00:54:49,039
We're going to have to apply damages to these companies.

1045
00:54:49,280 --> 00:54:50,920
And I think one thing if I could, you know

1046
00:54:51,199 --> 00:54:52,440
this is going to come out of left field, because

1047
00:54:52,440 --> 00:54:53,920
I haven't brought it up yet, but if I could

1048
00:54:53,920 --> 00:54:56,920
give one message to the conservative movement writ large, is

1049
00:54:57,000 --> 00:55:00,119
that it has been way, way, way too reluctant to

1050
00:55:00,239 --> 00:55:04,400
apply actual consequences to corporate America. We have been bitching

1051
00:55:04,519 --> 00:55:08,320
and moaning about these people for decades, and hey, you

1052
00:55:08,400 --> 00:55:09,679
could point the finger at me and say, well, what

1053
00:55:09,760 --> 00:55:11,360
have you done. You've run ad campaigns. Isn't not a

1054
00:55:11,440 --> 00:55:13,800
form of bitching and moaning, And it absolutely is. I

1055
00:55:13,840 --> 00:55:16,679
think it's hurt their brands in a way that is measurable.

1056
00:55:17,000 --> 00:55:21,599
But it has to the reason Larry Fink groans when

1057
00:55:21,599 --> 00:55:25,119
he sees US launch a new billboard campaign or advertising

1058
00:55:25,159 --> 00:55:28,760
campaign against him isn't the advertising campaign. He's a billionaire,

1059
00:55:28,760 --> 00:55:30,440
what does he care like? He'll just go off to

1060
00:55:30,519 --> 00:55:34,639
his place and aspen. He has to worry about the

1061
00:55:34,960 --> 00:55:38,360
actual real world consequences. But legally and financial that will

1062
00:55:38,400 --> 00:55:42,719
befallow his company if people wake up to the scam

1063
00:55:42,800 --> 00:55:45,280
that he's running, and that's what we have to make

1064
00:55:45,320 --> 00:55:49,039
sure gets applied. It's fine to point and shriek at

1065
00:55:49,079 --> 00:55:51,039
these issues, and we should keep pointing and shrieking at

1066
00:55:51,079 --> 00:55:54,440
these issues until they go away, but you have to

1067
00:55:54,519 --> 00:55:57,000
have the follow on. And if we don't have the

1068
00:55:57,039 --> 00:56:00,360
follow on because we're too busy listening to CATO or

1069
00:56:00,360 --> 00:56:03,400
the American Enterprise Institute or the Chamber of Commerce, then

1070
00:56:03,440 --> 00:56:05,840
this will just keep getting worse and worse, because why

1071
00:56:05,920 --> 00:56:08,159
would they take us seriously. We're not actually going to

1072
00:56:08,199 --> 00:56:11,159
apply any negative consequences. And there's one thing you can

1073
00:56:11,199 --> 00:56:14,039
say about the Democrats when you cross them, they make

1074
00:56:14,119 --> 00:56:16,719
sure people pay real prices, and that can't be said

1075
00:56:16,719 --> 00:56:19,320
for our political coalition. So I think that's what's going

1076
00:56:19,400 --> 00:56:22,840
to shift it. Whether that's legal, whether that's political. Prices

1077
00:56:22,920 --> 00:56:23,239
need to be.

1078
00:56:23,280 --> 00:56:28,519
Speaker 3: Paid, No, definitely, and I think that that is something

1079
00:56:28,559 --> 00:56:31,639
that you see sort of across the conservative movement. I

1080
00:56:31,679 --> 00:56:35,679
think a lot of it is libertarian priors. And when

1081
00:56:35,719 --> 00:56:39,360
I say libertarian, I don't just mean like fa hyek, right,

1082
00:56:39,800 --> 00:56:44,480
but this idea of kind of polite, gentlemanly conduct, right,

1083
00:56:44,559 --> 00:56:49,360
the Marque of Queensbury rules right of politics. And the

1084
00:56:49,440 --> 00:56:54,760
problem is, right, Look, you know, if if you were

1085
00:56:54,840 --> 00:56:59,719
in a tightly constrained system where these rules are kind

1086
00:56:59,760 --> 00:57:02,719
of in formally enforced, right, you know, playing golf with

1087
00:57:02,760 --> 00:57:05,719
your buddies or whatever, Yeah, you can have those, right,

1088
00:57:05,760 --> 00:57:07,400
you can have the like, ah, you know, you get

1089
00:57:07,400 --> 00:57:10,000
a mull again, or you know, everyone cheat, so who cares?

1090
00:57:10,440 --> 00:57:13,920
You know, you're all within a kind of an honor

1091
00:57:13,960 --> 00:57:16,840
based system, right, even in an un serious way. Once

1092
00:57:16,920 --> 00:57:20,400
that's broken, right, once the it has become sort of

1093
00:57:20,400 --> 00:57:25,320
an existential capital p politics struggle. Right, what Schmidt refers

1094
00:57:25,360 --> 00:57:28,400
to his politics where you have two groups whose you know,

1095
00:57:28,519 --> 00:57:31,239
quality or ability to live life as they see fit

1096
00:57:31,519 --> 00:57:35,119
are mutually incompatible. Well, dude, all of that, you know,

1097
00:57:35,239 --> 00:57:37,400
kind of like nice high school civics class stuff goes

1098
00:57:37,440 --> 00:57:41,519
out the window. And clearly our opponents have come to

1099
00:57:41,599 --> 00:57:44,960
that conclusion decades ago, right before my parents were born.

1100
00:57:45,719 --> 00:57:48,760
And so look man like if if you're a professional wrestler,

1101
00:57:48,880 --> 00:57:50,800
you're in a fake fight, you know, you kind of

1102
00:57:51,000 --> 00:57:53,239
know the bounds, and then all of a sudden, the

1103
00:57:53,280 --> 00:57:55,519
other guy pulled out a switchblade and sticks it in

1104
00:57:55,599 --> 00:57:58,440
your gut, and you're like, hey, what with this?

1105
00:57:58,480 --> 00:57:58,639
Speaker 7: Wait?

1106
00:57:58,719 --> 00:58:00,440
Speaker 3: This was what we were supposed to do. You're supposed

1107
00:58:00,639 --> 00:58:02,239
I was supposed to kick out, you know where. We've

1108
00:58:02,280 --> 00:58:05,440
got this whole thing choreographed. And he pulls out another

1109
00:58:05,519 --> 00:58:07,920
one stab you again, and you're still like, well, wait

1110
00:58:07,960 --> 00:58:10,719
a minute, this isn't fair. It would be sporting, you know,

1111
00:58:10,840 --> 00:58:14,000
to respond in kind like you're doomed. You're not serious,

1112
00:58:14,000 --> 00:58:16,079
You're gonna lose. And so when it comes to this,

1113
00:58:16,440 --> 00:58:18,400
this is something that the Democrats have done a very

1114
00:58:18,440 --> 00:58:22,440
good job of creating consequences for their political opponents. If

1115
00:58:22,480 --> 00:58:25,400
you're an octagenarian who doesn't like abortion, the FBI is

1116
00:58:25,440 --> 00:58:27,199
going to knock on your door. If you went to

1117
00:58:27,239 --> 00:58:30,239
a boomer rally five years ago, the FBI is going

1118
00:58:30,280 --> 00:58:32,639
to knock on your door. This is something that the

1119
00:58:32,679 --> 00:58:35,079
conservative movement is not very good at. I mean even

1120
00:58:35,159 --> 00:58:37,079
now they're they're getting just a little bit of a

1121
00:58:37,119 --> 00:58:39,599
taste of it. Right the idea that you can you know,

1122
00:58:40,000 --> 00:58:43,760
perhaps you know, receive some form of consequences, however minor

1123
00:58:44,360 --> 00:58:47,719
right for you know, threatening to go kill a US

1124
00:58:47,800 --> 00:58:50,679
president or you know, celebrating the death of a prominent

1125
00:58:50,760 --> 00:58:55,159
conservative figure. It's like, again, this is very very nation,

1126
00:58:55,440 --> 00:58:58,559
and it's so frustrating to see the kind of uh

1127
00:58:59,679 --> 00:59:02,639
prince of old conservatives wine and wine and wine about

1128
00:59:02,639 --> 00:59:05,559
how this isn't fair, this isn't what the constitution you know,

1129
00:59:05,639 --> 00:59:08,480
would have, what the framers of the Constitution would want,

1130
00:59:08,840 --> 00:59:13,280
And it's like, yeah, man, sure, but also like where

1131
00:59:13,280 --> 00:59:15,360
do you have been in the last hundred years? You know,

1132
00:59:15,440 --> 00:59:17,559
the idea that this is still the rules of the game,

1133
00:59:17,599 --> 00:59:20,440
The idea that everyone is occupyed or you know, occupying

1134
00:59:20,480 --> 00:59:23,679
the same moral frames is as mint Romney, is just

1135
00:59:23,760 --> 00:59:27,199
completely and totally absurd. And so again like there need

1136
00:59:27,320 --> 00:59:30,880
to be consequences to this. People need to have hefty

1137
00:59:30,920 --> 00:59:34,800
finds and lose their jobs for violating their fiduciary responsibilities

1138
00:59:35,199 --> 00:59:38,199
or else. This won't change that pretty much. That is

1139
00:59:38,280 --> 00:59:38,880
the math there.

1140
00:59:41,000 --> 00:59:43,639
Speaker 6: Yeah, I couldn't agree more and I would just go

1141
00:59:43,719 --> 00:59:48,199
a step farther to say one of one of the

1142
00:59:48,320 --> 00:59:52,760
things you when you have a conversation with somebody who's reluctant.

1143
00:59:52,840 --> 00:59:54,920
Maybe it's all just fake. Maybe they're just cowards and

1144
00:59:54,960 --> 00:59:56,800
they're just trying to come up with reasons not to

1145
00:59:56,920 --> 01:00:01,599
act and still sound like they're being principled. But often

1146
01:00:01,639 --> 01:00:05,719
you'll get this sort of like, but if like, I'm

1147
01:00:05,760 --> 01:00:07,719
in a big fight with the Chamber of Commerce right now.

1148
01:00:07,800 --> 01:00:10,559
For example, they've gone super woke. They were one of

1149
01:00:10,599 --> 01:00:12,559
some of the biggest pushers of DEI. In fact, they

1150
01:00:12,679 --> 01:00:16,119
gave out small business grants based on race. They gave

1151
01:00:16,239 --> 01:00:19,800
up to just black people small business grants during the

1152
01:00:19,880 --> 01:00:23,239
BLM thing, which is like obviously illegal but also just

1153
01:00:23,599 --> 01:00:27,920
an absurd thing for a supposedly pro free market organization

1154
01:00:28,639 --> 01:00:32,800
to do. And one of the pushbacks I get sometimes

1155
01:00:32,800 --> 01:00:34,519
when people talk to me about it, it's like, oh, well,

1156
01:00:34,559 --> 01:00:36,920
that wasn't what Chamber of Commerce was created for. Like

1157
01:00:36,920 --> 01:00:39,440
if you go back, it was made by William Howard

1158
01:00:39,480 --> 01:00:42,280
Taft to be like an advocate for the free market system.

1159
01:00:42,320 --> 01:00:45,760
It's a way for the businesses sort of payback. You know,

1160
01:00:45,800 --> 01:00:48,239
they were only successful because we have this free market system.

1161
01:00:48,280 --> 01:00:50,519
It was a way, a channel of a vehicle for

1162
01:00:50,559 --> 01:00:54,559
which them to help maintain that system basically voluntary tax

1163
01:00:54,639 --> 01:00:58,320
sort of the for you know, as the Dems love

1164
01:00:58,360 --> 01:01:00,719
to say the cost of living in some wised country

1165
01:01:01,480 --> 01:01:02,760
and they'll say, but like so we need to just

1166
01:01:02,840 --> 01:01:05,400
get them back to that, and it's like, but they're

1167
01:01:05,440 --> 01:01:07,840
not gonna do that because they're not doing it.

1168
01:01:07,880 --> 01:01:09,119
Speaker 4: It's like if somebody.

1169
01:01:10,360 --> 01:01:13,159
Speaker 6: Kidnapped your child and brought back a different child, and

1170
01:01:13,239 --> 01:01:15,119
you said, well, this isn't my child, this isn't like

1171
01:01:15,199 --> 01:01:16,880
who I was supposed to be raising. We need to

1172
01:01:16,920 --> 01:01:19,519
get back to the original child. It's like, yeah, you

1173
01:01:19,639 --> 01:01:21,559
have to get rid of the fake one, right, Like

1174
01:01:21,639 --> 01:01:25,760
you can't. You can't keep dealing with this impersonator, right

1175
01:01:25,920 --> 01:01:28,840
and get that back on track. You have to force

1176
01:01:28,960 --> 01:01:32,400
them either to abandon their current identity and their current

1177
01:01:32,960 --> 01:01:33,960
reason for being, and you can.

1178
01:01:34,079 --> 01:01:34,519
Speaker 4: You can do that.

1179
01:01:34,719 --> 01:01:38,559
Speaker 6: It just takes you know, leverage and exploiting that leverage,

1180
01:01:39,239 --> 01:01:41,960
or you just have to say that institution no longer

1181
01:01:42,239 --> 01:01:44,360
exists in the way that it was created. And I

1182
01:01:44,440 --> 01:01:47,920
think conservatives, like you said earlier, have a real hard

1183
01:01:48,000 --> 01:01:50,840
time reading past the label of something like if something's

1184
01:01:50,880 --> 01:01:52,960
a shoe company, well they're there to make shoes. It

1185
01:01:53,039 --> 01:01:55,239
doesn't matter if you know, like when you had the

1186
01:01:55,440 --> 01:01:59,679
Stakem's guy who was like a communist, very funny one,

1187
01:01:59,679 --> 01:02:02,440
by the way, it's a great account, but would be

1188
01:02:02,760 --> 01:02:08,440
like spewing like Marxist thought and rhetoric. You know, Stakeums

1189
01:02:08,480 --> 01:02:11,320
isn't entirely a Stakum's company at that point, right, And

1190
01:02:11,880 --> 01:02:14,960
clearly they're up to something else. And these institutions are

1191
01:02:15,000 --> 01:02:16,760
now up to other things, and we have to be

1192
01:02:16,840 --> 01:02:19,440
willing to acknowledge when they no longer are fit to purpose,

1193
01:02:19,639 --> 01:02:22,920
and be willing to destroy them. And I just think, honestly,

1194
01:02:23,320 --> 01:02:27,039
I think a lot of it is people have lived

1195
01:02:27,079 --> 01:02:31,000
through very very comfortable, quiet times. We've sort of lived

1196
01:02:31,039 --> 01:02:35,159
through another period of era of good feelings, and they

1197
01:02:35,320 --> 01:02:37,480
just don't want to come to grips with especially the

1198
01:02:37,639 --> 01:02:38,960
you know, people crap on the boomers.

1199
01:02:39,000 --> 01:02:40,599
Speaker 4: But and I'm about to as well.

1200
01:02:40,639 --> 01:02:43,719
Speaker 6: But I can understand your your sixties, like you feel

1201
01:02:43,760 --> 01:02:45,400
like you don't really want to spend the last twenty

1202
01:02:45,480 --> 01:02:47,159
twenty five years of your life in some sort of

1203
01:02:47,440 --> 01:02:53,920
revolutionary healthcape. But there they become institutionalists because they're worried

1204
01:02:54,440 --> 01:02:58,800
that if we start fixing things quickly and doing things

1205
01:02:58,840 --> 01:03:00,119
in a way that it's going to be. That's going

1206
01:03:00,159 --> 01:03:04,719
to require that the ground is going to shift under

1207
01:03:04,719 --> 01:03:06,159
their feet in ways that they're not ready for. And

1208
01:03:06,239 --> 01:03:08,639
that's probably true, to be honest and to be fair

1209
01:03:08,760 --> 01:03:13,679
to them. But the alternative is to simply sort of

1210
01:03:13,760 --> 01:03:15,559
die with a whimper instead of a bang. And I'm not,

1211
01:03:15,679 --> 01:03:20,239
to be clear, I'm not like, you know, advocating anything

1212
01:03:20,320 --> 01:03:24,559
in minecraft or anything. I'm just talking about I'm just

1213
01:03:24,639 --> 01:03:29,119
talking about, like, I'll give you a concrete example. Most states.

1214
01:03:29,840 --> 01:03:32,679
Most states have a Human Rights Council that, if for

1215
01:03:33,239 --> 01:03:37,800
historical reasons, is the one charged with enforcing state civil

1216
01:03:37,880 --> 01:03:40,239
rights laws. Most states have some sort of corollary to

1217
01:03:40,280 --> 01:03:42,639
the Civil Rights Act that says roughly the same thing,

1218
01:03:43,400 --> 01:03:47,000
and basically, you know, no race and sex being able

1219
01:03:47,079 --> 01:03:50,239
to be you know, part of the calculation of hiring

1220
01:03:50,320 --> 01:03:55,159
and promotion in red states. You would think, oh, well,

1221
01:03:55,199 --> 01:03:58,039
you're going to have at least, you know, good or

1222
01:03:58,079 --> 01:04:02,280
at least equal in force of anti white, anti Asian,

1223
01:04:02,360 --> 01:04:06,039
anti male, discriminate discriminatory policies or practices as you would

1224
01:04:07,920 --> 01:04:11,599
you know, against blacks or any other group. But the

1225
01:04:11,639 --> 01:04:14,480
truth is, in most red states, the governors who selected

1226
01:04:14,480 --> 01:04:18,800
the people to put on that committee because conservatives generally

1227
01:04:18,920 --> 01:04:22,199
don't they kind of get something's wrong with this committee

1228
01:04:22,199 --> 01:04:25,880
being able to constantly hassle businesses and for profit institutions.

1229
01:04:27,719 --> 01:04:30,159
Instead of taking the reins of power and saying, yeah,

1230
01:04:30,159 --> 01:04:32,360
you're not gonna you know, you don't want us discriminate

1231
01:04:32,360 --> 01:04:34,280
against you guys, You're not going to discriminate us either,

1232
01:04:34,400 --> 01:04:39,400
or we will face the consequences. Those organizations basically just

1233
01:04:39,559 --> 01:04:42,280
don't do anything. In red states, they put people on

1234
01:04:42,360 --> 01:04:44,480
them who will just sort of a win is they

1235
01:04:44,599 --> 01:04:48,119
just become benign, you know, committees that just chat a

1236
01:04:48,159 --> 01:04:50,760
bunch and they never do anything. And I will laud

1237
01:04:50,800 --> 01:04:53,760
the state of Tennessee. Recently they just gave co enforcement

1238
01:04:53,840 --> 01:04:57,639
powers to their state attorney general, Scrimmatti, who's very, very

1239
01:04:57,639 --> 01:05:00,119
good attorney general, and it's already paying dividends in the

1240
01:05:00,159 --> 01:05:03,119
fact that he's able to go after companies for anti white,

1241
01:05:03,119 --> 01:05:05,800
anti Asian, anti male discrimination in all the other kinds.

1242
01:05:06,400 --> 01:05:08,920
The reason I bring that up is because this is

1243
01:05:09,000 --> 01:05:12,599
on the books. This isn't like some you know, innovation.

1244
01:05:12,679 --> 01:05:14,360
I know we both love good old boys and we're talking.

1245
01:05:14,400 --> 01:05:16,320
You know, they talk a lot about Caesar and kind

1246
01:05:16,360 --> 01:05:19,519
of like doing new things but making them sound like

1247
01:05:19,599 --> 01:05:22,679
oh old things, that kind of thing. Conservatives wouldn't even

1248
01:05:22,719 --> 01:05:25,599
have to go that far to apply a price. These

1249
01:05:26,039 --> 01:05:28,239
state civil rights laws are on the books, are already

1250
01:05:28,280 --> 01:05:31,679
being enforced when the person being discriminated against as a

1251
01:05:31,719 --> 01:05:35,360
woman or a black person or a non white person.

1252
01:05:35,639 --> 01:05:37,800
They're just not being enforced when it's a white person.

1253
01:05:38,039 --> 01:05:41,440
And again, it's like, I just don't know how we're

1254
01:05:41,480 --> 01:05:44,159
not even enforcing rules that everyone agrees should be rules

1255
01:05:45,159 --> 01:05:49,880
when the party being aggressed against is a specific demographic

1256
01:05:50,000 --> 01:05:51,639
and that's something that we're just gonna have to get over.

1257
01:05:53,480 --> 01:05:55,760
Speaker 3: Well, well, this has been a great conversation. Where can

1258
01:05:55,800 --> 01:05:57,480
people find you? Where can they find your work?

1259
01:05:57,760 --> 01:06:01,199
Speaker 6: Absolutely well, they can visit us at Consumer Research Org.

1260
01:06:01,960 --> 01:06:03,920
It sounds really gimmicky. I thought it was really gimmicky

1261
01:06:03,920 --> 01:06:05,559
when someone pitched it to me, but everyone loves it.

1262
01:06:06,079 --> 01:06:07,960
On that website, you can sign up for something called

1263
01:06:08,039 --> 01:06:11,719
voc Alerts. It's a text message based subscription system. I

1264
01:06:11,840 --> 01:06:14,239
promise we won't spam you. It's not like when you

1265
01:06:14,320 --> 01:06:16,239
sign up for like a fifteen percent discount at a

1266
01:06:16,320 --> 01:06:18,519
clothing store, you get hit up like every two days.

1267
01:06:18,880 --> 01:06:21,599
This is like once every one or two weeks, we

1268
01:06:21,760 --> 01:06:24,519
put out a voc alert when it really matters, and

1269
01:06:24,719 --> 01:06:26,480
we don't just like to rile people up. We like

1270
01:06:26,559 --> 01:06:28,920
to give them an ability to take action. So we

1271
01:06:28,960 --> 01:06:32,079
always include contact information for the company that's going woke

1272
01:06:32,239 --> 01:06:34,599
or the woke activity that's taking place. And this is

1273
01:06:34,679 --> 01:06:38,039
the kind of patronage system political activism system that has

1274
01:06:38,079 --> 01:06:40,800
allowed the Democrats to push around corporate America. We're building

1275
01:06:40,840 --> 01:06:42,159
our own, so if you'd like to become part of that,

1276
01:06:42,360 --> 01:06:45,239
visits at consumers Research dot org and sign up for

1277
01:06:45,239 --> 01:06:47,599
the Vocal alerts. You could also follow me on x

1278
01:06:47,679 --> 01:06:50,440
formerly known as Twitter. I'll always call it Twitter. At

1279
01:06:50,559 --> 01:06:54,599
will Hill that's wil L Hild and that's where we

1280
01:06:54,679 --> 01:06:56,840
put out a lot of other stuff on ESG and

1281
01:06:57,199 --> 01:06:59,440
fighting back against black Rock and the other asset managers.

1282
01:07:00,480 --> 01:07:03,039
Speaker 3: Well, sure thing man, highly recommend it obviously. Look this

1283
01:07:03,199 --> 01:07:07,079
is a good old boys appreciation podcast as well. You

1284
01:07:07,440 --> 01:07:12,679
support them, so everyone should have your support. Wait, I

1285
01:07:12,760 --> 01:07:15,079
said that all backwards. Check it out, man. I don't

1286
01:07:15,079 --> 01:07:17,079
know what to tell you. As far as my stuff,

1287
01:07:17,159 --> 01:07:20,880
the Jay Verdon Show, Apple Spotify YouTube. Despite my inability

1288
01:07:20,920 --> 01:07:23,920
to speak basic English, I am a professional podcaster. I

1289
01:07:24,039 --> 01:07:25,800
can't do this without you. Guys. If you want the

1290
01:07:25,840 --> 01:07:28,360
episodes early in ed free throw me a few bucks

1291
01:07:28,400 --> 01:07:32,960
a month on Patreon, Substack or gum Road. Look at

1292
01:07:33,000 --> 01:07:35,320
that managed to get it all done again. Well, it's

1293
01:07:35,320 --> 01:07:36,719
a ton of fun to have you on. I appreciate it.

1294
01:07:36,800 --> 01:07:36,960
Speaker 1: Man.

1295
01:07:37,559 --> 01:07:41,320
Speaker 3: Thanks everyone home, keep your head up. I can't last forever.

1296
01:07:41,480 --> 01:08:00,440
Good Night, but

1297
01:08:02,079 --> 01:08:08,280
Speaker 5: Not the blagariagary problem.