1 00:00:00,000 --> 00:00:03,200 The Grift Economy: Everything is a scam, always. 2 00:00:03,200 --> 00:00:04,000 Thought Slime. 3 00:00:04,000 --> 00:00:06,000 Air Date November 5th, 2021. 4 00:00:06,000 --> 00:00:08,100 Everything in the world is a scam. 5 00:00:08,160 --> 00:00:10,360 Subscription services make no sense. 6 00:00:10,420 --> 00:00:14,950 They only exist to wring more money out of the consumer by offering upfront savings, 7 00:00:14,955 --> 00:00:17,920 offset by far greater costs over time. 8 00:00:18,040 --> 00:00:23,740 $11 a month, for example, feels like less money than $120, but if 9 00:00:23,745 --> 00:00:28,075 you use the service for 11 months, you've already spent more money. 10 00:00:28,165 --> 00:00:31,105 It's not that the monthly subscription service is a business 11 00:00:31,110 --> 00:00:32,965 model I'm necessarily against. 12 00:00:33,295 --> 00:00:36,295 There are plenty of services where it makes perfect sense. 13 00:00:36,445 --> 00:00:38,875 A movie streaming service would charge a monthly fee. 14 00:00:38,965 --> 00:00:39,985 Of course it would, right? 15 00:00:39,985 --> 00:00:44,005 Every time I use that, I cost the company money in the form of server 16 00:00:44,005 --> 00:00:45,985 costs and licensing agreements. 17 00:00:46,045 --> 00:00:50,198 Plus, these services also tend to make it worth my while by constantly 18 00:00:50,203 --> 00:00:53,948 updating their library of content, not to mention they're usually cheaper 19 00:00:53,948 --> 00:00:57,998 than like buying even one of the movies I'd wanna watch on them anyway. 20 00:00:58,328 --> 00:00:59,438 So this is a pretty good deal. 21 00:00:59,453 --> 00:01:02,723 But in the case of this teleprompter app, it, it's sure some bullshit. 22 00:01:02,723 --> 00:01:03,863 'Cause this isn't a service. 23 00:01:03,868 --> 00:01:07,223 I'm expecting to roll out a ton of useful new features over time. 24 00:01:07,253 --> 00:01:10,433 And should they do that in the future and I want those features, I 25 00:01:10,433 --> 00:01:12,323 would expect to pay for them then. 26 00:01:12,533 --> 00:01:15,613 All they gotta do is let me download the fucking software; that's it. 27 00:01:15,813 --> 00:01:19,708 They're not streaming Ghoulies in 4K to me every day, like the Full Moon app 28 00:01:19,708 --> 00:01:23,638 is, and there are plenty of programs with far more complex features, far 29 00:01:23,638 --> 00:01:28,048 greater download sizes, and far more utility that are one time purchases. 30 00:01:28,108 --> 00:01:30,268 I bought Clip Studio Paint, for example. 31 00:01:30,358 --> 00:01:34,168 That's just $60, not $5 a month in perpetuity. 32 00:01:34,433 --> 00:01:35,903 I bought it like five years ago. 33 00:01:35,933 --> 00:01:37,013 I still own it. 34 00:01:37,073 --> 00:01:41,423 When they update it, which they do regularly, I get access to the new shit 35 00:01:41,423 --> 00:01:46,163 too, which I will grant you is a luxury that smaller companies probably could not 36 00:01:46,163 --> 00:01:51,893 afford, in which case simply release new versions that I can also buy if I want 37 00:01:51,898 --> 00:01:54,513 those new features and additional support. 38 00:01:54,863 --> 00:01:58,853 You know, the way software has always worked. 39 00:01:58,943 --> 00:02:02,483 There's so much shit like this that we've gotten entirely too comfortable with it. 40 00:02:02,663 --> 00:02:06,383 It no longer even registers as something that should piss us off. 41 00:02:06,413 --> 00:02:08,873 After all, Photoshop charges a monthly fee. 42 00:02:08,963 --> 00:02:10,883 Amazon Prime charges a monthly fee. 43 00:02:11,003 --> 00:02:14,483 The extended warranty on your fucking cellphone charges a monthly fee. 44 00:02:14,603 --> 00:02:16,013 Don't buy the extended warranty. 45 00:02:16,073 --> 00:02:19,193 And there are tons of other ways the shit just squeezes money out of you. 46 00:02:19,533 --> 00:02:23,573 In small enough increments that you might not even notice it adding up over time. 47 00:02:23,633 --> 00:02:26,953 If you buy a video game, you have to basically subscribe to it to 48 00:02:26,958 --> 00:02:28,543 get all the post-launch content. 49 00:02:28,573 --> 00:02:32,293 Sometimes the game just straight up charges you a monthly fee to play it. 50 00:02:32,503 --> 00:02:36,883 Sometimes, in addition to both the full price of the game and the 51 00:02:36,883 --> 00:02:41,533 fee you are already paying to your console manufacturer's online service. 52 00:02:41,563 --> 00:02:42,943 Maybe that's not such a big deal. 53 00:02:42,943 --> 00:02:45,463 Video games, you don't need to be able to play a video game. 54 00:02:45,493 --> 00:02:48,823 And it's not even close to the most unethical thing video games do. 55 00:02:48,893 --> 00:02:53,043 But it acclimates us to the environment where you never truly own anything. 56 00:02:53,223 --> 00:02:57,803 You pay continuously and lose access if and when you stop paying. 57 00:02:57,923 --> 00:03:01,433 Or if they just decide to no longer give you access. 58 00:03:01,523 --> 00:03:05,573 In other words, you are renting everything. 59 00:03:05,723 --> 00:03:08,723 And I don't mean to focus too much on video games specifically. 60 00:03:08,933 --> 00:03:11,543 But they provide very clear examples of this. 61 00:03:11,633 --> 00:03:14,873 Do you know how many games I have in my PlayStation that I would lose if I 62 00:03:14,873 --> 00:03:17,333 stopped paying Sony for PlayStation Plus? 63 00:03:17,483 --> 00:03:21,203 Which I do every month, even though I haven't turned on my PlayStation 64 00:03:21,203 --> 00:03:24,513 since this summer simply out of fomo. 65 00:03:24,603 --> 00:03:25,683 Am I a sucker? 66 00:03:25,713 --> 00:03:27,033 Yes, obviously. 67 00:03:27,213 --> 00:03:31,713 But just because I and many people like me make bad decisions with our money, 68 00:03:31,833 --> 00:03:35,103 that doesn't let these companies off the hook for deliberately manipulating 69 00:03:35,108 --> 00:03:37,563 us into making those bad decisions. 70 00:03:37,623 --> 00:03:40,173 It's easy to say, just cancel your subscription. 71 00:03:40,203 --> 00:03:43,683 And it's easy for me to say, yes, obviously that's what I should do. 72 00:03:43,863 --> 00:03:47,133 But what if I wanna play Metal Gear Solid Five later, or Neo? 73 00:03:47,913 --> 00:03:49,113 I'd have to pay full price. 74 00:03:49,113 --> 00:03:52,353 I'm never gonna play them, of course, but I simply can't risk it. 75 00:03:52,413 --> 00:03:54,333 Now, sure, I'm a doo-doo dumb dumb. 76 00:03:54,393 --> 00:03:55,323 I grant you this. 77 00:03:55,353 --> 00:03:59,853 But is it okay for Sony and companies like them to prey upon my sunk cost fallacy? 78 00:03:59,913 --> 00:04:04,323 Do we want to live in a world where all doo-doo dumb dumbs just get charged 79 00:04:04,328 --> 00:04:06,003 money for being doo-doo dumb dumbs? 80 00:04:06,033 --> 00:04:09,393 Furthermore, how many people signed up for this service and then completely 81 00:04:09,393 --> 00:04:12,513 forgot about it and ended up paying when they didn't even want to? 82 00:04:12,603 --> 00:04:16,278 And then you kind of have to wonder if they count on that a little, and maybe 83 00:04:16,428 --> 00:04:20,478 that's the reason that so many services, which charge a monthly fee, will give you 84 00:04:20,478 --> 00:04:24,918 a free week or something, provided that you give your payment information upfront. 85 00:04:24,918 --> 00:04:25,668 Don't worry! 86 00:04:25,878 --> 00:04:29,208 You can just cancel before the charges start, but will you? 87 00:04:29,328 --> 00:04:31,098 Will you remember to do that? 88 00:04:31,198 --> 00:04:34,228 The tendency, I think, is to blame consumers for this. 89 00:04:34,318 --> 00:04:35,578 Why do we put up with it? 90 00:04:35,698 --> 00:04:37,888 Simply vote with your dollars. 91 00:04:37,948 --> 00:04:41,008 Choose to only spend on things with better business models. 92 00:04:41,038 --> 00:04:45,603 And yes, I suppose that might work in some one-to-one perfect sphere 93 00:04:45,603 --> 00:04:49,053 on a frictionless plain analogy level fantasy world, but we all know 94 00:04:49,053 --> 00:04:50,343 it's more complicated than that. 95 00:04:50,403 --> 00:04:54,393 It shouldn't be up to random consumers to contend with and defeat 96 00:04:54,573 --> 00:04:57,963 multi-billion dollar corporations and their enormous marketing and 97 00:04:57,963 --> 00:04:59,613 customer retention departments. 98 00:04:59,643 --> 00:05:02,043 Power and Corruption: The Devos Family. 99 00:05:02,043 --> 00:05:02,443 iilluminaughtii. 100 00:05:02,443 --> 00:05:04,443 Air Date January 20th, 2023. 101 00:05:04,493 --> 00:05:08,963 In 1959, Rich DeVos, who Politico calls "a boundlessly charismatic 102 00:05:08,963 --> 00:05:12,473 man," which ironically is a descriptor used for dictators. 103 00:05:12,533 --> 00:05:15,413 He started the company as a tiny little soap business. 104 00:05:15,503 --> 00:05:19,013 He and his partner would soon grow the company into a multi-billion dollar 105 00:05:19,018 --> 00:05:22,883 conglomerate that relied on independent distributors to sell its products, which 106 00:05:23,063 --> 00:05:27,233 nowadays ranges from pretty much anything from vitamins, makeup, energy drinks, 107 00:05:27,323 --> 00:05:31,143 basically anything you can think of, Amway probably sells a version of it. 108 00:05:31,643 --> 00:05:32,423 And that's right. 109 00:05:32,453 --> 00:05:36,383 We have somehow miraculously fallen into a two-for-one type episode, with 110 00:05:36,383 --> 00:05:39,713 multi-level marketing scams mixed in with some shady business dealings 111 00:05:39,713 --> 00:05:41,753 and horrific political practices. 112 00:05:41,933 --> 00:05:42,923 Yay for us. 113 00:05:42,983 --> 00:05:45,263 But Amway isn't just your typical MLM. 114 00:05:45,563 --> 00:05:48,653 Rich DeVos and his business partner quickly turned it into a massive 115 00:05:48,653 --> 00:05:53,633 company that had nearly $7 billion in sales by 1989 and over 1 million 116 00:05:53,633 --> 00:05:55,273 distributors selling their products. 117 00:05:55,973 --> 00:05:58,823 As distributors spent their days attempting to make as many sales 118 00:05:58,823 --> 00:06:01,943 as possible to meet their financial goals against all odds, DeVos 119 00:06:01,943 --> 00:06:05,273 was chilling, making something off of every single little sale. 120 00:06:06,083 --> 00:06:09,233 Of course, their products were mostly just knockoffs sold under an Amway 121 00:06:09,233 --> 00:06:12,113 name, but who cares about that when you're making billions of dollars? 122 00:06:12,563 --> 00:06:16,313 But again, when you are making that much money and have the sheer amount 123 00:06:16,313 --> 00:06:19,853 of distributors that Amway amassed, people are bound to take notice. 124 00:06:20,843 --> 00:06:23,648 And usually not the ones the company wants to be dealing with. 125 00:06:24,048 --> 00:06:27,323 In Amway's case in particular, their notoriety came with some special 126 00:06:27,323 --> 00:06:30,623 attention from one of our all-time favorite entities, with just a 127 00:06:30,623 --> 00:06:32,993 hint of sarcasm there, but the FTC. 128 00:06:33,743 --> 00:06:37,853 In 1975, the FTC accused Amway of being a pyramid scheme. 129 00:06:38,153 --> 00:06:41,303 Their accusations were pretty severe and ranged from Amway restricting 130 00:06:41,303 --> 00:06:44,693 distributors, sources and supplies, their advertising, and of course, 131 00:06:44,723 --> 00:06:46,173 misrepresenting the income. 132 00:06:46,823 --> 00:06:50,003 That all definitely sounds pretty par for the course in the world of MLMs. 133 00:06:50,243 --> 00:06:54,503 However, after a lengthy four year investigation, the FTC found that 134 00:06:54,503 --> 00:06:58,283 Amway was in fact not a pyramid scheme by the skin of their teeth. 135 00:06:58,583 --> 00:07:02,873 According to the FTC, Amway differed in several ways from pyramid schemes 136 00:07:02,873 --> 00:07:04,253 that the commission had challenged. 137 00:07:04,463 --> 00:07:08,843 It did not charge an upfront headhunting or large investment fee from new recruits, 138 00:07:09,023 --> 00:07:12,623 nor did it promote inventory loading by requiring distributors to buy large 139 00:07:12,623 --> 00:07:14,573 volumes of non-returnable inventory. 140 00:07:15,623 --> 00:07:19,703 Just because they weren't technically a pyramid scheme, though it definitely 141 00:07:19,703 --> 00:07:22,553 seemed to resemble the shape of a triangle, that doesn't mean the 142 00:07:22,553 --> 00:07:25,463 company didn't have new rules that they would have to follow to avoid 143 00:07:25,463 --> 00:07:27,173 any legal repercussions in the future. 144 00:07:27,833 --> 00:07:30,653 They had to do a couple of things like Stop misrepresenting their 145 00:07:30,653 --> 00:07:32,213 profits, earnings and sales. 146 00:07:32,213 --> 00:07:34,853 They had to print a disclaimer on the suggested retail price 147 00:07:34,853 --> 00:07:36,433 and stop retail price fixing. 148 00:07:36,883 --> 00:07:40,373 So it wasn't all roses and butterflies for the company, but they came out looking 149 00:07:40,373 --> 00:07:44,333 a lot better than they could have and changed the face of the MLM world forever. 150 00:07:45,063 --> 00:07:48,863 As Jeff Babener put it, had Amway lost, MLM history after 151 00:07:49,293 --> 00:07:51,293 1979 may have been non-existent. 152 00:07:51,683 --> 00:07:55,493 Amway's victory paved the way for hundreds of MLM companies that would follow. 153 00:07:56,273 --> 00:07:59,633 So yeah, again, thank you so much Amway for paving the way 154 00:07:59,633 --> 00:08:03,173 for hundreds of thousands of shitty other fucking companies. 155 00:08:03,233 --> 00:08:06,503 But of course, this would not mark the end of legal trouble for 156 00:08:06,503 --> 00:08:08,093 the company or for its founders. 157 00:08:08,303 --> 00:08:12,053 Only four years after this first big lawsuit, they were hit with another. 158 00:08:12,803 --> 00:08:14,978 This time it was for criminal tax fraud. 159 00:08:15,308 --> 00:08:19,268 In 1983, the Supreme Court of Ontario found the company guilty of criminal 160 00:08:19,268 --> 00:08:22,748 fraud and tax evasion after it was found that they had been making up fake 161 00:08:22,748 --> 00:08:26,558 and fictitious invoices and a dummy corporation to build their wealth. 162 00:08:27,368 --> 00:08:32,148 They found that Amway had defrauded Canada of an astounding $28 million. 163 00:08:32,978 --> 00:08:36,848 As a response, they were slapped with a $25 million fine, the largest 164 00:08:36,848 --> 00:08:38,548 in Canadian history at that time. 165 00:08:39,383 --> 00:08:42,533 Despite the massive hit to their reputation and their pockets, the 166 00:08:42,533 --> 00:08:44,423 founders seemed relatively unfazed. 167 00:08:44,753 --> 00:08:48,263 In fact, on the same day that the decision was made, the two owners 168 00:08:48,263 --> 00:08:51,623 ran advertisements in over four different American news sources and 169 00:08:51,623 --> 00:08:54,623 sent letters to their distributors trying to explain the situation. 170 00:08:55,163 --> 00:08:57,773 But they didn't really do a good job of explaining it at all. 171 00:08:58,433 --> 00:09:01,013 Instead they just tried their best to make themselves look good. 172 00:09:01,193 --> 00:09:03,803 And oh my God, I have rerecorded this sentence so many times, I know, I'm 173 00:09:03,803 --> 00:09:07,133 like, whatever, whatever, cuz it's like the founders pleaded guilty, but I keep 174 00:09:07,133 --> 00:09:09,713 saying "the flounders" and I'm like, I don't know why I'm doing that today. 175 00:09:09,713 --> 00:09:12,923 The flounders, the Phish founders, they pleaded guilty to charges is 176 00:09:12,923 --> 00:09:13,883 the point I'm trying to get at. 177 00:09:14,873 --> 00:09:17,903 The point is, these two pleaded guilty and then they sent out a bunch of 178 00:09:17,903 --> 00:09:21,293 letters and ads to make it look like the charges had been merely dropped when 179 00:09:21,293 --> 00:09:22,973 that's not the reality of the situation. 180 00:09:23,243 --> 00:09:26,423 They took no public responsibility and instead they blamed the 181 00:09:26,423 --> 00:09:29,033 advice of corporate officers for the mixup with the law. 182 00:09:29,603 --> 00:09:33,053 Then they included this statement regarding the founder's decisions. 183 00:09:33,803 --> 00:09:37,223 "They chose to make a tremendous personal and financial sacrifice in 184 00:09:37,223 --> 00:09:40,943 order to end the ordeal and eliminate this impediment to the future growth and 185 00:09:40,948 --> 00:09:44,828 potential of the business. They chose to make this sacrifice by settling now 186 00:09:44,828 --> 00:09:48,818 and thus preserving the Amway business opportunity for millions of individuals." 187 00:09:49,628 --> 00:09:52,898 And just like that, the company's PR made it seem like employees and 188 00:09:52,898 --> 00:09:56,588 distributors should be grateful to the very people who were committing criminal 189 00:09:56,593 --> 00:09:58,418 acts and defrauding millions of people. 190 00:09:58,973 --> 00:10:02,063 I've read a lot of PR statements in my time, and this one has to be one of the 191 00:10:02,063 --> 00:10:04,493 best acts of reframing I've seen, ever. 192 00:10:04,583 --> 00:10:07,373 Like, "No, we didn't pay money because we're guilty. 193 00:10:07,463 --> 00:10:08,363 No way! 194 00:10:08,393 --> 00:10:10,523 We paid money to save the company. 195 00:10:10,613 --> 00:10:12,533 What a personal sacrifice." 196 00:10:12,683 --> 00:10:14,513 Unsurprisingly, this worked. 197 00:10:14,543 --> 00:10:17,393 Amway was barely impacted by the massive scandal, and they 198 00:10:17,398 --> 00:10:18,593 just kept right on pushing. 199 00:10:19,013 --> 00:10:22,293 And today Amway's sales are still in the billions of dollars per year. 200 00:10:22,743 --> 00:10:26,288 This was just the beginning of the DeVos fortune and despite every scandal, they 201 00:10:26,288 --> 00:10:28,268 continued to grow and gain more power. 202 00:10:28,328 --> 00:10:33,528 Bill Black: The Best Way to Rob a Bank is to Own One. 203 00:10:33,528 --> 00:10:33,928 theAnalysis.news. 204 00:10:33,928 --> 00:10:35,928 Air Date May 31st, 2021. 205 00:10:35,988 --> 00:10:39,058 For people that haven’t watched the other episodes, at any rate, 206 00:10:39,388 --> 00:10:41,378 a quick definition of predation. 207 00:10:42,278 --> 00:10:48,658 OK, so predation in this context means that you’re deceiving people 208 00:10:49,028 --> 00:10:58,248 to massively overpay for homes and interest rates that you wouldn’t do 209 00:10:58,258 --> 00:11:00,668 to normal people under market terms. 210 00:11:01,738 --> 00:11:06,018 This is targeted overwhelmingly at Blacks and Latinx folks. 211 00:11:06,538 --> 00:11:08,768 So it has a discriminatory. 212 00:11:09,278 --> 00:11:12,458 And the motivation for someone to sign this is they probably wouldn’t 213 00:11:12,488 --> 00:11:15,958 otherwise qualify for the loan. 214 00:11:16,158 --> 00:11:18,978 The transaction wouldn’t qualify. 215 00:11:19,298 --> 00:11:23,338 It’s not even so much they; that’s the focus on the borrower. 216 00:11:23,688 --> 00:11:27,598 But this is a multiple fraud scheme, right? 217 00:11:27,788 --> 00:11:31,428 One fraud scheme is the appraisal. 218 00:11:31,878 --> 00:11:37,498 So they’re extorting -- when I say "they", the banks -- are 219 00:11:37,498 --> 00:11:44,598 incentivizing the loan brokers to extort the appraisers, to dramatically 220 00:11:44,598 --> 00:11:46,118 inflate the value of the home. 221 00:11:46,658 --> 00:11:52,108 Now, the bigger the home value, a) that means you can approve transactions 222 00:11:52,288 --> 00:11:58,278 you would otherwise not approve, but also the bigger the value, the bigger 223 00:11:58,278 --> 00:12:02,168 the fee, in terms of the home price. 224 00:12:02,358 --> 00:12:08,048 And so this makes sense for all the thieves to inflate the appraisals. 225 00:12:08,548 --> 00:12:13,238 It also makes the home look safer, and that’s part of the "art of the fraud" 226 00:12:13,238 --> 00:12:20,068 scheme, is making a loan that is almost certain to fail look incredibly safe. 227 00:12:20,938 --> 00:12:24,108 So if I inflate the appraisal, it looks like, wow, that’s a real deal, 228 00:12:25,138 --> 00:12:28,498 That home is worth four hundred thousand and they only borrowed three 229 00:12:28,498 --> 00:12:30,948 hundred and eighty thousand on it. 230 00:12:30,958 --> 00:12:32,118 It must be safe. 231 00:12:32,348 --> 00:12:34,898 But what’s the motivation for the borrower? 232 00:12:34,908 --> 00:12:38,848 They must know that this house is appraised way higher than their neighbors. 233 00:12:39,128 --> 00:12:39,758 No. 234 00:12:41,458 --> 00:12:47,698 Again, the reason you target vulnerable people is that they’re far 235 00:12:47,698 --> 00:12:52,708 less likely to understand what the true market value of their home is. 236 00:12:53,498 --> 00:13:01,018 Who of us goes and knows there’s an extortion racket by bankers to inflate the 237 00:13:01,018 --> 00:13:07,988 value of homes by extorting appraisers, and blackballing them if they’re honest? 238 00:13:08,638 --> 00:13:11,848 That wasn’t in the papers anywhere, which of us would have thought? 239 00:13:12,208 --> 00:13:14,408 Because we would think it’s crazy, right? 240 00:13:14,408 --> 00:13:18,058 Why would a lender -- a lender’s great protection against 241 00:13:18,058 --> 00:13:21,188 loss -- is an honest appraisal. 242 00:13:21,938 --> 00:13:26,758 Because these are secured loans, secured by the true market value of the 243 00:13:26,758 --> 00:13:29,918 home, not whatever the appraiser says. 244 00:13:30,108 --> 00:13:34,388 So an honest banker would want a very conservative appraisal, 245 00:13:34,918 --> 00:13:37,208 not to massively inflate it. 246 00:13:37,218 --> 00:13:40,998 So no, normal people don’t think in this way at all. 247 00:13:41,778 --> 00:13:49,618 Normal folks and the people that are first-time home buyers, they’re the least 248 00:13:49,618 --> 00:13:55,448 likely to be able to go, "wait a minute, this home is massively overvalued." 249 00:13:55,708 --> 00:13:58,008 So that’s one of the two kinds of frauds. 250 00:13:58,168 --> 00:14:01,098 The other key underwriting fraud 251 00:14:03,168 --> 00:14:05,188 -- again, this is novel in 1990 252 00:14:07,348 --> 00:14:12,258 and so the industry didn’t yet call it by the name that the industry 253 00:14:12,258 --> 00:14:17,728 would soon adopt behind closed doors -- they called them “liar's loans”. 254 00:14:17,738 --> 00:14:24,008 So people have heard that term and they assumed the borrower must be the liar. 255 00:14:24,008 --> 00:14:24,408 Right? 256 00:14:24,728 --> 00:14:25,098 No. 257 00:14:27,778 --> 00:14:32,078 The loan broker knows the magic ratios that you have to 258 00:14:32,078 --> 00:14:34,938 hit to get the loan approved. 259 00:14:35,288 --> 00:14:39,068 The loan broker knows the magic ratios -- and I mean debt to income 260 00:14:39,658 --> 00:14:45,528 type ratios -- that also get you a bigger bonus – kickback paid by the 261 00:14:47,858 --> 00:14:54,428 bank – and those are kept secret on a term sheet that by contract, 262 00:14:54,428 --> 00:14:56,308 can’t be shown to the borrower. 263 00:14:56,898 --> 00:15:02,658 Not that the broker wanted to show and inform the borrower in any event. 264 00:15:02,858 --> 00:15:09,238 So the lies are put and this is confirmed by the state investigators. 265 00:15:10,028 --> 00:15:14,708 It’s the lenders and their agents who put the lies in "liar's loans." 266 00:15:15,028 --> 00:15:16,268 Now, what’s a liar’s loan? 267 00:15:16,348 --> 00:15:20,228 It’s where you don’t verify the borrower’s income. 268 00:15:20,588 --> 00:15:25,878 And it is super simple to verify a borrower’s income, even if they’re 269 00:15:25,878 --> 00:15:32,128 self-employed, because the United States for decades, precisely to make this easy, 270 00:15:32,478 --> 00:15:39,798 allows banks to get an agreement under which we authorize the bank to get what’s 271 00:15:39,798 --> 00:15:44,718 called a transcript of our taxes, and that just means an easily machine-readable. 272 00:15:45,788 --> 00:15:52,358 So for next to no bucks with virtually no delay, and they can charge us a 273 00:15:52,358 --> 00:15:59,298 fee if they want to even, the bank can get exactly how much income 274 00:15:59,298 --> 00:16:01,078 we reported on our tax returns. 275 00:16:01,998 --> 00:16:03,158 Here’s a key thing. 276 00:16:03,508 --> 00:16:08,948 How many of us inflate our income deliberately on our income tax returns? 277 00:16:10,118 --> 00:16:12,688 Not too many, for obvious reasons. 278 00:16:12,868 --> 00:16:15,078 So it’s a super reliable thing. 279 00:16:15,278 --> 00:16:21,338 So it’s absolute BS that liar’s loans were developed for self-employed people, 280 00:16:21,388 --> 00:16:23,068 where you couldn’t verify their income. 281 00:16:23,328 --> 00:16:27,398 That is a total lie about all of this. 282 00:16:27,538 --> 00:16:32,778 So these two fraud mechanisms are employed typically 283 00:16:32,778 --> 00:16:35,918 simultaneously by the loan broker. 284 00:16:35,958 --> 00:16:42,878 And again, if I inflate the borrower’s income and if we go forward in time, there 285 00:16:42,878 --> 00:16:44,838 will eventually be statistics on this, 286 00:16:47,138 --> 00:16:52,748 the average inflation was 60 percent or more of the borrower’s income. 287 00:16:52,748 --> 00:16:53,228 That’s crazy. 288 00:16:53,228 --> 00:16:59,358 No, it’s not crazy, because it makes the loan look safer. 289 00:16:59,848 --> 00:16:59,998 All right. 290 00:17:00,048 --> 00:17:05,198 Let me remind people of something you told me about four times until it really sunk 291 00:17:05,198 --> 00:17:09,348 in my head, because everyone’s thinking, well, why would the banks do this? 292 00:17:09,348 --> 00:17:13,508 And your answer was, don’t think banks think the individual scooping 293 00:17:13,508 --> 00:17:16,738 up the fees because they don’t mind screwing their own banks. 294 00:17:17,608 --> 00:17:26,288 Oh, no, indeed the famous article by two Nobel laureates in economics is “Looting 295 00:17:26,638 --> 00:17:34,318 the Economic Underworld of Bankruptcy for Profit”. You bankrupt your bank as 296 00:17:34,318 --> 00:17:42,628 the CEO and it makes you a ton of money. If you want, I can explain why that 297 00:17:42,628 --> 00:17:49,228 works and why trying to do it by making good loans doesn’t work as a sure thing. 298 00:17:49,718 --> 00:17:51,048 You want that, OK? 299 00:17:51,058 --> 00:17:51,798 Yeah, sure. 300 00:17:51,808 --> 00:17:54,658 Let me just remind people about the title of your book. 301 00:17:54,658 --> 00:17:56,678 The Best Way to Rob a Bank is To Own One. 302 00:17:56,678 --> 00:17:57,268 Go ahead. 303 00:17:57,438 --> 00:17:58,538 OK, so 304 00:18:00,608 --> 00:18:04,858 consider the counterfactual, what if we tried to do the same scam 305 00:18:05,058 --> 00:18:09,318 but by making good loans instead of incredibly crappy loans? 306 00:18:12,758 --> 00:18:17,818 How many people who have incredibly good credit are unable 307 00:18:17,838 --> 00:18:19,538 to borrow money in America? 308 00:18:20,828 --> 00:18:22,808 Yeah, comes pretty close to zero. 309 00:18:23,128 --> 00:18:24,128 OK, pretty close. 310 00:18:24,378 --> 00:18:30,118 So if I want to expand -- remember the formula, the recipe, as we called 311 00:18:30,118 --> 00:18:37,498 it, this fraud recipe -- the first element is grow like crazy, which means 312 00:18:37,748 --> 00:18:40,448 typically 50 percent or beyond, right? 313 00:18:40,648 --> 00:18:46,588 Literally, there were 300 fraudulent savings and loans growing at 314 00:18:46,588 --> 00:18:48,898 a minimum 50 percent annually. 315 00:18:49,248 --> 00:18:53,318 Now, the rule of thumb in the industry is 25 percent growth and you die, to 316 00:18:53,318 --> 00:18:56,418 give you an idea of how insane this is. 317 00:18:56,578 --> 00:19:03,158 So I want to grow really, really fast, over 50 percent annually. 318 00:19:04,268 --> 00:19:06,688 How do I get good loans? 319 00:19:07,478 --> 00:19:15,678 Say I’m making 500,000 loans and I want to grow 50 percent, I can make 750,000 loans. 320 00:19:17,178 --> 00:19:21,118 But I’m trying in this theory to make them good loans. 321 00:19:22,068 --> 00:19:27,048 But there aren’t these other 250,000 people who have great credit 322 00:19:27,048 --> 00:19:31,348 quality and everything else who have any difficulty getting loans. 323 00:19:31,578 --> 00:19:32,758 So what do I have to do? 324 00:19:32,758 --> 00:19:36,578 I have to buy market share, as they call it in business. 325 00:19:37,508 --> 00:19:39,368 I have to reduce my price. 326 00:19:40,448 --> 00:19:42,038 My interest rate that I charge. 327 00:19:42,768 --> 00:19:45,368 Is that a very good way of maximizing profits? 328 00:19:46,068 --> 00:19:46,788 Not so much. 329 00:19:47,218 --> 00:19:48,128 Cut your price. 330 00:19:48,768 --> 00:19:50,528 But worse, what happens? 331 00:19:51,268 --> 00:19:52,998 What will my competitors do? 332 00:19:55,098 --> 00:19:59,358 They’ll do the same thing so they don’t lose their best customers. 333 00:19:59,368 --> 00:20:03,258 So at the end of the day, is this a great fraud strategy? 334 00:20:03,618 --> 00:20:04,168 No! 335 00:20:04,428 --> 00:20:08,378 All of us lose money under this strategy. 336 00:20:08,678 --> 00:20:13,258 Conversely, I can grow 50 percent a year because there are tons of 337 00:20:13,258 --> 00:20:17,868 people, millions, tens of millions of people in a country the size of 338 00:20:17,868 --> 00:20:20,488 America that cannot repay their loans. 339 00:20:21,608 --> 00:20:27,508 I can charge them a premium rate of interest because they can’t get loans 340 00:20:27,508 --> 00:20:32,958 as easily and because statistically, they’re likely to be less financially 341 00:20:32,958 --> 00:20:37,288 sophisticated than other people who already own homes and have much higher 342 00:20:37,288 --> 00:20:39,098 incomes and all those types of things. 343 00:20:39,358 --> 00:20:45,288 So this is a great thing, as Akerlof and Romer, the two Nobel laureates 344 00:20:45,288 --> 00:20:47,258 agreed in this paper on looting. 345 00:20:48,318 --> 00:20:56,078 This kind of fraud is a sure thing, and you deliberately make terrible loans that 346 00:20:56,078 --> 00:20:58,588 you know are going to bankrupt the bank. 347 00:20:59,108 --> 00:21:05,238 But you, the CEO, are going to walk away wealthy and hundreds of thousands of 348 00:21:05,238 --> 00:21:07,168 others are going to walk away wealthy. 349 00:21:07,398 --> 00:21:13,848 All the loan brokers, all the officers along the way with that $2 trillion 350 00:21:14,528 --> 00:21:18,298 in fees generated by these scams. 351 00:21:18,357 --> 00:21:22,757 Why FTX's Crypto Scam Is A Tale As Old As Time. 352 00:21:22,757 --> 00:21:25,157 The Problem With Jon Stewart Podcast. 353 00:21:25,157 --> 00:21:27,157 Air Date December 7th, 2022. 354 00:21:27,157 --> 00:21:32,557 When I read about how these crypto exchanges and, uh, companies have been 355 00:21:32,557 --> 00:21:39,547 set up, it seems that the biggest mistake they've made is they are mirroring the 356 00:21:39,547 --> 00:21:42,577 worst excesses of the actual stock market. 357 00:21:42,637 --> 00:21:46,267 market But with a much more volatile commodity. 358 00:21:46,267 --> 00:21:49,597 It seems like they've centralized things. 359 00:21:49,597 --> 00:21:53,207 There's only a few, like, big crypto exchanges. 360 00:21:53,547 --> 00:21:59,002 All the conflict of interest and corruption inherent in our more 361 00:21:59,002 --> 00:22:02,832 standard markets, they seem to have mirrored and they've the lessons of, 362 00:22:02,832 --> 00:22:04,872 sort of, what this was supposed to be. 363 00:22:05,502 --> 00:22:11,692 Yeah, I mean, I'd like to say that this is some sort of innovative and newfangled 364 00:22:11,722 --> 00:22:14,932 way to separate people from their money. 365 00:22:14,932 --> 00:22:19,902 But I think the real answer is it's the same schemes transported to 366 00:22:19,962 --> 00:22:22,212 something new with different acronyms. 367 00:22:22,272 --> 00:22:27,642 I mean, uh, you have here is you had two separate companies owned 368 00:22:27,732 --> 00:22:29,652 essentially by the same person. 369 00:22:29,657 --> 00:22:31,872 You had FTX and Alameda Research. 370 00:22:32,622 --> 00:22:36,102 FTX was the exchange where people could go on and trade 371 00:22:37,557 --> 00:22:42,537 cryptocurrencies, while Alameda was just kind of a simple hedge fund. 372 00:22:43,107 --> 00:22:43,467 Yeah. 373 00:22:43,557 --> 00:22:48,417 So, and Alameda was a customer on FTX, so... 374 00:22:48,417 --> 00:22:52,197 Well, that, that seems completely above board . Why would that be, 375 00:22:52,437 --> 00:22:54,687 why would that be something that would draw people's attention? 376 00:22:54,747 --> 00:22:57,957 Well, not only that, but they didn't have to play by the rules that 377 00:22:57,957 --> 00:23:04,607 everybody else played by on FTX regarding, uh, margins and leverage. 378 00:23:04,997 --> 00:23:06,587 Um, yes, apparently not. 379 00:23:06,767 --> 00:23:07,127 Yeah. 380 00:23:07,157 --> 00:23:13,247 So, uh, you know, the exchange is supposed to make its money essentially through, you 381 00:23:13,247 --> 00:23:15,422 know, small fees on transactions, right? 382 00:23:15,502 --> 00:23:18,472 so they are supposed to have, it's basically a bank. 383 00:23:18,472 --> 00:23:21,537 There are depositors, there are these entities that are trading on 384 00:23:21,537 --> 00:23:26,317 the exchange and they get a little bit of money from each trade, and 385 00:23:26,317 --> 00:23:27,727 that's how they sustain themselves. 386 00:23:28,387 --> 00:23:33,277 the number one thing you are not supposed to do, if you're a bank or a bank-like 387 00:23:33,307 --> 00:23:37,937 object, like an exchange, is take the customer money and gamble with it. 388 00:23:37,967 --> 00:23:38,327 Okay. 389 00:23:38,327 --> 00:23:39,407 Hold on one second now. 390 00:23:39,407 --> 00:23:41,057 Now you've really stepped into something. 391 00:23:41,057 --> 00:23:41,177 I have. 392 00:23:41,177 --> 00:23:41,627 I apologize. 393 00:23:42,087 --> 00:23:48,077 Because if I'm not mistaken, that is the foundation of American capitalism. 394 00:23:48,077 --> 00:23:52,537 That's, when they repealed Glass-Steagall, I'm pretty sure, if you looked at 395 00:23:52,537 --> 00:23:56,177 the fine print, it said, Oh, and by the way, if you wanna place like 396 00:23:56,177 --> 00:24:01,487 a really wild, long shot bet using these deposits on, let's say, subprime 397 00:24:01,487 --> 00:24:03,857 derivative bundles, knock yourself out. 398 00:24:04,247 --> 00:24:04,607 Right. 399 00:24:04,757 --> 00:24:08,367 But I mean, the point you make is the correct one, that we solved this 400 00:24:08,367 --> 00:24:11,037 problem almost a hundred years ago. 401 00:24:11,217 --> 00:24:16,362 Uh, and, and we continue to fall into it over and over again. 402 00:24:16,362 --> 00:24:22,192 So, just like MF Global, just like, uh, you know, some of the 403 00:24:22,302 --> 00:24:24,042 mortgage derivatives that we saw. 404 00:24:24,102 --> 00:24:27,862 The Savings and Loan scandals of the Keating Five. 405 00:24:27,892 --> 00:24:29,512 Just like this S&L scandal. 406 00:24:29,572 --> 00:24:32,842 I saw an economic historian say it's like the South Seas 407 00:24:32,842 --> 00:24:35,062 Company from the 18th Century. 408 00:24:35,312 --> 00:24:35,682 Oh my God. 409 00:24:35,682 --> 00:24:38,152 This is just the same kind of thing. 410 00:24:38,302 --> 00:24:41,752 They took customer money, they made a bunch of bets. 411 00:24:41,902 --> 00:24:45,112 They lost those bets, and the customers wanted their money 412 00:24:45,112 --> 00:24:46,522 back and they didn't have it. 413 00:24:46,552 --> 00:24:52,102 Whatever fun name that you want to put on it, it's the same damn thing 414 00:24:52,102 --> 00:24:53,602 that we've seen over and over again. 415 00:24:53,702 --> 00:25:01,162 And the thing that I find most galling about all of this is the sort of, Well, 416 00:25:01,162 --> 00:25:06,152 crypto is so difficult to understand and that, you know, there's no way that we 417 00:25:06,152 --> 00:25:10,102 could have seen this, or foreseen it, it's this brand new world, as though, 418 00:25:10,972 --> 00:25:16,862 as we talked about earlier, the general tenets of the corruption that exists 419 00:25:17,242 --> 00:25:22,042 between our government and the markets and all these big players, you could 420 00:25:22,042 --> 00:25:28,002 substitute out Lehman, uh, you know, Ken Griffin at Citadel, I mean, how is this 421 00:25:28,002 --> 00:25:32,562 different than Ken Griffin running a hedge fund at Citadel and also being the 422 00:25:32,562 --> 00:25:35,412 most gigantic market maker that we have? 423 00:25:35,522 --> 00:25:39,272 And who's the biggest donor to all kinds of politicians? 424 00:25:39,402 --> 00:25:40,917 It's Ken Griffin. 425 00:25:40,947 --> 00:25:46,917 I mean, the markings for corruption are all over our system, but they 426 00:25:46,917 --> 00:25:49,197 wanna point to this as it's an anomaly. 427 00:25:49,257 --> 00:25:52,267 The conflicts of interest are very familiar and dull. 428 00:25:52,317 --> 00:25:55,117 The Gig Economy Was Always A Scam. 429 00:25:55,117 --> 00:25:55,517 Wisecrack. 430 00:25:55,517 --> 00:25:57,517 Air Date August 8th, 2022. 431 00:25:57,567 --> 00:26:00,717 As Derek Thompson's recent piece in The Atlantic put it, "something 432 00:26:00,717 --> 00:26:03,897 beyond rising energy and labor costs is leading to sticker shock 433 00:26:03,902 --> 00:26:05,877 on once cheap urban amenities". 434 00:26:06,237 --> 00:26:11,127 Clearly, something has changed since Airbnb first hit the scene in 2008. 435 00:26:11,317 --> 00:26:15,277 This was the perfect moment for the gig economy to make its grand debut, as the 436 00:26:15,277 --> 00:26:17,497 US was reeling from the Great Recession. 437 00:26:17,797 --> 00:26:20,707 The unemployment rate had doubled and other workers faced 438 00:26:20,707 --> 00:26:22,477 furloughs and reduced hours. 439 00:26:22,627 --> 00:26:26,287 This made alternatives to classic employment seem quite appealing, 440 00:26:26,587 --> 00:26:28,537 like a potential safety net. 441 00:26:28,867 --> 00:26:32,317 As economist Juliet Schor writes in After the Gig, "In the years 442 00:26:32,317 --> 00:26:36,217 following 2008, people came to believe that digital technology 443 00:26:36,217 --> 00:26:38,347 could solve the problem of work". 444 00:26:38,437 --> 00:26:41,997 The thinking went that algorithms and crowdsourcing could do the 445 00:26:41,997 --> 00:26:46,387 work of bosses, while software could reorganize economic activity 446 00:26:46,437 --> 00:26:48,357 into a person-to-person structure. 447 00:26:48,417 --> 00:26:52,497 In this way, she notes that "this empowers individuals to take control 448 00:26:52,497 --> 00:26:57,447 of their lives. Vast swaths of the economy, especially in service, are ripe 449 00:26:57,447 --> 00:27:02,257 for this transformation. This vision came to be called the sharing economy". 450 00:27:02,917 --> 00:27:06,567 Note that we're gonna focus on the United States, and we're going by 451 00:27:06,567 --> 00:27:10,647 scholar Luigi Zingales' definition of the gig economy as "anytime you have 452 00:27:10,647 --> 00:27:14,757 a digital platform that coordinates a large amount of people doing a job. 453 00:27:14,817 --> 00:27:15,927 It's the case of Uber. 454 00:27:15,932 --> 00:27:16,917 It's the case of Lyft. 455 00:27:16,917 --> 00:27:18,447 It's the case of Airbnb. 456 00:27:18,507 --> 00:27:19,417 It's the case of Fiverr. 457 00:27:19,437 --> 00:27:21,647 It's the case of the Mechanical Turks on Amazon". 458 00:27:22,302 --> 00:27:25,722 And this model changed the very idea of what labor could be. 459 00:27:25,872 --> 00:27:30,492 It seemed to offer freedom and flexibility without compromising wages via the 460 00:27:30,492 --> 00:27:32,982 magic of part-time or gig-based work. 461 00:27:33,132 --> 00:27:37,122 For folks without spare rooms to rent out, Uber launched in 2009, 462 00:27:37,272 --> 00:27:42,157 followed by Fiverr in 2010, Rover in 2011, Instacart in 2012 and beyond. 463 00:27:42,427 --> 00:27:44,737 There was a gig for seemingly every skillset. 464 00:27:44,902 --> 00:27:48,632 Whether your specialty was picking the ripest avocado, bagging the 465 00:27:48,722 --> 00:27:52,342 sh*t of a stranger's dog, or copy-editing somebody's novel. 466 00:27:52,552 --> 00:27:56,392 Plus, you could hypothetically make your own hours and be your own boss 467 00:27:56,452 --> 00:28:00,802 with your earning potential limited only by your willingness to work hard. 468 00:28:01,042 --> 00:28:01,912 This caught on fast. 469 00:28:02,412 --> 00:28:06,732 By 2016, the Pew Research Center found that nearly 25% of American adults 470 00:28:06,732 --> 00:28:08,382 were making money from gig apps. 471 00:28:08,562 --> 00:28:12,282 And the startup founders behind the apps preached the gospel 472 00:28:12,282 --> 00:28:16,362 of Silicon Valley utopianism, promising staggering innovation. 473 00:28:16,452 --> 00:28:21,162 Like Uber's grand plans for self-driving cars, or Amazon delivering your 474 00:28:21,312 --> 00:28:25,902 year's supply of floss by drone, it would be a brand new economy. 475 00:28:26,082 --> 00:28:27,912 At first, it seemed to be working. 476 00:28:27,942 --> 00:28:29,832 That is if you didn't follow the money. 477 00:28:29,892 --> 00:28:35,227 If you're paying $7 for that ride, how is your Uber driver making a living wage? 478 00:28:35,377 --> 00:28:39,667 Well, a) they probably weren't, and b) the baffling bankroll was thanks 479 00:28:39,667 --> 00:28:44,167 to venture capitalists who allowed gig economy apps to operate at a loss. 480 00:28:44,377 --> 00:28:48,067 This was based on the assumption that in the future, when they've cornered 481 00:28:48,067 --> 00:28:52,987 the market on, say, self-driving cars, that's when they'll really see a profit. 482 00:28:53,347 --> 00:28:57,007 In the meantime, people got used to the idea of $7 rides. 483 00:28:57,157 --> 00:29:00,737 As Thompson writes, "For the past decade, people like me young-ish, 484 00:29:00,757 --> 00:29:04,492 urban-ish, professional-ish got a sweetheart deal from Uber. 485 00:29:04,492 --> 00:29:08,692 The Uber for X clones that vaguely pretended to be tech companies. 486 00:29:08,782 --> 00:29:12,352 Almost each time you or I ordered a pizza or hailed a taxi, the 487 00:29:12,352 --> 00:29:14,512 company behind that app lost money. 488 00:29:14,602 --> 00:29:18,472 In effect, these startups backed by venture capital were paying us - the 489 00:29:18,472 --> 00:29:20,482 consumers - to buy their products. 490 00:29:20,902 --> 00:29:24,202 But are those glory days over if consumers are no longer getting 491 00:29:24,202 --> 00:29:26,202 too good to be true prices? 492 00:29:26,592 --> 00:29:30,397 Because the gig economy has always run on underpaid labor. 493 00:29:30,757 --> 00:29:33,817 And to understand this, we need to contextualize where gig 494 00:29:33,817 --> 00:29:35,407 work as we know it came from. 495 00:29:35,557 --> 00:29:39,277 As Scholar Louis Hyman explains, "The decades following the New Deal 496 00:29:39,277 --> 00:29:43,477 witnessed the golden age of stable, long-term employment when union 497 00:29:43,482 --> 00:29:47,257 membership was skyrocketing, and companies competing for top talent 498 00:29:47,587 --> 00:29:51,127 started offering things like generous wages and employer-based healthcare. 499 00:29:51,577 --> 00:29:56,737 But after the economic boom in the 1950s, corporate structures started to change. 500 00:29:57,247 --> 00:30:01,327 At the top, short-term consultants started replacing executives. 501 00:30:01,327 --> 00:30:05,467 While at the bottom, union workers were replaced by cheaper day laborers. 502 00:30:06,037 --> 00:30:10,507 And while these moves helped businesses seem lean, and therefore more profitable, 503 00:30:10,777 --> 00:30:12,797 this also decreased job security. 504 00:30:12,952 --> 00:30:16,912 This, as Hyman argues, was "indicative of a sea change and how corporations 505 00:30:16,912 --> 00:30:21,052 function. They went from primarily trying to minimize risk to primarily 506 00:30:21,052 --> 00:30:23,272 trying to maximize profits". 507 00:30:23,362 --> 00:30:26,062 It wasn't about keeping your family company running and 508 00:30:26,272 --> 00:30:27,832 making quality goods for decades. 509 00:30:28,102 --> 00:30:30,052 It was about making bank, today. 510 00:30:30,382 --> 00:30:33,532 And this was a whole new way of looking at business. 511 00:30:33,862 --> 00:30:38,677 The risk taking entrepreneur thus became the capitalist ideal. 512 00:30:39,007 --> 00:30:42,847 And in pursuit of standalone, unabashed profits, short-term 513 00:30:42,847 --> 00:30:44,347 returns became the new goal. 514 00:30:44,617 --> 00:30:49,477 And one way to make sure your quarterly ROI looks shiny and efficient is to 515 00:30:49,477 --> 00:30:54,037 hire flexible laborers who take up less of your operating costs overall. 516 00:30:54,127 --> 00:30:58,237 The tech industry of the seventies and eighties relied on this business model. 517 00:30:58,297 --> 00:31:01,387 Short term investments partnered with flexible production to 518 00:31:01,387 --> 00:31:03,212 great growth and success. 519 00:31:03,362 --> 00:31:07,402 It also, as Hyman points out, relied upon the use of undocumented 520 00:31:07,402 --> 00:31:11,722 labor at an industrial scale, by the way of subcontractors who 521 00:31:11,722 --> 00:31:14,422 were paid on a per project basis. 522 00:31:14,842 --> 00:31:18,532 The rise of the internet would greatly influence how work is sourced and 523 00:31:18,532 --> 00:31:23,257 conducted, making it even easier to source temp workers via Craigslist or apps. 524 00:31:23,587 --> 00:31:25,237 No agency necessary. 525 00:31:25,447 --> 00:31:28,897 These workers would be known as independent contractors. 526 00:31:29,197 --> 00:31:32,527 There are big benefits to digitally sourcing contractors as Jamie 527 00:31:32,527 --> 00:31:35,637 Woodcock and Mark Graham explained in their book, The Gig Economy. 528 00:31:35,787 --> 00:31:38,877 For one, it adds a layer of invisibility and isolation that 529 00:31:38,877 --> 00:31:40,857 obscures the people doing the work. 530 00:31:41,337 --> 00:31:44,997 It's hard to know how many colleagues you have at TaskRabbit, after all, if 531 00:31:44,997 --> 00:31:46,857 there is no way to communicate with them. 532 00:31:46,917 --> 00:31:50,277 And for many of these apps, the sheer number of willing contractors 533 00:31:50,397 --> 00:31:52,647 has created an oversupply of labor. 534 00:31:52,847 --> 00:31:57,017 Woodcock and Graham write, "As a result of this oversupply, individual 535 00:31:57,017 --> 00:32:01,307 workers have very little power to negotiate wages or working conditions, 536 00:32:01,607 --> 00:32:05,177 which is why workers way back when started forming unions to begin with. 537 00:32:05,507 --> 00:32:10,277 But unionizing is virtually impossible for today's gig workers, because 538 00:32:10,277 --> 00:32:13,997 to form a union, you have to be an employee, and people who work for 539 00:32:14,027 --> 00:32:18,857 Uber, Lyft, GrubHub, Airbnb, and so on are not actually employees. 540 00:32:19,317 --> 00:32:22,227 This may sound like a technicality, but it's essential to the 541 00:32:22,227 --> 00:32:23,637 way these companies function. 542 00:32:23,937 --> 00:32:28,047 Unsurprisingly, when faced with a 2020 California ballot initiative, 543 00:32:28,047 --> 00:32:32,517 Prop 22, which would exempt companies like Uber from a state law that 544 00:32:32,517 --> 00:32:35,997 would've required these companies to treat workers like formal employees, 545 00:32:36,237 --> 00:32:42,477 DoorDash, Lyft, Uber, Instacart, and Postmates spent $204 million on 546 00:32:42,477 --> 00:32:44,637 a publicity campaign supporting it. 547 00:32:44,727 --> 00:32:49,557 See, if somebody is your employee, you're obligated to provide things like overtime, 548 00:32:49,557 --> 00:32:50,907 bargaining rights, and healthcare. 549 00:32:51,267 --> 00:32:54,717 According to The Seattle Times, classifying your workforce as 550 00:32:54,717 --> 00:33:00,327 independent contractors instead can save companies 30% or more on labor costs. 551 00:33:00,847 --> 00:33:04,417 And for companies that were definitely not all making a profit, 552 00:33:04,717 --> 00:33:07,657 this would've made their tenuous situations even more slippery. 553 00:33:07,837 --> 00:33:12,577 In the end, nearly 60% of voters agreed that all the bells and whistles of 554 00:33:12,577 --> 00:33:16,567 formal employment were unnecessary, especially if it jacked up prices on 555 00:33:16,567 --> 00:33:18,277 services they had come to rely on. 556 00:33:18,547 --> 00:33:22,652 The sheer amount of money poured into this campaign made Prop 22 the most 557 00:33:22,652 --> 00:33:24,902 expensive ballot initiative in US history. 558 00:33:24,902 --> 00:33:27,092 And arguably it paid off. 559 00:33:27,482 --> 00:33:31,892 Except, uh, except not for workers, though definitely didn't pay off for them. 560 00:33:32,132 --> 00:33:35,642 In this way, we can see the gig economy as being emblematic of a 561 00:33:35,647 --> 00:33:37,682 bigger shift in the power of labor. 562 00:33:37,982 --> 00:33:42,642 As sociologists Alexandrea Ravenelle concluded, "For all its app-enabled 563 00:33:42,662 --> 00:33:45,932 modernity, the gig economy resembles the early Industrial Age. 564 00:33:46,232 --> 00:33:50,457 The sharing economy is truly a movement forward to the past. 565 00:33:50,697 --> 00:33:55,107 That is, a past before workers had all the protections they gained through striking 566 00:33:55,107 --> 00:33:59,307 and organizing since the 19th Century and through the protections of the New Deal. 567 00:33:59,357 --> 00:34:01,357 Why Spotify Will Ultimately Fail. 568 00:34:01,357 --> 00:34:02,157 Benn Jordan. 569 00:34:02,157 --> 00:34:04,157 Air Date January 9th, 2023. 570 00:34:04,157 --> 00:34:08,567 For years, for an exhaustive amount of time now, I've been collecting data from 571 00:34:08,567 --> 00:34:13,157 hundreds of independent musicians and small record labels, and I finally feel 572 00:34:13,157 --> 00:34:19,047 certain enough to tell you exactly how Spotify is, how do I put this, a grift. 573 00:34:19,317 --> 00:34:20,047 A hiest. 574 00:34:20,227 --> 00:34:23,677 About two years ago when I made my last video on this topic, I looked at the 575 00:34:23,682 --> 00:34:27,667 data and I noticed that the amount of money streaming services paid artists was 576 00:34:27,667 --> 00:34:32,827 syncing by a whole lot, and I wondered to myself if they had pulled a massive 577 00:34:32,827 --> 00:34:34,867 bait and switch scheme with royalties. 578 00:34:34,872 --> 00:34:40,492 It wasn't until I got my hands on this, the entire contract agreement between Sony 579 00:34:40,492 --> 00:34:44,962 Music and Spotify, that I realized that it absolutely was a bait and switch, and 580 00:34:44,962 --> 00:34:46,942 major labels were completely aware of it. 581 00:34:46,942 --> 00:34:51,682 So much so that Sony Music got paid with huge non-refundable advances from Spotify, 582 00:34:51,687 --> 00:34:55,972 and in every case I looked into, none of those advances went to the artists. 583 00:34:56,062 --> 00:35:01,252 The initial contract with Sony in 2011 paid $25 million to Sony per 584 00:35:01,252 --> 00:35:05,302 year, plus $9 million in ad spots which Sony could then resell. 585 00:35:05,302 --> 00:35:09,142 Sony's advances were tied to market share and other variables on an annual basis, 586 00:35:09,142 --> 00:35:11,932 so they would keep rising year after year. 587 00:35:11,972 --> 00:35:16,452 Spotify knew that if they wanted you to become a Spotify customer and subscriber 588 00:35:16,457 --> 00:35:20,462 first, they needed to have the biggest names in music in their library right 589 00:35:20,462 --> 00:35:25,442 from the start, and to do this, they threw millions of venture capital dollars 590 00:35:25,442 --> 00:35:29,942 at the media conglomerates that own the licenses for the music on an annual basis, 591 00:35:30,092 --> 00:35:32,962 rather than just promising a fair royalty. 592 00:35:33,012 --> 00:35:36,162 So if you're an independent musician and if you ever wondered if Beyonce's 593 00:35:36,162 --> 00:35:39,702 label is getting more per stream than you are, the answer is such 594 00:35:39,702 --> 00:35:43,512 a complicated form of "of course", that you're better off just drinking 595 00:35:43,512 --> 00:35:47,442 whiskey until you fall asleep laughing maniacally at how unfair the world is. 596 00:35:47,472 --> 00:35:49,932 So why would musicians sign up in the first place? 597 00:35:49,932 --> 00:35:51,882 Well, I think there are a lot of reasons to start. 598 00:35:51,887 --> 00:35:55,532 Most musicians want to adapt to the next big thing and music streaming effectively 599 00:35:55,532 --> 00:35:59,822 made access in music so easy that music piracy started dropping, not unlike 600 00:35:59,822 --> 00:36:01,862 the effect Netflix had on movie piracy. 601 00:36:01,892 --> 00:36:04,292 But musicians couldn't just upload their music to Spotify. 602 00:36:04,292 --> 00:36:06,992 Spotify and iTunes couldn't be bothered to actually manage their 603 00:36:06,992 --> 00:36:10,112 own library that justifies their existence in the first place. 604 00:36:10,172 --> 00:36:13,472 They made independent musicians pay for the privilege for third party 605 00:36:13,472 --> 00:36:15,613 services like TuneCore or DistroKid. 606 00:36:15,632 --> 00:36:19,712 A little side note here, Spotify would actually buy a minority stake 607 00:36:19,712 --> 00:36:24,402 in DistroKid so they could monetize their own lack of functionality. 608 00:36:24,462 --> 00:36:27,432 After a few years, if you wanted to be an independent musician and have your name 609 00:36:27,432 --> 00:36:31,122 alongside the bigger artist that Spotify was actually secretly paying up front 610 00:36:31,122 --> 00:36:33,192 for you didn't have any other option. 611 00:36:33,192 --> 00:36:36,252 And for someone like myself who came into Spotify having already been 612 00:36:36,257 --> 00:36:39,312 making a living as a professional musician, once the payments started 613 00:36:39,317 --> 00:36:41,262 coming in, it started making sense. 614 00:36:41,442 --> 00:36:44,292 I won't bore you with the details, I already did that in this video, but 615 00:36:44,292 --> 00:36:48,612 once Spotify and the other streaming services dominated every other form of 616 00:36:48,612 --> 00:36:52,997 music distribution, including radio, take a wild guess what happened? 617 00:36:53,657 --> 00:36:54,447 Musicians got fucked. 618 00:36:54,447 --> 00:36:57,137 Here's a way of putting it that tech investors might understand. 619 00:36:57,137 --> 00:37:02,297 This is how much Spotify paid independent musicians per stream on average over time. 620 00:37:02,297 --> 00:37:05,057 Without a doubt, it is a bait and switch, especially when Spotify 621 00:37:05,467 --> 00:37:06,707 subscriber growth looks like this. 622 00:37:06,767 --> 00:37:09,587 Now, when I pointed this out in a video two years ago, I got quite a bit of 623 00:37:09,587 --> 00:37:14,657 pushback from investors or day traders who I assume had some sort of stake in 624 00:37:14,657 --> 00:37:18,572 Spotify and I couldn't fathom how they weren't seeing this as a bad thing. 625 00:37:18,602 --> 00:37:22,592 It's actively squeezing the life out of the one thing that you're reselling. 626 00:37:22,802 --> 00:37:26,252 If Uber drivers were paid so low that they couldn't afford fuel, that 627 00:37:26,252 --> 00:37:28,412 would not be good news for investors. 628 00:37:28,442 --> 00:37:31,652 I think a lot of people in the music industry have been completely blindsided 629 00:37:31,652 --> 00:37:35,752 by this because the modern Silicon Valley business model operates so differently. 630 00:37:35,782 --> 00:37:38,512 Most people would describe Spotify's business strategy as something 631 00:37:38,512 --> 00:37:41,872 called blitzscaling, and it's both clever and stupid at the same time. 632 00:37:41,872 --> 00:37:46,402 The goal is to grow at an absurdly rapid pace and get as high of a market 633 00:37:46,407 --> 00:37:50,572 valuation as quickly as possible, and then, after you've succeeded at that, 634 00:37:50,602 --> 00:37:54,602 then you find out if the business can be profitable and how to make that work. 635 00:37:54,942 --> 00:37:58,992 When a business is founded on blitzscaling or fast scaling, if growth slows down 636 00:37:58,992 --> 00:38:03,072 before a profitable business model is discovered, everything goes kaput. 637 00:38:03,282 --> 00:38:08,022 It's all or nothing, so the top priority above all other things is to keep growing. 638 00:38:08,022 --> 00:38:11,922 And in cases such as Movie Pass or Uber, the customer gets a slight 639 00:38:11,922 --> 00:38:15,792 lifestyle upgrade paid for by a pool of venture capital investments. 640 00:38:15,792 --> 00:38:19,472 Now in Spotify's case, the venture capital allowed the initial membership fees to 641 00:38:19,472 --> 00:38:24,482 be low and the royalties to be relatively high, that way, more artists would get 642 00:38:24,487 --> 00:38:26,342 on board and keep their music there. 643 00:38:26,372 --> 00:38:30,512 But since Spotify wouldn't dare risk slower growth of subscribers, their 644 00:38:30,512 --> 00:38:34,322 immense losses are bandaged and subsidized from independent musicians, 645 00:38:34,322 --> 00:38:38,282 both by cutting their royalties and charging them for listing prioritization 646 00:38:38,282 --> 00:38:40,302 on things like the marquee program. 647 00:38:40,332 --> 00:38:44,662 Unfortunately, due to Spotify's market share and absolute dominance and presence 648 00:38:44,667 --> 00:38:49,512 on everybody's phones, as a result, the perceived value of music in general 649 00:38:49,632 --> 00:38:51,672 has dropped to unsustainable levels. 650 00:38:51,677 --> 00:38:56,657 An extremely optimistic take would be saying that the music economy is at 651 00:38:56,657 --> 00:38:59,847 critical mass and not utterly irreparable. 652 00:38:59,847 --> 00:39:03,982 One might ask is Spotify's business model functional without a profit? 653 00:39:04,132 --> 00:39:09,142 And the answer to that depends on who you ask and what you mean by functional. 654 00:39:09,142 --> 00:39:12,202 Do you remember earlier in this video when I told you about the major labels 655 00:39:12,202 --> 00:39:13,627 having backdoor agreements with Spotify? 656 00:39:14,537 --> 00:39:18,112 Well, a lot of that was huge amounts of stocks in Spotify being 657 00:39:18,112 --> 00:39:21,592 transferred to the record labels and almost all the labels dumped that 658 00:39:21,592 --> 00:39:23,402 stock right after it went public. 659 00:39:23,402 --> 00:39:27,392 The CEO is worth 5 billion, employees like Dawn Ostroff get 660 00:39:27,392 --> 00:39:30,062 about $7.5 million in salary. 661 00:39:30,062 --> 00:39:32,912 Third party companies like DistroKid that exists solely to charge you 662 00:39:32,912 --> 00:39:37,772 to put your music on Spotify have a billion dollar valuation, and Spotify's 663 00:39:37,772 --> 00:39:40,472 investors have made, well, about that. 664 00:39:40,502 --> 00:39:44,132 Now, I'm no big city economist, but it seems to me that a blitzscaling 665 00:39:44,632 --> 00:39:47,222 strategy would work best with rock bottom interest rates. 666 00:39:47,222 --> 00:39:50,522 And if you haven't noticed, that parade came to a screeching halt. 667 00:39:50,582 --> 00:39:54,662 When those rates were low, Spotify for a long time has had a lot of 668 00:39:54,662 --> 00:39:58,262 trouble finding a profit, but it's about to get a whole lot worse, and 669 00:39:58,267 --> 00:39:59,972 this isn't news to most investors. 670 00:40:00,062 --> 00:40:03,872 But the much bigger issue with the streaming platform business model that 671 00:40:03,872 --> 00:40:09,667 investors seem to be wildly ignoring is that none of these platforms own any 672 00:40:09,667 --> 00:40:11,647 of the assets that they're reselling. 673 00:40:11,827 --> 00:40:15,397 They don't even have a license for them for the next fiscal year. 674 00:40:15,427 --> 00:40:18,697 Let's say that there was some sort of, I don't know, a viral Reddit 675 00:40:18,697 --> 00:40:23,137 post that created some sort of pseudo online musician union, or let's just 676 00:40:23,137 --> 00:40:26,727 say that Joe Rogan said something else completely insane that was the 677 00:40:26,732 --> 00:40:27,907 straw that broke the camel's back. 678 00:40:27,907 --> 00:40:31,607 If there was just some sort of small movement or occurrence where a few 679 00:40:31,807 --> 00:40:34,687 thousand independent artists with fan bases similar to mine decided 680 00:40:34,687 --> 00:40:38,827 to remove their music from Spotify today, it very well could create a 681 00:40:38,827 --> 00:40:40,657 snowball effect with subscribers. 682 00:40:40,657 --> 00:40:43,567 And of course, as a customer, if you put your AirPods in and picked up your 683 00:40:43,567 --> 00:40:46,807 phone, expecting to hear some artists that you're accustomed to listen to and all 684 00:40:46,807 --> 00:40:49,597 of a sudden weren't able to find them, you're not going to recite your loyalty 685 00:40:49,597 --> 00:40:53,407 to Spotify, you'll just use a platform that has the artist you listen to. 686 00:40:53,467 --> 00:40:58,057 The point is, this platform is extremely fragile and it is increasingly 687 00:40:58,057 --> 00:41:00,607 neglecting the only asset that it has. 688 00:41:00,637 --> 00:41:04,207 If you're an investor who has a stake in Spotify or music streaming platform 689 00:41:04,207 --> 00:41:07,057 and you think that there's a chance that they will stabilize and eventually 690 00:41:07,062 --> 00:41:12,067 make a profit or a steady long-term profit, I can tell you after spending 691 00:41:12,072 --> 00:41:17,497 years excruciatingly analyzing both the artist and business side of this 692 00:41:17,497 --> 00:41:22,227 micro economy, I am as certain as I could possibly be that you are wrong. 693 00:41:22,387 --> 00:41:25,987 James O'Brien caller wrote his dissertation on incel culture. 694 00:41:25,987 --> 00:41:26,387 LBC. 695 00:41:26,387 --> 00:41:28,387 Air Date January 27th, 2023. 696 00:41:28,617 --> 00:41:29,577 Alfie's in Liverpool. 697 00:41:29,582 --> 00:41:30,687 Alfie, what can you tell us? 698 00:41:31,617 --> 00:41:32,337 Uh, hi James. 699 00:41:32,607 --> 00:41:34,587 Um, just a bit of, uh, context for me. 700 00:41:34,587 --> 00:41:37,857 I'm a 22 year old guy who's just graduated from university this summer just gone. 701 00:41:38,457 --> 00:41:41,627 Um, and my dissertation was on, actually, it started on a discussion 702 00:41:41,627 --> 00:41:44,717 about social media, but I just ended up having to write it about sort of 703 00:41:44,717 --> 00:41:48,232 incel culture and how it develops and where comes from and what sort of 704 00:41:48,642 --> 00:41:50,752 solution is because once you do begin to read into it, you begin to realize 705 00:41:50,752 --> 00:41:54,202 there's much wider web of issues that all contribute to this sort of problem. 706 00:41:54,202 --> 00:41:54,832 I'm sure. 707 00:41:55,977 --> 00:41:57,847 Starting with, basically there's two sort of parts of it. 708 00:41:57,847 --> 00:42:00,817 One is, is how young men find themselves in a situation where they feel the 709 00:42:00,817 --> 00:42:04,307 feelings they themselves claim to sort of have as their sort of central motive. 710 00:42:04,307 --> 00:42:07,752 And then also where that turned into every young man at every single point 711 00:42:07,757 --> 00:42:11,082 in their life, you know, of any sort of, um, hatred, sort of feels those 712 00:42:11,087 --> 00:42:14,582 sort of insecurities, is how that turns into aggression and violence and 713 00:42:14,582 --> 00:42:16,112 just the nasty side of it afterwards. 714 00:42:16,112 --> 00:42:17,762 Cause there is a fundamental difference there. 715 00:42:18,402 --> 00:42:22,752 Um, it sort of starts with if you picture the sort of, um, life of a 13 716 00:42:22,752 --> 00:42:25,312 year old, 14 year old, 15 year old, or even getting older, you know, I'm 717 00:42:25,622 --> 00:42:28,162 23 and I remember social media when I was that age but nowhere near in the 718 00:42:28,182 --> 00:42:30,342 capacity that it's sort of involved in the lives of young people now. 719 00:42:32,352 --> 00:42:35,422 It goes back to this classic, classic thing that sex sells and that sexualized 720 00:42:35,422 --> 00:42:38,542 content, and not necessarily sexual explicit, but on that sort of gray area 721 00:42:38,542 --> 00:42:40,322 content, is everywhere at the moment. 722 00:42:40,322 --> 00:42:43,752 And it's there, every single person in the world who's all over your phone 723 00:42:43,752 --> 00:42:46,692 screens, all over your mate's, phone screens all over your computer, on your 724 00:42:46,697 --> 00:42:49,762 iPad, on the YouTube content you're watching, on the TikTok you're watching. 725 00:42:49,782 --> 00:42:53,892 Everything is at least in some capacity sharing a sexually 726 00:42:53,892 --> 00:42:55,412 explicit level of content. 727 00:42:55,412 --> 00:43:00,122 It just means that when you are at home by yourself in bed at 10 pm and you 728 00:43:00,242 --> 00:43:01,712 should be in bed for school tomorrow. 729 00:43:01,762 --> 00:43:03,952 And you flick into the TikTok and you just see, you know, I don't 730 00:43:04,112 --> 00:43:06,892 need to describe it, but sort of that content you feel, Well, yeah, 731 00:43:06,892 --> 00:43:08,242 why am I not part of this world? 732 00:43:08,242 --> 00:43:09,262 Why can't I be part of this world? 733 00:43:09,352 --> 00:43:11,852 And then you tie that in with, you know, the insecurities that most young 734 00:43:11,852 --> 00:43:14,817 men feel anyway in school about their position in the social system, the social 735 00:43:14,822 --> 00:43:16,677 hierarchy and how sex plays into that. 736 00:43:16,797 --> 00:43:21,587 So all of a sudden you end up with a nation of young men who feel way, way 737 00:43:21,587 --> 00:43:25,097 more insecure about their sort of place in the sort of sexual hierarchy than 738 00:43:25,217 --> 00:43:26,622 they have done in generations as before. 739 00:43:26,962 --> 00:43:29,282 And how do I then leap to hating women? 740 00:43:29,842 --> 00:43:32,992 So then another thing is when you're on Instagram and you spend about 15, 20 741 00:43:32,992 --> 00:43:36,392 minutes on a fresh account and you're using it as I was at the time, as 22 742 00:43:36,392 --> 00:43:39,982 year old man, it works out really, really quickly that I was 22 year old man. 743 00:43:40,112 --> 00:43:41,512 TikTok even better at it than Instagram. 744 00:43:41,512 --> 00:43:42,622 That's just two examples.. 745 00:43:42,622 --> 00:43:43,712 TikTok's infernal at it. 746 00:43:43,712 --> 00:43:43,802 Right. 747 00:43:43,802 --> 00:43:45,672 So they know what is going to push your buttons. 748 00:43:45,672 --> 00:43:48,112 They know exactly who you are, exactly. 749 00:43:48,292 --> 00:43:49,622 And cuz you push their buttons, right? 750 00:43:49,862 --> 00:43:51,112 Physically, and they can then push yours. 751 00:43:51,192 --> 00:43:54,162 So then all of a sudden, when you are someone who's liking lots of sexual 752 00:43:54,162 --> 00:43:56,862 content, because 17 year old lads just do that, and you realize, okay, 753 00:43:56,862 --> 00:44:00,132 let's put all of this in front of you, oftentimes it's not surprising, this 754 00:44:00,132 --> 00:44:03,132 is how their algorithm works, there's a massive overlap between the people 755 00:44:03,132 --> 00:44:06,132 who want to access sexual content and the people who feel left out from it. 756 00:44:06,322 --> 00:44:09,397 Which means that when you've got an Andrew Tate repost account or whatever, 757 00:44:09,707 --> 00:44:12,707 the same people who are liking all the sexual stuff are also liking all 758 00:44:12,707 --> 00:44:16,237 the Andrew Tate stuff, which is saying that, well, you are, you're a young man. 759 00:44:16,487 --> 00:44:17,387 You deserve sex. 760 00:44:17,387 --> 00:44:18,947 You deserve to be involved in this culture. 761 00:44:19,127 --> 00:44:21,527 This culture is happening without you, there is a big sex party 762 00:44:21,527 --> 00:44:22,597 happening that you are not part of. 763 00:44:22,647 --> 00:44:25,617 So again, it's the mythical conspiracy. 764 00:44:25,667 --> 00:44:26,237 It's the... 765 00:44:26,237 --> 00:44:26,687 Totally. 766 00:44:26,757 --> 00:44:27,597 Ahhh okay. 767 00:44:27,597 --> 00:44:28,517 That's, that's it then. 768 00:44:28,517 --> 00:44:30,117 And it's, and the word is a "grifter", right? 769 00:44:30,117 --> 00:44:32,677 It's pretending that you're there to support the young men when 770 00:44:32,877 --> 00:44:34,197 actually you're there for a paycheck. 771 00:44:34,197 --> 00:44:37,027 And saying that, being able to provide the answer to an security that people 772 00:44:37,027 --> 00:44:41,257 have that's fundamentally founded on a myth is really, really profitable in 773 00:44:41,257 --> 00:44:45,047 the age of such vicious and successful algorithms that can identify you... 774 00:44:45,137 --> 00:44:48,437 What would be the components of the incel myth, for example. 775 00:44:48,437 --> 00:44:48,527 Sure. 776 00:44:48,567 --> 00:44:51,997 So the fundamental idea is that, yeah, it's sort of as the last caller was 777 00:44:52,017 --> 00:44:54,267 saying, is that this is a women problem. 778 00:44:54,657 --> 00:44:57,347 It's that the problem isn't about you being able to identify your own 779 00:44:57,347 --> 00:44:59,867 reality and identify the sort of parts of your personality that you 780 00:44:59,867 --> 00:45:02,687 might want to change if you want to change the output of your lifestyle. 781 00:45:02,937 --> 00:45:06,232 But it's actually more so that it's people are withholding this 782 00:45:06,232 --> 00:45:08,482 from you, that you deserve it and it's a right that belongs to you. 783 00:45:08,482 --> 00:45:11,572 Just like everyone is, just like you see all the influencers doing on the internet. 784 00:45:11,577 --> 00:45:13,232 You are, everyone to be like an influencer. 785 00:45:13,237 --> 00:45:15,217 And a big part of that is the lifestyle they permit. 786 00:45:16,057 --> 00:45:18,817 I also think that the other sort of proponents of this myth is that like, 787 00:45:18,817 --> 00:45:21,647 yeah, is that it's an entitlement thing. 788 00:45:21,647 --> 00:45:25,397 Well, this is back to the days when women weren't allowed to say no. 789 00:45:25,847 --> 00:45:27,047 Exactly, exactly. 790 00:45:27,047 --> 00:45:29,537 That's when it gets, that's the point at which it gets horrible. 791 00:45:30,057 --> 00:45:32,367 Which is where the sort of anti-feminism thing... 792 00:45:32,547 --> 00:45:33,867 Well, let me read you something. 793 00:45:33,867 --> 00:45:34,927 Let me read you something. 794 00:45:34,927 --> 00:45:38,657 I'm gonna read you two things, one for reference and the second one, just whether 795 00:45:38,662 --> 00:45:42,017 or not as a result of your thesis, you can give any help to Steven in Dundee. 796 00:45:42,122 --> 00:45:43,352 So the first one is anonymous. 797 00:45:43,352 --> 00:45:45,812 'I have a best friend of 10 years who I met at university. 798 00:45:46,202 --> 00:45:48,772 He was once extremely liberal and lefty, like myself. 799 00:45:49,317 --> 00:45:51,687 However, after being single for many years, he's turned to 800 00:45:51,687 --> 00:45:52,977 Andrew Tate as a role model. 801 00:45:53,217 --> 00:45:56,457 Most recently he was telling me that women bear some responsibility for 802 00:45:56,457 --> 00:45:57,927 being sexually assaulted or raped. 803 00:45:58,317 --> 00:46:02,817 As a rape and sexual assault victim, it broke me to hear this and resulted in me 804 00:46:02,937 --> 00:46:04,857 taking some time away from the friendship. 805 00:46:05,157 --> 00:46:09,622 He still today believes he was "canceled" by his best friends for this. 806 00:46:10,012 --> 00:46:11,122 It's terribly sad.' 807 00:46:11,572 --> 00:46:14,152 That sounds like a textbook case of what you've been describing. 808 00:46:14,192 --> 00:46:16,622 And it escalates then of course, because the victimhood gets 809 00:46:16,622 --> 00:46:18,272 magnified by the reactions... 810 00:46:18,272 --> 00:46:20,848 ...and they become more isolated, and the person who's texted you wouldn't be the 811 00:46:20,848 --> 00:46:23,348 person to intervene in that life cause it's so difficult triggering for them. 812 00:46:23,348 --> 00:46:25,888 There's no one there then, they've isolated themselves. 813 00:46:25,948 --> 00:46:27,988 Okay, and now this is where you might be able to help. 814 00:46:27,988 --> 00:46:28,498 I don't know. 815 00:46:28,498 --> 00:46:29,188 This is from Steve. 816 00:46:29,188 --> 00:46:31,678 This is, 'my 14 year old son's doing really well in school. 817 00:46:31,678 --> 00:46:34,618 He seems to have plenty of friends, girls seem to like him, he's sporty, 818 00:46:35,108 --> 00:46:38,168 all of which seems really positive, but he comes defensive and gets very 819 00:46:38,168 --> 00:46:42,568 moody when challenged even lightly on Andrew Tate and the views and teachings 820 00:46:42,568 --> 00:46:43,958 that he is showing to young boys. 821 00:46:44,228 --> 00:46:48,138 He believes he doesn't listen to the bad bits about women and sexism, 822 00:46:48,138 --> 00:46:51,408 but Andrew Tate is innocent and has done nothing wrong and is part of 823 00:46:51,408 --> 00:46:53,988 the inspiration for him going to the gym and getting himself fit. 824 00:46:54,198 --> 00:46:57,438 It's really difficult to counter, James, as they watch it on social 825 00:46:57,438 --> 00:47:01,158 media and it slips past without even knowing it's going on. 826 00:47:01,488 --> 00:47:03,678 Hopefully he sees through it, but it's really concerning.' 827 00:47:03,678 --> 00:47:07,093 That's textbook but much earlier in the case. 828 00:47:07,193 --> 00:47:07,833 What can he do? 829 00:47:07,933 --> 00:47:09,203 Can he do anything, do you think? 830 00:47:09,713 --> 00:47:10,693 Yeah, I think we can, right? 831 00:47:11,113 --> 00:47:12,403 I'm hopeful after my thesis. 832 00:47:12,403 --> 00:47:13,673 I wasn't gonna go into it, but there's a solution. 833 00:47:13,673 --> 00:47:14,323 Well, that's good to know. 834 00:47:14,323 --> 00:47:14,563 Totally. 835 00:47:14,803 --> 00:47:18,703 I think, I mean, no one will be surprised to hear that this is the answer from my 836 00:47:18,703 --> 00:47:22,468 perspective, but I think you just need to talk to your kids and sort of, from a much 837 00:47:22,468 --> 00:47:25,378 younger age, I think we have a big issue in this country particularly, but also 838 00:47:25,378 --> 00:47:28,678 around the world, and this is changing over time, where we're beginning to learn 839 00:47:28,678 --> 00:47:32,248 that having conversations with kids about sort of sexual health and sexual wellbeing 840 00:47:32,248 --> 00:47:33,608 is really important from a young age. 841 00:47:33,628 --> 00:47:37,288 It's just making sure that young men, when they're like, not after they've already 842 00:47:37,288 --> 00:47:39,968 been presented with the Andrew Tate stuff, cuz then talking to them... the big thing 843 00:47:39,968 --> 00:47:42,668 about Andrew Tate is he says that anyone who tries to tell you otherwise is part 844 00:47:42,668 --> 00:47:44,438 of the machine or the Matrix or whatever. 845 00:47:44,888 --> 00:47:45,128 Yeah, of course. 846 00:47:45,128 --> 00:47:48,003 So it's not about dealing with it once they've already began on that slide. 847 00:47:48,003 --> 00:47:50,343 It's about making sure that from... this is why I've been in such a 848 00:47:50,363 --> 00:47:52,408 good position to sort of understand this from an objective perspective 849 00:47:52,408 --> 00:47:54,143 is that my parents made this effort with me when I was very young. 850 00:47:54,193 --> 00:47:57,623 Just understand that when you poised with those ideas, as intoxicating as they 851 00:47:57,623 --> 00:48:01,013 can be and as much as they sound right and they answer all your questions, you 852 00:48:01,013 --> 00:48:03,023 actually just have to look at it bit critically and try to understand why 853 00:48:03,023 --> 00:48:05,998 that person might be, and again, just this would solve our Brexit problem, 854 00:48:06,278 --> 00:48:08,978 it would solve our Tory problem, it would solve our misogyny problem. 855 00:48:09,458 --> 00:48:11,848 Addressing it at a young age with men and being like, look, we need 856 00:48:11,848 --> 00:48:14,898 to talk about these things before it becomes a problem in their lives. 857 00:48:14,898 --> 00:48:19,703 It means that then we have a generation of men who are... you'll start to say that 858 00:48:19,823 --> 00:48:22,423 this is the baseline of what we're aiming for... but generation of men who are 859 00:48:22,583 --> 00:48:23,863 critical thinkers, and women, and whoever. 860 00:48:23,863 --> 00:48:24,903 But specific to this conversation... 861 00:48:24,903 --> 00:48:28,443 It's susceptibility to grifters, I mean, this is why you just gave 862 00:48:28,443 --> 00:48:30,098 us the litany, the list of grifts. 863 00:48:30,153 --> 00:48:31,173 That's really helpful. 864 00:48:31,173 --> 00:48:34,918 It's great that you are more optimistic than you were going in, but the 865 00:48:34,923 --> 00:48:35,968 problem is getting bigger, right? 866 00:48:35,968 --> 00:48:36,508 At the moment? 867 00:48:36,508 --> 00:48:41,428 Or do you think that the exposure of Tate now in a much more mainstream way 868 00:48:41,428 --> 00:48:43,978 will actually diffuse some of his... 869 00:48:44,304 --> 00:48:46,049 Tate being the biggest thing in the world at the moment is a good 870 00:48:46,049 --> 00:48:49,069 thing for the culture and for the conversation, but Andrew Tate isn't the 871 00:48:49,069 --> 00:48:50,179 first person to have been doing this. 872 00:48:50,179 --> 00:48:54,229 There's been a line of people exactly like him, some worse, some not quite 873 00:48:54,229 --> 00:48:56,419 as severe, behind him and there's a line queueing up behind him. 874 00:48:56,419 --> 00:48:59,089 Cause now, cause back in the day when it wasn't even that profitable to be 875 00:48:59,089 --> 00:49:01,399 like this, just to have the internet clout alone was reason to do it. 876 00:49:01,469 --> 00:49:03,689 And now all of a sudden you've got a massive paycheck at the 877 00:49:03,689 --> 00:49:04,739 end of the line as other people. 878 00:49:04,799 --> 00:49:07,764 There was a huge, huge, huge queue of people looking to be the Andrew 879 00:49:07,764 --> 00:49:08,614 Tate role model in kids' lives. 880 00:49:08,684 --> 00:49:10,454 We've gotta make sure that there's people and there's people 881 00:49:10,454 --> 00:49:11,654 putting our output into the world. 882 00:49:12,044 --> 00:49:15,254 We are good young role models for young men who can access... it's like 883 00:49:15,254 --> 00:49:17,714 I was saying, that person who became so isolated because all their friends 884 00:49:17,714 --> 00:49:20,444 just didn't wanna associate with them anymore, all of a sudden who is there in 885 00:49:20,449 --> 00:49:21,764 their life to tell and challenge them? 886 00:49:21,764 --> 00:49:22,244 There's no one. 887 00:49:22,244 --> 00:49:24,519 So then they're just free falling through this rabbit hole. 888 00:49:24,519 --> 00:49:27,169 And as you know, as the callers have said before, and as we know with every, with 889 00:49:27,519 --> 00:49:30,789 all forms of extremism, once you're in and there's no one there to challenge 890 00:49:30,789 --> 00:49:33,909 it, it is an absolute free fall and you find yourself at the bottom very quickly. 891 00:49:33,909 --> 00:49:37,509 TikToker Exposes New A.I. Scam That Is Absolutely Terrifying. 892 00:49:37,509 --> 00:49:38,309 Rebel HQ. 893 00:49:38,309 --> 00:49:40,309 Air Date January 13th, 2023. 894 00:49:40,309 --> 00:49:43,459 Tonight my parents got scammed for $21,000. 895 00:49:43,579 --> 00:49:51,619 And here is how: The scammers used AI to create a voice that sounds like me. 896 00:49:51,679 --> 00:49:54,589 They used social media to come up with enough information about me to 897 00:49:54,589 --> 00:49:56,539 convince them they were speaking to me. 898 00:49:57,389 --> 00:49:58,384 Obviously it wasn't. 899 00:50:00,579 --> 00:50:05,319 I suggest that you speak to your family immediately about creating or instituting 900 00:50:05,319 --> 00:50:10,389 a password that must be disclosed before any transfer of money occur. 901 00:50:10,749 --> 00:50:18,144 Because even if they are speaking to you, from their point of view it's not. 902 00:50:18,414 --> 00:50:21,324 The future is here and it is terrifying. 903 00:50:21,444 --> 00:50:26,064 That was TikTok user Benno56 sharing the story of how his parents were 904 00:50:26,064 --> 00:50:30,834 scammed out of tens of thousands of dollars by fraudsters who used 905 00:50:30,864 --> 00:50:33,084 AI to clone their son's voice. 906 00:50:33,144 --> 00:50:35,634 That may seem like something out of science fiction. 907 00:50:35,949 --> 00:50:40,779 But the technology is already here and it's already hurting the vulnerable. 908 00:50:40,779 --> 00:50:46,009 And AI has more than enough capability, and social media discloses 909 00:50:46,009 --> 00:50:49,729 more than enough about you, to convince anybody that it is you. 910 00:50:49,879 --> 00:50:51,529 Prevent this from happening. 911 00:50:51,839 --> 00:50:53,979 It cost my parents $21,000. 912 00:50:54,129 --> 00:50:58,689 With AI technology advancing faster than ever, a growing number of fraud 913 00:50:58,689 --> 00:51:02,979 victims are realizing just how much information is out there for bots 914 00:51:02,984 --> 00:51:08,019 to feed on, and how scary accurate those machines become after digesting 915 00:51:08,019 --> 00:51:10,149 the contents of your social media. 916 00:51:10,179 --> 00:51:15,189 For older generations who may not fully understand how advanced AI has become, 917 00:51:15,459 --> 00:51:18,484 this latest evolution poses a real threat. 918 00:51:18,514 --> 00:51:22,054 And the scammer who defrauded this TikToker's parents wasn't done. 919 00:51:22,174 --> 00:51:26,284 He called back the next day and did his best to keep the money flowing. 920 00:51:26,464 --> 00:51:33,004 So a simple followup to the scam is that the next day, which was yesterday, 921 00:51:33,034 --> 00:51:38,634 my parents received a call from the scammer who continued the story. 922 00:51:38,694 --> 00:51:42,809 He said that he needed more money for specific reasons, and my parents 923 00:51:42,809 --> 00:51:44,879 finally said, okay, we know it's a scam. 924 00:51:44,879 --> 00:51:45,719 We've been scammed. 925 00:51:46,079 --> 00:51:50,639 And immediately he dropped his facade and he said, what gave it away? 926 00:51:51,149 --> 00:51:52,799 My dad was stunned by this. 927 00:51:52,799 --> 00:51:55,139 My mom went hysterical. 928 00:51:55,169 --> 00:51:57,739 There's a brazen impunity to this whole grift. 929 00:51:58,239 --> 00:52:02,844 And as we've seen in videos of other, less technologically-advanced scams, 930 00:52:03,144 --> 00:52:05,634 most scammers don't fear getting caught. 931 00:52:05,724 --> 00:52:10,014 So it's no surprise that this scammer dropped the act right away and had 932 00:52:10,014 --> 00:52:14,879 the audacity to ask the victim's parents what he could do to stop 933 00:52:14,879 --> 00:52:16,499 from being caught in the future. 934 00:52:16,599 --> 00:52:20,049 My dad said, well, my son called us that evening and he said we never 935 00:52:20,049 --> 00:52:22,029 spoke to him and it is what it is. 936 00:52:22,839 --> 00:52:25,119 My mom said, why do you do this? 937 00:52:25,179 --> 00:52:26,379 And he said, it's a job. 938 00:52:26,859 --> 00:52:28,029 My dad said, what did you make? 939 00:52:28,059 --> 00:52:29,379 He said, I made a thousand bucks. 940 00:52:30,759 --> 00:52:34,629 The reality behind this is it's well funded and it's a day job. 941 00:52:35,439 --> 00:52:37,339 Just make a password. 942 00:52:37,529 --> 00:52:39,689 Believe me or not, make a password. 943 00:52:39,839 --> 00:52:40,799 It's not a big ask. 944 00:52:40,859 --> 00:52:45,329 It can be hard to believe that scamming innocent people is just a job, but 945 00:52:45,329 --> 00:52:49,049 that's the case for so many who are involved in the dark world of fraud. 946 00:52:49,139 --> 00:52:52,919 And it isn't just the tech illiterate or the elderly who are at risk. 947 00:52:52,979 --> 00:52:58,349 These new AI-enabled fraudsters are using their technology to commit crimes on 948 00:52:58,349 --> 00:53:00,809 a scale we're simply not prepared for. 949 00:53:00,959 --> 00:53:06,234 Take this story from 2019, when a UK-based CEO was scammed out 950 00:53:06,234 --> 00:53:12,594 of almost $250,000 after falling victim to an AI generated deep fake. 951 00:53:12,654 --> 00:53:16,404 Those calls were so accurate, they convinced the CEO he was 952 00:53:16,914 --> 00:53:20,004 actually talking to his boss, even down to the conversational 953 00:53:20,004 --> 00:53:22,224 flow of his boss's casual style. 954 00:53:22,224 --> 00:53:24,874 Those scammers were never apprehended. 955 00:53:24,894 --> 00:53:29,184 Or take this story from 2021, when an organized crime racket 956 00:53:29,184 --> 00:53:34,554 used AI voice cloning to pull off a $35 million bank heist that 957 00:53:34,554 --> 00:53:36,804 stretched from Hong Kong to Dubai. 958 00:53:36,864 --> 00:53:40,884 Again, voice cloning was good enough to fool senior executives 959 00:53:41,004 --> 00:53:44,124 into thinking they were speaking to someone they knew very well. 960 00:53:44,214 --> 00:53:46,494 In fact, they were talking to fraudsters. 961 00:53:46,524 --> 00:53:51,444 Creating artificial voices is now easier than ever, enabling what experts call 962 00:53:51,504 --> 00:53:55,254 "quick fakes." These are deep fakes that don't take much time or effort, 963 00:53:55,434 --> 00:53:57,354 but sound just like the real thing. 964 00:53:57,534 --> 00:54:00,834 And with the newest voice synthesis models, it only takes 965 00:54:00,834 --> 00:54:04,704 a few moments of real speech to accurately model your voice. 966 00:54:04,734 --> 00:54:07,824 Scammers are now able to steal your voice with something as 967 00:54:07,829 --> 00:54:09,954 simple as a fake wrong number call. 968 00:54:10,014 --> 00:54:14,694 In fact, we know exactly how long it takes for a scammer to steal your voice. 969 00:54:14,724 --> 00:54:18,654 If they're using something similar to Microsoft's latest technology, it 970 00:54:18,654 --> 00:54:21,264 will only take them three seconds. 971 00:54:21,494 --> 00:54:22,124 That's right. 972 00:54:22,324 --> 00:54:23,024 Watch this. 973 00:54:23,899 --> 00:54:27,939 Microsoft released an artificial intelligence tool named as VALL-E 974 00:54:27,989 --> 00:54:31,919 that can replicate people's voices just by listening three 975 00:54:31,924 --> 00:54:33,539 seconds' audio of their speech. 976 00:54:33,659 --> 00:54:35,189 And it's really good too. 977 00:54:35,219 --> 00:54:38,579 Take a listen to just a few of the quick captures Microsoft 978 00:54:38,584 --> 00:54:40,079 used to prove their model. 979 00:54:40,179 --> 00:54:43,539 We were more interested in the technical condition of the station 980 00:54:44,049 --> 00:54:45,509 than in the commercial part. 981 00:54:46,064 --> 00:54:49,394 We were more interested in the technical condition of the station 982 00:54:49,754 --> 00:54:50,954 than in the commercial part. 983 00:54:51,434 --> 00:54:54,554 If our government wants to keep up with advances in deep fake 984 00:54:54,554 --> 00:54:58,484 technology, well they're falling dangerously behind the times. 985 00:54:58,544 --> 00:55:02,734 Not only are there no laws regarding technologies like this; most members 986 00:55:02,759 --> 00:55:06,809 of Congress don't even know voice cloning is a thing that exists, and 987 00:55:06,809 --> 00:55:11,009 they're up against some of the most sophisticated tech scammers in the world. 988 00:55:11,099 --> 00:55:12,209 That's bad news. 989 00:55:12,329 --> 00:55:16,139 There is one step you can take to protect yourself from being the victim 990 00:55:16,139 --> 00:55:20,309 of deep fake fraud: Set up a password with your family that should be used 991 00:55:20,429 --> 00:55:23,969 whenever anyone has doubts about who's on the other end of that call. 992 00:55:24,059 --> 00:55:28,169 That simple approach would've protected all of the victims in this video. 993 00:55:28,559 --> 00:55:31,079 And it may well protect you in the future. 994 00:55:31,079 --> 00:55:35,079 Mark Rober's Prank And The Truth About Scammers And Capitalism. 995 00:55:35,079 --> 00:55:35,879 Second Thought. 996 00:55:35,879 --> 00:55:37,879 Air Date June 17th, 2022. 997 00:55:37,979 --> 00:55:41,549 Why does everyone you know have a bad experience with bureaucracy? 998 00:55:41,789 --> 00:55:44,429 I thought bureaucracy was supposed to be over in our advanced 999 00:55:44,429 --> 00:55:46,139 neoliberal capitalist society. 1000 00:55:46,349 --> 00:55:48,269 At least that's what I've always been told. 1001 00:55:49,349 --> 00:55:55,919 Wherever government bureaucracy takes over, costs go up and quality goes down. 1002 00:55:56,879 --> 00:56:00,929 That's no less true of the post office than it is of the schooling system. 1003 00:56:01,589 --> 00:56:06,089 It's no less true of garbage collection than it is of the schooling system. 1004 00:56:06,809 --> 00:56:10,319 That lint covered lollipop giving a speech is Milton Friedman. 1005 00:56:10,529 --> 00:56:14,219 You might have heard that name before, because for over 50 years, he's 1006 00:56:14,224 --> 00:56:18,329 been the guy when it comes to hating bureaucracy, and it just so happens 1007 00:56:18,329 --> 00:56:21,879 that he's also the guy that has shaped our modern economy probably more than 1008 00:56:22,079 --> 00:56:26,309 anyone else, specifically by attacking bureaucracy, which he believed the 1009 00:56:26,309 --> 00:56:28,479 government had created a safe space for. 1010 00:56:28,779 --> 00:56:32,204 This guy hated bureaucracy like I hate coming up with an analogy. 1011 00:56:32,324 --> 00:56:35,384 Just listen to him, explain it in an article with a title that pretty 1012 00:56:35,384 --> 00:56:38,444 much gives you his whole vibe, Why Government is the Problem. 1013 00:56:38,744 --> 00:56:43,064 "Government has become a self-generating monstrosity. Abraham Lincoln talked 1014 00:56:43,064 --> 00:56:46,934 about a government of the people, by the people, for the people. What we 1015 00:56:46,939 --> 00:56:50,864 have now is a government of the people, by the bureaucrats, including the 1016 00:56:50,864 --> 00:56:55,274 legislators who have become bureaucrats, for the bureaucrats." You get the idea. 1017 00:56:55,584 --> 00:56:58,589 Governments are bad because of bureaucracy, therefore, get rid of 1018 00:56:58,589 --> 00:57:01,709 governments as much as possible and you'll get rid of bureaucracy and in 1019 00:57:01,709 --> 00:57:03,839 the process solve all sorts of problems. 1020 00:57:04,049 --> 00:57:08,579 This matters because even though he died over a decade ago, Milton Friedman is the 1021 00:57:09,009 --> 00:57:12,989 cultural mainstay for those who promote so-called free market policies, and who 1022 00:57:12,994 --> 00:57:16,439 constantly call for smaller governments, staffed with fewer bureaucrats. 1023 00:57:16,589 --> 00:57:19,619 The kind of people who believe that the state's responsibility is to 1024 00:57:19,624 --> 00:57:23,489 completely abandon social projects, and instead devote all its energy to 1025 00:57:23,489 --> 00:57:25,119 making sure markets are profitable. 1026 00:57:25,424 --> 00:57:28,274 Milton influenced guys like the Libertarian Party presidential 1027 00:57:28,274 --> 00:57:31,814 candidate, Gary Johnson, who you might remember from clips like these. 1028 00:57:32,814 --> 00:57:36,379 Governors, could you name three federal departments or agencies 1029 00:57:36,384 --> 00:57:37,179 that you would eliminate. 1030 00:57:38,269 --> 00:57:42,469 Education, the Department of Commerce, and Housing and Urban Development? 1031 00:57:42,474 --> 00:57:43,639 How's that for starters? 1032 00:57:43,644 --> 00:57:45,859 And would, would any of their functions still be performed 1033 00:57:45,859 --> 00:57:46,829 by the federal government? 1034 00:57:48,579 --> 00:57:49,139 Oh gosh. 1035 00:57:49,159 --> 00:57:53,419 You'd have to assume that they were doing something that was of value. 1036 00:57:53,424 --> 00:57:58,379 And yeah, if they are doing something of value, yes, we would. 1037 00:57:58,379 --> 00:58:01,139 We would be looking to continue those operations. 1038 00:58:01,349 --> 00:58:03,069 Those departments all do a lot of stuff. 1039 00:58:03,629 --> 00:58:05,849 You can't identify any specific things they do? 1040 00:58:05,849 --> 00:58:08,939 You're asking three departments and I'm giving them to you. 1041 00:58:08,939 --> 00:58:09,479 Right, but then you're... 1042 00:58:09,599 --> 00:58:11,994 Well, let's just take the assumption that they should be eliminated. 1043 00:58:11,994 --> 00:58:15,954 As dumb as Gary looks here, that same philosophy he inherited from Milton 1044 00:58:15,954 --> 00:58:17,874 Friedman is everywhere on the right. 1045 00:58:18,384 --> 00:58:21,804 Rush Limbaugh tells his listeners that Milton Friedman should be the Bible 1046 00:58:21,804 --> 00:58:25,734 for young people or anybody trying to understand capitalism and free markets. 1047 00:58:26,014 --> 00:58:30,759 Charlie Kirk, founder of Turning Point USA, celebrates Hayek and Friedman in his 1048 00:58:30,759 --> 00:58:35,559 book, while Ben Shapiro holds up Friedman as a conservative icon in National Review. 1049 00:58:35,799 --> 00:58:39,809 People on the right and more generally, all the politicians that advocate 1050 00:58:39,814 --> 00:58:43,359 for a more expansive capitalism, smaller governments, and all sorts 1051 00:58:43,364 --> 00:58:47,379 of free market policies, owe their support for this economic model to 1052 00:58:47,379 --> 00:58:49,599 the guy who made it extremely popular. 1053 00:58:49,869 --> 00:58:51,039 How'd it get so popular? 1054 00:58:51,319 --> 00:58:54,169 Well, Milton got big because constantly talking about how 1055 00:58:54,169 --> 00:58:58,249 much you hate bureaucracy always works—everyone hates bureaucrats. 1056 00:58:58,399 --> 00:59:01,789 But it worked especially well in America a half century ago. 1057 00:59:01,969 --> 00:59:06,079 That's because right next to the US there was a country that Americans really didn't 1058 00:59:06,079 --> 00:59:08,509 like and that had a lot of bureaucracy. 1059 00:59:08,839 --> 00:59:10,009 No, not that one. 1060 00:59:11,119 --> 00:59:12,889 No, not that one either, silly. 1061 00:59:13,069 --> 00:59:17,409 I bet you forgot about Alaska, didn't you.. No, the country Americans hated 1062 00:59:17,409 --> 00:59:19,479 touching tips with was the Soviet Union. 1063 00:59:19,719 --> 00:59:23,529 In the American mind, it was the epitome of what a bureaucratic government could 1064 00:59:23,529 --> 00:59:27,279 get you, and it was bad, so it was pretty easy for all Millie Frieds and 1065 00:59:27,279 --> 00:59:31,149 all his buddies to dunk on the American government by likening it to the Soviets. 1066 00:59:31,389 --> 00:59:34,779 Americans really hated the Soviet Union, so anything that made 1067 00:59:34,779 --> 00:59:37,629 their government seem anything like it was a super effective way 1068 00:59:37,629 --> 00:59:39,249 to promote capitalist economics. 1069 00:59:39,399 --> 00:59:42,909 And at the core of this discourse was the promise that capitalism would 1070 00:59:42,909 --> 00:59:47,109 solve the problem of bureaucracy, and in the process most everything else. 1071 00:59:47,319 --> 00:59:51,339 This video's number two Mark, Mark Fisher, talks about this very kind of 1072 00:59:51,339 --> 00:59:55,689 logic in his book, Capitalist Realism, except he uses fancy academic words to 1073 00:59:55,689 --> 00:59:57,429 say the same thing I said, but better. 1074 00:59:57,459 --> 00:59:58,479 So now you're gonna get a quote. 1075 00:59:58,959 --> 01:00:03,969 "In making their case against socialism, neoliberal ideologues often excoriated 1076 01:00:03,969 --> 01:00:08,079 the top-down bureaucracy, which supposedly led to institutional sclerosis and 1077 01:00:08,079 --> 01:00:09,909 inefficiency in command economies. 1078 01:00:09,999 --> 01:00:13,419 With the triumph of neoliberalism, bureaucracy was supposed to have 1079 01:00:13,419 --> 01:00:17,289 been made obsolete, a relic of an unlimited Stalinist past. 1080 01:00:17,634 --> 01:00:21,714 Yet, this is at odds with the experiences of most people working and living in 1081 01:00:21,714 --> 01:00:26,454 late capitalism, for whom bureaucracy remains very much a part of everyday life. 1082 01:00:26,604 --> 01:00:29,934 Instead of disappearing, bureaucracy has changed its form, 1083 01:00:30,084 --> 01:00:33,624 and this new decentralized form has allowed it to proliferate." 1084 01:00:34,434 --> 01:00:35,274 Look around you. 1085 01:00:35,334 --> 01:00:36,444 Look at where we are. 1086 01:00:36,624 --> 01:00:37,824 We're in Milton's world. 1087 01:00:37,914 --> 01:00:41,994 It's like Disney World, except, well, actually it's a lot like Disney World. 1088 01:00:42,084 --> 01:00:45,534 If you're an adult and you're really into it, maybe it's time to sit down 1089 01:00:45,534 --> 01:00:46,974 and think about that for a while. 1090 01:00:47,434 --> 01:00:51,354 Milton was an advisor to Ronald Reagan and Margaret Thatcher, who are most 1091 01:00:51,354 --> 01:00:54,924 responsible for implementing the neoliberal capitalism we live in today. 1092 01:00:55,104 --> 01:00:58,884 He was lead architect of our modern society, but surprise, surprise, 1093 01:00:58,944 --> 01:01:02,544 bureaucracy is a bigger part of our lives today than it ever was. 1094 01:01:02,664 --> 01:01:04,524 Here's Fisher again, talking about this, 1095 01:01:04,624 --> 01:01:07,704 "As a consumer in late capitalism, you increasingly 1096 01:01:07,704 --> 01:01:09,774 exist in two distinct realities. 1097 01:01:09,924 --> 01:01:12,504 The one in which the services are provided without hitch, 1098 01:01:12,684 --> 01:01:14,484 and another reality entirely. 1099 01:01:14,574 --> 01:01:17,304 The crazed Kafka-esque labyrinth of call centers. 1100 01:01:17,484 --> 01:01:19,614 Anger can only be a matter of venting. 1101 01:01:19,794 --> 01:01:23,634 It is aggression in a vacuum directed at someone who is a fellow victim 1102 01:01:23,634 --> 01:01:27,474 of the system, but with whom there is no possibility of communality. 1103 01:01:27,654 --> 01:01:32,004 Just as the anger has no proper object, it will have no effect. 1104 01:01:32,334 --> 01:01:36,084 In this experience of a system that is unresponsive, impersonal, 1105 01:01:36,114 --> 01:01:40,494 centerless, abstract and fragmentary, you are as close as you can be 1106 01:01:40,499 --> 01:01:43,714 to confronting the artificial stupidity of capital in itself." 1107 01:01:44,314 --> 01:01:47,664 Capitalists will constantly tell us we live in this seamless, efficient, 1108 01:01:47,694 --> 01:01:51,834 optimized reality, but love to ignore the horrible bureaucracy it all rests 1109 01:01:51,834 --> 01:01:53,694 on that fundamentally contradicts it. 1110 01:01:53,904 --> 01:01:56,304 You can think of all this bureaucracy like an iceberg. 1111 01:01:56,364 --> 01:01:59,814 At the top, you have the bureaucracy that is immediately visible to all of us, 1112 01:02:00,024 --> 01:02:03,954 things like call centers, of which scam callers are nothing more than an offshoot. 1113 01:02:04,224 --> 01:02:06,384 But below there's so much more. 1114 01:02:06,594 --> 01:02:10,314 The logic of bureaucracy permeates capitalism to its very core. 1115 01:02:10,564 --> 01:02:13,364 Is all money just a ponzi scheme? 1116 01:02:13,364 --> 01:02:14,164 Vicki Robin. 1117 01:02:14,164 --> 01:02:14,964 Big Think. 1118 01:02:14,964 --> 01:02:16,964 Air Date July 22nd, 2018. 1119 01:02:17,014 --> 01:02:22,264 There's so many ways in which we project onto money the ability to not only 1120 01:02:22,264 --> 01:02:27,744 make us happy, but to make us better or better than other people, or safe, 1121 01:02:27,774 --> 01:02:33,464 or so many deep, gut-level emotional feelings are playing themselves 1122 01:02:33,464 --> 01:02:35,234 out in our relationship with money. 1123 01:02:36,564 --> 01:02:38,269 Fine, I'm not saying it shouldn't happen. 1124 01:02:38,269 --> 01:02:41,869 Like, "we will be very conscious and we will not have any emotions 1125 01:02:41,869 --> 01:02:43,159 in our relationship with money". 1126 01:02:43,159 --> 01:02:43,999 No, I'm not saying that. 1127 01:02:43,999 --> 01:02:49,009 I'm just saying the more aware you are of what you're projecting onto 1128 01:02:49,014 --> 01:02:53,369 money in terms of meeting emotional and psychological, and even spiritual 1129 01:02:53,374 --> 01:02:56,969 needs, the clearer you're gonna be in those daily transactions. 1130 01:02:56,999 --> 01:03:00,874 In fact, that's part of why once you start to become consciousness of the 1131 01:03:00,874 --> 01:03:04,904 flow of money and stuff in your life this way, you stop spending so much money. 1132 01:03:06,384 --> 01:03:11,544 But around that is the cultural narrative, the rules of the game of our economy. 1133 01:03:12,184 --> 01:03:18,249 The financial system in so many ways, governs, not just our daily lives, but 1134 01:03:18,249 --> 01:03:22,999 who wins and who loses; who has power, who does not have power; who gets 1135 01:03:23,004 --> 01:03:26,059 to say what the game is; who gets to play by the rules and break the rules. 1136 01:03:26,249 --> 01:03:29,969 This is a cultural context, it has nothing to do particularly with what's 1137 01:03:29,969 --> 01:03:35,309 going on in our individual traumas and histories, it has to do with a 1138 01:03:35,309 --> 01:03:38,769 longer historical moment in time. 1139 01:03:39,299 --> 01:03:44,444 And the basic meme of the financial system is growth. 1140 01:03:44,544 --> 01:03:48,954 It's really, in a way, it's a very long con Ponzi scheme, because 1141 01:03:48,954 --> 01:03:54,084 it has to keep growing in order to keep meeting its obligations. 1142 01:03:54,654 --> 01:03:58,399 Money is produced, the actual piece of paper and metal, the credit that you 1143 01:03:58,399 --> 01:04:03,029 have isn't just like you go to a job and somebody gives you some pieces of paper, 1144 01:04:03,079 --> 01:04:05,869 money is loaned into being by banks. 1145 01:04:06,299 --> 01:04:10,489 Banks have the authorization to create money, but it's not like 1146 01:04:10,519 --> 01:04:14,419 they have to have $1,000 in the vault in order to lend you $1,000. 1147 01:04:14,439 --> 01:04:18,239 No, they have to have $100 in the vault to lend you $1,000, and then 1148 01:04:18,244 --> 01:04:20,249 they lend you the $1,000 with interest. 1149 01:04:20,779 --> 01:04:22,759 In the world of money, everything has to grow. 1150 01:04:23,239 --> 01:04:29,324 Everything has to keep growing or it's game over, which is a difficulty 1151 01:04:29,344 --> 01:04:33,654 for us now because of the capacity of the planet to support this ideology. 1152 01:04:34,164 --> 01:04:38,354 So that's that construct of money, which is fascinating. 1153 01:04:38,354 --> 01:04:41,319 People study economics and the financial system. 1154 01:04:41,319 --> 01:04:46,449 We're mesmerized by how people have played this system to the detriment 1155 01:04:46,449 --> 01:04:48,189 of many people except for themselves. 1156 01:04:48,859 --> 01:04:54,724 But what we say is that outside of that whole thing, those are all stories, what 1157 01:04:54,724 --> 01:05:00,064 we actually know for sure as individual human beings, we know that we have a 1158 01:05:00,064 --> 01:05:07,604 body, we know that we're alive and that we invest some of the minutes of our lives, 1159 01:05:07,604 --> 01:05:12,824 some of the vital force of our lives, in a process that produces money for us. 1160 01:05:13,214 --> 01:05:15,344 However it produces it. 1161 01:05:15,349 --> 01:05:19,934 Like whatever it is, we invest some of our precious life energy in 1162 01:05:20,094 --> 01:05:21,614 this thing called "getting money". 1163 01:05:22,474 --> 01:05:27,564 So money for us is your life energy. 1164 01:05:27,954 --> 01:05:33,804 The value of money to you is how much of you you invested in getting it. 1165 01:05:35,094 --> 01:05:38,304 And once you understand that, once you understand that money is something 1166 01:05:38,309 --> 01:05:42,154 that's abstract and seems unlimited, like if I go into debt, it doesn't 1167 01:05:42,154 --> 01:05:44,674 matter, I'll just keep having jobs and I'll keep paying it off, it's 1168 01:05:44,674 --> 01:05:46,858 just an endless stumbling process. 1169 01:05:47,458 --> 01:05:49,768 But you understand that your life is limited. 1170 01:05:49,768 --> 01:05:53,658 We've got, I'm gonna say 85 years on the planet, because now I'm 1171 01:05:53,658 --> 01:05:56,418 73, so I don't say 75 anymore. 1172 01:05:56,788 --> 01:05:59,368 So we've got a certain limited time on the planet. 1173 01:05:59,368 --> 01:06:03,833 We're gonna spend a third of it sleeping, we're gonna spend another third of it 1174 01:06:04,173 --> 01:06:11,073 commuting and showering and and sitting at a desk and doing somebody else's bidding. 1175 01:06:12,123 --> 01:06:13,613 Yeah, that's not a lot of life. 1176 01:06:15,033 --> 01:06:19,723 So you think I got a third, I have a third of my waking hours 1177 01:06:19,723 --> 01:06:22,693 are mine to do whatever I want. 1178 01:06:22,813 --> 01:06:23,623 Who am I? 1179 01:06:23,653 --> 01:06:30,073 So it's like it, it then sends it into an existential question, "who am I? 1180 01:06:30,283 --> 01:06:31,043 What do I care about? 1181 01:06:31,843 --> 01:06:34,303 What do I want the impact of my actions to be? 1182 01:06:34,573 --> 01:06:35,623 What do I wanna learn? 1183 01:06:35,623 --> 01:06:36,613 What do I wanna understand? 1184 01:06:36,613 --> 01:06:38,233 What do I wanna feel, taste, touch? 1185 01:06:38,233 --> 01:06:43,578 What do I want?" in what Mary Oliver calls my "one wild and precious life."