1145: Wall Street Lies About Real Estate Returns & Glass House, The 1% Economy & the Shattering of the All-American Town, Brian R. Alexander, NBC

If you don't have any investment, real estate investment, you will not have the opportunity to learn to make mistake, learn from it and then you will not be able to tell which one is a better investment. I think you just have to get it started somewhere and with the help of your investment counselor and then just keep moving forward.

Welcome to the Creating wealth show with Jason Hartman. You're about to learn a new slant on investing, some exciting techniques and fresh new approaches to the world's most historically proven asset class that will enable you to create more wealth and freedom than you ever thought possible. Jason is a genuine, self made multimillionaire who's actually been there and done it. He's a successful investor, lender, developer and entrepreneur who's owned properties in 11 states, had hundreds of tenants and been involved in thousands of real estate transactions. This program will help you follow in Jason's footsteps on the road to your financial Independence Day. You really can do it. And now here's your host, Jason Hartman with the complete solution for real estate investors.

Welcome to episode 1145. This is your host, Jason Hartman. Today we are going to talk with Brian Alexander. We are going to talk about the glass House, the 1% economy and the shattering of the all American town. Interesting interview, interesting topic. You probably haven't looked at it this way before, so I think you're going to learn some new stuff on this episode with our guest. But before we get to that, two things. Two things that I don't know if I should say they amaze me or if I should say they never cease to amaze me or I don't know what I should say about this. Okay, so two things. Number one, have you noticed in the world, you know, there's that old concept of what comes around goes around, the law of cause and effect that Dennis Whateley and Earl Nightingale and Jim Rohn and Zig Ziglar. Well, not Zig Ziglar as much, but the other three taught me about. When I was 17 years old, it changed my life. They really made me understand the value of being a good ethical person, doing the right thing. Because if for no other reason, life or other people would get even with you, right? So, so there you go. Maybe there's a higher reason than that. But if for no other reason, there's at least that. But it takes an awful long time for that to play out, doesn't it? It can be years, it could be decades. Maybe what comes around does go around. But I tell you something, it takes a while to sort itself out. And I'm sure you've noticed this, too. I know I have. I just saw it. I just saw it a couple of months ago. I see it all the time, right? In life, in the world of business, the sleazy operators in whatever industry. I'm not just saying my industry, but I'm saying that, too. The sleazy operators always seem to end up with the other sleazy operators. They work together. They form alliances together. When they're kicked out of working with the good operators. It's just amazing to me. I was listening to this other podcast recently, and I'm thinking, wow, here we go. I know most of these people, and they're all weasels. And it's amazing. The weasel cartel can bolster each other and pat each other on the back. In the weasel cartel, it's just. It's like they have their own ecosystem. It's amazing to me. And the sad thing about it is the customers really can't tell. They probably just have no idea what they're in for. Things look good with window dressing, but then you go six months, you go a year later after the deal, and you really see how things have just not worked out the way they should, how promises are broken, how the weasels have really impacted your life. So that's one thing that never ceases to amaze me. The other thing is the vast Wall street conspiracy talk about the weasels patting each other on the back, right? And it's so incredibly coordinated. It's so aligned, the way the media, the Wall street media, like, bolsters each other's. I'm just gonna say it. Bull. It's amazing. I'm gonna give you an example. You ready for an example? Here we go. Here's an example. I'm gonna give you two examples before we get to. Our.

Example comes from nasdaq.com is that a credible source? Well, hey, Bernie Madoff used to be president of nasdaq, so I guess it's credible, right? Nasdaq's a big deal. Okay, so here we go. On NASDAQ.com they say the best asset class of 2018. . You'll never guess, right? And it says this year's top performing asset class, meaning 2018. Because the article was written December 27, 2018. This year's top performing asset class isn't stocks. It isn't bonds, commodities, or real estate. And no, it's not cryptocurrency, either. It's. Drumroll, please. Cash. Cash. The article goes on to say, that's right. Cash is the top performing asset class year to date, beating out US Stocks, global stocks, investment grade bonds, junk bonds, commodities, real estate, you name it. Cash is king. Hmm. I guess you didn't know any of my friends who were making fortunes in real estate last year. Now, why is that so misleading? Well, number one, it's published by the Vast Wall street conspiracy right there. Right? All of you listening, who are clients of ours. Well, probably all of you. I don't want to say all because we know there are ups and downs and bumps in the road occasionally with some of you. But look, the vast majority of people invested in real estate in good, prudent, linear markets, had excellent returns. Why can this article say that without these people getting sued into oblivion? Well, because, number one, they're so rich you couldn't afford to sue them, even if they're lying through their teeth, which they are. Okay, but it's the same lie that the vast Wall street conspiracy tells you over and over. They calculate the return on real estate by only one metric of its multidimensional metrics. What is that? Metric appreciation. And so they're going to say that, of course, the Case Shiller is overloaded by 2/3 to 3/4. Cyclical, overpriced markets that are declining as they should be. Okay, These are markets we've never recommended, wouldn't touch. Haven't even thought much about those markets since 2004, when I was, you know, working on selling my traditional real estate company in Irvine, California to Coldwell Banker. And you look around the country, you look at any. Like, we could do a Performa for probably a thousand people listening to this podcast right now. Okay, probably several thousand people listening to this podcast who are clients of ours who owned properties last year through 2018. It's now 2019 when I'm recording, obviously. And we could look at the history of their property. We could put it into property tracker@propertytracker.com and between all of the multidimensional aspects of their real estate investment, even if they had no appreciation, even if they had depreciation, because they've had cash flow, they've had tax benefits, they've had leverage, they've had inflation induced debt destruction, you know, they've had the whole panoply of multidimensional returns and that beat cash by a giant margin. Yet if you read Nasdaq, you know, it'll tell you that cash was the best deal going. And then this other article, you know, the same thing, I just clipped part of it out. And this is the neighbors group that Published this and I wrote. Are you kidding me? Three question marks. Have you heard of income property? Three question marks. That was my comment. Cash was the best performing asset class of 2018. It's no secret that many prominent economists fear we're at the top of a market cycle. Economic growth seems to be slowing. Okay, fair enough. That's all true. I agree with that. All around the globe, fear of a potential recession manifested in making cash the top performing asset of 2018. With the ups and downs in the stock market, many investors are flocking to cash, according to bank of America Merrill lynch fund managers survey. Oh, well, do you think they invest in real estate? Of course they do. With all the money they're stealing from the middle class investors. Yes, that's what they invest in. They own all of these stock market people. Hedge fund managers. Guess what? Guess what? They own where they make a lot of money. Besides overcharging their clients, they make a lot of money on owning a bunch of real estate. That's what they do. So they did this survey. Professional investors are holding the largest position in cash since January of 2009. Well, compared to what? Compared to your crappy stocks? Yeah, sure. Okay, fine. Now, admittedly, you know, the market has come back a bit since this. You know, it's had its ups, its downs and all that stuff. But the point is, they're looking at the entire year of 2018 saying that cash outperformed real estate. Are you freaking kidding me? That is like such a lie. It's unbelievable. You take out the cyclical markets that have depreciated and don't have cash flow anyway, and you just do that survey based on good, prudent linear markets with sensible properties and they don't have to appreciate one penny. They could be flat, could be a total flatline. And those assets with just their cash on cash return just from cash flow only would massively outperform cash. And in fact, they've probably outperformed the stock market even on its best up days. So yeah. God, this is so frustrating.

Okay, let's go over to NASDAQ and let's pick it out in front of nasdaq. Yeah, let's do that. Let's get some picket signs and we can maybe throw some eggs at the building. No, don't do that, because that would be illegal. But picketing is legal. Okay, so no eggs, no throwing eggs. Okay, no graffiti, but just, you know, picket. Let's organize some picketers. Let's all meet in front of NASDAQ and let's get some picket signs and call them on their bs. Oh, maybe they tried to do that a few years back. It was called Occupy Wall street, but that was a misguided attempt by a bunch of lefty socialists. So that's a different issue. Right? Anyway, there you go. There's your entertainment for today. And now let's go to our guest. By the way, I want to remind you, we announced the winner of the YouTube contest. It was Edward Galbraith. Okay. We announced that yesterday on the show. So congratulations. Please reach out to us because you only commented on YouTube. We don't have your contact information, but reach out to us through jasonhartman.com or your investment counselor if you're working with one of them at our firm. And we can help you claim your free ticket for Meet the masters or your $500 travel allowance to Meet the Masters. Either one. Your choice. Claim that prize because you won. Congratulations. Okay, Meet the Masters tickets, a couple more sold today. The hotel room block, they extended it one more time. I begged them on the phone today. Christine at the hotel. I said, christine, will you extend this? And she says, jason, Monday is it. We already extended it one time. And Monday is the final, final, final on the hotel room block. So book your rooms, get your tickets. Don't miss that discounted price because, you know, why pay 70 bucks more per night for a hotel than you have to? You just don't need to. It's a waste. It's a waste. Even if you have the money, it's still a waste. Okay, Ben Franklin, he was probably pretty wealthy in his old right. What did he say? A penny saved is a penny earned. Hey, look it. I'm fine with spending money as long as it's for a purpose, but just paying more for paying more is not a purpose. So, yeah, tickets@JasonHartman.com Masters. Let's get to our guest and talk about the 1% economy. Here we go.

It's my pleasure to welcome Brian Alexander. He is a former columnist for NBC number one best selling author of his most recent book, glass House, the 1% economy and the Shattering of the all American town. Brian, welcome. How are.

You? I'm good, thank you very.

Much. Good. Give us a sense of geography. Tell us where you're.

Located. I'm currently located in San Diego.

California. Fantastic. I used to live there myself. Beautiful place. So the 1%. We've all heard a lot about the 1% since the Occupy Wall street movement. Tell us about the premise of the.

Book. Well, the premise of the book is what happens to A town when Wall street gets its hands on a primary employer, or in this case, employers in that town. And what is the social fallout, the economic fallout, the cultural fallout of that? And the reason I did that is because Lancaster, Ohio, really stands in for a couple of hundred other towns all over, especially the middle part of the United.

States. So Lancaster was the sort of town that inspired the book, is.

That. That's correct. That happens to be my hometown where I grew.

Up. Okay, great. So what happened there? I mean, did Wall street, did certain companies there go public or they were acquired through roll ups or M& A? What.

Happened? Well, it focuses on a company called Anchor Hawking Glass. Anchor Hawking was a Fortune 500 company, one of the very rare Fortune 500 companies located headquartered in a small town. At its height, it employed about 5,000 people there. It was the world's largest manufacturer of glass tableware, the second of glass containers like bottles, mayonnaise jars, baby food jars, that sort of thing. And it had plants all over the United States. It was a big deal. And what happened, to make a long story short, is that in early 1980s, Wall street discovered it. And a guy named Carl Icahn, whom many of your listeners may be.

Familiar with, a corporate raider. Carl Icahn, the corporate raider.

Yep. He decided to pull what was then known as a green mail move on Anchor Hawking. And the effect of that wasn't so much financial directly, but it created a cascade of events that eventually led to leveraged buyouts by two different private equity companies that decimated the company and started the erosion of the.

Town. Okay, so before we get to that, let's make sure we just. Let's back up a little bit here and let's talk about green mailing. He gave money to the board of directors. Is that. Tell us what green mailing.

Is. You know, I remember green mailing is you've got company XYZ and you make a widget, and I show up and I say, guess what? I now own 5% or more of your stock, and I am going to demand board seats and a variety of changes and things that you may not like. Or you can give me a premium for all this stock that I have purchased and I'll go away. In other words, I Pay, you know, $10 for your stock, but if you give me $13 per share for your stock, I'll go away and leave you.

Alone. Right? Right. So in other words, they do that to prevent the hostile takeover, right? Yes. Okay, then you mentioned leverage buyouts or otherwise known as LBOs. And. And that's the practice of sort of using the company's income to buy the company. Right. It's a pretty.

Incredible. Well, roughly speaking, yes. What you do is you. You borrow a bunch of money. You don't have the money to buy the company, so instead you borrow the money. But that is not your debt. You create a shell company and you force a merger with the shell company is the thing that entity that borrows the money, you create a merger, and then the new entity has all that debt. So you, as the, in this case, private equity companies, that's not your debt anymore. That is the debt goes on the back of, in this case, anchor hocking. And when you do that, you handcuff a.

Company. Right? Right. So they can't really move when they're saddled with so much debt.

Right? That's right.

Yeah. Okay, so tell us what happens to the town now? So that's kind of what the dynamics of the. Of the company and Carl Icahn's corporate raider activities. And you know, look, we've all seen probably both of the Wall street movies which sort of depict this behavior. You know, we were all familiar with this stuff that happened, you know, starting, I guess, starting in the 80s, really, or at least pop being popularized in the 80s. And it's debatable, I guess, if this is good or bad. You know, it's certainly good for the people who do it. They make money. But is it good for society in terms of the company itself and layoffs and splitting up companies and so forth? But then there's the actual geography, the town. Right. And I don't think anyone really thinks too much about that until your book came.

Along. And this sort of maneuver has a variety of effects. So when you have a town that's a relatively small town and you have major employers like this, there's a whole social web that springs up as a result of these companies being there. There's a symbiotic relationship. And so you have executives that live in the town. Their kids go to the local school. They go to school with the factory workers, kids, their wives. In the old days at least, their wives were the civic heart of the town. I got the polio vaccine because a bunch of these wives got together and said, well, the polio vaccine is now developed. We need to get our kids vaccinated. They created levees to make new sidewalks. They passed school bond issues. They were involved in the town. Another thing that happens is that workers have a pathway to the future. They're at a Stable company. They know that if they advance in the company, they're going to make a decent living, they're going to be able to send their kids to a decent state college, they're going to be able to buy a better house. And so they see this future and there's a lot of town pride. You know, you would say to people, hey, I'm from the town where Anchor Hawking is based. And people from Tanzania, Africa to Japan use Anchor Hawking glassware. And that Budweiser beer you're drinking comes out of an Anchor Hawking bottle. And when that stuff starts to go away, people become dispirited and they are open to wanting over a period of about 35 years, or they become open to electing somebody like Donald Trump, for example, who says that he's going to bring it all back.

Somehow. Okay, so sounds like you're not a Trump fan, I'm.

Guessing. No, I am not a Trump fan.

Okay. All right. In terms of the town, I mean, I totally appreciate all the things you're saying. And I'm someone who constantly watches and recommends that my listeners watch old TV shows and old movies because it is mind boggling how far we've come or maybe how far we've decayed as a culture, you know, again, debatable. But things have certainly changed. And you know, look, I mean, couldn't someone argue that, hey, you're being sentimental. That's how the world used to be. I know there were nice things about it. Sense of community. I get it. Totally, totally get it. But everybody now has to just hone their skills and, you know, go with a much faster moving society, right? Isn't that just the nature of.

Things? Well, that's what some people argue. In order to argue that though, you've got to say that community no longer.

Matters.

Right. We are a social species and I believe that community matters a great.

Deal. Oh, I do too. And I'm sad to see it go away. In fact, I look at just my own life and the way community has just evaporated. But there are so many causes of that. I mean, I know your book examines the Wall street component, but social media and it's a big world and a much more mobile society. And there's a lot more to that than just the Wall street component.

Right? Oh, yeah, no, absolutely. And in fact, the book does discuss some of.

That.

Yeah. No, I'm not saying that all the world's problems are laid at the feet feet of private equity companies. What I am saying is that towns like Lancaster Companies like Anchor Hocking have become the feedlot for people to scrape money away and leave damages behind without consideration of what this is doing to people and what this means for us as a.

Society. Right, right. Okay, so take us through more of what it means for us as a society or. Yeah, I think that's maybe the place to go.

Now. Well, look, if you decide that your only goal in life is to enrich yourself or enrich your investors, you know, this is often referred to by the Milton Friedman dogma of shareholder value, if that is the only goal you have. And Friedman advocated that business ignore a lot of their social responsibility, saying that they had very little social responsibility and their only responsibility is to shareholders to create shareholder value. If that's the only thing you're looking for. And we live in a capitalist system, I believe that that is a recipe for doom. I believe that businesses should certainly try to make money, should certainly try to have a profit, but that there is a social responsibility. When you have a business and you have employees and you have a location and a home base, you owe things to that community because no business survives all by itself. We as Americans have actually fostered business through a variety of initiatives, a variety of tax outlays to try to develop a healthy business economy, healthy capitalist economy. And we deserve some things in return for that. One of them is fairness and the concept of a social contract. And a lot of business today seems to feel that there is no social.

Contract. Right. I would agree with you. I think this could actually be divided up a little bit more. The Milton Friedman argument about shareholder value. I know he was behind that idea, but since the recent passing of Jack Bogle, the founder of Vanguard, and the democratization of the stock market, you could argue. I've been really looking at some of his work, and I'm almost finished with Bogle's book, the Battle for the Soul of Capitalism. And he distinguishes very nicely in that book between owner's capitalism, otherwise known as shareholders, the Friedman idea, and manager's capitalism. And with what you said, one could argue that it's really managers capitalism that's not necessarily creating that much value for the shareholders. It's the big wigs, the elitist, that make all the money in those deals, right? Yeah, maybe a little trickles down to the shareholders, but there's definitely a disconnect between the Wall street insiders and the common shareholders. Now, the guy that gets the, you know, the car. Icahn. That gets the premium green mailing the board, sure. That's different. He's In a different class. You know, during the Great Recession when Warren Buffett bought all that B of A stock, it wasn't like the common investor could get that deal he got. You know, same with the Goldman Sachs stock that he bought. So there really is a disconnect between this elite insider Wall street class and the everyday American investor, isn't.

There? Oh, of course, yeah. I mean you and I go to our little neighborhood broker and he does not have insight into any of these sorts of deals. Oftentimes when it comes to private equity, the actual investors in private equity are large pension funds for example, because what they're trying to do is beat the stock market. Now there's a lot of dispute about whether or not they actually do beat the stock market. But the point is that they have many millions of dollars to divide up and invest in a variety of ways. One of which is to invest in a private equity firm that then goes out and buys companies in these leveraged buyouts. The average investor who's got $1,000 to invest, that's just not available to them. So there is definitely a two tier system when it comes to.

Investing. Oh it's, it's even worse than that. I would argue that the average investor that's got a hundred thousand or a million dollars doesn't get that deal either, you.

Know. Oh no, of course.

Not. It's the billionaires that get that deal, you know, it's a total inside game. I mean, you know, it's not even, it's not like the thousand dollar guy doesn't get it. Nobody gets it until you're at the super elite class. But you know, I think you could trace all this. I mean, I think at the core you're talking about, you know, greed. Right? And it could really be traced back from what I can tell to Edward Bernays, the guy that really sort of invented modern public relations and advertising. And maybe that was around the 20s when this happened. That's when people got greedy. Like everything I research says that Americans were just pretty normal before that they just wanted to live a decent life and you know, have some progress and you know, over time gain some wealth. But now this has turned into this hyper wealth consciousness and you know, I would argue it's not healthy. I don't think it's healthy. So I'm going to agree with you there. I think you'll agree with me on that. But it's just pervasive. It's not just Wall street.

Right. I date it to the beginning of the Reagan administration. So what happened with the Reagan administration was a variety of deregulation that had been really sort of put in place in the era of the New Deal. And the Reagan administration lifted lots of these regulations. For example, the idea that companies cannot buy their own stock, well, that's what companies do all the time. And if you look at the current Trump tax cuts on corporations, they didn't use that money to invest in new R and D and hire lots of new people. They used that money in share buybacks. And now in an era when CEOs are compensated in options on shares, sometimes much more than any actual salary, they have an incentive to buy back those shares because it raises the stock price. That's just one example. You have something called carried interest, which is what private equity lives on. Carried interest is a loophole that says that the money they make does not count as regular income. It counts as a rate that's taxed at a lower rate than regular income. That's called the carried interest loophole that private equity guys get. So they have an incentive to do these outrageous leveraged buyouts. And what they also do is something called, for example, the dividend recap. And so what they do is they control a company, let's say Anchor Hocking, and this did happen several times at Anchor Hocking. They control the company. They want to squeeze some money out of the company, so they have that company take out more debt and they pay themselves a dividend out of this debt. So they may say, okay, we're going to take out a $30 million dividend recap. And we are going to take 15 or 20 million out of that 30 for ourselves. That's using debt that then goes on the company to reap a payday for themselves. This kind of stuff happens all the.

Time. I know. It's manager's capitalism versus owner's capitalism. The owners of those shares that own most of them, the general public, all right, and the various retirement funds and so forth that the general public is part of, they're not reaping most of the benefit of that. It's the managers. The managers are the ones exploiting that system so terribly.

But. And what you end up with, however, is great disillusionment, a feeling of helplessness and hopelessness on the part of average people. You know, the current drug crisis in America is not just because heroin is widely available and very cheap. It's because people say, why the hell not? I want to feel good for a while because I'm going nowhere. So the suicide rate among men between the ages of 20 and 60 is skyrocketing. Why is that? Well, I believe it's because they see no real future for advancement for themselves because they're being.

Blocked. I would agree with you. And you know, that's especially that suicide rate among middle aged white men. They're the ones that are the biggest victims of that. So it's really quite tragic. But when you talk about the Reagan era, I mean, you also gotta ask, compared to what? Like before the Reagan tax reform, for example, there was all kinds of mal investment with doctors, you know, buying these nonsensical windmill investments that really did nothing. Now, I know that technology is better nowadays, obviously, but. And you know, we don't need to go there debating wind power or not, but. But the point was there was all this encouragement in the old tax code before the Reagan reforms, right, to, you know, do a lot of mal investment. And that wasn't doing anything good for the economy. It was just scams to avoid paying taxes, you know, so these things are very complex, aren't.

They? Certainly they are. But we as a nation decided at the beginning of the 80s, actually really started in the very late 1970s. But the Reagan administration is a convenient place to take it because of the changes in laws that occurred there. We decided that we were going to sort of adore powerful rich CEOs and they became almost like movie.

Celebrities. Well, Hollywood did that. I mean, that was Michael Douglas and Wall Street.

Right. Well, but it was also Jack Welch at ge. We made sort of titans out of these guys. And we assumed or we came to believe, or we were told that cash equals virtue or cash equals brains. And in a lot of cases it doesn't. I mean, these people say that they are business geniuses. A lot of these private equity guys say that they're doing God's work. What they're really doing is messing up sometimes good.

Companies. Well, and you could argue the same thing with the Silicon Valley elitist too. These really scary tech companies, you know, we revere these people like they're gods or something. And they're just people that are abusing our privacy rights. And yeah, they do invent some cool stuff that changes our lives. But it's like this winner take all thing, the way capital formation works in this country and probably around the rest of the world. I guess I don't know enough about it to say, but is that it always goes to this winner take. All this crowding out. Look at Howard Schultz at Starbucks. He's crowded everybody out of the market. You got to eat and drink Starbucks poison. If you want to go to a coffee shop, there's nothing else left.

Okay. You know, and, well, you know, there's a whole other issue to talk about. We could, if you wanted to, about economic concentration and growing economic concentration. You know, Facebook is the current whipping boy for that cause, and not without.

Justification. Oh, yeah, Total justification. Facebook is.

Disgusting. So. So we do have some serious issues. And there are people who say, well, we should just have unfettered capitalism. And make no mistake, I consider myself a capitalist. Capitalism brought about 50 years of incredible prosperity, not only to this country, but a lot of other countries following World War II. But what we have now is a runaway vulture capitalism. It's a perversion of what capitalism should be. And my belief is that we ought to start asking what it is that we want capitalism to do for us. And if we want capitalism to make lives better, to improve our lot on this earth, then currently it's failing and something needs to be done about.

It. Okay, so what can we do? Let's wrap it up with some action.

Steps. Well, okay, well, so here's a perfect.

Example. Don't say, write your.

Congressman. There are a problem. You know, we should, the government should. Somebody should close the carried interest.

Loophole. So what effect would that have?

Just. Well, it would eliminate a lot of this incentive to do these leverage.

Buyouts. Okay. So there'd be less M and A activity. If we eliminate carried interest.

Loophole. Well, there'd be less leverage buyout activity, and there wouldn't necessarily be less M and A activity. There would be less carried interest. So these dividend recaps, they count that as carried interest, for example. So do that. That's one big thing right there. And there was a movement to do this during the Obama administration, but they chickened out. Donald Trump actually ran on closing the carried interest loophole and chickened out. So let's do it. Let's close the carried interest loophole. That's a big one right there, right off the.

Bat. All right, so that'll mean fewer leveraged buyouts, which will mean fewer buyouts. We all know if you can't finance something, you're going to get less activity. But I'm not saying that's good or bad. I don't know, honestly. Can you name a second one? Is there another.

Step? Yes, you can create, and this was something that was. That has been done, but in my opinion, not enough. You can create mandated longer holding times. So, for example, a private equity company would buy another company like Anchor Hocking and try to Turn it around in two years and sell it. You know, it's like house flipping. They would try to flip the company off to another buyer or do an IPO within a very short period of time. And then oftentimes the company would fail. Subsequent to that, there was a new law saying that you've got to hold these companies for a little bit longer. I would suggest that we lengthen that time even more so that you can't just go around flipping companies like this. Another one is pension reform. So a lot of times what happens is these private equity companies buy up a company like Anchor Hocking. There's a pension there, they short the pension, they have the company declare bankruptcy, and they wipe away their pension.

Obligation. That is so disgusting. I can't believe they can get away with that, you.

Know? Right. And so that becomes the obligation of the Pension Benefit Guarantee Corporation, which at this moment is in a crisis because so many of these maneuvers have occurred that a lot of pensions are really at grave risk at the.

Moment. Right. There is the perfect example of Discover disgusting Managers capitalism, you know, and you. You know, you could argue, like with Vogel's book, right? It's all the stakeholders in a company, right? And there are three main audiences. There are employees, and I'll put employees and vendors in one group. And then there are shareholders, and then there are the owners, the, I guess the owners that are managing the company, you know, the managers. And so now we've got this imbalance of managers capitalism. And the managers are always owners, too, but we've got this massive imbalance. I mean, you look at, like Lou Dobbs book war on the middle Class, and it's just insane. The disconnect between typical worker pay and CEO pay. It's absurd. It's just beyond absurdity. You know, they're just untethered, Completely untethered.

Now. Yeah, they are. We need good, sensible regulation in this country. And for a while now, we've had this dogma that any regulation is bad regulation. On the contrary, we need good.

Regulation. The problem with regulation, though, is the government always ends up picking winners and losers, and it's favoritism by lobbyists. Right? And so that really, I don't know if that works. I mean, I almost think that maybe you should just deregulate everything, you know, it's just. I don't know. You can never tell how this stuff's gonna play out until you do it. That's the problem with things. There's always a lag, Right? You change the law today one way or the other. And then it takes five years to figure out what happened. And there's a new president by then and a new Congress.

And. Well, I disagree. I think regulation can work. For example, one of the best regulations ever was the Glass Steagall Act. And we had a long period of decades of very safe, solid banking. Yeah, we lifted, we lifted the.

Glass Steagall and then all the banks.

Began to see 2008, 2009.

Recession. Right. But some would argue that that was caused largely by the Community Reinvestment act. And that took a couple decades to play out. And, you know, from Carter to Clinton to the Bushes and you know, that caused the mortgage crisis. Right. Because it's complicated stuff, isn't.

It? Well, it certainly.

Is. Yeah. Hey, give out your website and tell people where they can find your book and all of your. You've got other books as.

Well. I do. So this book is the 1% economy and the Shattering of the All American Town. The book website is glasshousebook.com my website is brianralexander.

You can find me on Twitter at brianralexander. And there you.

Go. Brian, thank you so much for joining us. Very spirited discussion. We really appreciate having you on the.

Show. Thank you for having me. Join us March 23rd and 24th for the 2019 Meet the Masters of Income.

Property. Let's break this down and look at some of the strengths of income property as an asset class. I found that this event is.

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About tax benefits to real estate and a lot of I've been investing actually well over 10 years now, and I.

Learned a lot of new things today. The other advantage of this weekend is networking, meeting new property managers, meeting new area specialists and seeing the product they have to offer that changes year by year. Register now@jasonhartman.com Masters.

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