1864: Davos Man: How Billionaires Devoured the World, Peter Goodman Part 1, Independence Day Inflation

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Hey there, Jason. Thanks for reaching out. What can I say? My life has truly been changing here since I joined your network. We just covered so much more, so much more in depth that we did not do in Jacksonville, especially that mortgage side. My wife was really impressed with that. Thanks again and I look forward to continue nurturing this relationship and overall, just awesome experience.

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 1864, take two. Yes, I had to record this one twice because the technology did not work the first time. Anyway, I want to wish our listeners and viewers from 189 countries worldwide a Happy Thanksgiving. Oh, wait. Happy Independence Day for our American listeners, of course. And our president's a little mixed up. You know, he might think it's Thanksgiving. He's a little out of it. Yeah, someone shared this meme with me this morning and I just loved it. I thought it was hilarious. It is a meme of good old Joe Biden and he's all dressed up in patriotic garb for the 4th of July, but wishing everybody a Happy Thanksgiving. And you know what? Sadly, this is not far fetched. It's probably actually something he really said. It wouldn't surprise me. Wouldn't surprise me. So today in America, we celebrate the Fourth of July, our Independence Day from 1776. And if you think about it, it's pretty amazing. You know, we've got listeners from 188 other countries around the world and hopefully many of you believe, as I do, how important the United States was in world history. And look, it's in decline and it is declining precipitously. It is declining so fast, it's head spinning how quickly the United States is just falling apart. Let's hope that the pendulum swings the other way, you know, we do have these checks and balances with the three branches of government. We have a fantastic constitution. And just think about and appreciate the United States Constitution for just a moment because it was only the second example in all history where a ruling class, where a government or royalty, a monarch, restricted its own power and decided it was important to do that so that individuals, people, citizens would have more power. That's like a miracle. I mean, that's like saying, okay, you're in a position of power. You're the CEO of one of these disgusting scummy woke companies that is, you know, ripping off the shareholders and oppressing the employees. Maybe you're Jeff Bezos. Oh, actually he seems to have gotten his head on straight lately with his last couple of tweets, so cheers to him. He's, he's now, you know, being critical of the Biden administration. Rightfully so. Took you long enough, Jeff. Anyway, say you're one of these scummy CEOs, right? And you just decide that you're going to restrict your own power. You're going to give up some of your power and give up some of your ill gotten money for the greater good. Can you imagine that? It happens like almost never. And the United States was only the second example, at least that I'm aware of, in world history where that happened before that, the Magna Carta, another pretty amazing occurrence in the history of the human race. And since then, so many other countries have followed and now we see the pendulum swinging the other way. And sadly, the US is very much in decline. Let's hope that turns around. We had a couple good Supreme Court rulings lately. I especially like the one last week where agency power, this fourth branch of government, the administrative state, the Supreme Court limited, the power of these tyrannical agencies that aren't accountable to the electorate, aren't accountable to the American people. And that's good. Maybe we're going in the right direction. You know, there's some hope. There's some hope. We'll see how it all works out. All right, so there's the funny meme for you. It's pretty good if you're only listening on audio. Grab this one off of my YouTube video and you want to share this and spread it around. It's such a great meme. Anyway, today our guest is Peter Goodman. He's the author of a fantastic book called Davos Man. Talk about oppression. Talk about the elite class oppressing the people of the world. Well, that's what goes on in Davos, Switzerland, at the World Economic Forum. You know Klaus Schwab. You've heard of him by now. Anyway, this book was great. I finished it a few weeks ago and I just had to get Peter on the show to talk about Davos, man, how billionaires Devoured the world. No, folks, this is not capitalism. This is cronyism. It's a scam. And sadly, in the modern world, everything has become a scam. Also, thanks to Ashley for getting him on the show. I interviewed Vivek Ramashamwe on his book Woke Inc. Inside Corporate America's Social Justice Scam. Interviewed him last week, and we'll have that interview published maybe next week or the week after. But it's such a fantastic book. These two books are must reads. They really are. Especially Woke Inc. I mean, that was just. I'm not finished with it yet. I got about maybe one quarter left to go. But it's. It's phenomenal. Just phenomenal. Everything has become a scam in the modern world. It's such a sad state of affairs. It really is. All right, so we'll get to our guest in a moment. But let's talk about the I word. Let's talk about inflation. Another big scam. It's the 4th of July here for the US and people are doing cookouts. Barbecues. Two pounds of ground beef in just one year. This is only one year. It has almost doubled in price. Chicken has gone up, maybe, I don't know what's at about 35% in one year. The price of lemonade is up. Potato salad holding steady. Burger buns holding steady. But can you imagine? This is just one year of inflation, folks. Only a year. Now, this is a perfect example of how the Consumer Price Index, another complete scam, the cpi. They manipulate the CPI in three major ways. Weighting, substitution and hedonic indexing. And this is a great example right here of substitution. So you see that ground beef has almost doubled in price in one year, just a year. And chicken breasts have gone way up, too, but not as much. So what they assume in this basket of goods in the Consumer Price Index is that if the price of beef goes up, everybody will just switch to chicken. But maybe you don't like chicken. You think chicken's a dirty bird. So the substitution is something that they assume, and maybe we don't want to substitute. And that's how they hide real inflation from us. Also, you hear them talking about core inflation or headline inflation or the core rate. Well, the core rate strips out food and energy. Now, nobody on earth can live without food. And energy. So yeah, it's a complete scam. But inflation is just zooming, zooming, zooming, destroying the value of our savings, stocks, bonds, even our equity and real estate, but thankfully destroying the value of debt. And that's why I created the strategy called inflation induced debt destruction many, many years ago. It is the most beautiful hidden wealth creator. So take advantage of it. Listen to my other shows for more about inflation induced debt destruction. There really are quite a few nuances to that that it's important you understand. All right, let's talk about housing inventory. Then we'll get to our guest and we'll talk about Davos man housing inventory. It's important that I report on this because in just one week it is up by about 26,000 homes. Now we are still far, far away from normal inventory. Inventory is still scarily low. It is very, very low. But as I predicted and by the way, another one of my predictions coming true here. But also as I admitted, I think I'm going to say I'm wrong about another prediction I made and that was about New York City. That has come back much faster than I thought it would since the COVID fiasco. Anyway, I'm not right about all of them. I was wrong about interest rates. I was right about many and I'm right about this one and that is that the inventory increases are unevenly distributed. They are mostly distributed to the cyclical markets. And I want to mention, give honorable mention specifically to Phoenix, Phoenix, Arizona. That really can no longer be called a hybrid market. That's going to be a cyclical market. Inventory has almost doubled in Phoenix. It is crazy how that has gone up. But other cyclical markets around the country, same story, inventory is largely increasing and it is heavily weighted in these cyclical markets. Hybrid markets less so and linear markets much less so. That's what we like and recommend those good solid linear markets for your investment. Go to jason hartman.com click on the properties page to learn more about the best linear markets in which to invest. Also, before we get to our guest, I want to announce that I am busy this last week working with our on staff economist and creating a new index. Yes, you know about the Hartman Comparison Index, the revolutionary index, the HCI that helps you understand the real value of real estate by not just comparing it to one thing, the moving target called the US Dollar, which would be completely erroneous, but comparing it to many things in a very large basket of goods and services. Well, I've got a new index that I'm going to be Launching soon. And it focuses on income. Because as I have taught you for 18 years now, when I talk about my three dimensions of real estate strategy, you know that income and housing prices are non correlating indicators. Very, very important to understand that. And so this new index is going to offer you tremendous insights into the income component of income, property. It's so funny that everybody is just so myopic and they constantly talk about prices and that's how they measure whether a market is good or bad or an investment is good or bad. Are the prices going up or they're going down? Are they stagnant? Not enough information. Because we are yield investors. We invest for yield, we invest for value for income. So I've got a new index launching very soon. Sleazy competitors don't copy me like you always do about everything. Yeah, I gotta just mention the sleazy, scummy, cheating, lying, stealing competitors out there. Yeah, with good cheers. Yeah. So imitation sincerest form of flattery. That doesn't mean I have to like it. All right, so that new index is coming out soon. But just understand, as far as the inventory goes, we are still far, far away from even normal inventory. It is increasing quickly. And the question is how quickly can we see housing inventory increase to 1 million homes or as some experts believe is normal, to 1.2 or even 1.5 million homes? How quickly can it rise to that level to get to what is called a normal market? Not a down market, not a bad market, just a normal market. We are still far, far away from a normal market. Inventory still being very, very low. Tom. And again, the inventory scarcity issue is dramatically more pronounced and more weighted on the low end entry level spectrum of the real estate market. Remember, we're just looking at the overall inventory when we talk about this stuff. Okay? So without further ado, that's it on inventory. Just had to give you that report today because just came out. And it is very, very important to understand we are seeing substantial increases in inventory, but we're still far, far away from even what is considered a normal market. If you need assistance with your portfolio, if you'd like a free portfolio makeover, if you'd like to make sure you are determining the highest and best use for any assets you have cash in the bank, money in the stock market, mutual funds, bonds, cryptocurrencies, whatever. And you're interested in income property, the most historically proven asset class in the entire world and the most tax favored asset class in America. When taxes are the single largest expense in most people's. Life. Go to JasonAhartman.com, reach out to us. Also, be sure you check me out on social media. I have been killing it, just killing it on Instagram lately. Never paid much attention to that before, but I've got over 70,000 followers now. YouTube, we've got lots of great other content there for you, so make sure you check that out in all the right places. Not just the podcast, not just YouTube, but also social media. We've got a bunch of great clips, Instagram, Twitter, short clips and, and things that we're posting on those platforms as well. All right, without further ado, let's talk about Davos man with Peter Goodman. Here he is. It is my pleasure to welcome Peter S. Goodman to the show. He is the global economic correspondent for the New York Times and author of a great book that I just finished last week entitled Davos How Billionaires Devoured the World. And he's also the author of Past the End of Easy Money and the Renewal of the American Economy. And Peter comes to us from just outside New York City today. It's great to have him. Peter, welcome. How are you?

Thanks so much, Jason.

I'm good.

How are you?

Good. Good to have you. And I got to tell you, I was really intrigued by your Davos man book. It echoed and mirrored a lot of the thoughts I'd been having for years about Davos. I've been following that conference for maybe, I don't know, about 12 years now or even more. And it just always struck me as a lot of hypocrisy. And, I mean, I don't know, would you. Would you even go as far as saying it's sort of a shadow government? Would that be fair to.

No. I actually don't buy into that popular idea. I mean, there are a lot of conspiracy theories around Davos. Like, you know, this is the ultimate place where all the decisions get made. There are a lot of important decisions that get made there because so many powerful people are gathered there. And anytime you have heads of state and regulators meeting with the billionaire class, which always is pursuing deals and, you know, pushing the envelope on permission to do all the things they want to do, you're going to have decisions made. It's not that it's irrelevant, it's that that part could be anywhere. The idea that it's some sort of shadow government run by the supposedly earnest academics in charge, I think that part's nonsense. And it actually does the bidding of the people I call Davos Man, I mean, it's A term I stole from Samuel Huntington, the political scientist who coined it in 2000, referring to the slice of the billionaire class that would have us believe that they will solve all of life's problems, that all of our interests are collective. And so when we buy into this idea of the shadow government, we affirm all of the well intentioned pronouncements that the Forum makes about climate change and corporate governance and the need to deal with gender and racial injustice. All that stuff is just a facade. I mean, it's a charade. It's a business conference. It's a chance for billionaires to get together and do business.

Yeah, and you know, people really need to become familiar with the term. And I don't even know if you use the term in your book. I can't remember. But rent seeking, that's what Davos, in my opinion, is largely about. It's about the billionaire class engaging in whatever rent seeking behavior they can get for their companies, for their causes, for whatever it is, and doing that at the expense of humanity, frankly, it's truly staggering. It really is. But first, let's just back up for a moment and give the broad picture, the 30,000 foot view, if you will, of. And I'll just let you answer it, Peter, because you know best. What is Davos? Just for some people that may not follow it or know, you know, it's the World Economic Forum. It takes place in Davos, Switzerland, which is sort of this kind of unimpressive, but beautiful place. But tell us what Davos is really. Sure.

So Davos, Yeah, it's this kind of modest ski village that's gotten glitzy over the years because every January, although this year it was in May, because the pandemic has messed up the schedule, the World Economic Forum convenes. And the World Economic Forum is this institution started by this German economist, Klaus Schwab, back in the 70s on the proposition that if he got businesses and governments together, you could solve a lot of problems. He's into public private partnerships, he's into Win Win solutions. But along the way, it's become, under the guise of a nonprofit foundation, a highly lucrative enterprise. And Schwab brings in heads of state from around the world to meet with billionaires, public intellectuals, a whole lot of journalists, the odd Hollywood celebrity. There are musicians there. You know, I once had dinner with Peter Gabriel, who was talking about how primates make music. You know, there's always this eclectic mix, there are poets wandering around. But in essence, and this is what I argue in the book, it is the opportunity for the billionaire class to engage in this virtue signaling, and this is the genius of Klaus Schwab's marketing, simply by being there. You're not at some Forbes or Fortune.

Conference or Milken conference.

Yeah, we're here to figure out how to make more money. I mean, this thing convenes under this mantra committed to improving the state of the world, which is sort of unintentionally hilarious given that the people who go there, about 3,000 people a year, are by any reasonable measure the ultimate beneficiaries of the status quo. And they use their presence in Davos, among other places, to signal, hey, we'll take care of everything. You don't have to regulate us. You don't have to stick us with progressive taxation. You don't have to enforce antitrust. If you just allow us to do our deals and have our conversations about how to solve the big problems of the day, we will take care of that. And all of the benefits will just magically trickle down throughout society. Something that has in reality happened zero times.

Yeah. So where do you want to start? As you describe Davos man, there's so much to cover here. Certainly the tax avoidance is just really beyond reproach if you ask me. But there's so much of this rent seeking behavior just everywhere you look. The environmental hypocrisy is beyond reproach. I mean, listen, I wouldn't have some big complaint about billionaires flying around in private jets if they didn't give me this virtue signaling speech about the environment all the time. It's just like one or the other, folks. I mean, fly your private jet, fine and dandy. That's what billionaires do. That's great, but don't give me a speech of how I need to drive a proletariat car at the same time or be on a New York subway. Right? Well, you know, it's so hypocritical, it's ridiculous. But where do you want to start in describing Davos Man?

Well, you know, my ultimate takeaway for Davos man is that he is selling us. I mean, first of all, he is like effectively a separate tribe, a separate species even from the rest of humanity. Because, you know, his fortune is so complex. I mean, the Davos men, they need to hire accountants and lobbyists and lawyers in scores of jurisdictions around the world. And Huntington used the term to describe a group that essentially doesn't have any allegiance to any particular nation. They're their own thing. And I think that's important to understand. And I think it's important to understand that they will sell us on this idea that life is this all or nothing proposition, that we either accept that there's inequality like we've got, that we're going to have much of humanity unable to afford Covid vaccines, to pick one obvious example, or we can monkey around with this successful form of capitalism that's at least got us Google and central air conditioning and jet travel that most people can afford nowadays.

We. Or.

Or we can mess with that and we could end up being, you know, Venezuela, where we're diving into dumpsters for our dinner. This false binary is at the heart of how Davos man sells us again and again on this idea that we need more tax cuts and deregulation. He's the good guy. The more money he's got, the more good he can do, especially through his philanthropy, which never pencils out to as much as he would have us believe he gives.

But by the way, I just got him. I want to just mention something, so I don't for. But have you seen the documentary Poverty Inc.

I have not.

Fascinating. You must see it. I've told my listeners that before, and it's all about how this philanthropy just backfires because it screws up the economies of these developing countries. And it's just a really fascinating take on the whole thing. I just thought I'd mention that as an aside. But yeah, the philanthropy from the Davos man is really just window dressing, isn't it?

Well, it's not always window dressing, right? I mean, like Gates, his philanthropy has been quite significant. I spent a lot of time on the book on Marc Benioff, who's a very interesting character.

Oh, he's such a virtue signaling. I mean, it's just ridiculous.

Well, so, you know, I mean, I'll give Benioff his due. His philanthropy actually is pretty significant. Like, he's organized his company around 1% of all revenues and staff time go to philanthropic efforts. He took out his checkbook to spend $10 million on a ballot initiative that actually increased taxes on tech companies to fund expanded services for homeless people.

But. But at the same time, what was he doing?

Yeah, at the same time, you know, he. His company is part of the business Roundtable, which played the central role in enabling the Trump tax cuts that lavish $1.5 trillion of cuts on people like Marc Benioff. And Salesforce, not coincidentally, has paid the modest sum of zero in federal taxes a couple of times in the last five years. So all that other stuff is to your point about philanthropy is Like a rounding error compared to that. And I didn't write this book to demonize Benioff or any billionaire. I mean, I'm fine with the fact that there's going to be some inequality in a system governed by capitalism. And capitalism is a terrific way, through price discovery, to give us innovation and consumer choice and economic growth and all sorts of things that we should actually hold onto. But we should be so lucky as to have real capitalism. I mean, what we've got is this kind of rugged individualism for regular people where there's no social safety net and various forms of corporate welfare. Back to your point about rent seeking for companies that are able to hire lobbyists the way most of us have, maybe hire somebody to clean our house if we can afford that. It's not that we need to demonize the billionaires, it's that we have to accept that they're going to run their companies catering to shareholders. And if we want to have a say over what sorts of government services are fundable, if we want to have a say over what rules of competition should apply, we're going to have to exercise democracy, our own democratic rights, ourselves, instead of outsourcing the jobs to these virtue signaling billionaires.

Yeah. So gosh, there's so much there. I mean, listen, you won't get any argument from me, I'm a capitalist. But the problem is we don't have capitalism. We have cronyism. I mean, if there is a place where cronyism takes place, it is Davos. You know, that is the, the place. And then in Washington D.C. of course too. But when you look at these billionaires, you know, you look at Bezos and, and the way Amazon paid no tax a couple of years ago. And there's a strategy, I think, you know, I might get the name wrong, but I think it's called like the double Irish twist that a lot of these big companies employ where everybody knows that Apple, the company is in California. Right. They built the $5 billion donut shaped UFO headquarters. That is absolutely a phenomenal piece of architecture. That's where Apple is, We all know that. Yet Apple evades California taxes because they don't like the tax jurisdiction of California because it's very high tax, obviously. And then they evade the United States government's taxation by somehow, even though Steve Jobs was in California, Steve Wozniak was in California, that's where the garage was. That's where everything was innovated. That's where it all happened. Right? Their $5 billion headquarters. There's yet Somehow their Irish subsidiary or their Netherlands subsidiary, they've got all of these things, makes all the money because.

It'S worth picking, picking apart. So first of all, you know, a key argument I make in this book is that none of this happens by accident. Right? It's important to understand it's not that we were, you know, marinated in some perverse belief system such that Congress decided that it would be this wonderful idea to allow corporate executives to bill all their revenue in some foreign jurisdiction to avoid U.S. taxes without seeing the inside of a federal penitentiary. And did this out of some holistic faith in the economic dynamism that would flow. This was a fairytale that was sold by legions of lobbyists working for the largest American corporations. The double Irish goes back to Clinton's administration. You know, we spent a lot of time talking about Reagan as a tax cutter, as well we should. Clinton, you know, was a big fan of corporate lobbying and he was the one who allowed companies to transfer their intellectual property. So you know, take Salesforce for example, because this has Salesforce managed to pay no taxes. They, they say, well, you know, all the stuff that's really valuable, the secret sauce of our technology that lives in Ireland and then the company in Ireland, our nominal headquarters, is going to charge these very high fees to our American subsidiaries for the use of this intellectual property through a kind of licensing agreement. And guess what? Those fees are going to be so high that the billions of dollars a year that we're earning in real revenue that just vanishes and gets turned into losses. Imagine if, if like an Amazon warehouse employee could just say, well, you know, my work boots, they live in, in the Cayman Islands now and I'm going to charge a licensing fee to myself to use those work boots every time I go off to work. Therefore, you know, my paycheck, Uncle Sam's going to write me a fat tax refund every week with my paycheck because I'm basically earning no money. Well, guess what? That Amazon warehouse worker can't afford to hire 100 lobbyists the way Amazon can. So not by accident, Davos man's interests are again and again turned into law in the halls of Congress and in countries around the globe.

Yeah, it's unbelievable. And since you mentioned Amazon, I mean the abuses perpetrated by Bezos have been staggering. They really have been. And this whole virtue signaling of all of a sudden he decides a few years back, let's raise the minim wage of Amazon warehouse workers to $15.

Right?

But what he was really doing is putting his competitors out of business because they couldn't afford to pay that. So a small business, a little retailer. Suddenly Bezos switched from where he was suppressing wages and just overworking these people, putting monitors on them like they're machines, the way he would treat people. You know, you take a break to go to the bathroom, you get castigated by yourself. Supervisor. Right. And then suddenly he's all in favor of lobbying Congress for a $15 minimum wage and raises all of those people to $15 because then he realizes he can just use that as a way to roll over his competition. It's just so ridiculous.

And at the same time that he's opposing any kind of organized labor.

I mean, the key is he's trying to destroy unions. I mean. Yeah, right, right.

I mean, I tell the story of Christian Smalls in the book. Who's this Staten island warehouse worker who notices in the. In. In March of 2020, hey, we're all here on the warehouse floor like it's normal. All the managers are somehow gone. He's told they're at a corporate retreat. Oh, everyone's on vacation. He's seeing the stories about the pandemic on the TV screens in the break room. He gets concerned. He starts asking, no, what's the deal here? And how come we don't have any protective gear? How come we don't have any face masks? We don't have any hand sanitizer? Bezos releases this letter. Dear Amazonians, we thank you for your sacrifice. We're unable to source the Everything store somehow can't turn up.

They're the best sourcing company in the world, right?

And of course, Christian Smalls and his colleagues can see. Well, they seem to be able to source it when we're putting it in boxes, sending it to people who are paying for it, but there doesn't seem to be any for us, because labor, well, we're just a cost to be minimized. Well, Smalls is ultimately fired for violating quarantine, which is really bitterly ironic given that he wants everyone to be quarantined while they sort out what the risks are for the plant. And they have a plan to actually make it safer for the workers. And he wants paid sick leave for everyone. Amazon has lobbied assiduously over the years against paid sick leave. The US Is the only developed democracy on Earth that does not have a federal paid sick leave policy. Again, not by accident. Well, Smalls later actually organizes the first labor union, but that goes against the grain. That's a significant victory for the labor movement. Precisely because one of the key traits of understanding Davos man as a species is he's good with philanthropy. He's good with unilateral shows of generosity. Here's your bonus. Here's my gift to people in a wretched country made slightly less wretched by my largesse, but no collective bargaining. Davos Man's not interested in altering the power dynamic. And so to your point about Bezos and the minimum wage, he uses Congress to essentially administer a higher wage which is productive for. For workers. But he does it as a kind of predatory pricing system against his own competitor to make it harder for companies like Walmart and Target to hire enough workers at the time of worker shortages.

Yeah, yeah, it's really something. Okay, give us some more examples of who Davos man is. Let's learn more about this creature.

Well, you know, let's. Let's take Steve Schwarzman, who's a regular at the Forum. So he's the world's largest private equity magnate. Depending upon the day, he's worth around $35 billion. He's the master at taking the area in which he's the problem and spinning it that he's the solution to the problem. So after the great financial crisis and the Great Recession, he vacuumed up millions of homes that went into foreclosure around the U.S. he sent his people to courthouse steps and bought homes at auction. A lot of people got moved out of their homes. In his memoir and in public appearances, he'll tell you this really wasn't about the money. Nevermind that he was throwing these bacchanals in celebration for all the bonds he was helping Wall street sell backed by these foreclosed homes. I was just doing this to revive communities. We were going into places where lawns were overgrown and swimming pools were full of algae and rodents were running around in the chaos. And we slapped paint, fresh coats of paint on houses and rebuilt electrical systems. You know, you can almost hear the soundtrack for a life insurance commercial. And I imagine a golden retriever puppy romping around with some child on a lawn. I mean, the reality is he starts this subsidiary he calls Invitation Homes, which is an invitation for people to pay much higher rents. He specializes in people who are especially in vulnerable areas where they don't have the money for security deposit for some new place. They have to pay the higher rent. It's an invitation to sit on hold.

For hours to get an invitation to have like a landlord that is basically a slumlord. I mean, these. Now, look, I would not be so critical of this, if there were a couple of things and, you know, maybe you can go to this side of the equation too. But, you know, when you really look at the things deeply and I've interviewed the author, I can't think of his name right now, of that sort of seminal article that was written during the Great Recession about Goldman Sachs, the great bubble machine.

Oh, Matt Taibbi.

Yeah, Matt Taibbi, right. Yeah, he's great.

I love Vampire Squid.

His book Hate Inc. Is really good, by the way, too. When you realize that these people had a huge part in causing the crisis.

Right.

And creating that opportunity to scoop up the foreclosed home. Right. I would be okay if they weren't the cause and they simply went in there, saw an opportunity and that, hey, look, you know, we're going to buy these distressed homes, we're going to turn them around, we're going to fix them up, and we're going to make the neighborhood better. Right. That'd be.

That's the market system. But I mean, they're simultaneously lobbying the Obama administration not to rescue homeowners. Right. So there are these too big to fail financial institutions. We're told by Tim Geithner, who now works at a private equity company himself, who was Obama's treasury secretary, that, oh, we have to think about moral hazard. It would really be wrong.

The only moral hazard is the one you see in the mirror, Tim.

Well, moral hazard is an interesting concept because it implies that every homeowner who goes Underwater after the 2008 financial crisis, you know, pulled out home equity lines of credit to go finance their honeymoon in Tahiti. Certainly there are plenty of people like that. We know people like that. I'm not saying that they don't exist, but there are plenty more people who simply came of age where they're raising families in major American cities where there are huge speculators like Steve Schwarzman who are bidding up the price of real estate and they're told there's a societal imperative to send their kid to quality schools, to be in a quality school district, they have to pay the freight. And the prices are set by a million other people, some of whom are availing themselves of home equity lines of credit to buy fancy new cars they don't need, many of whom are speculators because the money's so available. And so families are having to sign here to get themselves in a decent school district. And a lot of those people need to be understood in the context of what is and isn't moral hazard. And along comes the Obama administration, they say, well, we got money for Goldman Sachs, we got money for aig. We're not going to prevent bonuses from being paid out to the very bankers who caused the financial crisis, but we're not going to bail out homeowners because somehow that would be morally wrong and bad politics. And then to your point, the punchline is, the very financiers who participated in the speculative orgy that wrecked the housing market now have all this cash to buy up the properties and they end up profiting, you know, on the other end.

And we'll be back with a lot more on this topic with this guest on our next episode.

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