Part Two: Sam Zell: the Elon Musk of Real Estate
00:00Alphabet Boys is a new podcast series that goes inside undercover investigations.In the first season, we're diving into an FBI investigation of the 2020 protests.It involves a cigar-smoking mystery man who drives a silver hearse.And inside his hearse look like a lot of guns.But are federal agents catching bad guys or creating them?He was just waiting for me to set the date, the time, and then for sure he was trying to get it to happen.Listen to Alphabet Boys on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts.Did you know Lance Bass is a Russian-trained astronaut?
00:59That he went through training in a secret facility outside Moscow,hoping to become the youngest person to go to space?Well, I ought to know, because I'm Lance Bass.And I'm hosting a new podcast that tells my crazy story and an even crazier storyabout a Russian astronaut who found himself stuck in space.With no country to bring him down.With the Soviet Union collapsing around him,he orbited the Earth for 313 days that changed the world.
01:32Listen to The Last Soviet on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts.Oh yeah, it's behind the bastards.Oh my heart stopped.Samantha, do you see how she treats me sometimes?It's a fucking, it's two o'clock on a Tuesday when we're recording this.I don't, I don't need the drama.I believe I have civil rights, Sophie.I'm sorry, do I not have civil rights?
02:01What does that have to do with you doing quite literally the worst radio voice I've ever heard?Well, that's your opinion.This feels like my rights are being violated.Samantha McVeigh.Hi.How are you doing?I am wonderful.How are you?
02:20Samantha, is it true that were I listening, looking for a podcast about things that my mother had never told me,that you could help me with that?Yes, as in fact, you can just put stuff mom never told you and you will find my faceand then some other faces as the host.And yes, you can come and listen about things your mother may not have told you.If you have a cool mom, maybe they did tell you.I don't know.That is extremely based.
02:47I'm happy that we're talking today about why the rent is so damn high.But you know what else is too high right now, Samantha?Tell me.The Great Lakes.They actually hit record highs this year,which is causing serious problems for all of the communities who live near those lakes.And Samantha, that's why we got a nukem.This is his revenge for me telling him.
03:07Have you have you have you thought about my feelings when he does it?Have you thought about how many nukes the United States has that are just sitting around doing nothing?We spent a lot of money on those nukes.I understand that there is a lot and it's one of those that I'm like,I really hope I'm in the center of it.So I'm just decimated if it, you know, this happens with all of them being deployed.I want to be right there in the middle.We're going to shoot those missiles right at Lake Superior,
03:37Lake Ontario, the other ones.Take them out.Doesn't even know the names of the Great Lakes, but wants to nuke them.Right.Yeah.May I ask why?What have they done to you other than for one thing?They're at record highs, which is dangerous.
03:53For another thing, you were listed to the Gordon Lightfoot song,the wreck of the Edmund Fitzgerald.No.Well, maybe you should, Samantha.It's about a boat full of brave men who are killed by the vicious Lake Superiorduring a storm that we could have nuked away.But what were they doing there?They were trying to take steel from someplace to some other place.
04:17They're just being good sailors.Well, we have a lot of Great Lakes sympathizers.This is not a bit, Sophie.This is a serious political exercise.I believe I have the right to advocate.Sophie, if I'm remembering...This is dangerous.I never knew I needed it.
04:36If I'm remembering the company thing that we had to do recently,you are violating my civil rights by trying to force me to hold a political beliefthat I don't hold...Did you actually do that video?No, I have not.I have not done it yet.I was going to say there's no way you fucking did that on time.There's no fucking way.
04:53Absolutely not.I know there is a video, and it probably says that you can't stop mefrom wanting to nuke the Great Lakes.I haven't seen it either.I haven't done the training either, so I can't conform more than I.I did it.That's good.I want you to know I did it.
05:07It didn't count it, and I have to do it again.I'm very upset about this.Wow.I'm so sorry.I'm not doing it.I'm so upset about this.Samantha, I'm going to play a little bit of politics here.I'm going to play a little bit of politics.
05:17What if I add making us not have to do this thingto the bill that will nuke the Great Lakes?You know?You know what?See?See?It's not a pork.Exactly.
05:29Exactly.This is how we make sausage, baby.Sorry to the residents there.No, no.It's good for them.It'll keep the lakes off their backs.Yeah, it'll be fine.I don't think it's good for them.
05:40I don't think they would say that.Water soaks up radiation real well, so it'll be good.You know what it'll be like.It'll be like everybody's got a hot tub for a little while.That's going to be nice.Anyway, today we are going to start by talking about a bastard.Samuel Zell.Z-E-L-L.
05:58Now, he was born Schmooley Zilanka.I think I'm saying that close enough to right.On September 28, 1941, his parents, Rukla and Berak,were Jewish immigrants from Poland.If you hadn't guessed that they were Polishby the last name Zilanka.Yeah, his father had made good money as a grain merchant,and when Germany was gearing up to invade in 1939,
06:22he was one of those guys who was like,probably isn't going to go well.Probably time to be getting out of Poland.I think we should leave now.This is a good time to leave, y'all.Yeah, time to bounce.That was a great time to leave Poland.So, Samuel Zell.
06:41Samuel.He gets raised in Chicago,where his father takes up a new business.Oh, good.Okay, so you guys are both chitown babies.No, I'm not.I said, oh, Sammy.There's no shot.
06:53Oh, I thought you said, Sammy.I thought you were saying that you had also grown up in Chicago.No, not that cool.I'm not that cool.Well, I don't know.Chicago is certainly a city.So, yeah, his dad.He's just trying to bend everybody.
07:07That's right.That's right.There's only one city we like on behind the bastards,and it's Pittsburgh,where I have never been.So, his father takes up a new business as a jewelry wholesaler.From early on, Samuel was very interested in business.He's one of these kids who decides, as a child,
07:25capitalism is the thing for him,which another warning sign, right?Of course.Look, this kid is a refugee from war-torn Europe.I have a lot of sympathy for that,but no matter what your background is,if at age, let's say 12,you're talking about how you want to be an entrepreneur,
07:42we got to slow those kids down.Maybe like put some wasp sprayand like the school of ventilation ducts or something,but we got to slow those kids down.They're not doing any good for us.They're just hustling.That's what he's going to do.I don't know.
07:54If he'd just like gotten a little bit more lead maybe,or maybe a little less oxygen,maybe a little bit more CO2 in the house.Anyway, he doesn't.So, things are fine for him.He starts his first business at age 12.He realizes that local kidsin his upper-class suburb craved pornography,
08:13but they couldn't purchase it in any of the storesthat they could reach on their bicycles.So, Sam found a place in the citywhere he could buy Playboy magazines in bulkfor 50 cents each,and then resell them for between $1.50 and $3 each.Holy crap, this kid.Okay, wow, that's impressive.
08:30Well, it's impressive, but also that's a bad sign.It's a bad sign, but damn.Yes, yes, it's a good grift,but it's a bad sign.He later called this his quote,first lesson in supply and demand,bracking it to a 2013 meeting of the Urban Land Institute.For the rest of that year,
08:46I became an importer of Playboy magazines to the suburbs.Now, again, normally I think this is a good thingbecause the suburbs are desperately boringand they needed the mid-core porn that Samuel offered.They need that porn, yeah.Look, when I was a kid, my first pornography was porn.We found in a little stretch of the woodsin the middle of our suburbs
09:04that all of me and my cousins would like run toand you could go like,there's just like this box of Playboys.Many people, there's the legend of Johnny Porno's seed.Somebody seeded.Wait, it was in the woods?Yeah, woods porn is a thing.Okay, there are so many questions.
09:19I guess we don't have the time, but wow.Well, I don't think Gen Z has thisbecause they've got the internet,but like I encountered my first pornbefore the internet was commonand it was porn that was found like,it was kind of in like a little wooded areabehind the housing development, you know?
09:34Everyone had that experience.This is Texas, right?Yeah, this is Texas,but I know many other people had found woods porn.Wood porn, yeah.Yeah, which at least nobody,I didn't have to pay for my woods porn.Sure, it was kind of moldy and like crumbling
09:48and all of the colors weren't clear,but I was pretty sure you could see some nipples in there.You know, when I was like seven.Wait, it's kind of like the,because who would try to watch porn on static TV?Yeah, yeah, it's exactly like that.Showtime or Max?It's the physical version of static TV.
10:06Yeah.Oh my God.All right, let's go.He is peddling mid-core pornography to the suburbs.Samuel graduates from Highland Park High School,because again, his parents are rich.That is a nice part of Chicago.He's accepted by the University of Michigan.
10:24He is less interested in his studiesthan he is in finding new ways to make a buck.His roommate mentions to him one daythat their landlord was developing a new property,an apartment complex.Samuel thought it would be easy to manage,later saying, quote,I had plenty of faith in my own,
10:38what I call salesmanship.I could rent them and most important of all,I was a student and it was student housing.I thought I could relate.In return for running and maintaining the building,this friend of mine and I each got an apartment.So number one, for an idea of kind of how this kid works,he's able to talk a landlord into this arrangement.
10:55And then he's able to turn this arrangementinto a business that's shocking size.By the time he graduated in 1966,Zell had managed with his partner more than 4,000 departmentsand personally owned between 100 and 200 of them.This is a huge business.He's very good at this.Now he sells his share of the property management business
11:14he'd started to his partner and he moves back to Chicagowhere he passes the bar exam and he joins a law firm.Law was what he'd studied to doin becoming a lawyer had been his goal for years,but like now that he sells his real estate businessand he starts working as a lawyer,he's like kind of fucking hate being a lawyer.This guy just sucks ass.
11:33So pretty much immediately he quitsand decides to go back into real estateand make it his full-time career.In 1968 he founded a companyand brought in his old business partnerand he started buying properties.Now he happened to get into the marketright as it was hitting, it was on an overbuilding spree.
11:50Like again, one of these times when likethey're building way more housing than is neededbecause there's this irrational exuberanceof investors and buyers and whatnotwhich leads to a market crash in 1973.Multi-family residential real estateplummeted in value firstand a lot of commercial property loans went into default.
12:07So numerous properties are abandonedmid-construction, right?Companies like suddenly we can't financefinishing this house so there's just this lotwith like a basement dug or some shit on itand Zell sees this as an opportunity.He can buy up valuable real estate for nothingand cheaply put it into a portfolio
12:24that he can profit from later when the market recovers, right?Oh, yes.Tail as old as time.So he has other businesses as the years go by.He purchases an agricultural company that's closingand then a nitrogen plant that's going into bankruptcy.Then he buys a potash plantand starts like making fertilizer.
12:42So he's buying these businesses that are failingand then he integrates them together into one bigger businessthat's able to succeed.This is a pattern that asserts itself over and over again.Samuel Zell looks for misfortune,finds a business or a propertythat's fallen on hard times,buys them up at a very low price,
12:58then repackages them and sells them for a profit.In an article for the New York University Review,Zell described his strategy asdancing on the skeletons of other people's mistakes.This earns him the...Yeah, I mean, yeah, it's what he's doing.And he gets the nickname Grave Dancer as a result.Oh, he's bad.
13:17Oh, no.Yeah, I mean, that's funny.That is kind of cool.But it's not about to be.So sometimes...Oh, he called it cool.Yeah, sometimes he has to make the grave to dance on it.So he buys a controlling interest in the Tribune Company,
13:35which owned the Chicago Tribune and the Los Angeles Times.And I want to quote now from a New York Times articletalking about the guy that Zell brings in to run the Tribune,a man named Randy Michaels.Quote, after Mr. Michaels arrived,according to two people at the bar that night,he sat down and said,and offered the waitress $100 to show him her breasts.
13:55The group sat dumbfounded.Here was this guy who was responsible for all these peoplegetting drunk in front of senior peopleand saying this to a waitress who many of us knew,said one of the Tribune executives presentwho declined to be identified because he had left the company.It did not want to be quoted.I have never seen anything like it.
14:12So...Mr. Michaels denies this happened,saying the people who told the Times the anecdote were lying or mistaken.But boy, a lot of people have similar anecdotes about this guy,who Zell brings in to run the Tribune.Now, Zell's plan seems to have been thathe buys this company and he finances the deal.This might sound familiar.
14:32So the Tribune, massive media company.He's only able to buy it by borrowing heavily.That's how he finances it.He gets a bunch of banks to front the moneythat he can't put up front.And then as soon as he buys it,his plan is to engage in aggressive cost cuttingthat can make the venture profitable
14:49after trimming all of the employees.It's almost exactly likewhat Elon Musk is about to do with Twitter, right?Right.That sounds super familiar.Yeah, it sounds really familiar.Zell is doing this same thing.And when he buys the company, he allegedly tells the employees,
15:06there's a new sheriff in town.Which, like, you don't actually say that, Sam.You don't really say that.Nobody says that.What?So in buying and tanking the Tribune,Zell brought harm to a number of hugely influential local papers.In addition to the Los Angeles Times
15:24and the Chicago Tribune,the Tribune owned the Baltimore Sun,the Hartford Current, the Orlando Sentinel,as well as the Tribune and the LA Times.So he has bought up the most influential local news sourcesin the country.And he's about to run them into the ground.So as soon as he buys them, he goes on, like,
15:43a tour through all of these different properties,these different newsrooms, giving speeches.He's famous for cursing a lot in his speeches,I think, to try to be entertaining and stuff.But over and over again,the thing he tries to sell his new staff onis the fact that he's going to make them richwith his new management skills.
16:00At one point, he writes to the Tribune's employees,I have said repeatedly that no matter what happens in this transaction,my lifestyle won't change.Yours, on the other hand, could change dramaticallyif we get this right.They're not going to get this right.These are all newspapers, right?That's the business.
16:18Fairly large newspapers.The team he brings in to take over managementare all radio people.In particular, they're all shock jock DJs.I knew it.Mr. Michaels, who's running it, is a former shock jock.He's like a Howard Stern type.And so that's the people,
16:37he's like, you know, who can run a bunch of local newspapersis like drive time radio DJs who curse on the air.That's who will turn the newspaper business around.Now, since Mr. Michaels is a shock jock,the people that he brings in to help him run the companyare also all former shock jocks.And one of the first things they dois they rewrite the employee handbook.
16:58Working at Tribune means accepting that you might hear a wordthat you personally might not use.You might experience an attitude you don't share.You might hear a joke that you don't consider funny.That is because a loose, fun, nonlinear atmosphereis important to the creative process.This should be understood and should not be a surpriseand not considered harassment.
17:16Now, yes, of course,if you're working in a creative enterprisebased around like writing,people should be aware that they're going to encounter thingsthat are uncomfortable and stuff they might not likeand being open-minded and people being able to...But if you're putting that in your handbookspecifically to lead to
17:35you shouldn't ever complain about harassment,that's because you want to sexually harass a bunch of people.That's why you're putting that in there.And then you're going to be racist.So all of those things are going to happen.So go ahead and expect it for 10, like, it's 1909, essentially.Yeah, it's like everything else.Yeah, so they took this
17:53don't-call-our-harassment-harassment seriously.Mr. Michaels hired a woman named Kim Johnsonto be his SVP of local sales.In the news release announcing her hire,he said that she was a, quote,former waitress at Knockers,for hot racks and cold brews.I think this was a joke
18:11based on a fake restaurant chain,but anyway, it's a weird thing to sayabout someone you brought on as a VP.Right, but they can say,we have a woman.We have a woman, not sexes.Exactly, we have a woman and weonly a little bit compliment in her knockers
18:27in the press release we put out.In the press releaseannouncing her hire. Jesus.The press release.So this is like what they're putting out publiclyto the industry.We hired this lady because of her tits.That's literally...
18:43You're welcome.People might have thought at first,oh, this is just like a thing he saidat an office party that was inappropriate.No, no, no.They published this.So in his first tour of the company,Zell promised there would be no job cuts,
18:59but of course there were many of them.And what's worse, his business acumento try to like refocus all of theselegitimate newspapers on cheesygame show tactics.The company introduced promotionsthat seemed to have been drawn from the radiohandbook at four of the company's television stations
19:15an event called Cash Grabin which the viewer was led into a bank vaultand allowed to scoop up dollar billswas inserted in the middle of the station'snewscasts.At WPIX TV in New York,the viewers were cheered on by clapping Hooterswaitresses, giving the station
19:31the experience of televised shock radio.He literally, you know like,you ever seen RoboCop?No, sorry.Have you ever seen like Idiocracy?Nope.Oh, okay. Both of those movies have likefake TV news that has like,
19:47that's just like super trashyand gross and stuff becauseit's dystopian societies.He's just done that for real.He's just actually made that as aWasn't there an Eastern European stationthat actually had women strippingas they were telling news in order to engage
20:03viewers, but they'retrying to do real news. I feel like I saw thisawhile ago and I was like, what is happening?It seems like a thing that happened.To be honest, having just being like,hey, we're the news and alsopeople will strip on the newsis way less gross to me than, hey, we're gonna
20:19split the news up with Cash Grabwhere people stuck in a bank vaulthave to grab dollars.That's much grosser to me than just likeI guess not people will be naked.Yeah.It's pretty cool.So Zell hired a chief
20:35innovation officer who is likea maniac and would regularlywrite 5,000 word typo riddledmemos to journalists and editors that theywould be forced to read. Stuff likerock and roll musically is behindus. All caps, newsand information is the new rock and roll.
20:51This is like a corporate memo.Their director of innovation islike the Boomer Joe. Guys, we gottamake the news be rock and roll.At one point in a meeting, they'retalking about the war in Iraq andsomebody brings up that like LosAngeles Times reporters are actually
21:09in Iraq, you know, covering the warlike you do and heshocked that this is allowed. He hasno idea that this is how like journalismworks that reporters go to war. What?This is the director of innovationfor one of the largest newspaper companiesin the country. Were they one
21:25step away of just becoming a tabloid at this point?Yeah, I mean, that's what he's trying todo. He's trying to like his ideas thatwe make it profitable by, yeah, turningit into a tabloid, stick some tits onthere, stick some game show stuff in there.It'll be great. I hate this guy.Yeah, I don't like this guy. You know
21:41what I do like though?I like thefact that the Great Lakesbeing the largest freshwater bodieson the planet, plenty of room forthe U.S. nuclear arsenal.Yeah, apparently.I try to get it there, Sophie.
21:57Sophie. Sophie. I just like don't careanymore. I care about yourhometown andI'm trying to stop it from being eatenby a lake. Well, no, just the lakes.Just the lakes.Just the lakes. My hometownisn't there, so.
22:13Well, then everything's going to be fine.Here's some ads.During the summer of 2020, some Americanssuspected that the FBI had secretlyinfiltrated the racial justicedemonstrations. And you know what?They were right.I'm Trevor Aronson and I'm hosting
22:33a new podcast series,Alphabet Boys.As the FBI sometimesyou got to grab the little guyto go after the big guy.And then we'll take you insidean undercover investigation.In the first season of Alphabet Boys
22:49we're revealing how the FBIspied on protesters in Denver.At the center of thisstory is a raspy-voicedcigar-smoking manwho drives a silver hearse.And inside his hearse was like a lot of guns.He's a shark. And not in the good-bad-ass way.
23:05He's a nasty shark.He was just waiting for me to set thedate, the time, and thenfor sure he was trying to get it to happen.Listen to Alphabet Boyson the iHeart Radio app, Apple Podcastor wherever you get your podcasts.I'm Lance Bass
23:21and you may know me from a littleband called NSYNC.What you may not know is that when I was23 I traveled to Moscowto train to become the youngest personto go to space.And when I was there, as you can imagine,I heard some pretty wild
23:37stories.And there was this one that reallystuck with me.About a Soviet astronaut who foundhimself stuck in spacewith no country to bring him down.It's 1991and that man, Sergei Krekalev
23:53is floating in orbit when he gets amessage that down on earthhis beloved country, the Soviet Unionis falling apart.And now he's leftdefending the Union's last outpost.This is theeasy story of the 313
24:09days he spent in space.313 days thatchanged the world.Listen to The Last Soviet on theiHeart Radio app, Apple Podcastor wherever you get your podcasts.What if I told you thatmuch of the forensic science you see
24:27on shows like CSIisn't based on actualscience?The problem with forensic sciencein the criminal legal system todayis that it's an awful lot of forensicand not an awful lot of science.And the wrongly convicted pay
24:43a horrific price.Two death sentences and a life without parole.My youngest, I was incarceratedtwo days after her first birthday.I'm Molly Herman.Join me as we putforensic science on trialto discover what happens
24:59when a match isn't a matchand when there's no sciencein CSI.How many people have to be wronglyconvicted before they realizethat this stuff's allbogus. It's all made up.Listen to CSI
25:15on trial on the iHeartRadio app, Apple Podcastor wherever you get your podcasts.We're back.Sophie agreed off screen that mypolitical career has a lot of promise.Everything's good.Nuke the Great Lakes
25:35the middle of climate change.It'll stop it.It'll make the world darker.You ever see Snowpiercer?Yes, I have seen that.Did you see?I only watched the firstone and a half seconds of Snowpiercer
25:51but that's basically my idea.Eating roaches?Putting children to work?I didn't see any of those parts of the moviebut I assumeall of those things were also positivebecause it sounds like it started with a great idea.Super positive.
26:07SoJames Warren,the former managing editor and Washingtonbureau chief of the Chicago Tribunesaid of Zell's time running the companythey wheeled around here doing what they wishedshowing a clear contempt for most everyonethat was here and used power just because they had it.
26:23They used the notion of reinventing the newspaperssimply as a cover for cost cutting.Now during his time running the companyZell also became a pioneer of clickbaitadvertising.Advertising?He helps make this happen.Advertising has been inserted into the Los Angeles Times
26:39in new and unsettling ways.In March an ad mimicking the front pagefor Disney's Alice in Wonderlandwas wrapped around the first sectionand in July a fake version of the newspaper sectionfor late breaking news called LAT Extrawas wrapped around the real onepromoting Universal Studios' King Kong attraction
26:55with a lead story that readUniversal Studios partially destroyed.In April of 2009an advertisement posing as a news articleabout NBC's new show Southland appeared on the front page.In July the Los Angeles CountyBoard of Supervisors, the governing bodyof the County of Los Angeles, sent a letter of protest
27:11saying the use of advertising disguised as newsmakes a mockery of the newspaper's mission.Some might argue that yesthat's exactly what it doesbut that's kind of the point.Now what's interesting thoughis that none of this makes the business profitableand actually making all of these
27:27newspapers much worsedoes notmake people more likely to use them.Zell also had loaded the Tribunewith so much debt by the dealthat bankruptcy was basicallyinevitable. It was almost impossiblefor the company to ever turn a profit
27:43because of how much debt he'd loaded it up with.I would assume with the clickbaitthat he's getting money from the advertisersand that's how he was going to make moneybut not even that?No, because people stopped visiting the websitebecause it's shit.Investors hurt
27:59by the deal later accused himof basically loading the company up with debtand then sinking it on purposeand I'm going to quote now from the Chicago Tribune.Tribune Companythe precursor company, the predecessor companyto Tribune Media, filed for bankruptcyin December 2008. One year after
28:15Chicago billionaire Zell took the companyprivate and heavily leverageda $2.2 billion deal.At the time, Zell blamed a perfect stormof industry and economic forces, the Great Recessionbut the bankruptcy case turned on chargesleveled by junior creditors that the debt burdenwas unsustainable.
28:31Now one of the things again I found interesting here2008's prior to the social mediaage taking off reallyit's when we have our last big economic crashlocal newspapersare the primary way people get newsand Zell absolutelycrashes them in this multi
28:47he gets to banks to back himin this multi-billion dollar dealthat he could never make a profit onand then he sabotages the companies that he'sbought and destroys themand fucks over a bunch of people and thenblames it on the recession. Elon Muskis currently carrying out a tens of billions
29:03of dollar deal on what is a lot of people'ssource of local newsright as we're about to have a recessionand has been talking about how he plans to fire75% of Twitter staffersit's cool it's neat that these billionairesneed to just keep fucking with people'sability to get news because of their
29:19own egos when they want to.They'll be fine they're going to have a fun yearof stories and then a lot of people's liveswill be worse and they will notsuffer any consequenceswhich is goodyeah it's greatso obviously legally nobody ever
29:35accepts responsibility for anythinghowever there's a bunch of litigationlike ten years of it over thisZell starts to call it the deal from hellof the people suing him over thisand eventually the litigation trustgets around 200 million dollarsto redistribute to creditors
29:51as long as no liability or wrongdoingis assumed by Zell and other defendantsso there you gonow I want to read to youthat above I read to youan above excerpt from the Chicago Tribunewhich is a summary of the deal ten years onI think it's interesting how this New York Times article
30:07which actually focuses on the working peoplehurt by the deal describes it more viscerallybecause that one is just kind of likethey lost this amount of moneyand now there's a big bankruptcythe New York Times quote is going to be a lotgrittierless than a year after Mr. Zell
30:23bought the company it tipped into bankruptcylisting 7.6 billion dollarsin assets against a debt of 13 billionmaking it the largest bankruptcyin the history of the American media industrymore than 4,200 people have lostjob since the purchase while resources for theTribune newspapers and television stations have been
30:39slashedthe new management did transform the work culture howeverbased on interviews with more than 20 employeesand former employees of TribuneMr. Michaels and his executives use of sexual innuendopoisonous workplace banterand profane invective shocked and offended peoplethroughout the company
30:55Tribune Tower, the architectural symbol of the state companycame to resemble a frat housecomplete with poker parties, jukeboxes and pervasive sex talkso theycrashed this companylost 4,200 people their jobsthe largest collapse in the historyof American media
31:11but they got to be playboys for a little whileyeahthey just pay 7 billion dollarsto have a frat housefor adultsa frat house where they also got to fuck with serious peoplewho were trying to report on important local news issuesright
31:27so number onethis helps destroy local news nationwidelike now it is effectively dead as ameaningful forcethis is not the only reason for thatbut it is a big part of itso that's pretty coolbut obviously for Zell, fucking with the Tribune
31:43was only ever a side projecthis chief love remained real estateand while all this is going onhe had very savally sold his profileor his portfolio of propertiesoff to the Blackstone Groupfor 39 billion dollarsthe largest leveraged buyout in history at the time
31:59so he makes a fuckload of money after thisand he sells offa bunch of these rental properties of his to Blackstoneright before the subprime mortgage crisis hitcrashing the real estate marketand earning another feather in the capof the grave dancerwhen the market was at its lowest point
32:15he used some of the pile of cash that he'd earnedto buy up more propertieshe currently owns some 78,280 apartmentsin San FranciscoSouthern California, New Yorkall of these places were rent has surged over the last decadehe is a big part of thatgiven what happened with the Tribune
32:31you won't be surprised to learn that Sam Zellhas decided to pour millions of dollarsinto spreading propaganda to stop the spreadof rent controlled housing in any formso againhe destroys all these local news companiesand then he starts putting money in order to likeback into it
32:47well he starts putting money intobasically like pushing propagandathat will lead votersnot to select different ballot measures and stuffthat will allow for rentlike put caps on what rent increases and shitlike destroys the local mediathen
33:03bribes his way into trying to likepush against any kind of housing justiceor anything that will reduce the costto rentersso was this a big likeconspiracy for him to actually tankas they saidnews media so that he can go on and say
33:19if they actually do good researchand come out with good journalismand say hey the housing market and all thisis not just because of these thingsthey're lyingthey're not trustworthyI'm not going to saywhether or not there was intention there
33:35because I can't there's no evidence of itcertainlybut I don't know that's what happenslike that's the end result of itrightlike all this shit getsfucked upso it's good
33:51now before we get furtherinto this what Zell and other billionairesare doing to try to stop the passage of likelaws that could actuallymake housing affordable we should probablytalk a little bit about rent controlthis is a subject that is controversial todaylargely because of landlords like Zell
34:07who claim it cuts into their profitso much they can't afford to do stuff likehandle basic repairs and maintenancebut rent control has a long historyof helping people avoid disasterduring and after World War 2federal rent control in Los Angelesfroze rents and narrowed the scope of evictions
34:23so that housing construction could catch upto the population and make the city moreaffordable right it's this thing where you've gotlike yeah the population is growing by X amounthousing isn't keeping up so youinstitute rent controland you reduce likeand you like make it harder to evict people
34:39so that folks can hang onuntil there's more housing this is the piecethat's always missing from those articles that's likewe need to increase the housing supplywell that's not all we need to do there's otherthings that have been proven to stoppeople from winding up on the fucking streetand you're ignoring those in favor of
34:55just saying deregulate shitAlyssa Katz a researcher at UCLAexamined rent control and housingaffordability in LA going back to the 1940sshe found that rent control successfullystopped people from becoming unhoused in the40s and then again in the late 70swhen inflation rose again and rent spiked
35:11that time a rentstabilization ordinance quoteended dramatic rent increases for incumbent tenantsby limiting the rate by whichrents could be increasedwhen looking at California's modern homelessness epidemicshe put the blame directly on rent pricesand urged a repeal of statewide
35:27rent control restrictions and the expansionof rent regulationshe isn't the only academic making these claimsNicole Montoyo and Stephen Bartonreleased a study through UC Berkeleylooking into which of the different proposed solutionsto the housing crisis were likely to bear fruitthey found quote
35:43while other proposed remedies to the housing crisismay take years before they impact housing costsonly expanding rent controlcan offer immediate relief to tens of millionsof people in danger of being forcedfrom their homesanother write up on rent control measuresfrom LA Progressive goes on to add
35:59they noted that rent control can stabilizerents for existing tenants improve affordabilityfor tenants in the future and preserve the existingaffordability of housing that may otherwise becomeunaffordable and the researchersfound that claims that rent control has negativeeffects on development of new housingare generally not supported by research
36:15rent control can provide a timely solutionto a housing affordability crisisthat the market will notin a statement Barton further pointed out thatquote when the housing market is as dysfunctionalas it is in many parts of Californiatenants are effectively subsidizing landlordswith rent payments above would have fully
36:31competitive market would allow landlordsto chargeand what we're actually seeing herewith stuff like these fuckingprogram algorithms that allowlandlords to jack up prices with guys likecell putting millions of dollarsinto propaganda to kill rent control
36:47ballot measures in the state and he's been very activein that in California in particularis that the money that is beingextorted out of people to keepa roof over their head is being usedto fundlike to basically fund propagandacampaigns to stop any kind
37:03of rent control rightright it's it's pretty coolit's pretty coolI like that you use the terma lot in this episodeI find it fascinating withexactly what they're doing is just payinginto a way to keep
37:19money in their pockets but they're notkeeping money in their pockets as wellas the fact that there's so many other conversationslike you're keeping peopleina house and you're still getting moneyyeah I don't understandand you're using the thing that's most fucked up
37:35to me and really thought about it this way is thatand I like thatprogressive frames it this way is thattenants are subsidizingthe campaigns of these landlordsto stop housing reformright like their moneyis paying to keep rent
37:51high their money is payingto deregulate the system in order tolike make it possibleto continue to jack up the rentbut that's the wholescheme of renting it seemsit is the entire scheme of rentingyou never get anything for it you're just giving it
38:07to the landlords who have now by this timepaid off theirproperty they have taxes surebut they're still notanywhere near what you're gettingin rent from your rentersso what the hell and then you canas a renter especially in this market you can't
38:23save enough as you said in episode onesave enough to get your own houseyou don't technically own anyway for 30 yearswhat you're doing here and what guyslike Zell are doing isyou're recreating feudalismyou're making peonslike it's cool
38:39you're keeping the caste systemI want to continue this quote from L.A. Progressivebecause I think it's goodthe tenant subsidy is paid for extravagantlifestyles for many of California'slargest corporate landlords who spendtens of millions of dollars to kill rent controlballot measures in the state
38:55billionaire Sam Zell for example ownsPosh Homes in Chicago, Sun Valley, New Yorkand Malibu, collects motorcyclesand flies around the world in a private jetlandlord Steven Schwarzman owns mansionsin St. Tropez, Jamaica,East Hampton and Palm Beach and throws lavishparties for celebrities and high society
39:11friends at the same time a sky highrents force more people onto the streetsnearly 1500 homeless people have diedin Los Angeles in the Los Angeles areabetween 2020 and 2021so that's half a 9-11in a yearthat's good now
39:27when you start talking about yeahI was gonna say you're being too empatheticstop itthat's what our old buddy Roper would sayI mean come onwhen you're talking about rent controlanytime you talk about rent control you're gonna wind up talkingabout New York City rent control started
39:43there too as an emergency measure duringWorld War II at present around45,000 tenants in the citywho began their leases before1971 have rent control departmentssome of these people are like childrenor even grandchildren of the people who startedthe lease because you can pass it on that way
39:59their landlords are forbidden from increasingrent beyond a very mild ratewhich means that many of these folks payrents that are thousands of dollars a monthunderneath the present market raterent control in New York has allowed for somepeculiar situations where people willhave apartments the size of small palaces
40:15for what amounts to peanuts by modern standardsit's also led to several murdersin 1998 Mark Glassa landlord based out of downtown Manhattangrew frustrated that his tenant BridgetMarks wouldn't leave her rent control departmentin the former tenement that he bought and renovatedhe hired a hitman to kill her
40:31but that turned out to be a scamso he tried to kill her with a heroin overdosethat failed tooeventually she realized he was trying to murder herand got the police involved and they carried outa sting operation and he wound upin prison for like 7 to 14 yearsin 2002 a New York landlord named
40:47Lewis Huberk grew enragedafter trying to bribe and cajolehis tenants to leave this worked on everyonebut Miss Barbara Kinna a 67year old school librarianso Huberk shot her six times with a38 caliber revolver he wasconvicted of murder and sent to prison for the rest
41:03of his life two years lateryeah well you got thatright now you can now you'renow your kids can fucking renovatethe apartment get an extra couple of grandout of that placeyou know so two years later in2004 Juan Basia Goida
41:19pled guilty for hiring two of histenants to murder two other tenants who livedin a rent controlled three bedroom apartmentin his building they lived there since they were kidsand had legally assumed his father'slease this enraged Basia Goidaso he hired two other tenants tobreak into the apartment and stab
41:35both brothers who narrowly survivednowwouldn't you have to give him free rentthe tenants he hired to murderI think he was probably giving him a breakon their rent or somethinglike you get like six months off ofrent if you stab these guys to death
41:51I got youI'm gonna throw in water for freeif you'll murder these peopleat the end of the day it does not work outso obviouslythese arespectacular but like not the only casesyou could find a surprising number of cases
42:07of landlords murdering or trying to murdertenants over rent controlled apartmentsI mean that's my solutionmurder yeah murderwell that's actually the onlylike that's the only real solutionthat any landlords use in stuff like thisbecause the landlords who go about things
42:23the proper way by like evicting stuff legallyare also killing a shitload of peopleand we can look at that in terms of likehow being houseless you knowraises the rate at which you're likelyto die early how being evicted makesit harder to get housingthere's a number of different things that we
42:39could talk about but because we're in themiddle of like what year three of the pandemicright now I want to talk about that so I'mgoing to quote from a write-up by Juddand Testim ZakiriaA new study by public health researchers at John Hopkins UCLA and other institutions looked at the impact of the exploration of state-based moratoriums during the summer of 2020.The infections and fatalities occurred across27 states that lifted eviction moratoriums
43:21during the study period.In Texas alone the study found that there were4,456 excess deathsafter the state lifted its eviction moratoriumon May 18th.The researchers accounted for stay-at-home ordersmask orders, school closers, testing rates, time trendsand other state characteristics
43:37to better isolate the impact of eviction moratoriums.Now that's4,456 deathsin Texas alone as a result of the liftingof the eviction moratoriumnationwide pandemic evictionsalone have led to at least 10,000 deathsin the last couple of years
43:53so yeahno matter what you're talking abouteven if you're not shooting them with a 38you're still killing people in the eviction game.And the amount ofthose people are marginalizedwomen oftentimes and they are parentsand single mothers.
44:09We had a whole episode about housingand how it's affectingsingle momsmore than marginalizedblack women essentially or anyone elseand how this has been impacting them.Let's not talk about the fact that the credit scoreis a racist system in itself
44:25but all of these things have beenimpactable and racist as helland who they are trying to kill.And when you talk about credit scores toobecause credit scores there's a lot of racismin whothat system has a lot of problems with itbut also
44:41an increasing number of apartments are ownedby these gigantic corporationsthat are backed by like financeindustry money by companies like Blackstonethat means that more oftenand often when I was younger even ifwhen you went with like a corporatethey didn't care what your credit score was
44:57that's what you need for a mortgagebut that didn't matter for renting a fucking apartmentnow it does. You didn't even got a damn phoneneeds a credit score.Yeah it'sagain all of these arewe're not trying I hope nobody thinksI'm trying to give like this is it all of the reasons
45:13that rent has gotten highbut these are some big ones these are major factorsin it and these guys are major factors in itand that's gonna leave me to talk about StephenSchwarzman.Now I mentioned him earlier right when we talkedabout he's one of the billionaires in Los Angelesthrowing money into stopping
45:29rent control ballot measuresSchwarzman is not asinteresting as Zell. Zell is at leasta pretty entertaining piece of shitSchwarzman iskind of a boringsoulless corporate ghoulbut he's probably more influential in why
45:45your rent is raised. So Schwarzman'sdad was a dry good store owner like Zelllike his family's kind ofupper middle-class business ownershe grew up in Philadelphiabut was inspired to become an entrepreneurwhen he traveled to Israel for the first time as a 14-year-oldin a recent interview
46:01he said this quoteIsrael has an incredible entrepreneurial communityof course it had to because when it startedthere was almost nothing there. Everything hadto be invented by somebody.Nowyou might besaying to that wasn't there like
46:17a whole societyof Palestinian people therewith like universities and businessesand like homesand wasn't there like a lot of stuff there actually?Wasn't there in factcommunities where thousands and thousandsof Jewish refugees fled to
46:33during World War II and were able to survivebecause there was stuff there?Stuff includinglike wealthy Palestinian familieswho helped fund the construction of the first JewishUniversity in Palestine. Anywaywasn't all of that there?Anyway whatever. Fuck like this is pretty normal
46:49likeshitty guy stufflike this is not anabnormal attitude right but you get wherethis guy's coming from. So like ZellSchwarzman is also a child entrepreneuragain the worst warning sign.He started a lawn mowing business
47:05where he very quickly stopped mowing anyactual lawns. Instead he got hisbrothers to do the work while he brought inclients. One of those, yes.Yeah one of those. Againlook if you see a kid doing thiskind of stuff I don't knowyou just gotta poison him
47:21a little bit. A little bit of poison.A little bit. A little bit of child poison.Their water as well? Well it wouldn'tbe the worst thing.So anywayI don't know we canI'm still gonna I still have to tweak mypoison
47:37ambitious childrenplan but I think there's a lot of futurein it. I think it'll. Look Sophieyou were just complaining about howhigh your rent is you know what if we couldhave stopped that with a little bit of poisonnot a lot of poison. I think you could writeanother book on this. Yeah
47:53you can do another book on this. Yeah.Yeah the poisoningchildren driven lifewith me smilingin a suit. Yeah exactlyyeah it's gonna be good Sophie.This is gonna be what takes us into themainstream. It's gonna get you money so
48:09it's fine. Can you just do an ad break?You know who what elseI need a pause from thisbit. When it comes to poisoningchildren nobody does itlike our sponsors at whoever oursponsors are.During the summer of 2020 some Americans
48:29suspected that the FBI had secretlyinfiltrated the racial justicedemonstrations. And you know whatthey were right.I'm Trevor Aronson and I'm hostinga new podcast seriesalphabet boys. As the FBIsometimes
48:45you gotta grab the little guyto go after the big guy. Eachseason will take you insidean undercover investigation.In the first season of alphabet boyswe're revealing how the FBIspied on protesters in Denver.At the center of this
49:01story is a raspy voicedcigar smoking manwho drives a silver hearse.And inside his hearse was like a lot of guns.He's a shark and not in the good bad ass way.He's a nasty shark.He was just waiting for me to set thedate the time and then
49:17for sure he was trying to get it to heaven.Listen to alphabet boyson the iHeartRadio App, Apple Podcastor wherever you get your podcasts.I'm Lance Bassand you may know me from a littleband called NSYNC.What you may not know is that when I was
49:3323 I traveled to Moscowto train to become the youngest personto go to space.And when I was there, as you can imagineI heard some prettywild stories.But there was this one that reallystuck with me.
49:49About a Soviet astronaut who foundhimself stuck in spacewith no country to bring him down.It's 1991and that man Sergei Krekalevis floating in orbit when he getsa message that down on earthhis beloved country, the Soviet
50:05Union, is falling apart.And now he's leftdefending the Union's last outpost.This is thecrazy story of the 313 dayshe spent in space.313 days thatchanged the world.
50:21Listen to the last Soviet on theiHeartRadio App, Apple Podcastor wherever you get your podcasts.What if I told youthat much of the forensic scienceyou see on shows like CSIisn't based on actualscience?
50:39The problem with forensic sciencein the criminal legal systemtoday is that it's an awful lot of forensicand not an awful lot of science.And the wrongly convictedpay a horrific price.Two death sentences and a life without parole.My youngest, I was incarcerated
50:55two days after her first birthday.I'm Molly Herman.Join me as weput forensic science on trialto discover what happenswhen a match isn't a matchand when there's no sciencein CSI.
51:11How many people have to be wronglyconvicted before they realizethat this stuff's all bogus?It's all made up.Listen to CSIon trial on the iHeartRadio App, Apple Podcastor wherever you get your podcasts.
51:31We're back and we'rebetter than ever.Yeah, I think we're doing good.Sophie?I'm proud of this.We made a lot of plans.I'm glad that you at least can be positive towards mewhile Sophie's being so mean.
51:47Yeah.We're talking about Stephen Schwarzmanwho has started a lawn-blowing businesswhere he mows no actual lawnsbecause he is that kind of kid.Again, poison.His hunger to make a shitload of moneydid not run in the family.
52:03His dad is apparently a very different guyand the magazine makes clear.In an interview with The Washington Post in 2019,Schwarzman explained how his childhoodtaught him that not everybody was going to be the same.When pushed by a young Schwarzmanas to why he didn't want to expand his successful businessor open more stores across Philadelphia,
52:19Schwarzman's father answered simplybecause I'm happy the way I am.I thought that was sort of hard to take in,Schwarzman told the newspaper.His contentment is what made him a remarkable human being.Maybe you should havelearned something from your dad.He doesn't need all that.
52:35The endless source to extract more wealthand resources out of an areais actually what's going to kill us alland not a healthy attitude.But anyway...I mean, this is where you knowit's not always a nurture.No, no. His dad seems to be like,
52:51look, I have a thriving small business.We live a comfortable life. That's all I need.Everybody's happy. You're healthy. Let's move on.No, his kid is going to become a gurufor the highest order.So Schwarzman goes to Yale,which is probably where a lot of the ghoul stuff comes in.He joins Skolin Bones.
53:07So he's one of those fucking kids.And then he goes on to do financeat a big, fancy firm after getting his MBA.His first major employer wasLehman Brothers, which he described asquote, full of interesting characters,ex-CIA agents, ex-military,strays from the oil industry,
53:23family friends and randoms.He rose... He's a villain.Yeah, very quickly. He becomes a managing...Unbelievable red flags.I know.Unbelievable in the making.If there's a company like that, I don't know.Again, poison them.
53:39Once again. Once again.If you're on a dating app, you see somebodyhave their job listed at that company.No.Yeah.Sophie's giving all the realistic advicewhile Robert's over here with his dreams.Just poison them.
53:55Look, if we had just poisoned the waterof this company party in the late 1980s,a lot of problems wouldn't have happened.That's all I'm going to say.No comment, but yeah.I know.Look, if the CIA'sMK Ultra program had been about
54:11poisoning Lehman Brothersand other similar corporationswith doses of random hallucinogens that destroyedpeople's minds, nobody would think of themas bad guys. It would be like,oh yeah, those guys who got rid of the finance industry.Yeah, I like those guys. Those guys are chill.I'm just letting you know
54:27people would still consider the CIA the bad guys.Well, I don't know.Right.Less of the bad guys.Look, if the CIA takes outlike McKinsey, you know.You win some, you lose some.We're all happy.
54:43Yeah, whatever.Anyway, so he leaves.He becomes managing director of acquisitionsat Lehman Brothers at age 31,but then he leaves the companywith a firm which he calls Blackstone.Quote.Oh, he is old.
54:59Yeah, he's the guy who founds Blackstone.I mean, co-founds, but yeah.Samantha is hyped.This is, these are some bad dudes.They started lifeas a boutique M&A advisory firmwithin a couple of years Blackstonehad launched its first private equity fund
55:15and later by 1990 had branched out into hedge fundsusing partners' own money.The time of Blackstone's initial public offeringin 2007, the business had morethan $88 billion worth of assetsunder management.The IPO saw shares finish at over $35 each,valuing the firm at around $39 billion
55:31and enriching the personal fortunesof both Schwarzman and Peterson.Peterson's the guy he starts the company with.So,today Blackstone claims to have $880 billionof assets under management,including $260 billionin private equity and $280 billion
55:47in real estate.Schwarzman is still the company's chairmanand CEO, and has indicatedhe has no intention to retire.He has two children, the film producer, Teddy Schwarzmanand writer and podcaster, Zibi Owens.I'm just happythat his daughter's a podcaster.
56:03You know what, let's all learn something together.What is Zibi Owens's podcast?I don't know, but did you just put us on a target list?Maybe.Sophie, what did you do?Sophie.I don't know.I don't know much about this,
56:19but her podcast is calledMoms Don't Have Time to Read Books.Am I...That doesn't sound great.But I'm on her website.Is she Q9?It's a top literary podcast.She's an author.
56:35She interviewed Jill Biden.What does she write?She interviews...It seems like she interviews...She's a book fluencer,which is a term...If you're a writer and you ever write the wordbook fluencer, you should not be a writer.
56:51Um...I'm going to say that right now.Is all her books like how to write your childor kindly or whatever?No, I think she's like reviewing booksas like a mombook reviewer.You should send her your book, Robin.
57:07No.No, I don't thinkshe's going to be a big fan of my book.Um...I don't know.Let's see what S.A.'s Zivvy writes.There's a picture of her in her chair.Oh, no.
57:23Let's see.This rabbit hole is...Yeah, these are mostly just lists of books people can read.So it seems a lot of it's likeSEO listed bullshit.She's trying to make her own likeOprah magazines.Of course, she's a book fluencer.
57:39Yeah, she's very much like Oprah.Her, she's likeinterviewing Ralph Macchio.That's the Karate Kid guy, right?There's nothing wrong with that. He just wrote a book.Yeah, he just wrote a book.She's just like a book influencer.Oh, she's hiring.
57:57Zivvy Media is expanding.They're hiring superstars.She's a big fan of J.K. Rowling.She must be because she'sNYC's most powerful book fluenceraccording to Fulcher.She's a book fluencer, Sophie.I don't think that's real.
58:13It's also just like, if you're saying someoneis an influencer, you can bean influencer in the literatureindustry. You don't have to call someone a bookfluencer, which is a stupid, that's not onZivvy, but she brags about itin every page of her website. So it is a littlebit on her.
58:29Wow, yeah.Zivvy Media is hiring a fuckload of peopleit looks like. So get on the Zip train.Oh, man.Oh, she does classes. She does classes.I don't know why we're attacking her so much.Her dad's the bad guy.Aw.
58:45Never mind.I actually, there's nothing.We're laughing about this. I can't find anythingthat's offensive about her or anything like that.We know nothing.She could be a lovely individual.She seems fine. I'm sorry.She could be a lovely individual.
59:01You know, you can't, you know.Look, if somebody...You can't choose your family.If you claim to love literatureand somebody calls you a book fluencer,you do have a moral responsibilityto the art of writingto say no. You're like, you're not wrong.
59:17That's not a term we're going to use.Book fluencer is not a word.Let's get Robert as ablue book fluencer.Nothing is a fluencer.I'm reallyhaving a hard time even saying the words.I'm so angry about that.
59:33That's all, honestly.Zibi has done nothing wrong but used that word.That one wordwhich I've never heard of.I've heard TikTokbook talk or something like that.Which is fine.Book talk is fine because
59:49that makes sense.Book fluencer is fucking nonsense.I've never been angry.I've never been angry in my entire lifethan I am right now.This is so much worse than war crimes.Back to her fatherwho is a lot worse.
01:00:05I bet he doesn't use the word book fluencer.Most of youprobably know what happened to Lehman Brotherswhich was forced into bankruptcyafter helping to cause the 2008 financial crash.Lehman had been a major driverof the fraudulent mortgage-backed security businessbacked by subprime loans and their collapse
01:00:21nearly took the global economy with them.Shoresman had been out of the companyfor quite a while by this pointand he and Blackstone did very wellin this recession.They lose a little bit of money up frontbut they're heavily invested in companieslike Starwood Waypoint and Invitational Homes
01:00:37which merged in 2017and start buying up all of thesefucking properties that aresuddenly fucking bargain-ben.A website for tenants of Invitational Homeswww.invitationaltenants.comnotes,they benefited from the deception and fraud
01:00:53that saddled so many families of colorwith subprime and booby-trapped mortgagesthat ultimately affected African-Americanand Latino families.Lower post-crisis home prices could have beenan opportunity to increase affordable home ownershipbut too often instead, Wall Street buyersswept in while neighborhood families
01:01:09were left out of the game altogether,unable to compete with cash buyersor denied access to credit.For these Wall Street speculators,with Blackstone being the biggest one,the recession of 2008 was not economicallyand emotionally devastating as it wasfor all the families that lost their homes.
01:01:25The company firms to begin buying up foreclosed homesin the wake of the financial crisis,fixing them up and renting them out.The firm, which began buying homes in earnestin 2011, is estimated to have spent$10 billion in its foreclosed hometo a rental bet.So, that's cool.
01:01:41In the years since the financial crisis,Blackstone Group has more than doubledthe assets under managementfrom $90 billion to $218 billionof real estate assets in its first five yearsafter the financial crisis alone.As a result, Blackstone todayis among the largest corporate landlords
01:01:57in the United States, and it reportedits highest earnings ever this yearon the strength of rising rentsin its real estate portfolio.Here's Quartz.On the January 27th call with investors,Blackstone's executives explainedrents for real estate sectors in their portfolio
01:02:13had risen as much as two or three times fasterthan the overall inflation rate.Relatively short leases on their propertieshave allowed them to raise prices quickly,which has dropped 7%.Awesome stuff.Really, really good.Again, I don't know much
01:02:29about real estate, nor do I know muchabout the corporations, especially likeBlackstone. It's been a recent thingthat I'm understanding all of thesegiant buyouts, and I do knowthey profited off the2008 crash.They did great off of the 2008 crash.
01:02:45For closing on families and leaving themhomeless, and we know all of thatis pointless, and without houses.But was Blackstone involvedwith all the military buyouts?They wore profiteers as well, or is thatjust in the back of my imagination?I think you may be thinking of Blackwater.
01:03:01Let me double check.They manage a lot of investment,so I wouldn't be surprised if there's somedegree to which they're involved in one sec.I feel likemaybe again, I might beconfusing thatthey had private organizations
01:03:17developingthings for them.They invest inprivate equity firms, so they haveinvestments in aerospace and defense companies.You could call them, they're definitelyprofiting off of the defense industry,but that's not kind of their primary
01:03:35thing, it's just sort of a side effectof the thing they do, which is that theyinvest in businesses that have reliablerates of return, and that includesthe defense industry.Yeah, so I want to closeby noting from a write-upin The Atlantic in 2020,
01:03:51which kind of makes the point that the natureof Blackstone's business, both its scaleand its single-minded pursuit of profits,means that tenants nearly always come last.Quote, some evidence suggeststhat private equity firms in contrastare willing to engage in predatory practicesto realize short-term returns.
01:04:07Blackstone's target properties in Southern Californiasuggest an investment strategy similarto flipping single-family homes.Biled properties invest in cosmeticupgrades such as new appliances and facadeimprovements, and then increase therents. Furthermore, some anecdotalevidence also indicates that private equity
01:04:23firms are less conscientious landlordsin the single-family rental market.Researchers and journalists have documented concernsabout poor quality housing, difficulties raisedby tenants trying to communicate with landlordswhen problems arise, and higher ratesof evictions. And we can thank Mr.Schwarzman for an awful lot of that.
01:04:39Yeah, so that's it.That's some people who have madethe rent high.Stephen Schwarzman,that Zell motherfucker,Roper, all these assholes,fuck them all.So let me ask you, as we are looking
01:04:55at possibly repeating historyin the next couple of years,where do you see, do you thinkwe're coming upon a crash as well?I mean, everyone seems to saywe're heading for a recession.That would make sense.Except for the fact
01:05:11that they're seeminglytrying to hedge it offby, again,charging the individualsand homeowners and renters instead ofactually trying to get the corporationsto pay out what their billions of dollarsand or stop
01:05:27stopping the inflation by no means.It sounds like what's happening is they're trying to,the Fed is trying to cut inflation by raisinginterest ratesand a bunch of companiesare using inflationas a hedge for rising pricesand making
01:05:43record profits right nowin part because I think they're getting readyfor what you might call an ugly winterin which they're going to take those profitsand continue doling them out to their shareholdersand executives while they cutstaff and fire a lot of peoplein the unemployment rate rises.
01:05:59I think more or less what'sprobably going to happen, I don't know.We'll see how it is.2020 was pretty ugly too.That was a gnarly recession, but it didn't lastvery long. I don't know.I'm not an economy guyand I kind of think...
01:06:15You're an expert of all things, Robert.I kind of think most of the peoplewho are economy guys are justengaged in some kind of con or another,but yeah, it's probably going to be pretty uglyin the near future and these are the peoplewho are going to make sure that a lot more folkswind up on the street
01:06:31when it does.Solution. Poison.Poison is a good solution.Keep an eye on kidswho express an entrepreneurialdesire. Don't trust that.And I don't know, if you...Don't call yourself a book fluencer.
01:06:51That is not going to bebehind as well as now.I'm livid.Oh, okay. So hisson, Teddy,not the other kid that he hadis the producer who made theimitation game.
01:07:07Invitation or imitation?Imitation.You win some, you lose some.I guess. I haven't seen that movie,but oh no, I have seen that movie.That's the movie about Turing that came out.That was actually pretty good. Yeah.You win some, you lose some.
01:07:23You win some, you lose some.Is he a film fluencer?He's a film fluencer.He's apparently who produced at leastone good movie while his dad wasbuying up all of the housing thatwas briefly affordable after the financial crash.Like I said, you win some, you lose some.
01:07:39And speaking of winning some, Samantha,do you have any pluggables? Yeah.Yes. Come and visit me over stuff Momnever told you. Nowhere near the samemomdoesn't read things. I don't know.I'm not a book fluencer. I'm so sorry to say.Yeah. And I can't read.
01:07:55Oh, well, that's a new one.And my Twitteris McVaySamanthaand then it's where I'm at McVay.Samantha.So if you want to see picturesof my dog and me complaining aboutthings, come visit me.Yep.
01:08:11FindSamantha on the internet.Find the kidin your neighborhood who starts a lawn mowingbusiness where he doesn't mow any lawnsandI don't know, just like smoke around him.Smoke?
01:08:27Smoke real close to that kid.Just hang out next to that kidand smoke a shitload of cigarettes.My God.It'll be good. Shitload of cigarettes.Anyways.Oh, we have a new podcast on CoolZone Media.It's called Internet Hate Machine
01:08:43and it's hosted by the one and onlyBridget Todd. Check it outon, you know,the iHeartRadio app, Apple Podcastswhere you get your podcasts.I have to say that a lot.Yeah.Fucking do that.
01:08:59I also have a book called After the Revolution.You do. You can buy it.Which, by the way, my partner loved.He just pumped it.Because he wanted to tell you how much he liked the book.Oh, thank you. Well, maybe he can helpmaybe you can helpbookfluencerZippy.
01:09:15Yeah, so this is Joe.I hope he gets to see part of this podcast.I did not hear you because I have an earpiece in.Oh, you don't have a.Just tell him I'll smoke some meatsand thank you for that offer of illegal drugs.Oh, my God.No, no, no, no. Bring him.
01:09:31Samantha, bring him back on.I want to get a neutral opinionabout this.Okay.Let me give him an earpiece. Okay.Yeah, we'll make it work.This is Joe. This is Robert.I'm going to say a word that a person
01:09:47described their job.And I just want you to give me the emotionthat hearing this word for the first timeinspires in you. Okay.Nervous. No.Tell me.Bookfluencer.Oh, no.
01:10:03I'm going to color that intimately.I hope you know that.It's a horrible word, right?It's a terrible word.Do you get that often?No, no, no.Absolutely not. How dare you?No, it's from a lady
01:10:19with a book podcastwhose dad destroyed the rental market.Forbidden to come up to this podcast again.No, you're coming back every week. You made me happy.I'm happythat you added Bookfluencer to my vernacular.Also, it is now going to beunder your titles. Thank you, Robert.
01:10:35Bookfluencer.Bookfluencer.All right, everybody. Why don't we all gofluent some motherfucking books?You will come to Atlanta.All right. Goodbye.Behind the Bastardsis a production of CoolZone Media.
01:10:51For more from CoolZone Media,visit our website, coolzonemedia.comor check us outon the iHeart Radio App, Apple Podcasts,or wherever you get your podcasts.Alphabet Boys is a new podcast seriesthat goes inside undercover investigations.In the first season,
01:11:07we're diving into an FBI investigationof the 2020 protests.It involves a cigar-smoking mysteryman who drives a silver hearse.And inside his hearse look like a lot of guns.But are federal agents catching bad guysor creating them?He was just waiting for me to set the date, the time,
01:11:23and then for sure he was trying to get it to happen.Listen to Alphabet Boys on the iHeart Radio App,Apple Podcasts,or wherever you get your podcasts.What if I told you that much of the forensicscience you see on shows like CSIisn't based on actual science?And the wrongly convicted
01:11:41pay a horrific price?Two death sentences and a life without parole.My youngest?I was incarcerated two days after her first birthday.Listen to CSI on trialon the iHeart Radio App,Apple Podcasts,or wherever you get your podcasts.
01:12:25Listen to the last Sovieton the iHeart Radio App,Apple Podcasts,or wherever you get your podcasts.
There aren't comments yet for this episode. Click any sentence in the transcript to leave one.