Grubstakers - Episode 37: Julio Ponce Lerou (Pinochet's son in law) feat. Jake Flores

Episode Date: October 15, 2018

On this episode we cover the misadventures of the one the only Julio Ponce Lerou. We discuss how his father in law essentially paved the way to his billions, his time spent using his connections to continue his corrupt business practices and all of this while we are joined by hilarious NYC comedian Jake Flores. Follow him on twitter @feralJokes and listen to his podcast Pod Damn America. Enjoy!

This week on Grubstakers, we're talking about Julio Ponce LaRue, the former son-in-law of military dictator of Chile, Augusto Pinochet, and now billionaire. Hear all about how he leveraged his connections with his father-in-law to liberate the markets of Chile and put a formerly nationalized mining company under his own control, and how he would later go on to defraud investors in that mining company with the help of the folks at Citigroup. All that and more coming up on Grubstickers. I think we disproportionately stop whites too much. I taught those kids lessons on product development and marketing, and they taught me what it was like growing up feeling targeted for your race i am proud to be gay i am proud to be a republican you know i went to a tough

school in queens and they used to beat up the little jewish boys you know i love having the support of real billionaires. 5, 4, 3, 2... Hey, welcome to Grubstakers, the podcast about billionaires. We're back another week. Sean P. McCarthy here, joined by... Yogi Paiwal. Andy Palmer. Steve Jeffries.

And this week we've got a very special guest. Jake Flores is here from Poddam America. Hello. Hey. Thanks for being here, Jake. I want to say, just from last episode, about the timeshares. You guys said I would come

in, swing in, and I just want to say some of you listeners are probably hesitant, and that's understandable, because not everyone can see a good deal when it's put right in front of them. But, you know what? If you're not interested, you're free to leave anytime

that's our heavy duty uh salesperson andy palmer convincing you to buy a timeshare right there what if i told you a chilean timeshare just outside of santiago no don't worry about Allende nationalizing it. We've got a plan for that. But yes, so this week we are talking about Chile. We're talking about Pinochet. But more specifically, we're talking about a guy named Julio Ponce Leroux. And Julio Ponce Leroux is a billionaire because he is or was Augusto Pinochet's son-in-law.

Augusto Pinochet being the former dictator of Chile. And, you know, so the way he became a billionaire is being the son-in-law of a military dictator who privatized large sections of the Chilean economy and put his son-in-law in charge of one of those sections, the Sociedad de Químicos y Mineras de Chile. Flawless. Sean's been hours practicing that before the podcast. Just in the mirror. It's commonly called SQM, which is what I'll be referring to it as.

But SQM is the second largest lithium exporter in the world. It's number two after a Chinese company, which we'll talk about a little bit more. But they have the lease to one of the largest lithium mines in the world in Chile from the government until about 2030. And Julio Ponce Leroux owns about 30% of this company. And this is what makes him a billionaire. All right, wait a minute. We should just talk. I guess like before we kind of get into his life and the history,

we should just kind of talk about essentially why Augusto Pinochet matters. Because we just saw this weekend Gavin McInnes is here in New York having some rally at, I guess, the Republican Club in Manhattan to celebrate. That place sounds great. Remember when he used to do the do's and don'ts in Vice when it was just a magazine about fashion? It's so weird, you know, thinking back to reading that shit in, like, 2007 that he would become, like, the figurehead of a neo-fascist movement. Didn't change too many letters on his focus. Yeah. Fashion.

It was a subtle shift. Now all do's are those weird polo shirts that they wear. Everything else is a don't. I was in an indie film with him one time. Really? Yeah, I had to film this scene. It was filmed at Stand Up New York, and the scene was that the couple that the movie centers on

was on a date at a comedy club, and then he's the comedian. So I was the comedian that would intro him. Sure sure take his dick out yeah that's why he's banned from the stand um so we had to shoot this scene like 10 times in a row which took fucking forever and to do stand-up like 10 times in a row like that with a fake audience it was pretty grueling i only had to do like one joke sure by the end of it, I was like fucking done. But I had to watch him do quote unquote stand up like ten times. And his act is just like Pauly Shore.

It's just him talking about fucking. It's just who you're like having sex shit. You know why I realized I don't have AIDS? Because I am AIDS. Like the audience had to, it was fucking bizarre. They had to endure that. I hope they were paid that night. That sounds miserable. Yeah, it was fucking bizarre they had to endure that i hope they were paid that night that is that sounds miserable yeah it was fucking weird i didn't read his book he wrote

this book like how to piss in public and i happen to have a copy because somebody gave it to me and i just opened to a random page and he tells this story about he had gonorrhea and he was in a house with other people and he jacked off on the couch and came in his hand and because he didn't want to get up and go to the bathroom he ate his own cum while he had gonorrhea and had a violent episode where he was throwing up and had gonorrhea in his throat i guess well sean i knew that that was a do from back in the day jesus and uh so uh he was trying to figure out stand-up comedy he's like and it's called the aristocrats everyone's like gavin you don't actually have to do it you just describe it um i just like made like six people

vomit at their desk at work yeah good good i do know this uh weird from that experience i have a weird factoid about him which is that he hates it when you say Gavin McGinnis. That's not really good anti-fascist action or anything, but if you just happen to be around him, that bothers him. I'm just trying to put that out into the world. That reminds me of that clip of Sugar Ray outside of a club and on Coke,

and some guy just goes, Sugar Gay! Sugar Gay! Who said Sugar Gay? I'm gonna beat your fucking ass! Who said Sugar Gay? You know what's weird about that? I don't want to derail the podcast before we get started but i just have a weird story about sugar ray is that nick mullen when i used to know him when he was like 21 right uh back when he was drinking he would just um he would just get chased home by angry mobs all the time because he would be running around a fucking austin a precursor to his twitter days yeah, yeah.

They have multiple times. And one time he started this huge fight at a bar. Not even for saying anything that provocative. He just was like, Sugar Ray is in a good band. People got so mad at him. It was so fucking weird. So funny.

It was the tamest thing he's maybe ever said in his life. And this group of guys was just furious on behalf of Sugar Ray Wild Simpler times But yeah so Gavin McGinnis A patriarch of traditional Western values Masculinity and military Dictatorships and yeah he was

He like posted on his Instagram in celebration Of this 17 year old Japanese Ultra-nationalist who in 1960 K the leader of the Japanese Socialist Party. Interestingly enough, hung himself in prison after writing in toothpaste on the wall, seven lives for my country, long live the emperor. Yeah, I read the Wikipedia article. But basically, he's celebrating the violent murder of a japanese socialist and uh gavin mckinnis's organization the proud boys they'll often wear these shirts that say pinochet

did nothing wrong or they'll chant you can look on youtube pinochet pinochet and you know like other people got shirts with a picture of like a helicopter and yeah figures with, I guess, the Antifa logo falling out of the helicopter. I like the idea that Hillary is like directing Antifa and leading them into a trap. But yeah, so it's like, and look, I'm not their economy scream. I'm not the first person to point this out but a lot of people i may not be in the black box i don't even know how to finish that one sorry i started the joke assuming i would uh figure it out because she's pretty easy to make fun of yeah i'll figure it out yeah uh but so essentially like other people have made this point but in africa they call her comrade hillary

i'm just chilling in cedar rapids a lot of people have made this point but In Africa, they call her Comrade Hillary. I'm just chilling in Cedar Rapids. A lot of people have made this point. But the idea is that a lot of these alt-right Gavin McInnes type people essentially praise Pinochet because it's not cool to praise Mussolini or Hitler. Pinochet is like the hipster dictator, you know, the neutral milk hotel of military juntas. Right. Or the mountain goats goats if you will his old stuff is as good as his new stuff you know you might not have heard of him right right right and uh and so that's why all your friends are really into him

yeah his youtube videos have hundreds of thousands of hits even though you're not particularly familiar but so that's kind of why i wanted to talk about Pinochet today, but also just the story of Julio Ponce LaRue is fascinating in that, I mean, really, you can't find a more direct tie between the support that government ultimately provides to billionaires and the guy who became a billionaire entirely because of a military dictatorship and subsequent privatization. I like how he's the Chilean Jared.

Yeah, right. I haven't seen a picture of him, so in my imagination, I'm just imagining Jared with a mustache drawn on. You're not far off. But yeah, so I guess we can just kind of get into the chronological bio, and then we can digress of get into the chronological bio,

and then we can digress to talk a bit about Chile and what happened there with both Salvador Ande and the dictatorship of Augusto Pinochet. But to just start with the chronological biography of Julio Ponce Leroux. He was born November 1345 in a mist-sized city in central Chile. He was the son of a doctor and a nurse. A scorpio as well. Yeah. Oh, and I guess people have complained that I just read off Wikipedia on this podcast,

but this time we're doing it different. I'm reading off Spanish Wikipedia. Oh! The English translation tool of Spanish Wikipedia. But yeah, so he has three brothers. One of them is actually a mechanical engineer who also was an executive at SQM, the mining company we mentioned.

But basically, the way this guy... So, you know, his dad's a doctor, his mother's a nurse, upper middle class Chilean family. But the way he becomes a billionaire is entirely through happenstance. And the story is just this. As a teenager, he was vacationing with his family where he met Veronica Pinochet Harriot, daughter of Augusto Pinochet and Lucia Harriot. Harriot.

Art, I guess. Flawless. Pinochet's widowcia Harriot. Harriot. Art, I guess. Flawless. Pinochet's widow. She's still alive. They were married from 1969 to 1991 and had four children. Coincidentally, he would divorce her in 1991,

the year after Augusto Pinochet stopped being the military dictator of Chile. Oh, yeah, my man. I just like the idea of, like, kind of holding out, like, yeah, the marriage, it's really on the rocks, but I'm kind of waiting until her dad doesn't have the power over life and death of every citizen in the country. Meanwhile, the whole time he was, like, backdoor pushing

for, like, no 50-50 laws. That makes more sense than what I was thinking, which is that he was like, oh, for like no 50 50 laws that makes more sense than what i was thinking which is that he was like oh now i can't get free shit because your dad's not i guess he was like oh i can't leave while he can't dump the dictator's daughter okay i get it well maybe but um but so it would be hard to dump a dictator's daughter though i mean like at some point you'd be like i gotta just trudge through this whole fucking shit. Yeah. When he takes her to prom,

Pinochet is like standing next to them in the photograph with his fucking gun. Yeah. Three armed guards. Yeah. He's wearing one of those t-shirts. It's like, this is what a feminist dad looks like or something, but he's still also got the Cape.

Yeah. Yeah. You want to take my daughter to prom? We're going to go for a ride in a helicopter first. I was going to say. Then they arrive at the prom and he's like, oh, thank you. That was very nice. You know, that was a much faster mode of transportation. Yeah.

Julio Leroux, he studies medicine for a year, but then he attends the University of Chile in Santiago, and he becomes a forestry engineer. And interestingly enough, he goes to Ontario, Canada, and works as a sawmill worker. But then he returns to Chile in about 1969. Are we in Chicago?

No, he comes directly from canada back to chile in about 1969 uh he works for a company that was a paper and newsprint manufacturing and exporting company uh which was uh basically um you know he was essentially working in uh uh what do you want to call it forestry lumberaking, these kinds of things. And so he does this in Santiago for a little while. But 1972, he moves to Panama City to take over a sawmill. And he's in Panama when Augusto Pinochet overthrows the Allende government on September 11th, 1973. Never forget. Yeah.

But I guess... 70th 9-11. 11th 1973 never forget yeah but I guess but so I guess there's there's two things so he's over in Panama City running this sawmill and now 1969 he's married Pinochet's daughter 1973 Pinochet is the absolute dictator of the country

of Chile so 1974 Pinochet asks him to come back and take over the National Forestry Corporation of Chile, CONAF. And so this is just like one of those things where it's like if you happen to have a forestry degree and then the guy who like runs the entire country knows you, it's like, okay, you're now the number one forestry person in the entire country. So 1974, he comes back. And so he's in charge of all the Chilean forestry policy as of 1974. But also he oversees properties, redistribute it through land reform. And so here we can kind of talk a little bit. I did a little bit of research on land reform in Chile, but we can also just talk about allende and what kind of led pinochet um to overthrow allende but basically legitimate grievances land reform in chile well kind of took place from the 1962 until uh 73 when pinochet put a stop to it but basically the idea

was that um what year was ellen allende elected? I think 70 or 69. Oh, so it was pre-Allende. Allende, so essentially the difference was Allende's idea was every single person with more than 80 hectacres, hectacres, whatever it is, of land... Hectares.

Hectares. I like how my English is worse than my Spanish. But Allende's idea was essentially all... There were these large landowners in Chile, unsurprisingly. They're haciendas, right? Yeah. And Allende's idea was everyone with more than 80 hectares would have their lands...

Okay, I know. I got it wrong. You suck. Stephen was shaking his head. The most stoic co-host was disappointed in your lack of skills. Everyone with more than 80 units of land would have it expropriated, and then they would go down to 80 of the common uh uh land units so i

end it yeah i end it comes to power in 1970 land distribution land reform in chile begins in 1962 they start giving peasants state-owned land these are peasants who are of course not landowners 1967 they give a legal status to the syndicates, which are essentially like cooperatives of different peasant farm owners. And then they expropriate 3.5 million more hectares of land. Hectares of land. There you go. Positive reinforcement. Yeah.

And so 1970, Allende comes to power, and he wants to continue the process, and then everybody with more than 80 basic irrigated hectares will lose their land. So this is, of course, a huge threat to the landowning classes of Chile. And basically... The job-making classes? Yes. Oh, the landlords, your people. Right. the job making classes yes and so the landlords your people right and so julio larue julio larue

is put in charge of all these redistributed lands and what ultimately happens is about 30 percent of the lands that had been redistributed were returned to their original owners i think like 59 percent of chile's entire agricultural land was redistributed during a land reform. But it's kind of interesting where the other thing that happens is under Allende and the governments that came before him, all these peasants were put in charge of these small plots of land, and they were formed into these syndicates. Pinochet outlawed trade unions and outlawed a lot of syndicates and took away all legal protections they had. And of course, these small peasants, due to the lack of capital or credit, were not able to invest in their lands and had to sell them back to these large landowners. So of course, inequality exploded under Pinochet. But it is just like an interesting thing where...

It's a shame they elected him against their best interests. Yeah. If you have a problem with pinochet you should have voted um but yeah i guess um susan sarandon uh but it's not i don't vote with my vagina but um it is just kind of like an interesting and a sad sad point in history where you had like all these peasant landowners essentially just fucked over because uh the allende government was a threat to the status quo and i guess we can just kind of talk a little bit here about uh the story most people would be familiar with if they've read shock doctrine or these kinds of things which is that

the allende government elected 1970 was a moderate socialist government. They were elected in a fair democratic election, and they were setting out to, in addition to the land reform we just mentioned, nationalize several key industries, and the Nixon government was not really a fan of them. What? Yeah, after he first heard that Pinochet was elected, apparently he said, Suck it to me!

Well, so yeah, there was a meeting between Nixon and one of his either trade or foreign policy people where the note that remains was Nixon told him to make the economy scream or something. Yeah, make it scream make that economy slap um socket to the economy hit the back walls of the economy him and kissinger both talk a lot about uh the economy of chile like um well nixon was like a dick about it and he's like funny like he's like one of the funnier presidents you know yeah but kissinger was more like um sort of uh subdued and coded about it but he would talk about the economy as like him being like a physician and prescribing free market capitalism to this you know when people asked him about like why he you know

how he justified that and he said would said, would you not justify a doctor treating an ill patient or something? Right, right. It was very condescending and patriarchal. Pinochet was the straps they used to keep the patient glued to the bed. No, you cannot leave. You will take the medicine. And it's just really funny because it's all like... The Chicago school, Milton Friedman, Kissinger, all these people had this sort of...

Let's explain what the Chicago School is. Let's do that. Yeah. So, yeah, well, Chicago School, we've mentioned, we've referred to it a little bit on this podcast, but essentially a very radical free market school of economics along with the Austrians. But it's this idea that almost all government interference... It started at the University of Chicago. Yeah, University of Chicago, economics department. Milton Friedman and Hayek?

Yeah, I think Hayek was there. Hanging out. Yeah. Yeah, he wrote The Road to Serfdom, Hayek did, which was a big inspiration for Milton Friedman. And Milton Friedman's idea was called monetarism, which we talked about a little bit. But essentially, the idea is that through monetary policy, government can control all things and all kinds of government spending is intrusive and crowds out the private sector and very few, if any, government departments can be justified and all this kind of stuff. And it also had the convenient effect of in the case of south

america uh american multinationals who wanted to go in and own uh assets and uh resources such as lithium that might belong to countries there under this kind of university of chicago thing well the government should privatize everything and sell it to the highest bidder which tend to be these american multinationals yeah and they were sort of insistent upon this concept of like quote-unquote golden mathematics of free market capitalism in that, you know, if you could treat if you could overthrow a South American country and install free market capitalism, then we would see it play out inevitably as this thing that structures and benefits society. Naturally, that was their whole deal. They tried to instill it over and over again became frustrated with it

not happening. And this is pretty much like a cornerstone of a lot of libertarian beliefs it's really funny because it never historically actually works but there's always this insistence that it works and i think it's really funny that they came from chicago because i've been thinking about how funnier it would be if they instead of coming from the university of chicago if we had trained these libertarians at the UCB, right? Like paratrooped in improvisers and like Chicago-style pizza and that's what wrecked the economy, you know?

The golden mathematics of like, yes and. You have to have a military dictatorship to make people eat Chicago-style pizza. Deep dish arcarker season. Can I get a suggestion from the soccer stadium? What was that? Massacre of the Dissidents?

Why are all the suggestions just food? I don't have any food. But I do have entertainment for you. We want more rights. Okay, I heard baseball. Yeah, I was trying to yes and and you just pushed me out of a helicopter.

So, basically what they did at the University of Chicago is they had this program where they just brought in a bunch of they had, what was it? Discounted tuition or something. You know, the free market. To bring in a bunch of, they had, what was it, discounted tuition or something, you know, the free market, to bring in a bunch of

South American economics students to basically train them in this school of economics, the sort of monetarist Milton Friedman School. And they became known as the Chicago Boys. And then... What a great name. Yeah, that's right.

They set them loose back in South America, assuming like, oh, now we've built the intelligentsia of South America. They're going to turn it into libertarian paradise. And they were largely ignored by like everyone there.

The history of libertarianism. Yeah. Probably because your five Chilean friends left for a few years and then came back with just like thick Chicago accents. Tried to blend back into society. Look over there, the bands. Yeah, yeah, yeah.

They kept going to parties and ranting about the free market and everybody just kind of ignored them. Yeah, they just developed a huge drinking problem. Like everyone in Chicagoago just doing keg stands and talking about free market capitalism and ayn rand and shit non-aggression principle and then like you know the people in in the the administration nixon and kissinger are just like this is the perfect plan this wacky college uh you know comedy that we've created, this is going to change an entire society.

This weird suicide squad of people that we're sending down there. Madness. Horseshit. They had a big effect on the U.S. economy, too. Oh, yeah. I mean, that was right in the thick of a major turn away from fiscal policy towards monetary policy. Right. And we talked about this a bit in the MMT episode,

but essentially with the stagflation in the U.S., the Chicago school monetarist policy comes into force in the 1980s in the U.S., and that's modern neoliberalism. Yeah, I was going to say, when Jake was describing this sort of Chicago school, you might as well say, also known as what you now hear referred to as economics.

Yes. Which even though... Yeah. Wasn't always the case, but now it's kind of ubiquitous. I just hate anything called the Chicago Boys isn't a barbershop quartet.

Like that's really the only place I want to see Chicago Boys. I was going to say, didn't Kanye just sign them to his label? I was going to say like 2003 era hip hop. Like D12 or something.

But so, oh, and the fact that I forgot, and this is from Fruits of Capitalization Modernization of Chilean Agriculture, but after land reform there was a period of reconcentration of land ownership so that by 1997 the land ownership was more concentrated than it had been in 1955. So essentially, and Chile is of the OECD countries, it has the most income inequality.

So a big part of that is essentially Augusto Pinochet and the neoliberal turn, which is by Milton Friedman, among others, referred to as the miracle of Chile. So let's go back to Allende and the Chicago Boys. So they came in. They were largely ignored. So Nixon and Kissinger tried to make the economy scream. Basically did everything in their book to go, Those motherfuckers won't ignore me

make the economy calm I can't believe I have to stop thinking about the Jews for this and so they thought basically they could defeat him electorally and then Allende got reelected and so they tried a different

strategy which was to have the cia uh talk with both business leaders and the military on uh you know maybe maybe uh enhancing the democratic process and essentially there was a military tried the electoral college? There was a military coup that ousted Allende, which sounded something like this. Nope, it didn't. Basically, yeah, so they, as Jake said earlier, I accidentally stepped on it with a Panama drop on, what was it, September 11th, 1973, little 9-11.

They literally bombed the government buildings with Allende in them, also bombed poor neighborhoods around them, sent the military into the presidential complex. I don't know if it's a palace or whatever it is. It has a weird name. I was reading about this yesterday and I forgot it, but it's got a cool Chilean nickname, like their White House. Man, what is with the CIA carrying out these operations on September 11th?

You'd think they're taunting us right hey it's a slow month for them they need to do something la moneda palace is that what it is yeah i think so policia de la moneda yeah yeah that's it yeah that that's definitely how i would pronounce it i think i did a better job than you could flawless yeahlawless. Yeah. And Allende did not surrender, or in his own words. Allende! He was so terrible! Which is from a movie that was on Netflix briefly,

but I think got pulled pretty quick, called Allende and Su Laberinto. Flawless victory. Flawless. Thank you. pulled pretty quick called uh ayende and su labrin to flawless victory flawless thank you i also practiced that one uh ayende and his maze uh which is ayende and his corn yeah it's about the last seven hours of the Allende presidency, and I would also probably call it the best 9-11 movie. It's basically an action movie. Have you seen the one with Nicolas Cage?

It's pretty good. Yo, if I was there on 9-11, the 70s one, it would have never happened. They would have never gotten to him. I would have punched Pinochet right in the face 9-11 first responders didn't actually fare that well yeah they spent their time in a soccer field

what about building CS or should we just do all the 9-11 jet fuel can't melt whatever the fuck the palace is called. Moneta or whatever? I like how every other episode of this podcast is a 9-11 episode. Hey, billionaires love 9-11. It's not our fault.

So he was found with a bullet in his head. The official story is suicide. It sounded like he was walking around like, hey, there's a bullet in your head uh the official story is suicide like he was walking around like there's a bullet in your head yeah the official story is suicide but he did not surrender um i don't get why would he say that if he's a native spanish speaker didn't he record a speech oh yeah he recorded a speech i do not have that um it's really cool he uh so the the folklore about him is that when um castro came to visit his like sort of project he was building in the chilean government that castro was kind of impressed with it and was like oh wow okay so

maybe this is possible without revolution maybe you can sort of democratically build this which on some level was happening um and castro gifted him uh an assault rifle which during the coup supposedly i don't know how true this is but this is like kind of the legend is that that assault rifle is what he used to kill himself before he killed himself he got on the radio and he said say hello to my little friend he said uh uh you know attention my comrades sock it to me fucking button and then he shot himself in the face he stepped on his own uh fucking joke or whatever but he um the speech is like long it's pretty interesting um you can sort of google it or look it up or whatever but he gave like a farewell address and sort of a uh you know this is not the end

impassioned political contra speech. It's pretty cool. Yeah, off the top of his head while he was about to die. Yeah, he did 15 minutes off the dome. He learned from those improv kids. The Chicago boys, they train you up right. Yeah.

And so we'll kind of get back to this in a minute here, but I do just want to do a quick stat from uh the united nations basically uh under allende uh 17 of the population of chile was in poverty in 1969 uh this exploded to 48 in 1988 after um augusto pinochet's neoliberal reforms and by the year 2000 chile had a lot Chile had an economic boom in the 90s, but by the year 2000, the poverty rate was still at 20%. So the poverty rate was still higher than it was when Allende was in office, and that's despite all this inflation and all these sanctions and stuff from the Nixon administration.

So it's just one of those things where it's very sad for the people who live there and really just anyone trying to do socialism around the world it's just one of those things where it's, I mean, it's, it's very sad for the people who live there and, uh, and really just anyone trying to do socialism around the world because they saw what the CIA will do to you. Yeah. Like, uh, once Pinochet took power, uh,

I mean, we, we made jokes about a stadium. Basically he took a bunch of, uh, supporters, uh, and government and,

uh, I guess high level political supporters and massacred them in a stadium uh they also threw they also tortured a ton of people um threw them out of helicopters uh i the i think the official numbers like they killed 3 000 and like torture disappeared yeah mass rape torture i mean it was a horrible yeah there was like a famous uh sort of They killed 3,000 and, like, tortured. Yeah, 3,000. Disappeared. Yeah. Mass rape, torture. I mean, it was a horrible regime. Yeah, there was, like, a famous sort of activist folk musician who was a guitarist, and they, like, broke his hands

so he couldn't play guitar. Just spooky. Real Game of Thrones shit. Yeah. Terrible. Yeah, they chopped off his fucking hand like Jamie Lannister. They made him gold hands, which he can't play guitar with. Can you imagine just two gold hands?

He'd make me kindly scream with that. And in the midst of all this... Wait, I'm just imagining the stadium on the marquee. It's like, this week, mass murders by Pinochet. Next week, Tom Jones. Tom Jones comes in. His manager's like, we told them to put you above the mass burgers.

Tom Jones does not get second billing the mass burgers. He won't play here. Yeah, you're saying something. In the midst of all this killing, Milton Friedman thought it would be a nice time to pay a visit and give him some economic advice on how to run his country. And yeah, it was like immediately after Pinochet took power, the economy took a nosedive. In 1982, there was a banking crisis, which was worse than all of the economic problems of Allende.

1973, when he took powers, inflation hit 500%. Right. 500%? That's just too much employment. Inflation is the thing that libertarian, right-wing, free-market types hate the most, so it's really odd

that they use Chile as this example of how it worked. know, it worked. Our whole thing worked because that's like their least favorite thing. And there's tons of it. But yeah, so there's all these economic problems. And I guess we can kind of return to the billionaire, his son-in-law, Julio Leroux. We mentioned he's in charge of essentially undoing these land reforms that Allende has put in place.

He's the head of CONAF, the Chilean Forestry Ministry, until 1980. But then in 1980, he gets a promotion, which is essentially Pinochet puts him in charge of the Corporation for the Promotion of Production, or CORFO, in Chile, which is an agency that's been around a while, but it's basically the Chilean Development Agency. So some governments have this where they'll have like a government agency that's in charge of promoting economic development and that oversees all the corporations there. And it's kind of interesting where Julio Laro is in charge of this as of 1980. So he knows all the details about all the major state-owned corporations and major private corporations in chile and he also happens to know that sqm has the rights to the the massive lithium mines and these kinds of stuff so he's essentially able to trade on insider information and he makes um

uh he goes through various stints of uh presidents of various state companies from 80 to 83. He's the president of all these different state companies, including the Telephone Company, the National Mining Company, the National Electricity Company, and of course SQM, the Chemical and Mining Society of Chile. But so he actually, Julio Leroux has to resign in 1983 because even in the context of Pinochet's regime, there's a, uh, uh, an anonymous letter circulated among the higher upschet regime there was a lot of allegations that Julio Leroux was self-dealing and enriching himself at the expense of the state in a way even more than Pinochet did who of course Pinochet would later be charged with corruption

and these kinds of things but it's kind of in the 1980s you see it wasn't real free market capitalism no wonder it didn't work this doesn't happen under a real free market you got me there but it's just kind of like an interesting Capitalism no wonder didn't work. This doesn't happen under a real free market. You got me there. But it's just kind of like an interesting story in the 1980s where Pinochet begins a major privatization drive.

And according to one estimate by the New York Times and Chilean government officials, or the New York Times reported that a Chilean government study said that most of Pinochet's privatization government officials or the new york times reported that a chilean government study said that most of pinochet pinochet's privatization occurred at about a third of the market price so these state assets were sold off a lot of cases to people pinochet knew in this case his son-in-law for about a third of what they would have gotten assuming they'd been just sold for market prices and one estimate said this cost the Chilean government six billion U.S. dollars at the time so it's it's just that kind of back dealing stuff but we can just kind of continue unless there's anything else

about Pinochet's Chilean this time but what happens is Julio Leroux, he goes back to the private sector because this corruption memo gets circulated. So he has to step down in 1983. He goes back to the private sector. He starts up his own company in 1984. And what happens is this company gets a loan partly backed by the state to buy up a herd of cattle. He gets this agricultural company. He's going to raise cows or something. But what happens is the company,

it gets this massive loan in 84 and 85, and then in 1987 it declares bankruptcy and only repays one-third of the loan. So this was actually investigated as fraud by the post-Pinochet government in the 1990s but they ultimately cleared him and it's kind of an interesting thing where it's like essentially there was a big thing where pinochet steps down in 1990 after a referendum in 1988 says we don't want any more pinochet but the government that came right after him you know made him the commander

in chief of the military it made him a senator for life as per the constitution he drafted up in 1980 so there was a real like let's not don't ask don't tell thing about pinochet and the endemic corruption the torture and mass murder but um the story goes on essentially and if you're gonna if you're gonna embark in an ambitious project uh you know there's gonna be some growing pains uh the uh essentially like the way i've read it is that by the 1980s pinochet like knows he's on the way out so he engages in a very rapid program of privatization. Oh, he gets senioritis. I feel you. We've all been there. Yeah.

Also, his government made abortion illegal in 1988, in all cases, where it remains today in Chile. Really? But, you know, just the backdoor illegal abortion thing and backdoor privatization. But essentially what happens is in 87, interestingly enough, partly with the help of American Express,

who exchanged their government bonds for shares of SQM, Julio LaRue is able to become the chairman of SQM, the mining company, which a post he will hold until 2015. So 87, he's able to buy something like a 30% stake in it, become the chairman, and he essentially knows that this formerly government company

has all of these very lucrative mineral rights, and now as of 87, he's the chairman, and it's a private company so all of that money is going to him to the point where today forbes estimates his net worth at about 3.8 billion dollars well and um yeah you know and i mentioned the privatization was heavily underpriced pinochet himself um stole at least 20 million for in a swiss bank account you know so just like a lot of that kind of stuff that really goes with privatization, this supposedly efficient process

that's not corrupt, unlike governments. But so I guess if there's nothing else unlike Pinochet's government, we can talk about, there's a couple scandals that Julio Leroux was involved in in recent years. Let's get into El Jared. Basically,

he's running this company from 87 until 2015. And then he runs into two scandals there. The first is... Oh, wait, wait. Did we talk about what happened when Pinochet lost power? Right. Well, there was the referendum in 1988

and then he stepped down in 1990. I mean, in El Jared's private life. Oh. And this is why I think... We did talk about that. The divorce. He divorced his daughter in 1991, after he was like, yeah, now that I own this fucking billion-dollar company, and you're not the guy who throws people out of helicopters anymore.

Yeah, I'm out. You're just like a senile guy who has to fake strokes to avoid war crimes charges in Britain. Yeah. And that's why I think he's smarter than Jared. Because I think if Trump went to prison, Jared would still hang on. Yeah, he would still want Trump's approval. Yeah.

Whereas this guy ghosted his dictator dad. It'd be very still want Trump's approval. Yeah. Whereas this guy like ghosted his dictator dad. It'd be very like Arrested Development, no touching. Yeah, Jared would go to the conjugal visit like room and press himself up against the glass and shit.

Jared doesn't have anywhere else to go. Whereas this guy totally did. Like Jared would try to go back to the Observer and they wouldn't have anywhere else to go, whereas this guy totally did. Like, Jared would try to go back to the Observer, and they wouldn't have him. Maybe they would just make him, like, they would give him my old job, where you just have to write about TV shows that no one watches. That would fucking rule. Yeah. What's Jared's take on the blob?

Yeah. But yeah, I mean, so it's like, I mean, it's a pretty straightforward case as far as like how you become a billionaire. And interestingly enough, I can't remember if we mentioned it earlier, but Tesla and all these other electric car companies are heavily dependent on lithium. So essentially why SQM is such a huge company right now is the electric car market so our good friend elon musk has also been helping out uh pinochet's uh son-in-law using the uh money he got from his apartheid engineer father uh elon musk by the way i told you guys this before the podcast, but this should probably go on the air, is I've been listening to Joe Rogan's podcast because I'm trying to get on his show.

And he interviewed my friend Roseanne today. And he told this story on the podcast that's very thinly veiled. He's not doing a good job at covering up for his friend, but he's talking to Roseanne and he's like people get fucked up on Ambien all the time. You can't drink on it. My good friend who's a CEO he told me that he woke up covered in his own vomit on an airplane the other day

in Germany after trying to fuck all the women on the plane and starting all these fights. My friend who's a CEO did this and it's very obvious that he's talking about Elon. My friend who's the CEO did this and it's very obvious that he's talking about Elon. My friend who has a space program. Can you imagine that doesn't get out to the press

just on that airplane after he passed out covered in vomit? They just had this procedure in place where they walked down the aisle handing out NDAs to everyone. All right, here. Immigration form and NDAs, you know the drill. But yeah, I mean, it's just kind of amazing to me where it's like, I don't know what else

I can say about it except for just the case itself, which is Julio LaRue is worth $3.8 billion because he was the son-in-law of a war criminal, or I guess it's not war crimes if you do it to your own population. Thank God. A mass murderer, torturer, who his soldiers committed serial rape, and he was, of course, tried for this. He was ultimately released for medical reasons and placed under house arrest. But because this person was your father-in-law, you get a very rich state-owned company.

And instead of that money going to, say, the citizens of Chile, it goes directly into your own pocket. So it's, I mean, you know, we kind of talk in this podcast about how there's like no such thing as a good billionaire. But, well, I think he's the exception. But, yeah. And so he's running SQM from 87 to 2015. And then 2014, there's like a lot of discontent in Chile. Because as we mentioned, there was kind of an economic boom in Chile in the 90s. But it's in the context of huge income inequality.

And there were these corruption scandals, which basically it starts in 2014. He gets fined something like $70 million because he's doing stock market manipulation, which like, I read like four different Google Translate articles from Spanish of what exactly he did, and I barely understand it. Maybe that's part of why you didn't understand it.

Possibly. But so basically he had all these different holding companies through which he would own stock in SQM and my understanding was that he was passing stock back and forth between related parties and then reselling it like he was acquiring it at under market prices and then reselling it at above market prices or some sort of stock value at 420 dollars to impress his new girlfriend 69 000 shares shares um but so he was fined about 70 million dollars for this and then he he stays on um as a chairman but what happens is in 2014 and the us sec would actually fine sqm for this as well under the foreign corrupt practices act um but so just quoting from Financial Times here,

according to the USSEC, SQM made $14.75 million in improper payments to Chilean politicians, political candidates, and individuals connected to them between 2008 and 2015. And that's kind of like the other thing. It's like we talk about this guy with the mass murdering dictator father who goes in uh buys up

this company at a third of the price and all this other corruption and then like why it wasn't investigated after well part of it you pay money to the right people so he was giving money to both the right-wing governments but also some of the left-wing governments i mean i think if you kind of clamp down on that you're restricting free speech there is like some kind of weird argument to be made there though that like i think uh you know whenever these guys get in trouble for these like weird impossible to understand you know byzantine stock trading practices right it reminds me of like um blackjack how you can sort of be like thrown out of a casino for being just good at the game like what it is it's not really even cheating it's just that the whole system just shouldn't

that's the logical end of it is of course you would manipulate the fucking system right well it's interesting like you'll get some libertarian types who will write like the article like insider trading should not be illegal which is like i think according to their doctrine it probably shouldn't well essentially yeah logically if you know this system's not particularly fair and it always will favor these kind of elites with government connections like well yeah i guess it makes sense that insider trading should not be illegal but maybe you should take the next step and be like, oh, I guess powerful people will always be able to deal on government information and non-public information,

so maybe we should look at reforming these systems. Yeah. I think we should live in the radical center. Nice compromise where we just assume no one is cheating within the system or try and buffer it in some weird way. No, I think that's what we have now, Jake. I'm pretty sure.

I think we should allow insider trading, but means-tested insider trading. Yeah. What I'm saying is it sucks. That's my whole point. There's like a centrism Facebook group, and I posted in there the other day, like once you accept that capitalism

is going to destroy the planet through global warming and must be ended, you realize that socialism is actually the centrist position. And the left wing is Stalinist Purgis and the right wing is Bernie Sanders. Brilliant. There's a centrist Facebook group? That is so sad.

There's our neoliberal now. I've heard about that. I mean, I understand a little bit more. I just like, sometimes you look at people and you go, what are you doing with your precious time being alive? You know? Hanging out in a centrist Facebook group.

Starting the centrist Facebook group. Oh my god. I'm defending reasonable discourse. Well, it is such a meaningless term because it's just the centrist between any two positions so like if you're starting with uh reactionary capitalism okay discard it uh yeah uh so i guess just like the kind of continuing the sqm story and we'll just kind of run through it to the end. So he's bribing politicians and he gets caught for this in 2015 and he has to resign as chairperson of the company SQM.

And then this is in addition to his large fine for stock manipulations. He was hurting a lot of the other smaller stock owners through manipulation and transferring value to himself through this kind of like shell game scheme of, uh, passing stocks around. But, um, what happens in, uh, but basically despite shocked,

despite all of that stock market can be manipulated. Despite all of that, he still like controls SQM. It's, it's kind of a weird situation where we mentioned he has a 30% stake, but he's able to work with other shareholders to determine who sits on the board and these kinds of things. So in August 2017, the vice president of Chile's state development agency, Corfo, which we mentioned, which Julio Leroux was in charge of during Pinochet's regime, now it's nominally independent. But this vice president was speaking at a lithium forum in Santiago.

He said that although Ponce LaRue is no longer chairman, the company's current share structure allows him to appoint four board members, which effectively means he retains control. And that was from Bnamericas.com. I'm really not getting the gag. Really? You playing the music. I'm so happy.

You know what this song's called? Oh, what? Lipium. Oh. That took me a minute. Are you fucking not from Seattle, Sean? Get the fuck out of here. Now I get it.

Well, for your listeners, that's your game this week you'll be cut the part where we explain the joke yeah i got i'm in but so um you know so as of like at least 2017 he's still controlling the company even though he's like not the chairperson and it was interesting like so june of this year the company sqm wants to bring him back as an independent advisor but it provokes a lot of outcry so they back away from it but he's still running the company and it was something where like the government of chile was trying to cancel their contract because they have a lease on this extremely profitable lithium uh mine in the desert in ch up to 2030. And part of the conditions for not canceling that was he had to step away from...

Are these licensed? Yeah. There's like 20 covers of it on Spotify, and I was trying to see how many I could get through by the end of the episode. Well, you've done enough! This is Rockabye Baby. Look, just to bring this story up to the present,

is a Canadian company that owns like a 20% sum stake in SQM Has to sell it as part of some other regulatory thing So right now a Chinese company Which is the largest lithium exporter in the world SQM is the second largest A Chinese company is trying to buy this 20% stake What's the Chinese company's name, Sean? Tianqi Lithium.

Oh, boy. Perfect. Tianqi? Tianqi Lithium. Sean, get your new overlord's name correct. This podcast turned into bullying when people make me pronounce words. Listeners, circle back to our episode on Russian augers. Hey, Sean, what's the day after today?

Monday? Another term for it that's not the specific date. Tomorrow? I said it right this time. What are you going to do? Sometimes the Irish bleeds through. I call it canadian okay but so basically this chinese company was buying up the stake in its main competitor so the chilean regulator looked at this and it approved it but as of like two days ago julio laroe is actually suing to give the regulator more time to look at this so he's

trying to prevent this chinese company from coming in and having a stake in his SQM mining company that has made him a billionaire. And he's suing in court. I figured it out. Okay, so lithium is vibranium. LaRue is challah. The Chinese are killmongers.

Yeah, okay, yeah. Does that play? Yeah. Once the Chinese company company if they do actually finalize this deal if when they take over it'll be like the chinese version of the chilean theme song wait is that community center at the end the chicago boys oh yeah no i don't know maybe i didn't follow the thread of the analogy but that seemed about right i'm just trying to get this to a like a final punch line where um larue is fighting a chinese

guy on top of a waterfall for control of the lithium that's it now i'm abandoning this bit yeah but so i'd like to think that i'm like my ancestors who chose to be thrown out of a helicopter instead of living a prisoner there you go it works completely this podcast is free sorry i just watched that movie santiago forever what if the last thing those people heard before they were thrown out of the helicopter was the Sorry, I just watched that movie. Santiago forever. What if the last thing those people heard before they were thrown out of the helicopter was the drop of saying Nixon, suck it to me. Of Nixon saying, God damn it. became a billionaire entirely through connections with a illegal military dictatorship that murdered at least 3,000 people for no reason other than them expressing political opposition. He's still a billionaire

and he's still fighting for control of his company and still kind of arguing with the state, but it's clear, I think, that he has significant influence over the state of Chile, unsurprisingly, for a billionaire. Of course. So at what point did he become a billionaire? Do we get that into that, or is it kind of we don't know exactly he was definitely a multi-millionaire at the time of pinochet's dictatorship because you know by 83

he had to resign for corruption where he was looting millions of dollars from the state or taking kickbacks or whatever else it was so but i think it was like 87 he becomes the controlling share person of this mining company sqm um and i think he he was listed as a billionaire by forbes in 2014 for the first time um and i think part of that is just like all the applications of lithium and like he is one of the few sources of lithium in the world, or one of the few major sources under his control. Well, it's nice to know that he got a second chance after all that corruption. Can you imagine just plugging your phone

directly into the lithium mine? Like, how secure you would feel just knowing you're going to have a charge for so fucking long? Yeah. Your phone's just glowing and shit. Functioning at such a high capacity. I feel like you just always put a new battery in.

You would never recharge. You'd just be like, I'm good. Yeah. You'd be like, yeah, one of those really rich people that smokes like half a cigarette and then flicks it with just fucking cell phones. Oh, man. I like to imagine that, you know, right before, when they're going up in that helicopter with the leftists, one of the military guys pulls out a cup of water and is like, hey, check this out.

And he drops a piece of pure lithium on the water and it starts skittering around and burning. And they're like, what? It's catching fire from the water? And the guy's like, yeah, cool, right? Science is awesome. Then he pushes him out of the helicopter but I guess like so that kind of

brings you through the biography of Julio Leroux we'll see if he's able to keep his company from the Chinese and we'll see if the government of Chile has anything else to say about him because essentially they were trying to push him out of the company they found some agreement with the company where they were like yeah he'll step away he'll step down but he'll

keep his ownership stake but he won't interfere but it's clear he's still interfering he's still a senator yeah so he'll be a helicopter ceo and like to tie it back to gab mcginnis this is this shit we just described is uh the shining example that the alt-right uses like while their shit works yes this is like the best thing to them well and that's like you know and i guess kind of like to conclude this we can talk a little bit about the idea of the chilean economic miracle which which milton friedman has talked about but essentially like there's a couple parts with to it where you have like the alt-right people like gavin mcginnis who are celebrating the suppression of socialism uh through violence where essentially you have like a democratically elected person in japan and a democratically

elected person in chile both uh murdered by fascist elements uh to prevent them from becoming popular enough to do any sort of redistribution or these sorts of things. And so it is something that I think you're going to see more and more, especially if, say, you know, Bernie Sanders or whoever is like popular in 2020, you will see a lot of groups advocating violence and celebrating violence against leftists because, um, there is like, uh, I talked about this on our old podcast once, but there's a libertarian philosopher named Hans Hermann Hopp.

And Hans Hermann Hopp basically has the idea that socialists and leftists are such a threat to private property rights that they inherently violate the non-aggression principle that libertarians are supposedly all about. Nice one, Triple H. h right so uh and that's why you'll actually see this meme on like right-wing people about like quote-unquote physical removal because the hans herman hop quote this so-called libertarian economist his idea is that

leftists are such a threat that they can be quote physically removed from the country because they inherently violate the non-aggression principle. That's like the right-wing version of the paradox of tolerance. But yeah, I mean, and so that's just something that, like, we have to be very vigilant about. But I think it is important people know what happened in Chile because it is it's certainly not something to be celebrated. But there are very violent people. And I worry that we're headed towards a place of political violence. But hey, we'll see.

Well, I'm disappointed that this wasn't a podcast about chili, the food, like I thought. But I did learn a lot. I mean, we had a huge chunk on baby back ribs, but Sean made me cut it, and I don't know why. I don't know why. And I guess, like, I don't know. Steve, did you have anything else about the economy of chili,

or just, like like this kind of stuff because we mentioned the poverty rate like they've signed a lot of free yeah well like eventually I mean things got so bad with the shock doctrine sort of like Chicago Chicago style economics

the deep deep dish unemployment land reform they actually went back to some of their social programs interestingly enough Pinochet came into power

but he did not privatize the copper mines that Allende nationalized and didn't that keep their economy afloat for a while it took years before the 100 digit plus inflation annualized was

taken under control. And they did it by raising interest rates to like 100%. Wow. Yeah, it's funny that... Insigating a recession almost as bad as the Great Depression. That almost rhymed. To like 25% unemployment. It's like 25%

unemployment. It's funny that the copper mine kept their economy afloat because it's just antithetical to all this right wing capitalist shit. They'll look at the successes on some levels of the Chilean economy and attribute

it to all the freedom, you know, and the being libertarian and attribute it to all the, the freedom, you know, and the like, uh, being libertarian and atheist online shit that they love and not to this huge other factor, the, the copper mines.

Um, you know, it's just a case of like people seeing what they want to see, I think. Yeah, certainly. I think that's a good chunk of all ideology that's flawed. It's like, oh, you mean you're choosing what you like

and ignoring what's wrong about it and you're believing it wholeheartedly? Just like one more thing from Julio Leroux. So basically, according to one of the minority shareholders in SQM, and they sued because of this stock manipulation that they said was costing them money. So basically, this person alleges that during the tenure of Ponce Le Roux, his companies

were never really inspected, and then anytime somebody from the government offices that were supposed to investigate his companies left, they would get a directorship at one of his companies. Which is like, not something you see anywhere else. Any other

countries that I am thinking of or currently living in, this kind of revolving door between government and major private corporations. I mean, it seems like that would be the most qualified person to take that job. They're already familiar with all the subject. I want to mention that my man Julio Scorpio loves to fuck. I bet he loved to eat butt, especially married up. You know, let's be honest here. But once he got divorced,

no more. No more eating butt after that. You think so? I think so. He's easily the most evil forestry major I've ever met. I love knowing that their sawmill employees are like,

I used to work with that fucking guy. I like the idea of like, him not wanting to eat butt and then his wife starts making helicopter sounds yeah you get down there all right well anything else on uh pinochet and this uh incredibly good billionaire uh who uh leveraged private connections and the informational advantages

that came with them. Jake, plug stuff. Poddam America. Yeah, listen to my podcast, Poddam America. It's like this. Another vulgar leftist podcast. Follow me on everything. My at is at Ferrell Jokes. It's an anagram for my name, Jake Flores. I me on everything. My at is at

Feral Jokes. It's an anagram for my name, Jake Flores. I do stand up. You can check me out at my monthly show at El Cortez. It's called Yoko. I run it with Clara Kane and Ian Fadance. That's it. Just look me up online. Nice. And with that, this has been Grub Stakers. I'm Yogi Paiwal.

I'm Saka Tumi. I'm the Jews. Steve Jeffries. You're so evil, Jared. All right. Thanks to our guest, Jake, and thank you for listening. I don't care. I'm so horny.

That's okay. My will is good. Yeah. Yeah. Yeah. Yeah. Yeah. Yeah, yeah, yeah, yeah, yeah, yeah I like it, I'm not gonna crack I miss you, I'm not gonna crack I love you, I'm not gonna crack

I killed you, I'm not gonna crack I like it, I'm not gonna crack I miss you, I'm not gonna cry. I like you. I'm not gonna cry. I miss you. I'm not gonna cry. I love you. I'm not gonna cry. I killed you. I'm not gonna cry.

Hello from Tacoma. Do you know where you are? My guess is I'm in the clutches of the angry pink menace. I am Souvana. We will be spending much time together. You'll get nothing from me but my scorn. Tom, this is the people's army. From here we strike out and bring hope to the oppressed.

The oppressed who are still slaves to running dog, foul-breast, capitalist vermin like yourself. We exist only to spread the word. Tom Tuttle von Tacoma. You will be brainwashed. Me, America's son? Ha! That will be a challenge. You bet.

Our enemies are all those in league with imperialism. The bureaucrats, the big landlord class, and the reactionary section of the intelligentsia attached to them. Very good, Tom. You quote the chairman well. Our enemies are all around us. We must always be on our guard. Sure, we'll lose a lot of snooze time, but that's okay. We'll catch up after the revolution's over. That's enough, Tom.

The leading force behind our revolution is the industrial proletariat. Our closest friends are the entire semi-proletariat and the petty bourgeoisie. That's enough, Tom. But there's so much more. I am running for president so that in the unlikely event that I am elected to office and there's not an immediate military coup d'etat to take me out of power. This country will engage in an unprecedented revolution politically to take on the billionaire class. Because in a society where the top 1% of the top 10% of the top 1% of the top 10% of the top 1% of the top 10% For those of you not tracking it, that's.0000001 of the top 1%!