The Chris Voss Show - The Chris Voss Show Podcast – Plunder: Private Equity’s Plan to Pillage America by Brendan Ballou

Episode Date: June 12, 2023

Plunder: Private Equity's Plan to Pillage America by Brendan Ballou https://amzn.to/3oT6KW6 The authoritative exposé of private equity: what it is, how it kills businesses and jobs, how the government helps, and how we stop it Private equity surrounds us. Firms like Blackstone, Carlyle, and KKR are among the largest employers in America and hold assets that rival those of small countries. Yet few understand what these firms are or how they work. In Plunder, Brendan Ballou explains how private equity has reshaped American business by raising prices, reducing quality, cutting jobs, and shifting resources from productive to unproductive parts of the economy. Ballou vividly illustrates how many private equity firms buy up retailers, medical practices, prison services, nursing-home chains, and mobile-home parks, among other businesses, using little of their own money to do it and avoiding debt and liability for their actions. Forced to take on huge debts and pay extractive fees, companies purchased by private equity firms are often left bankrupt, or shells of their former selves, with consequences to communities that long depended on them. Perhaps most startling is Ballou’s insight into how this is happening with the active support of various arms of the government. But, as Ballou reveals in an agenda for reining in the industry, private equity can be stopped from wreaking further havoc. About the Author Brendan Ballou is a federal prosecutor and served as Special Counsel for Private Equity in the Justice Department's Antitrust Division. He graduated from Columbia University and Stanford Law School.

You wanted the best. You've got the best podcast, the hottest podcast in the world. The Chris Voss Show, the preeminent podcast with guests so smart you may experience serious brain bleed. The CEOs, authors, thought leaders, visionaries, and motivators. Get ready, get ready, strap yourself in. Keep your hands, arms, and legs inside the vehicle at all times, because you're about to go on a monster education rollercoaster with your brain. Now, here's your host, Chris Voss. Hi, folks. This is Voss here from thechrisvossshow.com, thechrisvossshow.com. Welcome to the big show, my family and friends. Welcome to all that good

stuff. I think we screwed up the audience soundboard. Wow. We started playing rock. People are going to be like, are you a DJ? What's going on over there, Chris? But we finally got it right. Welcome to the show, my family and friends. We've got an amazing gentleman and author on the show. He assures me that he is a both so we're going to check his references as well uh but uh in the meantime we're talking to uh our audience and asking them to refer the show to your family friends and relatives go to goodreads.com fortune s christmas youtube.com fortune s christmas linkedin.com fortune s christmas subscribe the big linkedin newsletter and also we're over on tiktok give us some help over there

we're trying to be cool Give us some help over there. We're trying to be cool with the kids, and they're not sure if they're going to let us get on their lawn or not. Wait, is it the opposite of that? I don't know how that works. Today, we have an amazing gentleman on the show. And he has a book that is one of these books that I'm like, I wish somebody would write a book on this. Because I really would like to know more about what the hell is going on and why it's so expensive to buy a house here and other things. He's the author of the newest book that just came out May 2nd, 2023 that's titled Plunder, Private Equity's Plan to Pillage America. Brendan Ballew is on the show with us today and he's going to be talking to us about his amazing work and very thick book with a massive amount of notes.

Brendan is a federal prosecutor, and he served as a special counsel for private equity at the U.S. Department of Justice. You may have heard of it. It's kind of a larger organization there. He began his legal career in the department's National Security Division, where he advised the White House on counterterrorism policy. He graduated from Columbia University and Stanford Law School. Welcome to the show, Brendan. How are you?

I'm well. Thank you so much for having me. Thank you for coming. I've been really interested in this discussion and all that good stuff. Give us a dot com wherever you want people to find you on the interwebages which is in the sky. Probably plunderthebook.com or twitter.com slash Brendan Ballou. There you go. So Brendan, what motivated you want to write this book? So I really did not know what private equity was until I was many months into this project. And so I don't think any of your viewers or listeners should feel embarrassed about it because I

certainly didn't know. But I was working at the Justice Department in the antitrust division. And when one company wants to buy another, they have to submitisle, KKR, Blackstone. It just seemed like the entire economy was getting bought up by these businesses that seemed like mysteries. So I started researching what they were, learned about this idea about private equity and realized that nobody had really written much for a popular audience about it. And so I tried to find out more. There you go. Here, I always thought private equity was something that my dad had and he wouldn't give to me when I asked him to loan me some money. Can I get five bucks, dad? He's like, no, it's private equity. So what is private equity? What are these

private equity firms? Give us a baseline foundation that we can define on. It's a great question to ask. So private equity firms take a little bit of their own money, some investor money, and a whole bit of their own money, some investor money, and a whole lot of borrowed money to buy up companies. They then try to make financial or operational changes to those companies with the aim of selling it for a profit a few years later. So it's a very simple idea, but because of the legal structures that we've got around private equity firms, they have incentives that ultimately can lead to really bad effects often for the companies that they buy. And I've been wondering about this

for a long time. Like I mentioned in the show, this is one of these books that I've been waiting for someone to write. So thank you very much for covering this. And I think this is a really good expose where the American public needs to understand what's going on. You know, I was just watching before the show, the network scene of, of, uh, of what was it? The network, the movie, you know, I'm going to get up out of your chairs, you know, can you just leave me alone with my, with my radial tires and my TV shows and, you know, just let me go through my day. But people need to realize this impacts them.

And I grew up in the era where I came into business and life in 1986, graduating high school of the, of the, um, greed is good. You know, the Ivan Bioski, the Michael Millikins leverage buyouts, um, and this whole thing where I guess America, or at least investors, um, on wall street said, yeah, uh, screw main street. Let's just do whatever we want. Uh, so I watched the whole rise of that. And some of this, I, screw Main Street. Let's just do whatever we want. So I watched the whole rise of that. And some of this, I suppose, comes from that. What is your background? Tell us a little bit more about you and what got you interested? What got you working for the Department of Justice and in this field? Yeah, well, I don't have an entrepreneurial

bone in my body. So I was never going to form a company and become a billionaire or something like that. But I ultimately got interested in sort of these broader issues around antitrust and economic justice really because of my family. My mom, before she had me, was a community organizer in the Midwest and worked to make sure that people who couldn't pay their bills to the utilities wouldn't have their heat shut off in the winter. And I think I learned from her and from other, you know, from my dad and from others, the importance of making sure that, you know, you have an economy and a set of laws that actually work for ordinary people. So that's what drove me to those issues. And then, you know, I sort of explained on the specifics of why this topic specifically, but I'll say, you know, I think, you know, I sort of explained on the specifics of why this topic specifically.

But I'll say, you know, I think, you know, like you said, people, you know, you kind of came of age where greed is good. I don't think that, you know, this that private equity is really different from anywhere else. And that, you know, unless we change human nature, people are always going to be greedy. That's not, you know, That's not necessarily a bad thing. The challenge that we've got is that we've got a legal structure in place that allows private equity firms to make an enormous amount of profit, oftentimes at the expense of the very companies they buy. And not just the companies, but the people that work there and even the customers that they're trying to serve. Yeah. I think a famous depiction of the Ivan Biosky, leveraged buyout age, Milliken age, it was of the ivan bioski leveraged by that

age millican age you know it was in the movie wall street everyone's familiar with that in fact everyone's always like no i haven't bioski didn't say that chris it was uh you know michael douglas and i'm like yeah you don't understand what the movie's based on but um you know there's the example where he takes over the airline of uh which mccall at the big coke head um and and he uh and and then he you know fires the employees and and all that sort of stuff you know corporate rating uh was the big thing back then and i've always wondered you know with with private equity you know they'll go by i think sears is a good example where they'll buy it out and then they'll they'll just scrape it and and uh and and and just destroy it and then

the bankruptcy and somehow it's like this zombie that stays alive yeah like my question has always been how are these people making money and you detail that in the book and all these different ways they can make that happen yeah you know maybe i can talk through a couple specific examples so you know when you're talking about retailers you know one of the ones that I think about is Shopko, which was, if you grew up in the Midwest, was kind of like one step above Walmart, but one step below Target. It was a great store. It was bought by a private equity firm.

And then they did a lot of the tactics that might be obscure to most people, but are very common within the private equity world. So they did something called a sale leaseback, where they required Shopko to sell all of the assets, the stores that it owned and lease them back to themselves, you know, which creates a quick hit of cash. But now you essentially have to rent something that you used to own, and you can't borrow against it and so forth. So sale leasebacks is one. They extracted transaction and management fees, which are these fees that you have to pay essentially for the privilege of being owned by the private equity firm.

And I think even in this case, they did what's called a dividend recapitalization, where they essentially required the company to borrow money in order to pay a dividend to the private equity firm and the other investors. So there are all these tactics that work for the private equity firm. It's a way to get money to the private equity firm, but don't necessarily work for the company. And at the risk of going on a little long, you mentioned how do these companies make money even when, or how do these firms make money even when the companies fail? it really goes down to the bankruptcy process. So often what will happen is you'll have a private equity firm push a company

into bankruptcy and it owns the company, but it's also the company's largest lender. And what they do with that is by being the owner and the lender, they're able to sell the company from itself to itself and in the process, push off the pension obligations and other debts, they're able to sell the company from itself to itself, and in the process, push off the pension obligations and other debts that they have to employees and retirees onto these quasi-government agencies. And so it's a world where literally companies that they own can go bankrupt, and yet the private equity firm can succeed. Wow. And so you're basically dumping the debt. I think in Wall Street, they did that. Didn't they try and go after the airline pension fund and dump that or pilfer it? And this is interesting because like I said, with the network example, people are just sitting around going, hey, why do I have to care about this? Yet this is going to impact your jobs. It's going to impact

your pensions. It can impact other things. And it's interesting to me, all the different variations they have for this. You mentioned the dividend recapitalization, our pension funds. One thing I was watching in an interview with you and the details in the book was, you know, I'm very familiar with Silicon Valley and funds, startup funds, venture capitalists and how they work. And a lot of it is, you know, they're, even if they buy some turd startup software company that flops, you know, we've seen a lot of those over the years, they, you know, they're going to make their money off of fees. And so fees that they're, you know, charging or whatever they're charging into the company and then fees that they're charging for their investors. And so that buffers, you know, and of course spinning out or doing new rounds on their stuff, it almost seems like private equities are kind of basically like venture capital, Silicon Valley startup funds,

only they buy old companies as opposed to new. Is that a good analogy or am I just smoking the- No, I think that's a good distinction. Venture capitals are, in some ways, they're sort of playing the lottery a lot of times. You know, they want to find that unicorn that's going to explode. And so they place a lot of bets, whereas private equity firms tend to buy established companies and then oftentimes try to extract value from it. You know, I think one of the big differences is that, you know, venture capital, at least as I understand it, typically makes an investment, but then it's sort of a long for the ride. They may get some board appointment rights, but they're not really in charge. Private equity firms really are running the business. But the odd thing about it is despite the fact that they run the business, they aren't necessarily going to be held legally responsible

for their actions. So one of the stories that I always go to is when Carlyle bought up the nursing home chain, HCR Manor Care, they executed a lot of the tactics that I always go to is when Carlisle bought up the nursing home chain, HCR Manor Care, they executed a lot of the tactics that we were just talking about in terms of, say, leasebacks and transaction and management fees. Health code violations spike, staffing declines, and at least one resident dies. But when the resident's family sues for wrongful death because she went to the bathroom by herself and there wasn't the nursing staff to take care of her, Carlyle was able to get the case against dismissed by essentially saying, we don't technically own the nursing home chain. We just advise a series of funds whose limited partners through several shell companies own the nursing home chain. That was enough to get the case dismissed. through several shell companies own the nursing home chain. That was enough to get the case dismissed.

And so to go back to your original question, one of the things that sort of unites venture capital and private equity is that neither is really going to be held responsible for what their companies do. And that misalignment of incentives can really hurt people. Definitely. I mean, and it's kind of, I don't know, I don't know if I should say anti-American, anti-capitalism, but you know, that's kind of one of the things we have in America. If you injure people, you're held liable.

I mean, you're an attorney. I mean, that's your job. No, I'm just kidding. But you have a whole chapter in your book about this. I have a sister who is in a, she's in a uh a care center she has ms she has dementia and one thing we've seen is she's been about five or six throughout her life and one thing we've seen over the years is these you know they've gone from private guys that started them like i you know i start one or something like that um to where they've been bought out by all these chains.

And I don't know if there's a venture capital firm behind them, but we see the squeezing of care, which you see in most leveraged buyouts, where they try to thin out resources, they thin out services, they thin out employees, and they're trying to maximize the return on investment for their LBO. And I've seen the sufferers that she's done and the care has been lowered in there. And you have a good chapter on your book on this as well. Yeah, it's really tough because private equity has been extremely active in nursing home

chains. Oftentimes, there's cuts to staffing and so forth. One estimate suggests that private equity ownership of nursing home chains is responsible for an estimated 20,000 premature deaths over a 15-year period. But it goes back to, I think, something that you were saying at the outset of the question, which is this isn't necessarily an extreme form of capitalism. It's more like a perversion of it. And, you know, you can be a Reagan Republican and, you know, be concerned about private equity because it's not people just trying to maximize value.

It's people trying to maximize value, value, not necessarily being held responsible for the consequences of their actions. And, you know, just looking at nursing homes specifically, I talked with lawyers that represent families of folks that die in nursing homes, and we've been looking at the research on this. And one of the things that PE owners will often do is essentially divide up the assets of the nursing home company among many different shell companies. So there'll be one company for the nursing home property, another for its operations, another for its pharmacy and so forth. And by sort of complicating their ownership

structures, it makes it very hard for families to recover when someone gets a bed sore or is injured or dies. And it means that the private equity firm can hold on to the money, even if they're not necessarily strictly entitled to it. Wow, that is crazy. And this is how a lot of things work when it comes to trusts and shell companies and separating assets. You know, I mean, we were, you know, we went through that with our attorneys back in the day with our career company. You know, you separate the cars and you make the thing. Hi, folks. Here's Voss here with a little station break.

Hope you're enjoying the show so far. We'll resume here in a second. I'd like to invite you to come to my coaching, speaking, and training courses website. You can also see our new podcast over there at chrisvossleadershipinstitute.com. Over there, you can find all the different stuff that we do for speaking engagements, if you'd like to hire me, training courses that we offer, and coaching for leadership, management, entrepreneurism, podcasting, corporate stuff. With over 35 years of experience in business and running companies as a CEO. And be sure to check out chrisfossleadershipinstitute.com.

Now back to the show. But it's interesting to me that these are very large companies and they're being backed by, what sort of firms are backing these? I mean, who gives these guys people money? Yeah. So the largest private equity firms are backed typically by pension funds, by sovereign wealth funds, so funds of other countries, sometimes high net worth individuals. And I think the scale of private equity is often, folks don't really know it, PE firms spent an estimated $1 trillion buying companies last year.

So for comparison, the entire US GDP is about $25 trillion. If you looked at, I might miss up the exact order, but I believe it's KKR, Carlisle, and Blackstone, if you considered them together with their portfolio companies, would be the third, fourth, and fifth largest employers in the country after Walmart and Amazon. So there are these sprawling, enormous institutions, but because they don't sort of plaster their name on the companies that they own, oftentimes you have no idea that you're interacting with a private equity firm. Yeah. We had David Rubenstein on the show. We'll give a plug out so people can go watch that, his book, How to Invest. That was a lot of fun. I don't think he knew what to do with me he's like this guy is funny and interesting and and crazy and he was like whatever but we had a lot of fun on the show um the you know what's

what's curious about me is and i'm sure people are asking or assume like i did how come this doesn't fall under the department of justice enforcing um monopoly rules rules, antitrust rules? So it does. The private equity acquisitions are often part of what are called roll-ups. So not just buying a single company, but buying up many companies in a single industry. So you buy up all of the portable toilets in the region, or you buy up all of the church nonprofit software, or all of the OBGYN clinics in a certain region. And potentially, you know, by doing that, you're able to, you know, in the positive sense have, you know, efficiencies of scale, but in the negative sense, you have market power that allows you to, you know, raise prices, lower quality care, potentially lower wages,

and so forth. You know, I will say that, you know that there's been a lot of public speeches lately by Department of Justice officials about using the antitrust laws to sort of look critically at a lot of these acquisitions. I mean, one of the challenges, just speaking honestly, is that it's hard for any one institution to take on sort of the whole scope of these antitrust issues. In that, you know, to go back to, you know, a trillion dollars worth of acquisitions, that's a not insubstantial part of the economy. So while antitrust plays a role here, I think that there are sort of other areas of the law and other sort of institutional actors that can also be useful here. And maybe we need to update the antitrust laws. I mean, they were created, what, in the early 1900s? Yeah, you know, and there, you know, there have been efforts in Congress to update the antitrust laws in the last session. To get a little in the weeds here,

there's also something called the merger guidelines, which is an interpretive document that the government puts out, and that's currently being revised. There you go. You know, capitalism is great. It's good to have, but you go. You know, uh, there, there, capitalism is great. It's good to have, but there is such a thing, I believe, and more and more I've been convinced of it is unbridled capitalism. And then that was the whole reason we put in antitrust laws. There needs to be some constraints and guardrails on capitalism. It can't just be unfettered where, you know, we can just go do whatever we want.

I mean, that's the reason there's rules against product liability and stuff like that. But you mentioned one thing, and I guess one of the big challenges is, of course, we live in kind of almost an oligarchy where, you know, with SCOTUS's Citizens United rulings and other things, you can just buy whatever politicians you want. There's a lot of money of this, Washington politicians. And of course, people run the rail between politics and working for these organizations. Talk to us a little bit about that. Yeah.

So I think private equity firms have been almost uniquely successful in advancing their agenda and government. Private equity and investment firms, according to open secrets have spent an estimated $900 million on the campaigns of federal candidates since 1990. They have employed really kind of the biggest names in government. We're talking multiple secretaries of treasury, state defense, a vice president, two former speakers of the house, any number of generals, a CIA director, senators and Congress people. And that sort of bench has been really useful in advancing its agenda in Congress. Very briefly, one area where

I think they've, they have been really passionate has been around the carried interest loophole. Some of your listeners may be familiar with this idea that hedge fund and private equity managers often pay a lower effective tax rate than certainly I as a government employee do. thing about it is, you know, despite repeated efforts by, you know, presidents, both Democratic and Republican, to try to rein in the carried interest loophole, they have all uniformly failed to such an extent that last time President Biden tried to propose closing the loophole, not only did that effort fail, but private equity gained a new tax advantage through the course of that debate. So it's an area where I think private equity firms have been really, really successful. There you go. Now, one thing I've been interested in, and the other reason I wanted your book written was I own a mortgage company for 20 years, and I watched the crash of 2008. I was

consulting with banks at the time. And I remember we started getting what were called jingle mail. And I remember being in an office in San Diego going, what's jingle mail? And they go, so many peoples have thrown their keys into the mail and said, F you, go ahead and foreclose on the home that we get US mail bags that when you jingle them, they're all the keys. keys i was like that's extraordinary and i i wondered at the time if we were entering an age where you know everything everything we'd done had had had kind of moved from assets and money and and middle class had moved from investments and in different stuff to where their kids were just buying rims basically

or you know blowing it uh i don't know whatevers basically, or, you know, blowing it at, I don't know, whatever they blow it on, you know, expensive cars and different things. And so I'm like, are we going to end up in a position where we're going to become a renter society? And one of the big concerns, and I think it's concerns everybody's listening, is one of the great wealth generators for the middle class has been able to buy a home and have an advance in equity and be able to live well with that. I mean, the boomers, that was a real big key for them. You have a chapter in your book where you talk about that. And what's been extraordinary is the last few years we've seen these private equity

firms go in and they're just track buying huge amounts of homes, driving up the prices where most people can't afford them. And almost what seems to be like what I predicted earlier, that we might turn into a renter society, only this time it wouldn't be a buyer choice. Yeah, it's really interesting. And I should say this answer, like all of them, I'm speaking personally and not necessarily on behalf of my employer. But when we're talking about ownership, home ownership, private equity has really played a transformative role here. You know, when you had the Great Recession, and you had an enormous, you know, sort of amount of foreclosures and people with underwater mortgages, you know, rather than, you know, sort of having a temporary reprieve on paying principals or principal reduction or anything like that,

the FHFA and Fannie and Freddie ultimately collected these foreclosed homes, and rather than selling them individually so that people could buy them, started selling them in these large tracks where only institutional investors could, especially private equity firms. And when they did that, private equity firms. And when they did that, you know, private equity got in the game. And rather than then reselling these homes, they converted them into rental properties. And so you have large tracks, you know, if you worked in the mortgage industry, you're familiar with this, you know, communities that really were devastated by the Great Recession, whether you're talking about, you know, Las Vegas, or Tampa,

you know, Atlanta, and so forth, you have many of the same people living in the same neighborhood, but now they are, you know, renters rather than owners, which, you know, takes away the opportunity for building wealth. It's gotten to such a point that home ownership, as I recall, is now back to what it was in the 1980s. For people in, you know, for African-Americans, at least according to one commentator, home ownership is back down to what it was during the civil rights era. So it's a really transformative trend in sort of the nature of building wealth in America

and private equity helped to lead the way. That is amazing. And I, you know, one of the nature of building wealth in America and private equity helped to lead the way. That is amazing. And I, you know, one of the companies, I don't know if you're familiar with SFR Investments in Las Vegas, you mentioned Las Vegas, but when I first moved back from California, I rented a home from them because I was moving back and they had run an extraordinary game where they, with the laws of first and second titling in Nevada, all the banks had pretty much not been paying the HOA fees. And so they went in and kind of deal with the HOAs and bought track homes for pennies on the dollar just by paying the bankruptcy or the HOA fee backlog.

And they acquired, I think it was 800 or 1600 homes. And then they, because of a stipulation in the law, they were able to write off the first and second liens and have them taken off the title or fight to have them taken off the title. And the banks were like, wait, what, what the hell just happened? We have first right of, of title. And it's like, no, the way Nevada law is written, HOA does. And so they fought that for years, but they acquired a ton of title and it's like no the way new vandalas are written hoa does and so they fought that for years but they acquired a ton of homes and the hoas were like there's a key you paid our fee and the bank's like what the hell and then of course my neighbors were angry because they're like man it's you know you're a nice guy chris but you know there's a lot all this riffraff now

in the neighborhood maybe i was the riffraff but uh it's just running so now people can't build wealth the prices are so high we need a reset um i mean i think we would uh and the resets are never good but uh you know that that affects how families can build wealth you know we're we talk about how you know the new gen Z is trying to make it in this whole post-COVID world. And, you know, maybe we just end up with an enslaved renter society along with college debt and all the other different things that we have going on, health care debt and et cetera, et cetera. Yeah. You know, you don't need to be sort of a democratic socialist to be concerned about this. You can be a traditional conservative and be worried about this. You know, homeownership is down dramatically, especially for younger people.

And you look at the surveys and it's not that preferences for home ownership have changed. People still want to be able to own a home, but they say that they can't afford it. It's interesting because, you know, when you look at what it's like to live in these rental properties that private equity firms own, you know, it's a pretty tough road for a lot of folks, you know, not just about, you know, whether or not they're maintaining properties as they should, or if a renter falls behind sort of exacting, frankly, kind of embarrassing or cruel tactics. I was reading about, you know, how one private equity owned owner would wrap caution police tape around a home if a person became what, you know, was a few days late on their rent and so forth. Really?

But also, you know, just that a lot of the money comes not just from the core rent, but from piling on fees that, as you know, you know, you can start adding an awful lot of fees before somebody is going to move, you know, whether it's fees, you know, for things that you might expect, like a pool or something like that, but, you know, special lock fees and things like that, that people just aren't going to be aware of when they first signed their lease agreement. So I think it is really changing the nature of what it means to build wealth in the country. Yeah. And changing our ability to build wealth. You know, ever since 1980s, when I grew up, it just seems like Main Street's been attacked.

You can blame the liberalism and Reaganism. You know, I'm still waiting for my checks for that trickle-down work. I don't know about you. Maybe you got your check. But, you know, there's a point where it's out of control, and I think housing is the biggest concern because people are just trapped. I mean, they're trapped and we're almost, I think you mentioned in another interview I saw you talking about just a rent extraction market.

And since there's such a monopoly of tracks they bought, you don't have really a choice. It's almost a monopoly. Yeah. You know, I think like the most extreme version of this in housing is mobile homes, where private equity firms have been buying mobile home parks. And I don't know if this was ever part of your business, but mobile homes are very rarely mobile. They're usually sealed with concrete on the property. Only in tomatoes. Yes, exactly. Homeowners really pay two rents. One is the mortgage that they pay on the property, and then they pay what's called a lot rent. And so there are really tough stories about private equity firms buying up mobile home parks and then increasing the lot rent. In some cases, I think allegedly even doubling the lot rent.

And this had a twofold effect because it meant that the residents had to pay, obviously, increased lot rents, but it also meant that the homes that they had paid a mortgage on or owned outright now dramatically lost value because fewer people could buy them. And so it was a way to extract not just the income from residents, but also potentially their wealth. And those things are expensive to move. So you almost have a gun at your head where you go, you know, I have that with my storage units, like they love to give me a low cut in. And then over the course of a couple of years, I just got another one that I'm just like,

seriously. And I sit there and go, okay, I got to pay movers a grand to move this crap. And they just did this. And how much am I paying per month? And, you know, and then they know that game is going on in fact i can name a few companies that do that um and some of the uh big uh what do i want to call them here uh the rental companies and and some of these big funds um you know some of them they're really awful landlords jared kushner excuse me um i don't know what that was uh but uh you read about some of the things that were going on and some of their stuff and you're

just like holy crap so what are some what are some things that people can do what are some things that the government should maybe look at doing what are the things maybe we should demand more from our politicians to change or improve the business? Because evidently, I imagine there's some good things that private equities do. Yeah. I always say that as long as people want to build factories and hire employees, there is a role for finance and investment to play. You need somebody that's willing to put up the money and take the risk for a business to succeed. So my goal is not to end private equity or anything like that. It's to make private equity, I always say, sort of less interesting in some sense. The basic problems that we've got with private equity is they tend to invest for the short term. They tend to load up companies

with a lot of debt and a lot of fees. And they tend to be, as we've been talking about, insulated from liability for their actions. And if you change that, private equity can be made a useful force overwhelmingly for society. So how do you get there? You can push change through Congress, although Congress is, it's often very hard to get action on these issues. There's things that can happen at the local and state level. And I actually think that's where a lot of the movement on this is going to be over the next few years. For instance, requiring that if a company is bought in your state, that they not execute some of the tactics that we've been talking about, about dividend recapitalizations and sale leasebacks and so forth. Federal regulators, whether we're talking about the SEC,

the Treasury, Federal Reserve, Fannie and Freddie, when we're talking about housing, can do a lot of these things. So I think that there are a lot of different levers that people can pull in order to make private equity work for the country. There you go. And of course, your book is the greatest thing that we could have to expose some of the stuff, talk about it, get people educated, get people to learn about it and go, hey, what the hell is going on? And that's the real important part. That's why we do the show. Education is everything. The more you know, as it were. Any final thoughts you want to share, Brendan, before we go? Just very briefly, as people are learning more about this issue, don't underestimate your own

influence. I think that, I say this as a lowly government employee, that hearing people talk about these issues can empower folks in government, can make people realize, you know, what, how issues affect, you know, people in the real world. Um, so I encourage people to learn more and to make their voice heard. There you go. Make your voice heard, talk about it more. And, and, you know, I mean, capitalism is a great thing. The weird thing about America is everyone thinks they're going to get rich. It's like that fight club scene. Everyone thinks they're going to be a millionaire and rock stars. And so everyone's like, well, maybe we shouldn't regulate rich people because I'm going to be rich someday, according to the American dream.

And so we kind of this thing where we don't, we're like, hey, I don't want any rules. So when I get there, I can do whatever, you know, Elon Musk is doing, whatever that is this week. I'm not sure he knows either. No, I'm just kidding. We're just kidding, Elon. Don't sue us. So there you go. So fun is fun.

Give us a.com, wherever you want people, Brendan, to find you on the interwebs. Plunderthebook.com and twitter.com slash Brendan Ballew. And you can look up the book anywhere books are sold. There you go, guys. Educate yourself on what's going on because this affects everyone's bottom line. Your future, your pension plans, your retirement, money you're making.

You know, Main Street seems to be the one thing that needs to recover in all of this. Thank you very much, Brendan, for coming on the show. We really appreciate it. Thank you so much for the time. There you go. Thanks for tuning in. Go to goodreads.com, 4chesschrisfoss,

youtube.com, 4chesschrisfoss, linkedin.com, 4chesschrisfoss, help us out on tiktok give us a like over there we're trying to be cool it's not working of course thanks for tuning in be good to each other stay safe we'll see you guys next time