TRASHFUTURE - The House that Garfield Built feat. Hettie O’Brien

Episode Date: April 28, 2026

Riley and November speak with journalist Hettie O’Brien about her book The Asset Class: How Private Equity Turned Capitalism Against Itself. It’s not necessarily the most uplifting topic, but it��s very illuminating. And don’t worry: we also talk about “MPs should be allowed to be drunk on the job,” and much more. Check out Hettie’s work here! Get more TF episodes each week by subscribing to our Patreon here! *MILO ALERT* Check out Milo’s tour dates here: https://www.miloedwards.co.uk/liveshows *NATE ALERT* Lions Led By Donkeys will be performing live in London on 29th May and you can get tickets here! Nate's band Second Homes is about to release their debut album, and you can stream / preview / preorder it on Bandcamp here! Trashfuture are: Riley (@raaleh), Milo (@Milo_Edwards), Hussein (@HKesvani), Nate (@inthesedeserts), and November (@postoctobrist)

Hey everybody, welcome to your free TF this week. It is Just Nova and I as Hussein has contracted what I believe to be Hanta virus. RIP. And so the first half, we're going to talk a little bit about some of the goings-on of the day. And the, let's say, the great chip switch, the great transatlantic chip switch among right-wing NPCs. Yeah, some stuff's happened. Yeah, yeah.

And people feel the way they've been told to feel about it. Then in the second half, we're going to be talking to Hetty O'Brien about her new book. the asset class, which is all about private equity and what is this industry? What does it do? Where does it come from? And what's its relationship to democracy? I assume fine. Yeah, nothing to worry about.

Assume fine. All right, let's get into it. I think that it's super crazy that conservatives on both sides of the Atlantic today got their NPC chips switched at the same time, but about different stuff. It's weird to see them be completely going in opposite directions right now. Yeah. And here's the thing. The British one, as ever, is the funnier one.

The American one, the American set of talking points that came out was, our president does not get his gay ass ballroom. He will be assassinated by Antifa immediately, who will fire an RPG full of dildos at him, killing him. Whereas over on this side of the Atlantic, it was, you know what's cool, it's drinking at work. It's like every columnist and MP from every party except for the Greens and like maybe the S&P and played,

are standing up, swaying gently, and saying, I don't have a problem, you have a fucking problem with Hannah Spencer. How good is being drunk at work, though? So for Americans who might not know, because you're paying so much attention to the ballroom argument, because from what I can tell, a, like, Jesus was a socialist co-exist guy, Naruto ran into the Hilton where they assassinate presidents.

That's so funny. I mean, I have to give credit to my co-host on Kill James Bond, Devin for having the funniest take on this several years ago, which is, it's so embarrassing that it's never a leftist. We're such pussies. We are cooked. But the thing is, right, there's a read on this. And I mean, this is, this is, this is, this is, this is G. Here's read. And I think it's correct, right, which is that if you're a socialist, if you're a communist and anarchist, you have a kind of optimistic program of government. If you are a lib, right? If you believe in the institutions, and then, and you don't think anything else needs to change, then he's got to go. Like,

and just him, that's fine. All these guys at the top, they need to be killed in that mindset. If you're a coexist bumper sticker guy, Donald Trump, single biggest threat to the kind of coexist mindset. Yeah, because if you are this kind of guy, you're like, I love my electoral college. Yeah. I love my Supreme Court. I love my separation of power.

The unitary executive, I don't even mind that. What I don't like, it's orange man bad. And the thing is, right, like, I'm going to cite someone else who's views I've read on this or think are worth bringing in, which is Ken Clippenstein. I think raised the question very well, which is why do increasingly normal people feel the political system is so unresponsive to their concerns that they resort to violence? It's this, I think, constellation of beliefs that aggressively normal people have, which is they don't really think that much about the institutions in the systems because they're imminent. They're everywhere. They're they go without saying.

Yeah. Well, it's also like a couple of things. First of all, we're witnessing the libs with the most motion unexpectedly. And, you know, we do have to hand it to him on that. basis, they really do, like, have their beliefs wholeheartedly, and they are willing to narrow so run at the president through a gauntlet of Secret Service guys for them. But also, this is sort of blowback, right, from the Trump administration's trigger all normie's approach, right? In that they really, they really want sort of like war against normal, right? And they

love triggering these people, not as much as they love triggering sort of like, you know, the woker more leftist people that they imagine in their heads. But they love triggering these sort of like process guys too. Well, they're all the same. Yeah, yeah, absolutely. They're all NPCs. And I think people do not respond well to that. And sometimes you will find a guy who is just like huge Ruth Bader Ginsburg fan.

Hassan Piker is too radical who is like, yes, I understand Pod Save Johns. I will assassinate President Trump. It's like instead of putting the bandana of the rising Sun flag. It's putting the bandana of like the live laugh love. Like putting a wrapping of live laugh love bumper sticker on your head like a rising sun bandana. And then Naruto running into the White House

Correspondent dinner. They also shot Cheryl Ford. But not so Jody Foster would love you. So John Roberts could be free from judicial pressure, I guess. Wait, who do you think got shot at the Washington? Fucking Reagan. God damn it. I mean, Ford also got shot but like shot ads. Yeah.

It might have been there. Fucking maybe everything happens in like the Washington Hilton. Maybe. Maybe it's on some laylines that guide the kind of weird or American there. That's why the Kennedy assassination happened in Dallas and not at the Washington Hilton because that was a larger plan. Not just a weird guy. What's also really funny is once again the Trump administration doing everything it possibly could ahead of time to make this look like a false flag inside job just because of their

commitment to being fucking Sephiroth posting. and speaking as portentously as possible. So Catherine Leibat, the press secretary, worst liar in the world is like, I don't know, there's going to be some shots fired tonight, if you know what I mean. And, of course, she's talking about a drinking game with Heggseth, but... Yeah, probably.

But I think, like, what I want to go back to, I think is right, is like a lot of the modern political project, and that's not just the right, that's like the center as well. Anyone whose politics is anti-politics. Screwing the silence around to the end of my right. for. It's nice, isn't it? Quiet. It will be nice. But I think when I say political style, I mean, I don't mean purely aesthetics,

but what you're trying to do with the state and what you think political engagement means. Yeah. And for the right, anyway, if you're not in their reactionary clique of rapist cokeheads that make up the entire government. Yeah. Then what you're trying to do is largely aesthetic, which means that they want to feel good, which means launching missiles, no quarters, send the troops, send ice, build the wall. They want to make, they want to feel good by making this guy who has like a lawn,

sign for like a Democratic judge on his, you know, out front. They want to make him feel bad, you know? They want to make like substitute teacher or like software engineer or like anyone who could be in the B role of like normal Americans in a campaign ad because that's how kind of how they experience reality. They want to make that person feel bad and they're not really prepared for what happens when that person kind of realizes that they're being told, oh yeah, democracy is over. It's sort of like, you know, the rape Coke Burger Reich forever

and realizes they live in a country with all of the guns. I think because their project is also so internet, they're like, well, the goal is to make someone mad. Yeah. The matter you get, the more you win. Yeah, I mean, this is ultimately what it's sort of spiraling towards is Donald Trump bleeding out on the floor of his big, beautiful boreum and his staff is declaring that ultimately he has won the argument with the guy who shot him.

Yeah, actually the president is actually laughing. Yeah. He's down there with Charlie Kirk looking up laughing too. It's so funny that they gave Erica Kirk PTSD. I can't think of a single person who deserves it more. Oh my God. But yeah, like, okay, your whole project is based on getting people mad. They're mad.

Okay, what was your next plan? Erica Kirk being the kind of right-wing Robert Todd Lincoln, where she's just present at every assassination attempt of significance for the next. 50 years. Other than that, Mrs. Kirk, how was the campus debate? Did you win? In a sense, yes. But if we jump over the pond again, right, which is,

because obviously all the NPC right-winger in the US are now saying we must build the ballroom because the American government must be a fortress of its administration. On this side, of course, we've alluded to this. Oh, by the way, one little thing, one quick hit before you move on. Do you see that Trump said that he felt reassured

because of how hot all the cops were? Yeah, I mean, look. Listen, I don't love that he's America's what, like, third gay president, but I ultimately, I have to respect he keeps putting it on the record that I was like, yeah, I wasn't worried because, you know, it's a dangerous job being president, but all the Secret Service guys were really beautiful. Gotta find his A.03 account. Oh, no, we don't. All the president's men. President slash secret service. Secretary of War made to watch.

They got Vance evacuated before Trump, and I think it's just because Trump was distracted by how hot the Secret Service were. They got Vance evacuated before Trump because it was like, get that ugly boy out of here. Well, they got Vance evacuated because that's just how he leaves every event. You know, this secret service detail is ordered to like usher him quickly to the exit. We just assume he's upset someone enough that they're after him now. So let's, I'm going to jack it over the head, Vance. Let's go. But the UK Commentariats operation to continue giving Polanski and the party the Starmor treatment

has resulted in like that all the right way NPCs here getting the chip switched out in their brain and they're say, oh, don't like getting pissed all day at work while you're making all the laws. Now here's the thing. I do not respect Parliament. Not at all. I think if they were drunk while they were doing their jobs, it would change very little because most of it, most of what most of them are doing is on autopilot. Yeah, absolutely.

This is the thing, having a sort of green theory. power means maybe these guys shouldn't be drinking at work. I barely even respect the Green Party at this point. I'm a proud maybe member of one incarnation of your party, thank you. It's tough to tell. Like I say, I don't respect anybody in Parliament. I think it would be great if someone in Parliament tried to, I don't know, use politics to change things instead of have little sort of fencing battles about who gets to not really

take it around the edges. The thing is, if you elect someone to do that, they are going to have to get over first the kind of realization where they get into parliament and go, damn, bitch, you govern like this. Yeah. And to come into parliament and deal with all the people who are all convinced that they should not be there. Like, everybody in parliament, I think that me's Hannah Spencer probably says, well,

you're not the right sort of person to be here because she is both too posh, because she's not trying to, let's say, pander to the politics of a sort of coal-streaked minor that, like, fucking West Streeting imagined. Yeah. You know, she's not doing that, which means she's too posh. And also, she was, until very recent memory, a plumber, not to mention a young woman, which is basically,

according to them, dumb because it's a plumber and not like a uni job. And two, also posh and dumb because she's young and a woman. And listen, if you think that's difficult to kind of follow and reconcile in your own head, what I would recommend is having about five or six strong whiskeys that you get at

extremely subsidized prices. Yeah, it's like when I first moved to the to go to university. There was a bar that did 5p shots. I used to think that it closed. I think it just moved. In case, she says, you know, I'm pretty uneasy being around this many drunk people in my working

day. Again, because I think the thing about Polanski and Spencer is at least what we hope and what we on knowledge what I will on knowledge and belief say, they want to take politics seriously as opposed to treating it as an inconvenience between sinecure. Yeah, whereas

if you're in the kind of like Westminster Village, It makes you feel big and special and also like it's a reward for working so hard, both to get there and also, you know, in the actual governing to be like, yeah, of course I'm going to be sick down myself. Why shouldn't I? Do you know how hard I work to get into Oxford? I think that entitles me to just hit the tequila three in the morning, three in the afternoon. Well, you know, or morning. I think it's, I think it's over the way. The curtains are kind of heavy and all the security windows and stuff. You can kind of lose track, to be honest. Well, the thing is, when you queue up. for parliament. You should look like you belong. And then they will probably let you in. Yeah. Wear all black. It's crazy to have your actual first thing in parliament be like, damn, it smells crazy in here.

It's weird that everybody's constantly hammer. And I mean, look, I know people. And it is weird. It is weird and embarrassing. And it sort of, it threatens the ecosystem, the biome, the whole fucking rock pool, right? Because if somebody normal comes in and says, it's weird to get drunk at work this much,

then, you know, it kind of punctures a bit of the illusion that like everybody there is looking out for each other and is in a similar kind of like alignment, right? And nobody from the media has ever credibly threatened that. Nobody in government's ever credibly threatened that. So this is bad news. Fundamentally, I think what's something you hit on earlier is worth repeating, which is that it makes them feel very special.

Yeah. Because they're like the only other people who get drunk and midday at work is like city people. Yeah. You know, everyone else, those, you know, idiots who didn't get as good degrees as us and artists connected and artists inside, they're all in the sucker jobs. Yeah. Whereas we are in the sort of the cushy fun ones, like on television.

So what I've learned is by the transitive property, we should get some more greens in investment banking. Don't summon that into existence. Don't do that. You have a power to do things like that and I'm tired of you doing it. No, no, no. Listen, if you're sort of like listening to this and you're thinking about going into a job and finance, you can change the system from the inside. She says, there have been recent cases of questionable and dangerous behavior from Parliament staff potentially MPs because of the unprofessional culture of drinking.

Yeah, notice how none of those incidents, by the way, ever prompted that much of a like, you know, formal internal investigation or any kind of real media scrutiny as well. Like, again, the kind of damage that like any journalist could do with an impressionistic treatment of. of Westminster would be huge. But none of them do that. Even when they retire, right? So it's worse than the fucking mafia, right? Because there's so much mystique and so much self-belief to it that all they want to talk about is the kind of position and the seriousness and the sort of,

oh, how grown up it all is. And it isn't. It's the inverse of that. It's fucking school. It's student politics. You never leave the quad. No. No, well, this is the thing.

You go to like Oxford for PPE and you, never come out. You just stay there forever and the rest of your life sort of contours itself around that experience continuing until you die of a heart attack because you kept drinking at nine in the fucking morning. What happens is you go to Freshers Week and you get a bit drunk and then you keep on chasing the hangover and then you're a lord. Fifty years later, you're Lord. Have we considered that the entire parliamentary system might be in a kind of like lost weekend? We left what? you just it's a hole you fall into in fresh as week and then you kind of come to 60 years later in a

retirement home where you're like I was a what elected for where? But of course this is also why you know I say that advisedly because also this is one of the reasons that most MPs mostly have contempt for the places they represent yeah they mostly have contempt for the people who broadly they represent from their parties they don't have contempt for one another they don't have contempt for some of the press yeah and again this this is aggressively polarized against normal. It's just not quite as, like, as ever, the US has lapped us in terms of what it means

to be aggressively polarized against normal because here we've been doing it in a slower, more grinding way, right? And so then we have, because everything is negative polarization, if Hannah Spencer says something, it has to be wrong. And it has to be beyond the pale and it has to be sort of disgraceful behavior. Yeah, I mean, this is the thing that unifies the two stories

is in both cases you can go to where the head of the government is and just yell active shooter in the building. But in the UK, that's sort of legend behavior. Active shooter in the building, downstairs, he's got 10. Yeah, it's Midori Sowers, but if you take enough of them, they'll see through the fucking wall. Because of cross-party committee. I would kill myself.

I have to be honest. If you never, not that this was a risk, but if I was ever MP for anywhere and I had to, to hang out in that middle year, it would drive me deeply insane. Well, that's the thing. I think, again, if she's who I hope she is, that's going to be something that a relatively normal person who wants politics to be serious and make change in people's lives other than just continue the fun game that they've been having and just sort of wave through whatever gets written for them by fucking Palantir or whatever, you know,

then of course it's going to drive you crazy. Here's the thing. Like, Greens or not, right? This is a strong argument for staying out of parliament as long. long as you can, something which I think is, you know, probably in the Polanski playbook personally. Yeah, he's doing well not being in there. Absolutely. And I think it's doing him good, not being in there just on the basis that like, you know,

you take any group of people, whether that's sort of like greens or anyone else, right? And there's an environmental effect on your thinking. And also, you know, someone goes, hey, do you want to drink? A lot of people, decent number of people are going to go, yeah, sure. And so all of the ways that that building and that system can get its hooks. into you. It's good in so many ways to be able to build a sort of like political apparatus that doesn't involve it. I mean, just sort of going through some of the comments here before we move on is Natalie Fleet, Labor MP for Bolsover at Seb. Working in a palace is mad. The smell of fags

and beer is one of the things that makes it seem a tiny bit normal. And it's like, no, sorry, you can't be like. Sorry, sorry, hold on. Where else has Natalie Fleet ever worked? I need to know this because a nice hair streak, actually. I respect that immensely. But otherwise, any woman with the like Cruella hair, that's a decision I've made for myself. So actually maybe she's right, you know? Yeah, ultimately right. The party line is, this is my comfort beer. Yeah, yeah, yeah.

Or Luke Charter's Labor's MP for York Outer responded saying, Breaking news, MPs are human and sometimes have a drink, which is the most alcoholic response? Yeah, I would say so. It's just like, Your Honor, is it a crime to have a simple drink, a thing that's legal to have while I'm operating this legislature. And the judge would say, of course it's not. I'm also drunk. This is Britain. Yes, yes, of course.

It's very funny to have like strict laws around like operating a forklift than a fucking parliament. That Luke Charterers goes on. But sure, let's talk about that instead of the Greens' wacky policies. Well, the thing is, I would genuinely rather they were talking about hypnotic breast expansion if they were all sober for it. I think it wouldn't have as many hooks. Yeah.

Oh, you're trying to distract us from your crazy policies, but also like the policies that always get cited are drug legalization, which is popular in supermajorities. Yeah, and also not at work. Yeah. I mean, maybe. Maybe I've been misunderstanding the Green program this whole time. And what Zach Polanski wants to do is institute full Sharia on alcohol and then hotbox the comments. And if he does, then I will have no choice. But to, you know, remove my principles as maybe a member of your post.

party and vote for him. But also the other wacky policy that gets cited is taking the UK out of NATO. But Donald Trump is sort of constantly hinting at taking the US out of NATO. Yeah, yeah. It's one of those things where it's going to become more and more awkwardly correct until they do the classic maneuver of just brushing past it and being like, yes, yes, of course you're always correct. But like, we knew that the whole time. You were correct before it was obvious to us, which makes you wrong. Yeah, you don't, you don't remember any of that stuff that happened. We all came to the realization at the same time that you also came to with us. And so the last one I want to quote before, I'll do a quick article and then we go on to talk to Hetty is this is Shirel Jacobs from

the telegraph who said, the real story here is how the Greens are signaling to their young professional base who barely drink and when they do are frequenting trendy cocktail bars on weekend evenings, not local pubs when they're still on the clock. Okay, she's got us there. but also the MPs drinking are also broadly young professionals they just drink way more in ways that are in a...

It's not like, they're not sitting there with like fucking woodbines and pints of bitter like they haven't put a fucking like fixed odds betting terminal in the bar in parliament, I don't think. Not yet. Well, maybe they should. That's how the gambling lobby gets its hooks even further into the labor government

is by putting a fixed odds betting terminal in the bar and parliament, but the odds are amazing. Yeah, Prime Minister's three things, first policy. You win every single time at that fixed odds betting terminal only. It's not a bribe. It's just a very badly programmed

lottery terminal. Anyway, I love virtue signaling to young professionals or whatever. And yes, there's a generation of young people who simply cannot comprehend the idea of drinking to take the edge off a long day. Cocaine, maybe. You know, to take the edge off? Uh-huh. Well, of course, we know that MPs would never use

cocaine in Parliament. No, no, not at all. But alcohol genuinely baffling to them. After all, it has calories. And I feel like there is... Whoa. Okay. The longer that these people... Doesn't even have that many calories.

Attempt to negatively polarize against something that's pretty normal by acting like it's crazy, the less sense they make. Do you ever... Do you ever Owen Smith's frothy coffee? I do. That's sent me on a kind of vision quest

trying to work out the furthest away you could get in the United Kingdom from a cappard. Or somewhere you could get a cappuccino. And I really don't think it's far, especially in like the mainland. You know, like, you could be upper Breckenbeacon and like just fall down it into the nearest sort of village. And there would be a coffee shop. It's like the whole premise.

Because Morgan McSweeney didn't come up with that particular hero voter that they're all going for. Yeah. They just say the only people are retired white pensioners in small towns. Yeah. I'm a retired white pensioner who lives in a small town. I start every day. with six pints for breakfast, and I'm deeply concerned about men and women's spaces. Yeah, that person, because they must always, it's just, you must always polarize that person

as a real individual. Yeah. And it's still, even though they're retired, they're still in work, and it's still 1976. You must have to polarize that person away from anybody trying to do anything serious with politics. And that just, it means you have to be like, oh, those, those Puritans who don't want to get hammered at noon. I think we're, I think we're, you know, sort of forestalling another.

potential outcome, which is that Hannah Spencer and Parliament end up in a kind of like love, hate relationship like DCI Gene Hunt and D.I. Sam Tyler from Life on Mars, you know? She comes back first day. It's like, why are you drinking at work and like hitting people with phone books? But eventually they come to respect each other and their different approaches to solving the same problem. One of them's drunk. The other one drives. This new buddy cop comedy. I mean, literally, life on Mars the bit was one of them's drunk, one of them's woke. what will they do? And I think that's our co-exist bumper sticker. That's our get along parliament. Okay, hold on. I'm thinking of it right now. It's a coexist bumper sticker and it's like the

exes or the three sobriety straight edge exes. Pretty good. Uh-huh. And then it's the C from the Coors logo. The things that the drunk woke coalition can accomplish in government, you know, we've been talking about dark woke for too long. I think what we need to be talking about is drunk woke. I think that's the energy we should take in to the second half of our episode where we will be interviewing Hetty O'Brien about her new book about private equity. Amazing. All right, hello from the second half to everyone from the first half. I hope the short musical interlude was enjoyable. We are now speaking with Hetty O'Brien who's written a new book called The Asset Class, How Private Equity Turned Capitalism Against Itself, or for our purposes, what I'm I'm calling it, private equity is the ultimate contradiction heightener.

Heady, welcome to the show. Thank you for having me, and I like that as a subtitle. So I kind of want to talk about this book today along two tracks like we so often do here, because we talk about capitalism, finance, the tech industry and so on, on its own terms, to understand the problems inherent in those things that even they would recognize, as well as understanding them to that they're a system that is exploitative and undesirable, and even one that was fixed would still be exploitative and undesirable. Now, the thing is, we talk about private equity as well a lot on the show, but mostly by implication.

It's usually we see the weird little morbid symptoms. Yes, we talk about the symptoms of private equity. We also talk about the, I would say, quite reckless accumulation of assets that they might undertake. But generally, when we talk about the private equityization of something, it's synonymous with the degradation and service quality, increases in price. And so, Eddie, can you just take us through? What's the model of PEization in general? because we've only talked about it in specific cases. Let's just do some table setting.

Yeah, and I think, to be fair, I guess part of the reason I wanted to write this was because I was sort of thinking, you hear a lot about this industry. You're actually, nobody can really explain what it is. And there is this, like, really fascinating history to it that I hope we kind of get into a bit later. Private equity is a term is a bit like a form of camouflage in the sense that it tells you basically nothing about what private equity actually involves. And it was sort of invented as a term to do some reputation cleansing slash laundering

after the backlash against what were known as leverage buyouts in the 1980s. And so those leverage buyouts are really at the heart of what private equity historically has done. I think some of your listeners will be familiar with this model. It involves a private equity fund comes along and buys a company using lots of borrowed money and then loads that borrowed money or debt onto the company itself. And whereas you or I might go and buy something using debt, say using a credit card and we eventually expect to be in a position where you had to pay back that debt, the private equity fund and its managers managed to essentially outsource the consequences for that debt. And so it's this

kind of heads I win, tails I also win model whereby even if the deal doesn't go well in the long run, the private equity fund managers do not necessarily have to pick up the consequences of that. But also when you think about the kind of macroeconomic picture or what this means for things like productivity and growth and everything like that. When a company is really heavily indebted, it does end up in a position where it has less money, less cash flow to spend on other things that you might expect a company to be doing, whether that's manufacturing widgets or providing care to your elderly grandmother or whatever. Yeah, I kind of understand this to be part of a larger transfer of, you know, sort of economic assets from company that does stuff to

guy in a gilae who doesn't. I do think that's yeah, that's not wrong. It is a kind of model of ownership that has less to do with owning in the sense of taking care of something in a kind of long-term stewardship way and more as a kind of shorter term

what money can we make from this and how might we be able to extract this extract value rather than create value kind of way. If you, like I so often do, follow a lot of like financial accounts on Twitter if you're a fin-tuit person. then the stereotypical private equity leveraged buyout is you find a regional HVAC technician with $5 million in sales that's like a family business, but has no website and no CRM.

And then what you do is you take a bunch of money, you buy that and five other identical businesses, and then you create value by pushing them together, getting them a CRM, getting them a website, finding redundancies, and so on and so on. That's the story that they tell, which is... All the stuff. that signals value as opposed to making products. Yeah, but even then, the story that they tell is one where we are in, by using debt, we have a bird's eye view where we can make all of the HVAC technicians in Southern Ohio,

for example, way more efficient because we've spotted that opportunity. I'm a capitalist central planner. Yeah, well, we are going to get to the central planning element. But yeah, they think of themselves as capitalism's answer to central planning. but because of the incentives in the system that they're in, they are probably, and I say this advisedly, the most self-enriching central planners in history. Because the other thing is, as far as I'm aware,

Heddy, please keep me honest with this one, that story about like finding efficiencies in like regional companies and making them into a bigger, leaner, better machine, even we explain that it's pretty evil. It involves making a lot of people redundant. even, but that's their cover story. That's like their PR story. What they do is actually much, much, much, much more insidious.

Yeah, no, I think that the phrase cover story is one that I kept coming back to you when I was writing the book and in the sense that when you were kind of doing something like this and you're working with what can feel like quite naughty and remote economic concepts, you were looking for a way to really bring those to life. And while I was writing it, it just felt to me like it really had the outlines more of a sort of spy thriller as a story because it is a sense in which there's this kind of industry that exists just at the edges of our consciousness or visibility and is outwardly working to do one thing, i.e. kind of create efficiencies and basically improve the way that companies operate,

even though in reality it's sort of secretly working to undermine that very aim by actually, you know, imposing huge debt burdens on these companies. In another sense, it comes where it comes from that cover story is where PE or private equity emerges from is after the kind of post-war period. It's sort of, you can kind of map it on to the broader kind of forces that have been amassed against sort of social democratic capitalism, quote unquote. And so there is a sense in which these, this small group of kind of crusading financiers in the late 70s, early 80s really start to look at the nature of America's corporate economy and think, this is kind of a sluggish, unattractive, yeah, inefficient operation where there's a lot of managers who are sort of abusing

their positions and their largesse and they have like, I don't know, multiple membership. to different golf course clubs and they can, you know, in one instance, actually put the German Shepherd on a private jet stewarded across America, escorted by a member of staff. And the sense in which these kind of almost Tim Pop bureaucracies, these kind of this corporate largesse that exist in the American economy and what these financiers want to do is they want to kind of inject some discipline into the system and sort of splash cold water onto capitalism.

And so they think that the best way of doing that is putting these kind of huge debt burdens onto companies that debt will serve as this kind of disciplinary rod that will mean that as a company manager you can you no longer got the ability to you know take all of your staff out for a slack up meal as part of a kind of team bonding session because actually you've got to focus on servicing that debt so it's a sort of a disciplinary rod for your back um i i assume all of these guys are sort of personally quite ascetic right they would never sort of fly their dog anywhere privately Well, the more I looked into it, the more I was like, on one level there was a kind of belief in this asceticism. And one of the guys that will come on to discussing perhaps in a bit is William Simon, who's the kind of founding father of private equity.

And he is so committed to the values of austerity in his personal life that he encourages his kids to get the bus to school, have been driving them. And he also tells his wife that she has to crimcassaroles rather than roast because they're more fuel efficient. But actually, when you look at the kind of prodigious amounts of debt that these guys pile up, And also the way in which they then start behaving once they have rested control of these companies from the managerial class. There's a great quote that I came across of the former CEO of, I think it was Revlon Cosmetics that was targeted in a hostile take over or a leveraged buyout. And he says, you know, it's a really funny thing when these financiers take control. They start, you know, they go to France to get their wine.

They start getting their suits tailored on Saville Row and suddenly one plane isn't enough for them. They have to have two or three planes. And it's this kind of process of osmosis. And there was a sort of really, an irony there that so much of the mood music of this was actually about the growing threat of the kind of Soviets at this time during the Cold War and the sense in which the revolutionaries end up becoming the government bureaucrats. And actually it's a similar process within the American economy where these people who attain their revolutionaries who are going to inject dynamism into the system end up resembling

the people that they originally hated. Just to go back a bit, I don't know what's. funnier that there was a sort of plan more or less to cut the fat out of social democracy or that it then involved buying a bunch of HVAC firms functionally or that it sort of worked what you've been describing HVETI reminds me of and I sort of passed this note to Nova what you're talking about is a Protestant reformation for capitalism yeah I haven't I'm sorry about it in those times, but yeah, that's not wrong. This age fat company, way too many popes.

Yeah. And instead of hell, you have originally the Soviets, but then quite quickly, suddenly, Japan. Yeah, yeah, yeah, yeah. There's always someone out there who's, like, scarier or central planning than you are. Yeah, yeah. And, like, if you could, you can map this onto a lot of the, like, oh, we must be, we must be disciplined only by money. Can we, can we truly know if we are saved? You can apply this to China now.

Yeah. And the thing is, right? You mentioned this, this guy, William Simon and going to Moscow. The man so horrified by a five-year plan that he created the financial transaction that played a significant role in dismantling the functioning liberal capitalist state. And partly by creating the shareholder value ideology that's now everywhere and treated as this brute fact of nature. It's actually quite recently connected to this one guy. Oh, it was one guy who made everything bad. Well, that's going to save a lot of time in my daily schedule for like hating that one guy. So thank you for that.

Pledge enmity to the guy. Yeah. But let's talk a little bit about William Simon, why he sort of, as we say, like, created sort of the leverage buyout and how that led to this ideology of shareholder value sort of taking over everything. Yeah. I mean, and it is, I think, as a writer when you're writing about, you know, something that is quite a period in history where a lot happens and you find one guy who does seem to be at the center of it or you do feel really, it's really exciting when you get that kind of aha moment when you realize that this guy. really was, yeah, in the right place at the right time in so many different moments of his career. And so, yeah, he's a former, well, he starts off as a bond trader at Salaman Brothers, who's pretty abrasive and used to making enemies rather than friends, but he's also incredibly

good at his job at selling bonds. And he kind of tells his fellow colleagues that, you know, if they weren't selling bonds, they'd be driving trucks. He's kind of very much doesn't seem himself as a member of a professional managerial class. And he then enters government. He becomes Treasury Secretary under Richard Nixon. And he is kind of in the meeting during that period, sort of becoming friends with people like Irving Crystal and his awareness of the thoughts of people like Shumpeter is increasing. And he's sort of becoming more and more right-wing in his politics.

And I'd say he's almost 10 years too early in terms of that because Reagan was not in the sightlines of American presidency at that point. And so William Simon is doing things like he kind of fronts this film called, well, he does a kind of introduction to this film called the Incredible Bread Machine, which is if you're familiar with Reaganomics propaganda, you all have come across this film. It's a film created by this bunch of students about this story about a kind of incredible baker who's then basically ingenuity is ruined by the central planning kind of state and government bureaucracy. And again, it's a sort of, yeah, there's always a central planner that's worse than you

point. But then he wants to work under Reagan and Reagan takes a look at him and he's like, actually this guy is almost not too politically extreme, but he almost wants too much power and I'm not willing to give it to him. And so he never quite makes it into the Reagan government. But instead he gets called up by the Heritage Foundation to help advise on this thing called Mandate for Leadership, which is this document that ends up kind of, it is intended as a blueprint for the incoming Reagan administration as a way to help translate right-wing political ideas into actual policy. Project 1985. Yeah, Project 1984, which then becomes Project 2028, which then becomes Project 20s, as you're probably familiar with. And he is kind of, yeah, a real political firebrand. But he also, his decision to leave government or to at least give up on the idea of becoming

this big dog within the Reagan administration means he goes back to business and he meets somebody and he decides to go into business with them. And they start doing, and he meets an accountant and they start doing these kind of early leveraged buyouts with this kind of partnership they found. And one of their first big ones is on give some greeting cards, which is this. unloved subsidiary of Radio Corporation America. That's so sad. Just a perfectly innocent company, I guess. Yeah, which happens to be the company that owns the IP to Garfield the Cat.

So it's like Garfield the Cat is like one of the first level. Garfield the cat was like the prototype for why nursing homes are all terrible now. I guess you could draw that connection if you wanted to, yes. It's quite. A lot more people started hazing Mondays after that. So they basically, yeah, do a classic leverage buyout on God. I was about to say Garfield, the cat on Gidson Greetings. And he ends up making a kind of colossal return on investment.

I can't remember the exact numbers. I think it's like $600 for every dollar invested or something. He charges the company management fees so that basically he gets it for free. And everybody else on Wall Street starts looking at this. And they don't necessarily know what leverage buyers are at that point in time. And they think, God, how can we do this too? And so Steve Schwartzman then writes about this in his memoirs later on. He says, I basically saw what William Simon had done with gifts and greetings.

And I thought, God, that's exactly what I want to do. And then a few years later, he found Blackstone. And so it is this kind of, yeah, William Simon was just a super interesting character, both in the sense that his politics are quite clear and yet quite before their time in the way that he tries to enforce them. But also his business, his kind of, yeah, his professional career is really pivotal to the emergence of private equity. And PE is the house that Garfield built. Apparently.

So the thing I want to go back to as well is there is two strands here, which is this is a sort of the financial arm of an ideology that is attacking the sort of basis of the social democratic state. But it does do that a number of ways where it's that these people are, as you explain, had he deeply politically connected and they have strong beliefs about free markets and what economic activity ought to be for and ought to be generating shareholder value. which is like this idea that comes out of that time, comes out of like this group of people even.

Yeah, it's like we are doing evolution here and I'm a virus. Yeah, yeah, literally yes. And on the other side of it, they are attacking the economic foundations of a slightly inefficient economy that actually does benefit a lot of the people who work for it by saying we're going to make the economy way more efficient, which actually means we need quite a lot fewer people.

And so it's this twin track of make capital much better at exploiting labor, and secondly, attack the institutions that make life maybe without a job or without a high paid job livable. I guess my sort of question here is, it doesn't seem to matter that it doesn't make it more efficient in anything, but a really contrived basis, right? You're not making more Garfield greasing cards, but the Garfield greasing card company is now worth way more. Yeah. I mean, and so what's the question that basically creates, value that only accrues to a very small group of financial ideas. So what extent is that value sort of illusory, you know?

To what extent is that just a story the market's telling itself? I mean, it's really, yeah, it's really interesting point. And I do think that it's like there's, you know, lots of finance academics you've tried to drill into exactly whether and how PE ends up making the pie bigger. And I think that's almost like that idea that it's the point that Riley just made of sort of this, this kind of brittle relationship between capitalism and democracy being premise on the idea that everybody, or at least in that. enough people could claim to benefit from the kind of spoils of capitalism such that they would go along with it.

And that for the last 50s, or I guess more like 70 years, has been the kind of principal source of legitimacy of capitalism. And actually, I think that while the cover story of P is that it is conducive to economic growth, and that's very much the argument that, say, the chief lobbying body, the BBCA in Britain, which has kind of quite a close relationship with some of the members of the Labour government, would argue. No way. That's crazy. Who'd have thought it. But that's definitely an argument that gets made. But then I actually think it's almost like pro-equity is totally symptomatic of this era of low-growth, kind of capitalism that we find ourselves in where the pie isn't growing bigger every year reliably. And some people, rather than getting any kind of share or just being left with crumbs or actually with nothing at all. And so you do have this kind of rampant

sense of inequality, but also within that context as a model of ownership, the heaping debt upon a company and sort of speculating upon its future value is one of the most reliable routes towards wealth creation in a low growth economy. And you can see that it's almost the leverage buyer as being a metaphor for that, I think, when you look at the obsession with property flipping and asset accumulation and these like TikTok housing influences that I became a bit obsessed with whilst writing the book, I sort of came to think of them as doing the equivalent of the poor man's LBO. And so that just feels as though, yeah, as a, while private acting makes the argument that it is doing something to kind of improve capitalism, create value,

it's actually, its popularity, or at least its widespread reach is symptomatic of what looks to me much more like a kind of quite sporadic low birth economy where it's basically a sort of war over the crumbs and actually some people are getting extremely rich at our expense. Would you say it's a morbid symptom? Yeah, that's probably the language I was searching for. This is something we've talked about before as well, right? Which is that capital always needs a frontier. Yeah.

Well, I mean, and sort of invented colonialism to have a geographic frontier, it invented debt to have a temporal frontier, sure. A lot of the sort of mental gymnastics that you needed to believe, like, the metaverse would be real. You can put data centers in space is a credibility frontier. And what makes private equity unique as a morbid symptom is that it says, what if the frontier was us? What if it was a cannibalistic frontier? Yeah.

I went back to, I called it a virus. Really, it's more of a cancer. Yeah, or a prion maybe. But yeah, I think it is, I think a cancer is actually the right way to think about it. I mean, cancer is really good at growth. It generates a lot of growth. And if you don't ask questions about what kind of growth that is or how sustainable it is, you'd be like cell division, way up. Yeah, going to the oncologist.

and they're like, I'm so impressed, you have so many cells. Because it cannibalizes the institutions that make capitalism reproduce itself. Like I mentioned earlier nursing homes, water companies in the UK, they work by this exact model. They are bought with huge amounts of debt, loaded up with more debt that debt's used to pay dividends. And then if you try to look at the corporate structure of those water companies, they're incredibly opaque. But it's like reverse fortism, where salaries are decreased in the minimum amount possible, and as little is made as possible, so that you can Steve. try and steal value from sort of theoretical value, that quote unquote value, from the other guy

who's also doing it. It means the sort of the unproductive economy is where a huge amount of the value is lying. And the productive economy is largely an afterthought because the people who it's important to sustain are the people who are the managers of the funds. And so the nursing home that has like decided to lay off all but one of their contracted staff, for example, that that's like slowly killing your grandmother, well, that's fine because you're not a real person, nor is your grandmother, nor are the staff that were laid off. The real people are the private equity managers.

The real people aren't even the investors in most cases. It doesn't make that much fucking money. And I think that's one of the things that often gets said is that actually when you look at this compared to public markets or compared to just sticking some money into a passive index tracking fund, you're probably going to do better once you've taken account. The astronomic fees are private equity fund money. the suffering that you're avoiding.

Doing specifically unethical investment. Yeah. And I think there is this sense that the kind of language of the frontier is really interesting. It's like there is this kind of irony in the sense that there's this looming over the book and looming over the questions that I was asking when I was doing this research was this idea that the revolution is almost eating its own children in the sense of this thing that argues that it's been made capitalism better and to undermine the institutions upon which capitalism relies. And yet, actually, when you look at this is just simply a way in which some people are perceiving that capitalism has been sort of undermined or thwarted during the postwalk on a mid-century period.

If you consider that capitalism was never really about democracy, that that relationship between capitalists and democracy was something of a kind of historical blip, and this makes complete sense. And actually, when you look at where this is taking us, particularly when it comes to the kind of hatred of some of the regulators, such as the securities and exchange commission that have played, you know, know, a big role in the idea of kind of bringing the economy into the light, which is actually something that private equity does the opposite of by putting it back into the dark. You see that actually there is this kind of real attempt or perhaps even, you know, in a person, kind of shift towards moving us back to a economy and a political economy that looks much more like the 1920s where you have this oligarchic economy where a few people get extremely rich at everybody else's expense. But also when you think about where the frontier might be going next, it does look

like it's just increasingly us in a much more direct sense, which is when you, not just, not just in the sense of the kind of services that we rely upon, whether that's water or care, but also in terms of the shift into 401Ks in the US, which is a really significant move where you're getting. The industry being private equity, which has always argued that it's only interested in the world's most sophisticated investors, is now aiming to get into your average retiree 401k account. And that does look like a small group of financial insiders or super rich individuals harvesting an ever greater portion of society's wealth for itself. Sort of Dracula rattling the windows outside. Like, dude, let me in.

Private equity is a legitimate investment technique. Look, honestly, you invite me in. I promise I won't drink. I'm going to drink 2% of the blood that you have and 20 more percent of any extra blood that I bring to you. There are a couple of things I wanted to go through. before we, before we end, which think are worth doing, which is there are some worked examples in the book, like that of care homes. I think I've come back to a few times. I think it's probably worth diving into, right? Like, what has that actually looked like where a chain, say, or even a couple chains of regional

nursing homes get, like, fall into the sites of someone who's deciding to give them the old regional HVAC treatment? Get him a website to CRM. I mean, I think it's also really, I guess it's also really interesting in the sense that care is such a most is such a depressing subject at least in the UK social care is a kind of subject that a lot of people don't want to really think about because it all going to end up needing care at some point and so I was kind of looking for ways of making this more exciting and so I was really keen to turn the lens on the people who'd actually been profiting from this rather than just the people who are being sort of victimized by it and so I ended up spending a lot of time with private equity founders and fund managers who had really

take an interest in social care and it was interesting. in the sense that, you know, none of them actually seem to think this was working particularly well. Although, having said that, they'd obviously made a lot of money from the situation. So it's kind of easier to say that once you've already made your fortune and retired offshore to Guernsey or wherever. But yeah, it was definitely something that arose in the period, I guess, again, sort of late 80s, early 90s, as with so many things in Britain that went wrong can be traced in part to the decision to sell off or privatise the public service. So that was that to government's decision to privatise social care. And on one hand, you get this group of kind of businessman slash kind of Jack the Lad types.

You just find themselves in the right place at the right time. And there were suddenly all of these empty hotels and country houses that were previously kind of frequented by British people who are now going to like Tenerife and Benadalton places for their holidays because air travel's got a lot cheaper. And so these businessmen think, take a look at those empty properties and they're like, hey, we could turn these into care homes and make quite a lot of money from doing so. And so they start doing that. And then private equity also gets interested. And the consequences are pretty catastrophic. You get a lot of debt heat on upon care home companies, but you also get this technique whereby a private equity fund or bumble splits up the care home

into a kind of operating company and a property company. Make the operating company, the company that provides all of the care, pay rent to the property company. So it's kind of like a family selling its family home and paying rent to a landlord. And it means that when the, the rent goes up and up and up as it does every year, that care home company basically ends up in a position where it can't afford to pay it so it goes bankrupt, which is what happened at least once in the UK and probably will happen, I imagine, again at some point, that is continuing. And when you look at some really good kind of studies that I came across on the life or death

consequences of these types of investments, so there was one in the US which finds that I think the studies about 100 different care home companies that have been taken over by. private equity and finds that the death rate before and after those leverage buyouts increases by 11% once they've been taken over. Or in the UK too, there's a really good study showing that I think in the first wave of the COVID pandemic, the homes with the highest amounts of leverage had a mortality rate that was, I think, almost twice as high as those with no leverage at all. So it does really, this is, I think, one of the kind of real, the places where the impact of this investment model really start to come, start to be revealed in a really meaningful way.

I would say, well, at least we created a lot of value for the shareholders, but we didn't. All we did was, here's the machine that turns the elderly into exchange value that, by the way, the managers keep all of. I want to go back to the beginning, though, right? Which is, this mission ostensibly was born out of terror at the American or global Northwestern, whatever you want to call it, economy, being sluggish and having too much largesse. You don't understand. We had to kill your nan because we had malaise. I didn't feel sort of like a youthful and vibrant.

I was never going to eat that car. Sorry, I love an Italian futurist reference. And so, of course, we needed to be disciplined. But when you see value as exchange value only and they're sort of inured to use value, you don't sort of encounter it at all, then keeping the old people in a care home alive, at least at the margins, is largesse, basically, because that's using some of what could be exchange value. That old person living right there, another sort of two years of a high quality life, that might cost, say, one dollar of youth value, that's one dollar of youth value, but 10 of exchange value. That old person must be killed. Well, that's the thing. You put those sentimental feelings about the old person into democracy

rather than capitalism. And now, much like the sort of operating bit of a home, we're jettisoning the democracy part, then, you know. And I mean, fundamentally, the model is an attack on democracy as well, because if you think about democracy in its sort of thoroughgoing sense, you can see where it is quite obviously, which is economic democracy is about things like collective bargaining or unionization, or even like capital not being too efficient. Even just stuff like states funding care homes, you're kind of doing a leveraged buyout there in that sense.

You're just taking money off of the state and, like, loading it with debt. And that's the other half of it is that it must attack the foundations of thin democracy as well as thorough democracy. Oh, okay. Because that thin democracy also is a place where possibly sometimes by voting, they worry that they could be held to account. Again, official position of this podcast is only thorough democracy will hold these people to account, not thin democracy, but they attack it anyway. They attack the institutions of thin democracy as well as thoroughgoing economic democracy. Yeah, I think there's kind of two points that come out of that.

One is that it's a really interesting, I think one of the things I was interested in is that there is this tendency on the part of the media and a lot of people who might consider themselves kind of politically liberal to view the dissent into authoritarian capitalism and the complete hatred of democracy from, you know, say members of the second Trump administration, that that is somehow that these individuals can just be mapped to sort of characters who have character failings, who are sort of immoral individuals who we should, yeah,

not take seriously as people with plans to enact upon the world, but rather do them as aberrations. And I think when it comes to understanding how the right run government, you have to, yeah, look at how the right run expanse. And I think private equity is a really interesting example of that, because it is all about concentrating power and concentration decision-making. And actually it really is the antithesis of something like, you know, of a company where you've got workers on the board and some kind of semblance of economic democracy. And there's one of the private equity, people who I came across and questioned the books

put it, I think it was like, but maybe it has to be that way for the results to be that good. And yet, as you guys, wisely pointed out, the results frequently aren't that good for investors. But also, you know, when you look at some of the effects about politically, one of the things that came up whilst researching the book was this incredible, secretive kind of lobbying campaign that people seem to have somewhat forgotten about that went on to get, those huge tax break for the industry around the time of, I think it was, yeah, during the, during the FACCH government that there was a really quite scandalous series of backdoor meetings that resulted in this agreement whereby private equity fund managers pay much less

tax on their profits than you or I pay on our salaries. And I think in order for that to happen, you have to be kind of finding the loopholes of democracy because nobody really would ever want to vote for that. And so it has to occur in these background meetings. And I think, Yeah, it really is both in the way it politically operates, but also in the kind of structure of ownership that it points towards. I think it raises really interesting questions about that relationship between capitalism and democracy. Almost as though there is a fundamental and inherent contradiction that makes not necessarily the form of private equity inevitable, but something like it, something that will have that cannibalistic function that will begin to attack the roots of the social reproduction itself. Yeah. God, no. Who can say?

It's probably fine. It's probably fine. I wouldn't worry about it. No, and I think that's true. And I think there is like the kind of plastic, you know, Marxist's point, which is that eventually ends up eating yourself. But also that it, to me, there is, you know, capitalism takes different forms in different time periods. And I think this is a really interesting form that has taken in terms of the way it speaks to our time period and our politics and our kind of economic failures. Well, I think, unfortunately, I can't.

I can't say that's particularly cheery note to end on, but that's all the time we have. So, Hetty, I want to thank you for talking to us today and recommend anybody who wants to learn more about what the fuck private equity is and why it made everything. How specifically it made everything bad? What happened to your Garfields? What happened to your Garfield, your nan, and your water company? Three questions on anyone's life. In the past, we used to have Hope, Jobs, and Garfields. But now there's poo in the river.

No Garfield at all. The Dilbert guy's dead. Anyway, Heddy, thank you very much again for coming on. And of course, the asset class, how private equity turned capitalism against itself, is available wherever fine books are sold, especially bookshop.org if you want to buy from there. Buy the book.

Buy the book. Why not? Live a little. And other than that, where can people find more of your work or writing if they wanted to follow you? I am on, well, I have a website, Hetti-O-Bron O'Brien,

obri-I-e-en-com and also on the normal social channels. So, blue sky, Instagram. Everyone's posting on LinkedIn nowadays, which is extremely depressing. Oh, wow. And I would not advise anybody posting LinkedIn. What's happened is you stared into the private equity and the private equity stared back. That's possibly true. Yeah. All right. Well, thanks again, Hetty. And thank you for listening to the show. Don't forget. Of course, there is a second episode every week. It is five bucks a month. It's on Patreon.

you know what to do. Other than that, see you in a few days. Bye, everyone.