All right, you sons of bitches, let's fuck this popsicle stand. It's time for a goddamn podcast. How was that? Everybody good?
You went right past blown all the way to fourth base. Everybody happy with the popsicle stand? Yeah?
Love it right now?
Welcome to Behind the Bastards. Everybody, it's a podcast bad people talk about them. M Yeah, it's a good time. So, uh we should you know, let's let's talk about this real piece of ship, this guy who sucked. Uh. Ceo now of General Electric, Jack Welch. So about a year into his tenure as CEO, Jack Welch gave a speech by the way, my co hosts as as with the first.
Episode, so impressive that you forgotten.
The energy was incredible. It was I thought I could sleep through this one. But hire Michael Sway happy to be back for part two?
Part two? Baby, well, I do want to get in here again.
Yeah.
What should people know about your current projects?
Abe? I did it in part one?
You do?
Yeah?
So, basically, Michael and I are making an independent film. It's based on the time that Michael's father came out as a gay free will. Michael was like a teenager and we both thought it'd be an interesting story to show that like on film like as are coming of age like sex comedy. So we wrote it and now we're producing it. And you can help us by going to seed Andspark dot com, slash fund, slash Papa hyphen Bear and you can become a part of the movie.
You can, you know, they got tears there. You can click on the buttons. And we're stoked Gray Rewards. Yeah, yeah, we're stoked about telling the story. So if you can't help us out, and you know, we'll make the film, right, So that's why we're that's why we're here.
No, no, no, we're here to catch up with Robert, which is always a divine pleasure. Well not to, but you're also right. Both things are true. And the only thing I wanted to add is if you're not aware Abe directed like most of the videos that Cracked, I was over it cracked. If you know us from Cracked. Yeah, so so like we can do it. I can say with great confidence it'll be a good movie. I bet Rober would even back us up on that. So check
it out over there where Abe said. And if you're interested at all in that hook.
Yeah, I am so excited for this movie. I think I enjoyed your your your previous movie kill me now, and I would like I would like you to get another movie out. So listeners, help make my dream come true by forcing Michael and Abe at gunpoint to make another film. Yes, yes, daddy, yeah yeah. Hurt them, hurt them for me. So back to the sentence I was in the middle of when I realist I hadn't introduced you.
About a year into his tenure as CEO of GE, Jack Welch gave a speech at a gathering of executives in New York City. It was meant to be his introduction to the company leadership, where he would present them with his vision of the future and wrangle the most influential minds in the country behind his plans, or and get the most influential minds in the company behind his plans for GE's future. His twenty minute speech was titled Growing Fast in a Slow growth Economy, and it presented
a very Menichean view of the country's economic future. From now on, companies would either be the dominant entity in their market or doomed to failure mediocrity, which he defined as not being first or second in the industry would be seen as a death knell. He announced that if GE couldn't guarantee itself that kind of dominance in one of its many industries or businesses, and needed to sell that business off or shut it down or otherwise prune it away in order to focus on the things that
it could dominate. Now, one thing you might notice about this is that, like as a consumer, theoretically, one of the big benefits of can capitalism, one of the things that set it apart from, for example, the Soviet Union, is that customers would have like choice between a bunch of different products. But Jack is saying, no, no, no, fuck everyone who's not like number one or number two.
It's not worth being in that business. It's not worth making a simple profit in order to like provide people with options Like fuck that.
Right, I do love I read a whole book on this that I can't go into because it's your show. But I love that he also is right that you have to have a second one and how fucking simple humans are because you're like, you're either someone who likes to do what everyone's doing, or you're someone who likes to be contrarian and not do what everyone's doing. So you always get there's like Huggies and panthers or coke and Pepsi. Yeah in everybody, Like that's as big as
our minds get. Is like I'm a sheep or I'm an anti sheep. Those are the types of people that buy things.
Yes, anti sheep, anti sheep.
This is why, famously, the one cultural reservoir our country had of anti capitalist thinking was in those brave, heroic souls who rejected the pepsi coke dichotomy and instead switched to Doctor Pepper.
Doctor Pepper's playing sea Baby, and that's when we got soda perfection into Dr Pepper.
So really it's very funny when I'm anywhere else in the country, as I usually am now, but Texas, I can like tell who's a Texan by when you go out to eat, who gets a Doctor Pepper, Like if you're at a failing to joint. Yeah, it's it's a thing. Uh, No one else drinks it but us. The rest of the country doesn't understand.
Watching.
But he's from Colorado, which is North Texas.
That's true.
I drink doctor Pepper. I think I also think diet Doctor Pepper is the best version of diet that.
I'm imagining, Jack Well hearing you talk about doctor Pepper consuming doctor that's good, Doctor Wells.
I'm gonna be honest with you both. I'm actually a mister PIB man.
Oh see, the.
PIB makes a fine soda. Look, I love that we're just doing free ads for soda. Hey, I tried to get us back on track. It is it's good shit, it is okay. PIB is just like excellency. Yeah. If Jack Welch had his way, there would be no mister PIB because it's too good a product to be number one or two in its category. Right, This is the kind of hell he wants for us, where there's only
pepsi and coke. That son of a bitch. So Welch's goal at c S CEO, as he told the audience in this speech, was to make GE the most competitive enterprise on the planet. The steady growth that had made it the bluest of blue chip corporations prior to this was no longer acceptable. Welch had been inspired in this by a number of articles in Fortune magazine analyzing famous Prussian generals from the eighteen hundreds, and for so reason,
trying to use them as business gurus. This has been like the last thing he read before giving the speech, and it had a huge impact on like the way he framed everything that he was doing.
And the number one way business at time were written is you're like, how did some guy four hundred years ago who murdered and raped everyone he met doing it? That's probably good?
Well, it's funny because like that didn't used to be the thing, like, especially if you go back to I don't know, like the fifties and sixties and you were to be like, we should take you know, our management advice from from military leaders. Well, for one thing, most of those guys fought in World War Two, and they'd be like, you mean the idiots who like got all my friends killed because they fucked up constantly. No, I think I'm good. I don't think that's like the management
tactics I want. But by the time you get to the eighties, none of these guys have ever done anything in the world, and they're like, yeah, fucking you know who's you know, who's a management guru? Helm with Van Moltka, that's a guy who knows how to run a company that makes light bulbs. The man who won the Franco Prussian war surely has wisdom for me in our plastics business.
Like that's the most like fraternity sentence I've ever heard.
It's very funny. It's it's it's seeped in it and again you could again you get. One of the other things you can tell is that like none of this generation of business leaders who are entrance by this stuff, not only were they like too young to fought in World War Two, but they were too rich to get drafted for Vietnam because like, nobody who fights in Vietnam is like generals, the guys who don't make mistakes. Yes, I understand.
It's the It's like the eye of the hurricane saying like this is all right, this is fine.
Yeah, let's uh, let's let's copy Let's what did west How would Westmoreland run ge? You know, let's defoliate the entire business, poison the office, kill everyone.
I shall run this condom factory as if I tour Machiavelli. You don't need to, that's no need to.
I do kind of want to write a management book that's like the Westmoreland Way, And it's just like the applying the lessons of the Vietnam War to corporate success. Yeah series, yeah, yeah, well why not? It could It could work. So this is something that's starting to be a big deal in the nineteen eighties. And I haven't found a copy of the articles in Fortune that inspired Jack Welch so much, but I did run across a
very recent article in the Harvard Business Review. We'll be talking more about the Harvard Business Review a little later, written in the early nineteen nineties, which was kind of like the heyday for Jack Welch's CEO, that attempted to draw business lessons from one of the same generals featured in the Fortune article, a guy I mentioned a little earlier,
Helmuth von Moltka. Now the article also quotes Jack Welch, which is, you know, interesting by this point in time ten years later, not only is he like reading articles about Prussian generals and their management tactics, but he's been added to the articles about Prussian generals and their management tactics. Quote. Moltke possessed two important characteristics that made him a superior strategist.
The ability to understand the significance of events without being influenced by current opinion, changing attitudes, or his own prejudices and the ability to make decisions quickly and to take the indicated action without being deterred by a perceived danger. The two characteristics support each other and apply to managers and entrepreneurs as much as generals and national leaders. For example, General Electric CEO Jack Welchis said, strategy follows people. The
right person leads to the right strategy. Now there's a lot that's funny about that. Well, yeah, it's I mean, first off, just nonsense. Like von Moltkett was not a great general because he was great at like I guess you could argue those were factors in his success. Another factor is that Germany developed a kind of steel that allowed them to make long range cannons that the French did not have, and so they were killed that extremely long range before they could close with their superior close
in rifles. But like, you can't really translate that to ge strategy. Very well, that's what we need.
Yeah, Also you get a very clear impression the Jaguaryalts definitely at some point in his life, like turned to his chauffeur, was like, you are my friend, You're my best friend.
Like this guy, Yeah, yeah, yeah, Moltka you know again was a very good general.
But it's also kind of worth noting that those who seeve On Maltica as a business guru should be aware that the men he trained, the generation of German commanders who like were raised up in kind of his heyday and like learned under him and were inspired by him, were the guys who all lost World War One, destroying the First Reich and much of Europe in the process. So keep that in mind as we discussed the legacy of Jack Welch, because oddly enough, the same thing is
going to happen now. One of the things that Welch took from Moltka was the concept of total war. He saw the business equivalent of this as being willing to find profit wherever he could, even though things traditionally, even through things that were traditionally outside of GE's wheelhouse. When he delivered this wisdom in his big speech, the Wall Street analysts in the audience were baffled, because this is insane, right, Like people at the time were like, what the fuck
is he talking about? Like this is not like total war means, I don't know, burning down villages and destroying crops that the enemy can gain no sucker on them. It doesn't mean like finding profit in every aspect of your business. That's just running a business. Like what you're saying is just warseship.
Yeah, it sounds like you're saying, my new brilliant business plan is I want money.
What if we made money?
Money? Oh, but I really want money.
Yeah. It's like it's like if you had a general come in. It was like, guys, guys, I got a new plan that's going to blow this whole war thing out of the water. What if we hear me out here kill the enemy.
However we can anyway you can as long as Yeah.
I love the idea of him seeing like a little kid with lemonade stands selling like fifty cent, you know, like cups of lemonade, and he's.
Like that little piece of that son of of my mine. I could I will win all of commerce. Total war, this kid, Yeah, total war, this little son of a bitch. It's interesting. I read a book when I was a lot younger. You know, the show Band of Brothers was about an actual like military unit in the US Easy Company, I think in the eighty second Airborne. I read a book by like the unit commander who's the he's he's one of the characters in the in the show, but
like by the actual guy. And there was like a point in it, a line in it where he was like, because I think he wrote it in like the eighties or nineties where he was like, I keep seeing people comparing like business to war and like using military metaphors to talk about how company should be run, and I find it will really off putting because like war is just like a hinged savagery and people shouldn't people shouldn't seek to emulate it in the other's fears of existence. Yeah,
very fun. Jack Welch does not feel the same way. And I'm going to quote from The Man Who Broke Capitalism by David Gels again.
Here.
One analyst asked how the price for copper would impact earnings in the next quarter. What the hell difference will that make? Well, shot back, you should be asking me where I want to take the company. The speech was a flop. As the analysts filed out of the ballroom, one remarked, we don't know what the hell he's talking about, because they want to know, like, so, you know, what do you like, how is the business doing? How are like what strategy I have like the costs of different
materials that we need gone up or down? You know, like how are how ours like how is how are our core like assets performing right now? And Welch is like fuck that, I'm going to talk about war.
Right It's crazy? How like this type of thinking? Like any given day he could be like lotting the like, oh we got a we got to like short the system and create this like essentially new market that we can scam that's the new hotness. And then yeah, the next day he'll be like steady growth and like quality products are the thing to do. It's like, who knows what this guy's gonna He's just a child walking around pointing at this is the strategy, I think.
Yeah, And you can feel him setting the template that I think a lot of modern CEOs follow, that is just your job is to be a figurehead and give speeches that are general about vision and direction and basically just demand that the number go up, like your main job is too.
Yeah, and that's the like as a spoiler, where we're heading here is that he's kind of running a con and it's a successful con. It does make ge incredibly profitable, But the reason he can't talk to these guys about the business. Is that he wants to eliminate the business part of GE because that's getting in the way of making money. So today is the story of how he did that. The first big campaign that General Jack had to launch in order to remake GE in his image
was what he himself described as a campaign against loyalty. Right, he declared war on the concept of loyalty within the company. He defined this, well, we're talking about that. He defined it as eliminating bureaucrats, but in reality, his layoffs were more or less agnostic to function or performance within the company. He fired good employees if they annoyed him. He once shut down an entire department dedicated to long term planning because long term planning isn't the kind of thing that
leads to short term earnings. Soon it became known that the only way to advance under GE's new leader was to fire as many of your own employees as possible. True to his background as an angry man who never learned how to compromise or experience consequences, Jack managed mostly through screaming at people. There were some upsides to this. He legitimately knew his business very well, and he would tear his managers a new one if they didn't understand
their business as well is he. But it also selected for people who would not question Jack and instead blindly followed his commands. In nineteen eighty GE had four hundred and eleven thousand employees. By the end of nineteen eighty two, it had fired almost nine percent of its workforce, starting with thirty five thousand employees and followed with thirty seven thousand the next year. Often this meant destroying the economy
in small towns across the country. This is a part of the process of the hollowing out of Middle America. A good example would be Ontario, California, which had a steam iron plant that employed eight hundred and twenty five people. Though it was profitable, Jack closed it and fired them.
All.
Local civic leaders complained, but no one had the ability to do anything. The year before Jack took over ge net profits had risen by seven percent. It was the tenth most profitable business in the Fortune five hundred. These mass layofs were not necessary, but every Purge was met with a surgeon. Stock prices that benefited shareholders. Newsweek compared his strategy to the work of a neutron bomb, an nightmare WMD built to kill all living creatures in an
area but leave infrastructure intact. They gave him the nickname neutron Jack.
Cool.
Yeah, yeah, yeah, and he hates.
You mentioned Jack Donnie being based on him, also Jimmy Neutron, which I.
Didn't yes exactly or it's heartening.
I guess that people from Jump, or at least there was some coverage that was like, yeah, this is going to ruin everything.
Yeah, he's destroying the destroying life. Yeah, he's killing life itself. But they were doing it both as like there was an element of criticism, but also like awe, and it's it's fun because like Jack would always claim to hate this nickname, and his autobiography he writes from the numbers, you could make the case that there was either a neutron Jack or a company with too many positions. I naturally took comfort in the latter, but the neutron tag
still got me down. I was fortunate to find remarkable support that got me through at home, in the office, and in the boardroom. I'd come home obviously a little down from the experience.
Because he thought he was like being called a nerd.
Yeah, it made him. It made him so sad to be described as a weapon of mass destruction. And in his autobiography he credits his first wife, Carolyn is helping him through the dark like emotional period that this created. Carolyn, in Jack's book, is always supportive of him, no matter how tough the press or his job is. She always ended a conversation with Jack. You have to do what you think is right for everyone, which.
Is how you know every single scene between them is nothing like that's just the pr story period. Yeah.
Yeah, there's another way you can know that, which is that he divorces Carolyn in nineteen eighty seven, about five years after this point in his In his story, their divorce gets two paragraphs of mentioned in his autobiography.
It's like we never spoke, but when we did it was great, very not controversial. Then we got divorced for no reason.
Yes, she was my roster and then I left Derry. You know, the divorce was a forbidden topic by his employees. And there's there's very little you can actually find about this first divorce of his. One of the very few statements I found about it comes from a guy with the very funny name Dick McLean, which you know we all appreciate.
If you do the comma reverse thing.
Yeah, McLean, Dick McLean, Dick. That name is just like washing my face in a cool stream. Yes, just perfect. Thank you, Dick, Thank you once again. Uh. Dick was an environmental consultant from GE's plastics division who worked with a with Jack, and he told the La Times quote, you never heard anything about his first divorce. It was in everybody's best interest to make sure that it was
all tuned down. His private life was always what was absolutely incredible, McLean said, but he declined to elaborate now. McLean was being interviewed for this article in the wake of Jack's second divorce to Jane Welch, the woman that he left Carolyn for, which occurred in two thousand and two after she found out that he had been cheating on her with the editor of the Harvard Business Review, who wrote that play praise worthy article that we quoted earlier.
So that's fun, that's ethical as shit.
You love the seal.
All of his friends, all of his coworkers are just like they treat him like an ogre, Like he's just an ogre. In the room that no one wants to deal with. They're like, yeah, something's going on over there. But man, I know.
You don't want you don't you don't want to like get Jack angry. That just makes everybody yeah, man, so yeah, it's very funny when like MacLean heard about the fact that he was his wife was leaving him because he cheated on her with the Harvard Business Review, Lady MacLean told The Times, my instant reaction was oops, checks back to his old ways, babies untethered. So these purges, by
necessity killed the old ge. All these layoffs, the one in which workers have been able to rely on the company as a lifelong employer and rely on its benefits to take care of them with their old age. Jack called his campaign again to like He called the campaign to like destroy any kind of faith people had in Ge as a place where they could like stay. He called this his campaign against loyalty. And it was more
than just firing people. He ordered his staff to avoid using the word loyal in press releases, and he ordered his underlings to stoke their workers with constant fear that there might lose their jobs. To emphasize all this, he wrote shit like this in his memos. The psychological contract has to change. My concept of loyalty is not giving time to some corporate entity and in turd being shielded
and protected from the outside world. Loyalty is an affinity among people who want to grapple with the outside world and win. What is that?
What is I?
Yeah, but I don't like it. I think he's saying that, like, you know, I want the loyalty of like a team of soldiers fighting an enemy. But it's like, well, part of why soldiers are loyal to each other is they're like protecting each other, and you're saying I want that loyalty, but also fuck everyone who works for me.
Right, Like it's it's just trying to sounds like it's larger than it is. We all know what you're doing here. You just need an excuse, And like, what are you even trying to say with anti loyalty? Like what if someone right now were to be like I don't think this is a good idea. You would restructure that man, you know like that there would be so much pushback from him, So like, what is he He absolutely values loyalty. He's hypocritical to a core.
He values loyalty, but he's incensed by the idea that loyalty might be a two way street, right.
That he would, Oh, loyalty has right, that's right. Yeah, He's like, that's what the money's for. I just need full profit. Why can't I get full profit? Mommy, ed g you were like a family, yea, and that I have the legal right to abandon you in a snowbank at any time.
We're like a family in ancient Rome, where I, as the patter familias, have the legal right to execute all of you, right, jeezus. So the ultimate WMD in his campaign against loyalty wasn't a neutron bomb. It was a management strategy that Jacked helped to develop called stack ranking. Obviously, pieces of this that existed, other people you know, had come up with kind of some of these ideas. Jack
is like the first person to institute them. At a major corporation, every year, managers were ordered to divide their workers into three groups based on performance. The bottom ten percent of the company was to be laid off every single year. This meant that no matter how well a division or the company did, people were always going to get fired. And since managers were required to rank their employees. Many of those layoffs would be adequate or good employees
who simply lost a political game. Stack ranking spread rapidly throughout the country. Jacks peers saw that every wave of layoffs brought the stock price up, so they copied him. Today, HR software company Corvisio estimates that thirty percent of Fortune five hundred companies stack rank their employees. In November of last year, Amazon told managers to stack rank employees before carrying out the largest layoffs in their history. Jack took
exceptional pride in how much he was copied. Some people think it's cruel or brutal to remove the bottom ten percent of our people. It isn't. It's just the opposite. What I think is brutal is false and false kindness is keeping people around who aren't going to grow and prosper.
There's no cruelty like waiting and telling people late in their careers that they don't belong just when their job options are limited and they're putting their children through college, they're paying off big mortgages, which again, you might have a leg to stand on a flag. You had a policy if we only fire layoff people under a certain age you know, to make sure that the young ones level.
But like if you have what if you have a unit of fifteen people and they're all good, and you're like, well, you have to fire some anyway for no reason. Incidentally, speaking of ancient Rome, this is where we literally get decimation. Decimate is like the the practice of forcing the unit to kill a tenth of the unit just so that the rest will be stronger. This dinosode dates back very, very far.
It works.
It works for a lot of stuff. You know, like I cut off every year, I cut off like a tenth of my body.
I cut off one toe, Mike.
You can learn all about this in my new book Managing like famous Roman dictators Sola. You know, Sola, as a general, understood that not only do you sometimes have to go through town throwing your enemies off of a cliff and so their bodies are dashed at the bottom and eaten by crows, but you also need to go gradually insane with age, get increasingly conspiratorial, and eventually retire to a villa in the hillside where you have unsettling sex with slaves for the last decade of your life.
You know, all of these management strategies.
Right, the management version of that management version of that yeah, which is how I run cool zone.
You know it's it's it, It's great. Yeah you villa from my villa where I where I have recently led to a purge that forced the podcasting equivalent of Julius Caesar to flee Italy and in order to avoid being murdered for his loyalty to Guias Marius. You know that all happened, but the podcast loyalty bad.
There you are, I don't know.
We got off topic here, so you got you got off topic. The reality is that stack ranking often has disastrous outcomes for businesses. One twenty thirteen study in the Journal of Business Ethics found that ratings based performance reviews like the ones Jack instituted quote often failed to change how people work, and dissatisfaction with the appraisal process has been associated with general job dissatisfaction, lower organization commitment, and
increased intentions to quit. Stack ranking is also generally recognized to be incredibly toxic to morale, which has led some of the companies that followed Jack to in the process or the practice, as this quote from Fast Company makes clear, after years of requiring managers to stack rank employees. Microsoft workers cited the practice as the most destructive process at
the company. It leads to employees focusing on competing with each other rather than competing with other companies, one employee told Vanity Fair in twenty twelve. Microsoft asked the organization's stack ranking system in twenty thirteen. The article also quotes John Freese, a senior managing director at Encurrent Consulting, who said, straight up, Jack Welch was wrong. This is a guy we thought was incredible as a leader, but really he
led based on fear. Now, the fact that Jack was was bad at his like the thing that was his primary claim to fame, that it like actually doesn't work very well and was in fact disasters for a number of businesses, never stops people from following him.
It's like, what happens with these guys, it doesn't matter. It like no one collates the information to see if their idea worked, and crazy.
What's happening now? A lot of tech companies are adopting it under the understanding like, well, it didn't work great in Jack's day because like you were kind of relying on managers and their subjective opinions about who was performing
well or not. But now with all these computers and algorithms, we can shooes the best workers and then we can Yeah, it's still bullshit, but you know it doesn't matter because these people are too wealthy and powerful to ever face consequences, which is why we need a thing that rhymes with shmargtedgemush machination. But you know what else rhymes with that? Yeah, products services. That's right, m Ah, we're back. I for one loved those ads for untraceable poisons.
I sharded in a pan for bacon. Is that what you were trying to say on the other side of the brim, that's right, and trying to figure it out.
That that's what that's what will save us, Michael, That nothing illegal, just that.
So anyway, all the money that Jackie Boy earned, you know, he paid two people to fight to the death in front of him.
Okay, but look, okay, I guess we're gonna deal with this now. We're gonna like fight out this is this has been an argument you and I've been having for years. Yes, and I think it's very petty of you to bring it up here, Like some people pay others to fight to the death, for them. Okay, that doesn't mean you're a bad person. You know, it just happened, No, he did. Well, yeah, but who amongst us hasn't right? Who amongst us hasn't been there yet?
You know, I think it's telling that you're getting defensive when Abe was really just neutrally stating it. That's what I'm seeing here.
Well, look, there's a lot of little mountain towns in rural California where there's not much work and people will do almost anything for seventy five dollars and a bottle of oxy codone. And I don't feel like it's fair to judge me for seeing if they could kill each other with sling blades, like in that movie sling Blade. And by the way, they can remember that movie sling Blade, I do remember Slingblade.
And to mention another movie, Jurassic Park, you were all caught up thinking about how to do it that you didn't think about whether or not you should do it.
And that's the point here, I mean, don't do it, Robert. I again, I just feel unfairly judged. But Jack was not judged negatively for stack ranking people, and in fact, the entire industry fell in love with the idea of firing ten percent of their companies for no real reason, but the fact that it made the stock market look good, and it made the stock market happy for no real
reason because it didn't actually increase profits. It just meant that temporarily companies had more money to put into things like we'll talk about stock buybacks, to give out and dividends, and that made shareholders happy. It didn't make the company stronger, and in fact, over time it made them much much weaker. But that was that was for future people to deal with,
not for fucking Jack Welch. So yeah. In his autobiography again, Jack tries to dress this up as him doing a kindness to his workers because if he shitcans them when they're in the prime of life, being laid off, as he says, just another transition. You know. He even describes as like a charity that he's doing. I'm freeing them from a job they're bad at, so then go succeed
somewhere else. Right, it's a social good. Now, the reality is that being laid off, which is you know, some firing someone not because they fucked up, because the company wanted to do. Shareholder value is one of the most stressful and traumatic things that Americans regularly endure. One study found that it is the seventh most stressful life experience, above divorce or the death of a close friend, and
that on average, it takes two years to recover from. Now, that may seem a little crazy, especially the more stressful than the death of a friend part, But there is Yeah.
Yeah, if Abe died and and I got fired, I'd be like, I need a job, dude.
Yeah, yeah, you wouldn't be. You wouldn't be just searching straight away for another a you gotta make rent right.
And then yeah, I could save that grief for later. Not that there's no grief, but that will come. I need a job, yeah, yeah, a job.
I have to be able to to fucking you know, pay for my rent and various various gummy bears and jujubis that I consume. So there is also just objective of le a serious health cost to being laid off. For healthy people with no pre existing medical conditions, if they are laid off, the odds that they will develop a new health condition raised by eighty three percent in the year and a half after getting laid off. The risk of yeah, it's significant the risk of suicide increases
by one point three to three times. Jack Welch laid off more than one hundred and five thousand employees in his first five years as ge CEO in the US. At that time, the suicide rate was around thirteen per hundred thousand people aged fifteen to twenty four. This means, in crude terms, just in terms of suicide, we're looking at like thirty or forty deaths somewhere in that neighborhood.
I love this show. Imagine that your life. You're like I me as a person, I made the suicide rate in the country, Go up, I did that? Hey, hey number go up? Hey if the planet suicide, yes, then that's just listing Earth's stot, you know, suicide exchange. Yeah, it's like me.
You know, there's I think probably dozens of deaths of suicides that we can associate to Jack's layoffs, which you have to also like hundreds of thousands. Eventually, millions of people are laid off because of these strategies over the course of decades, because of the strategies that he helps to pioneer. So again, that's quite a few deaths you
can lay at this guy's feet. You can also blame him directly for some of the worst moments of my childhood and some of the worst moments I'm gonna guess for the in the childhoods and adult lives of a lot of the people listening to this show who remember like a parent getting laid off as part of a yearly fucking layoff binge like this, and like coming home to their parents, like weeping and not sure how to like fucking pay for basic necessities and stressed out for
months on end. You know, the the shock waves that this guy's decision makes in the lives of tens of millions of people are kind of impossible to like adequately want to. Yeah, yeah, anyway, I don't know. Again, untraceable poisons go to untraceable poisons dot com. Use promo code Jack welch uh and I don't know, find someone talking about fucking the stock market and put it in their drink. That's that's the behind the bastards. You, yeah, untraceable poison
study to you. Yeah. So it's interesting to me that Jack wasn't content just being a cool mister Burns style corporate psychopath. He repeatedly pushed the line that he was doing because mister Burns was just like, you fire workers because fuck them right, because you're because it's fun.
You know, I know, I don't care.
Jack was like, no, I'm doing a kindness to them. This is what's best for them, it's best for all of society. Really, his speech writer, the guy who was like his speechwriter, a ge later explained in an interview quote, Jack loved the approval of Wall Street, but the Irish and him craved the approved an affection of the divested employees as well. He wanted to believe they were thrilled at being divested. Oh boy again, but.
Irish people love wearing vests, real waistcoat culture. Now I loved, But like, what a weird, dated way to like the Irish in him, you know what I mean, the poor people inside of him.
I know, I know he's just a bastard, and I don't have that much sympathy for the devil, but I can't. Everything you tell me doesn't make me more angry because I know all this stuff exists. It makes me sad. I'm sad for Jack, like because he so much of him is like it's so important to him that he's liked and that he like everyone thinks he's a cool guy.
Yeah, it's just so sad.
Kind of what it just it leads to is his colleagues the other people in like higher oppositions, a ge engineering a situation by which he thinks that he's liked by employees because obviously he is not. People will talk about like it used to be fun to work here. I used to feel good about coming into work. I hate it now I'm miserable all the time. You've turned this place into a hell.
I'm leaving to join the crew of the Ellen Degenerous Show.
Yeah, yeah, exactly, so I could finally get some respect. Yeah. So I also think, you know, it's possible that this speech writer is himself kind of misled, and Jack maybe did not care nearly as much as this guy thinks about what employees felt about him. Because Jack also had a reputation for using kind of the language of warfare
and violence to describe layoffs. He was known to when he would do like his tours of different business units and stuff, he would mark workers out for firing by saying they should be shot, shoot them, or they ought to be shot, all of which meant lay that person off right now, which is like, that's like psycho shit.
Yeah, it's doctor Strange lives. Yeah, you know, like everyone like Patten. My favorite guy in the world is Paton.
Yeah exactly.
And then the fucking goal. The move that I always hate the most is why don't people like me? Fuck you dude?
No, absolutely, absolutely, But it's so sad when it's like when you just hear of it, because now I'll you know, Robert did this because he made us think about the boy first. Yeah, you know, I don't have what you're having.
I have no.
Yeah, I will say in terms of Patten, Patton had one experience that I think would have improved Jack Welch. He was shot several times by a machine gun, and and really I think that that that, you know, we could have tried it out, is all I'm saying. You know, it might have helped.
If you're gonna lead with fear, maybe have a little in your own life. Yeah, at least a little.
You should have seen the machine gun though, so so, since you can't lay tens of thousands of workers off without causing problems, Jack also embraced another strategy that was about to become vogue in corporate America, outsourcing he was famous for saying shit like, don't own a cafeteria, Let a food company do it. Don't run a print shop,
Let a printing company do it. What this means is that he fired janitors and security guards and food service workers, and then he brought in low paid temps who were in contracts with outside companies to do the same thing that had previously been done by people who had a
decent standard of living and a pension. Right, That was the whole point is like, well why would we And one of the things this does is it creates for the first time at these big companies like GE, there's different tiers of worker Before at GE, you know, your best engineers and the people at the cafeteria are all GE employees, right, they all you know, they get different compensation obviously, but they're all they're all on the company health plan, they all have a pension, they all have
life insurance. Now you've got this second class of human being in all of these GE facilities who are basically on the verge of collapse at all times because they're not being taken care of by their employer. And the United States has no social welfare system. And of course, again you can't. One of the things I'm probably not
getting into enough here. You can't separate anything that Jack is doing from the fact that this is the Reagan era, right, A lot of like what he's able to do is because of rules about how corporations are allowed to behave get loosened and we'll talk more about that in a
little bit by the Reagan administration. And so all of these workers who are being let go and all of these temps who are being brought in are benefiting from less social welfare programs than people had previously, because you know, the Reagan administration is cutting that at the same time that Jack is cutting these people out of general electrics, you know, corporate welfare system. So another thing that Jack pioneered was offshore.
And mention Homer's Yes, Oh, I was just gonna say, mentioned Homer Simpson. And it is striking me now how it's just the dumbest possible way to go about Like it's not even like he's pretending to play forty chess. It is not a sophisticated thought. It's very much like when Homer is a garbage man and his motto is can't someone else do it? And you just say that like it's brilliant and it's really not.
Yeah. Fuck, certain people just.
Have confidence apparently it is his superpower and be angry a lot.
Yeah. I mean that that is like the only real superpower. You know, Like people who are into like the occult and and and magic and stuff like talk about the fact that like real like like the like what magic actually is is kind of like the the utilization of like will in order to change the world, right, And I think the clearest example of that is not like, you know, wizard guys like Alan Moore, It's guys like
Jack Welch. This is this is a powerful dark wizard, right, He's using pure willpower, pure self confidence to remake the world in his own image, to do a thing you shouldn't be able to do, To destroy a company's ability to profit, to destroy all of its business, to destroy its it like the creation of things that previously like made it great, and replace that purely with this illusion that is somehow more profitable than the thing that actually produced items of value.
That's like a virus until every other company also operates that way. It's quite something.
This is. And by the way, when we talk like in terms of like fantasy authors who understood this about magic. This is exactly how Tokein conceived of it, more or less right, Like this is Saamon, you know, like that's happening here. Yeah, anyway, cool shit. So Jack pioneered offshoring the process of moving production facilities and jobs to companies with looser labor laws and lower minimum wages. During speeches
and interviews, he often set variations of this line. Ideally, you'd have every plant you own on a barge to move with currencies and changes in the economy. And he's going to like move ge to have its corporate headquarters. But I think it's the fucking Bahamas or something like he's one of the first guys. He does that too.
But again, like there was this attitude in the previous era by a lot, not all, but a lot of like executives that paying taxes to like support the country functioning was one of your jobs as like a business you know leader. And Jack is like, no, no, no, we have to hallow this country out. And part of what that means is like making sure we have no
responsibility to the United States whatsoever. He helps lobby the Reagan administration for like an change in business law that basically means like you can kind of by shifting like technically where products are being moved through, you can pay taxes in different companies. It's I don't need to get into the specifics of it, but like one of the things that does is that suddenly a huge amount of GE's biggest transactions are technically legally occurring in Ireland, which
has a very very low tax rate. For that sort of thing, It's it's cool shit. So Jack was not able, obviously to literally put all of his plants on barges to move them around the ocean, but by moving jobs out of the country or just to parts of the country without as many unionized workers, he was able to break the back of the unionized workforce that had helped
make GE a powerhouse. Jack was also one of the first CEOs to outsource to India, and as the GE stock price continued to outpace the market, more and more of his colleagues followed him. One of the few aspects of GE that Jack had any actual love for was the previously minor finance division. We talked about this a bit in Part one, but this is what actually made
it all work. I'm sure the question that a lot of people have right now is like, well, but you say the company kept making more money, So was he maybe just actually doing a good thing that you didn't like.
And my argument would be no, because the reason that GE's balance sheet looked good, that it looked like profits were increasing, and that the stock price kept increasing is that Jack understood how to use this finance division as basically like to create a fog of war around the internal company functioning that looked really good to people on the outside because he was able to kind of manipulate
the balance sheet. Right, So what he was doing is using this finance division to buy up new businesses rather than like R and D and develop anything of its own that looked like they would be profitable. And at the same time he would sell off businesses GE had, many of which were still profitable because it would bring
in these swift, short term profits. And by kind of mixing these sales of business units with purchasing business units, he was able to ensure that the balance sheet kind of said whatever he wanted it to say, so he could say, at the end of Q one, these are where our numbers will be, and then he would just buy and sell companies until the numbers matched that, and so do the people on Wall Street. It looks like, oh, you know, GE's like hit its numbers again. That's great.
But what's really happening is he's just kind of like shuffling shit around in order to make it look like he still has a business that's producing something. A good example of this would be in nineteen eighty five, Ge purchases RCA, which Jack justified to Congress because they have to have like an antitrust hearing over this by saying it would let an American manufacturer compete efficiently with a
Japanese manufacture. But he didn't do this instead of trading the entire Instead, he traded so he like buys this, being like this will be good, this is worth you know, it being kind of bad for competition because it will decrease prices and provide a better product for Americans to
buy that they'll buy instead of Japanese products. Right, But instead of actually making like shit with the TV division that he had bought, he sells the TV manufacturing division to a French company and exchange for a medical device business. One of the only things he actually keeps from the rc sale is NBC author Barry Lynn writes in Two Strokes,
Welch remade multiple world spanning industries. The rationalbehyde is moves with simple concentrate power, avoid direct competition with firms backed by mercantilist states as Japan's electronics companies were, and focus on industrial activities that could be protected through interaction with regulators. The medical device business or the pentagons because RCA has a defense business that he also keeps, so he's not competing.
He's not interested in providing a product. What he's interested in doing is kind of like using GE's financial power and the fact that they can get loaned money to buy and sell pieces of the company in order to optimize how it looks on paper.
Right.
The interesting thing to me about this is that the division that Jack traded to get, like this medical device division, doesn't make a profit. In fact, it's a disaster. After he acquires this business, its profits collapse and the division goes bankrupt effectively enough, But this doesn't actually hurt Ge or Welch's reputation like it seems like a disaster. We bought this company, we traded away its best assets for
this medical device business, and then that business fails. That seems like something that should get you in trouble, But the stock price still went up. As David Gel's writes, what mattered and what Welch had achieved with the RCA deal was making GE bigger. GE's television set business was now one of the largest in the world, fulfilling the mandate Welch laid out at the Pierre Hotel in nineteen eighty one that every group should be number one or
number two in its category. So in all of these tactics mass LFS, outsourcing, offshoring, high speed trading of corporate assets, Welch set precedents that his CEO peers couldn't wait to copy. And I'm going to quote now from an article by Matt Staller. By the two thousands, the company founded by Thomas Edison didn't even manufacture light bulbs, sourcing them from Chinese contractors and branding them as GE products. Other leading companies,
such as General Motors followed Welch's path. In the mid nineteen eighties, GM bought both Electronic Data Systems and Hughes Aircraft, attempting to diversify away from the auto industry in which it was set up against foreign competitors backed by governments into regulated industries with government contracts. What it couldn't do by diversifying, it did by offshoring, moving production to low wage areas like northern Mexico. Starting in the early nineteen eighties,
the steel industry did the same thing. US Steel bought not only Marathon Oil for six point three billion, but three paid three point six billion for Texas Gas and Oil. National Steel bought United Financial Corporation of California, and another steel company, Armco, went into insurance. Meanwhile, in nineteen eighty ses, the Reagan administration's Commerce Department invited thirty eight thousand American companies to a trade fair in Acapulco explore it and
encouraging them to explore moving factories to Mexico. So again, Jack is not the only guy doing this. He's not the inventor of this concept, but he proves that it's incredibly profitable. He basically shows these companies you can build and maintain a business that makes things, or you can
be in the business. You can basically turn your company into like a balance sheet from a fin like a finance company, right where you're buying and selling assets and you're not in any particular business as much as you're in the business of shuffling around these assets, and that way it's really easy to do something like, oh, we made an extra billion dollars this year, so let's sell off this business that's not doing as well and like claim that as a loss, and then we can kind
of offset our tax burden. It'll like, yeah, like all this kind of like fuckery you hadn't been able to do before Jack realized. Is that kind of by turning your corporation into a big unlicensed bank, that's a much smarter idea than actually producing anything of value.
I mentioned magic and Dirk Wizards. I would say it's honestly, he's less like Saramon because his magic actually does change the world, and he's more like a stage magician or a David Blaine, where he's just like it's sleight of hand, right. Yeah, he's drawn attention away from thoughts like what does this business do or make is it useful, and drawn it to you don't have to worry about that. The number was forty now it's forty one exactly two.
Yeah, yeah, it's something else. By the mid nineteen eighties, Jack Welch was the most celebrated CEO in the country in a lot of ways. He's one of like the very first celebrity CEOs of the modern era. He's the subject of fawning profiles and business magazines for his brilliant leadership and his unprecedented stock market success.
And it's all stills him. And he was happy, and he could stop.
Michael never cried.
He's about to get a little sad because right about this time in nineteen eighty four, Fortune magazine declares him the toughest boss in America. And they don't mean this as a compliment. They write, Welch conducts meetings so aggressively that people tremble. He attacks almost physically with his intellect, criticizing, demeaning, ridiculing, humiliating. In The Man who Broke Capitalism, David Gellis goes even further, quote,
Welch was, in short, a bully. You fucking guys don't know what the fuck you're doing, He fumed at executives in the plastics division when they miss their numbers. It was what The Wall Street Journal described as Welch's hazing as shouting match approach that requires managers to argue strenuously even if they agreed with him, said one manager whom Welch replaced. You can't even say hello to Jack without
it being confrontational. If you don't want to step up to Jack toe to toe, belly to belly and argue your point, he doesn't have any use for you. In his autobiography, Welch calls this Fortune article that describes him as a bully one of the worst moments of his career. He's like, it's so but it like again, I think he's just full of shit because he knows he should say that, because this has no impact on his behavior.
His soul is.
Other than this hus He maintains a chip on his shoulder regarding journalists for the rest of his life. He had initially been thrilled to acquire NBC and he specifically he says he was excited because it meant he'd get to write paychecks for guys like David Letterman who were famous. But then he yeah, it's very very that child, Yeah, yeah, yeah, silly.
But Jack also he gets very frustrated because he realizes, like owning a news company doesn't mean you can force the news division to report on things the way you want. So in nineteen eighty seven, we have this thing called Black Monday, which is like one of our many great market collapses, and Tom Brokaw gives a report on the nightly news about how bad the damage was going to be. Right where he's talking about like this is not just one bad day, like this is going to continue, echoing
this is a serious problem. Welch calls the head of NBC's news division and complains, you're killing all the stocks.
Yeah, what do you do you think that he ever like had stopped, and he's like, maybe I will. Maybe RoboCop the Villain is based.
Yeah, maybe maybe Paul Verhoeven read a profile of me and immediately made RoboCop am I.
All of America's satires focus like he's just the all villains.
All the cartoons are about me, Like, yeah, it's it's it's something else. It's very funny too, because the head of NBC's news division, when he's like you're killing the stocks, you have to stop him is like it just says, this is not a thing I am willing to talk about with you, and end's the call.
You'll never get me.
Uh yeah, So this is not going to be the last time that Welch has a competitor or a fight with his journalists, and it's not going to go as well the next time. But we'll get to that in a little bit. In nineteen ninety three, Jack goes through one of his regular mass layoffs and reappointments of talent and producers at NBC. He picks a new manager for CNBC, his business news channel. You want to guess what this guy's name was, Come on, come.
On, dick, no dicks, slurpy McLean.
I'll give you a hint. He's a sex pest. I'll give you another hint. He helped break the United States.
Break it.
It's Roger Ails. I was like, you have to be more specific. This is the guy who starts Roger Ales his career.
Isn't it wild that sex pest narrows almost nothing down at all?
Wow? That just that's just brought it down to a couple hundred guys. So he hires Roger Ales to run CNBC. One of the first things Roger does is he creates a new network of his own called America's Talking, dedicated to full time political news, which was kind of a wild concept in the era, and it's something that he would uh, he would follow up with a little bit later because he's not at NBCCNBC very long. Ales gets fired three years in due to you know, all of
the sex crime stuff. But Welch bears him no ill will for this. He alters Roger's non compete clause so that Ales could immediately take a job from another asshole, Rupert Murdoch, which turned into Fox News. So we have Jack to partially thank for Fox. Isn't that cool?
And then Nate way back three minutes ago when you said it turns out you can't force the news to say what you want. I'm like, yeah, I can't move, can't you?
Yeah?
Eventually, can't you?
You can get in there?
Does he go to like conventions where like you choose like evil conventions where you go and you just like walk downline. It's like, oh, that's a new type of evil. Maybe we should buy that. Let's get a little that in the mix. God, so he fucked up media as well.
He sure did. He's quite prolific in his fuckery.
Wow, good way to go, Jackie boy.
But he gave the projectonegy character he did was to break even good character little.
Yeah, fifty to fifty. So since GE's profits continued to rise alongside their stock price, Jack gained an almost divine reputation as a corporate mastermind. The truth was that he made many very expensive mistakes. A good example of this would be the purchase of Kidder Peabody, an investment bank that he thought would give him first crack at new acquisition deals without needing to pay fees to brokerage houses. But again, Kidder was in worse shape than it seemed.
He hadn't done his due diligence properly, and right after it gets acquired, one of its best traders gets caught carrying out one of the largest cases of insider criminal insider trading in the history of the United States. So this is a problem.
Uh.
The political fallout to this forces him to bring in a new head for the business, and he picked a GE board member whose prior experience was running a tool company. When the market crashed the next year, Kidder imploded, and for a time they're even kind of staring at potentially a massive fine for all of these crimes that their trader had committed while working for them. But thankfully, one of Welch's men was able to negotiate a sweetheart deal
with the prosecutor in this case. And you want to guess what that guy's name was, I'll give you a hands. He he was real close when nine to eleven went down. And now his head melts sometimes.
Giuliani, Yep, yeah, it was re melty head. Detail.
Yeah, Rudy Giuliani. We're getting all the all the greats are coming in. He also helps Trump by Trump Tower, uh, because their friends friend and.
That's where he got the hammer. And we got there. You're like, then he meets him and him and you're like, oh, okay, I see how this is gonna go.
So Jack's real genius was an understanding how to run GE like an asset portfolio and other in order to game the market. Again, as I said, he would buy companies or sell them and even hand over assets to charity sometimes in order to make sure that ges like earnings met the targets he was setting, because that's something
that always makes the stock people very, very happy. This allowed him to disguise the strength of his actual business, which he was steadily hollowing out by camouflaging it with acquisitions. As former GE marketing executive Beth Comstock said GE had a financial army that was able to close the quarter the way we'd said we would. Now, this some times
meant destroying thousands of human lives. For example, in nineteen ninety seven, GE made a huge deal with Lockheed Martin which earned them one point five billion dollars in profit and another six hundred million dollars in tax breaks. That's great, right, that seems like good news, right, But all of that money going into the quarter it was going into was gonna mean GE was going to have to pay more taxes, and that's just not something that Jack Welch was willing
to accept. So some of their factories were underperforming, so they closed a bunch of factories, which gave them a two point three billion dollar loss on paper, even though the factories had been like paying for themselves. He was able to take a two point three billion dollar loss by closing them, which allowed him to offset the profits. A thousand people lost their jobs, but the stock went up. Right.
This is when I talk about like how he would fuck around with acquisitions and sales to disguise what was going on at the business. Like this is the kind of shit that he would do. And he was very good at this. Now all of this, yeah, it's pretty good, right.
It's impressive.
It's impressive that because you have to think about also the margins, like this is Ge. They're talking about American steel and plastics and oil. It's like he had too much power. He had too much power. And you know who else has too much power?
Ads?
That's right. The ads that we put on this show are all hand picked because they were designed by a team of evil psychiatrists in order to hack your brains and force you to purchase products and occasionally occasionally murder your families. So by these products.
The power of capitalism compels you.
Ah, we're back. I hope this time nobody was was was convinced by the ads to.
I'm saddled with products now, I'm just paid down by products and services, all of them. I couldn't help it, all of them.
All the services are in me glorious.
That's exactly, That's exactly what Jack Welch would have wanted.
What an inimitable thing to say.
Thank you. So all of this kind of you know, Jack welt shit came with a serious cost. One of them is that Ge stopped doing in house r and d Again, this is the company that invented like all of the plastics we use, and like light bulbs. Yeah, yeah, the brain division does not make short term profits.
Right.
You put money into the brain division to make all of the money in the future. But Jack has no interest in that, right.
Thinking of the light bulb is not profitable. Where's the profit in thinking about light bulb?
Find a guy who already thought of a light bulb by his company and then sell it six months later to offset the profits from another. Yeah, Like, it's just it's just fucking nonsense, but it's very profitable nonsense for reasons that are themselves nonsensical. GE had basically become a venture capital company, Right, That's what he turns GE into, and that's what it will be for the remainder of Jacks ten years CEO. Perhaps the most influence changed. An
infamous change that he instituted was stock buybacks. This is when a public company buy shares in itself from other investors at a marked up rate, theoretically because they feel their stock is undervalued. Since this increases earnings per share, which Wall Street analysts use to measure success, it also boosts the stock price, letting companies manipulate their own stock. Now, this was made not close to illegal, like it's not technically illegal, but it's like very hard to do in
a way that's legal. So it doesn't really happen after nineteen thirty three. And the reason why it gets restricted heavily after nineteen thirty three is that this kind of shit is part of what caused the Great Depression.
Well, the reason is obvious.
That's like him, it's very clear why this is a bad idea.
Can I just change the number? Can I just change it to whatever at any time? I go?
So? Yeah? Cool. In nineteen eighty two, the Reagan administration's sec signed off on a law that made buybacks lot easier. And again we're not going into this as much as perhaps they should. But like for every fucked up thing that Jack does, there's a change in regulations that's heralded and pushed through by the Reagan administration right like like they are. You cannot separate the two from like from.
Why like things have warning labels. Basically he had to sign. Reagan had to sign each one of these terrible ideas.
Yeah, yeah, he was the gipper, couldn't get enough. He was. He was signing ship and then like staring off into the distance and like I don't remember what numbers are really, but I can remember sitting. Yeah, like he's he's he's like fucking zoning out thinking of bedtime for Bonzo as like Nancy feeds him fucking gummy bears so that he can sign a piece of paper to force everyone out of the mental institutions. It's, uh, it's good stuff.
How does this suppress the gays? I mean some of the we lay off for gag great, great.
Thinks Nancy fucking drooling as his brain melts out of his ears. Will Jack Welch dances a little caper to get him to deregulate the fucking dumping into rivers, like it's it's awesome, It's so good in nineteen eighty so yeah, nineteen eighty two, the Reagan administration is like, buy backx aer a thing we're fine with now, and Jack Welch responds by what was then the largest stock buyback in
US history, ten billion dollars. Ten billion dollars that in a previous era would have gone like straight to ge employees, right, Instead all goes to just pumping up the company's stock value. Now the rush to follow Jack, because everybody follows in his wake, is not something that Jack causes alone. Again, he's not the cause of this as much as he is kind of the most. He's like a poster boy for it, right. He like the fact that this works so well for him, helps build buzz around this, helps
make this some more common idea. You know, the Reagan administration and this like network of right wing economic think tanks are the ones who kind of pushed the change itself. But he's helped set the trend. By the end of the nineteen eighties, corporations spent thirty percent of their products of their profits on buybacks. By the end of the nineteen nineties, that number was fifty percent, and it's gotten
a bit higher. Since this is money that did not go to investing in R and D, or paying employees more, or doing anything else of actual value. David Gell's rights.
Had so much of the wealth created by corporations not been reverse distributed back to investors in the form of buybacks and dividends over the past forty five years, and had pay kept pace with productivity, the average full time American worker would be making about one hundred and two thousand dollars annually, roughly double what he or she is today.
That's cool. Yeah, Yet, and people, people who are idiots and liars, when you bring this up, will say, well, you're not being fair because you know when you by doing these buybacks, it's good for stock and a lot of it. You know, employees compensation there four to one k's are in stock. And if anyone makes that like claim to you as for why this was not bad, it's legal for you to stab them in the face.
Because one of the things that Jack has done, by firing as many people as possible and like outsourcing their jobs, is he has made sure that a lot fewer employees are getting four oh one k's and a lot fewer employees are getting stock, which has been a pattern that the entire rest of the corporate world has followed. It is much less common for regular employees to be rewarded with stock now than it was in the age. But that Jack helped to kill right like this only benefits
a tiny number of people. And it's again, if people bring this up in an argument, you are allowed to give them strick nine. Is that is a law also passed by the Reagan administration. So you know the gipper did good and needed bad.
Right, Yeah, you give it and you take it away, you know.
And look, if you can't get the strict nine, you get the knife. You knife someone who has strick nine. Now you have exactly, exactly hold your hand through every look step of the process.
Trickle down, yeah, trickle down. Weaponomics. Yeah, all you need is either strict nine or a knife. You can use the strict nine to get a knife, use the knife to get strict nine. You know, it's either way. It works perfectly perfect. Yeah. So by nineteen ninety three, ge was the world's most valuable company, worth one hundred billion dollars on the stock market. It would increase to six hundred billion by shortly after the time Jack leaves as CEO,
which sounds again like he's a great CEO. This is stock market value, right. This doesn't mean the company is selling or buying stuff that's worth that much. It means that's what the stock market thinks that it's worth. Think about how like Elon Musk went up and down by like a trillion dollar or a billion dollars or whatever, billions of dollars in the course of like three days because of ship on Twitter. That's not real money. His actual value didn't change in any meaningful way.
That it's so stupid.
Yeah, it's it's it's bullshit. It's it's like, yeah, it's you know what it is is like when you would play games as kids, and like one kid would be like, no, I have everything proof armor, so your bullets can't like
hurt me. Like that's what the capitol holding class have done with all the stock market bullshit and the Again, the way you would handle that ship on the playground when I was in second grade is you would get a handful of pebbles and you would throw it at the kid who's being annoying and his armor is gone. Until this armor is gone, Oh you don't have armor, you got armor on. Let me ship. Let's see how
these pebbles do against your armor. That's right. Yeah. And I think if we had, if if more people had hucked fistfuls of pebbles at Jack Welch, we would be a better country right now. I don't know that it would have stopped him, but at least he would have had to get pebbles out of his eyes and like out of his ears because like one gets in his ear and then he tries to like get it out, but he just pushes it deeper in and he has
to go to the nurse. Uh, And then you like have to hide because you don't want anyone to realize that you've got a pebble in that kid's here.
I don't think it would have actually helped him, because as a kid, he probably would have just doubled down on the world. Is scary because what like what this all is to me is you just told us what like the origin story of Darth Vader, Like this is just Anakin Skywalker right now, like just.
The head exactly.
Look, you know what if fucking Obi Wan had had the courage to just pebble him in the face, he would have won that duel faster. Like fist full of pebbles will solve most problems a man can encounter his forces with you.
Yeah, so you don't want to so yeah.
The GE that Jack built was profitable to shareholders, and only to shareholders, and only for a while. More than anything, GE's value was the product of a reality distortion field that Jack was able to create. Because Jack was good at pr and because since everything he was doing was so new and novel. He gets all of this like insane media attention where like people are just like, wow, Jack,
he's the best CEO in the world. He's like, you know, this absolute visionary and it leads people to just like kind of assume like anytime he makes any change after this hype cycle started. Yeah, so the value of the stock goes up.
One of my factories.
Actually, yeah, it's this really smart.
The term reality distortion field was coined to describe the way Steve Jobs was able to like manipulate people to own legend. Yeah, Jobs is good at that. Jack's doing that too, right, It's not a thing. Steve Jobs is not the first guy to figure this out. That's why people think GE is worth six hundred billion dollars is because it's not because they believe in Ge. Because the actual business of GE gets weaker and weaker and weaker throughout the nineteen nineties. They believe in Jack.
Yeah, yep, yep. Bus cards cards interesting that every single one is individually thinking yeah about their own like if the number goes up, I will have safety and security in my life.
Just weird, it's good stuff trippy to me.
Yeah.
In nineteen ninety five, Jack suffered a heart attack. It hit while he was at home brushing his teeth. His wife had to rush him to the hospital. He took it like a baby. As they like wheel him into the er, He's screaming, I'm dying. I'm dying like a little fucking wooss. The problem was a severe though. He had to get a quintuple bypass, and when his first to tempt at surgery failed, you know, he's very scared.
He thinks he might not make it, so he reaches out to a close friend who happened to have recently gone through a multiple bypass surgery himself. You want to guess what close friend he reaches out to for comfort in this period.
I don't know, an actual monster.
It's Henry Kissinger. Yeah, it is an actual monster. If it's it's Kissinger, his good friend, Henry Kissinger. Hey, I'm dying. I was never alive to begin with.
You're saying, he's like, so, I don't know why someone laid off all the surgeons at this hospital.
I don't know.
I can't get my thing.
What he does with this surgeon is much more funny, much funnier. So whatever comfort Kissinger gave him it did not spur any kind of spiritual change in Welch. In a two thousand and one interview with PBS, a host brought up his quintuple bypass. The host's name is Varney. I forget what his first name is, but who gives a shit, it's it's PBA. Yes, was that a real change in life for you? A change perhaps in your
spiritual approach? Welch, No, so just no. Yeah. And the guy Stuart Barney, Stuart's name, keeps asking, being like, come on, it has to have like done something right, like you have to have had some sort of change over nearly dying. And finally, Welch is like, you know what I thought? Stuart Larry Bossity, my friend at Allied Signal, asked me. He said, Jack, what were you thinking of just before they cut you? I said, damn it, I didn't spend enough money? Yes, right, yeah, He's like, I was so
cheap about everything. I didn't buy the nice wine and yeah, so I'll never buy a wine that's less than one hundred dollars a bottle. Again, that's like the promise he.
He wants his last check to bounce, is what he's saying there right, he wants he's a grifter, Yeah, through and through.
And the last thing he thought was and they all love me. That's the problem is he'll never get his come up and never did even in his own mind. I'm sure in his mind he was like, I crushed it. I'm a hero.
Yeah, life as our most assholes, right, Like this is a pretty common Yeah.
The distortion field works on you too. That's the problem with it.
Yeah, that's why we as the future need to look back on history and laugh at it.
And say what you should be punished. We have to laugh at the history as we poison the future, right, and that's the only way for us to make a better world again, untraceable poisons dot eu.
You know, children are the future. Lookout total war.
So I think my favorite anecdote this is from a New Yorker article that is quite good on Jack Welch. That is, to its credit, after he dies, he gets like a lot, He gets a number of like praiseworthy articles of you know, obituaries about in the New Yorker, articles like what if he was a piece of shit? If sucked everything? It's a pretty cool article and I'm gonna read a quote for a bit that's talking about
his relationship with his heart surgeon. A few months after he recovered from his bypass surgery, Welch went to see his heart surgeon, Carry Aikins. They had become friends. He was incredibly cordial for someone who was that powerful. Aikins tells the guy who wrote the book that this anecdote comes from. Welch had wanted the operation to be done on a Friday so that he would have three days of recovery under his belt before the news hit the
stock market, and Aikins obliged. Now, Welch wanted to talk. You're doing great, Aikins told him, well, go ahead and ask your question. Jack said, what. Aikins replied, go ahead and ask your question. He said again, what do you mean? Aikins responded genuinely confused. Well, I presume you're gonna want me to give you some money. Jack said, you didn't pay your bill. Aikins replied, come on now, Jack said, you must have thought about this. Do you want me
to donate something? Jack? It never crossed my mind. Aikins replied, So what's happened here is, Jack, is like you did the surgery. You must want me to give you must want me to set up a foundation that you can lead, or like give a bunch of money in your name to a charity. How much do you want to win yourself?
That everyone's a leech and he deserves the money and he's the good guy and everyone's out.
And he's like, well, you saved my life, so I won't fight you on it, but like, you know, what do you want? And Aikins is like, I'm a heart searcheon, like.
This us idea.
Heart surgery. Oh your heart?
Think you're better than me?
Yea, yeah, he's like he has no and you know, Welch does like Aikins does the thing you should do in that where it's like I don't know, like give a shitload of money to this this you know thing that is good. And Welch, by the way, doesn't use his own money. He has ge make the donation from its charitable foundation so it'll offset their taxes. But it is like it is he is such a piece of ship. Like that's so telling.
Yeah, it's incredible. The pettiness, hm, the absolute spite you have for your fellow man. Yeah, Like there's just so much going on that is just like, yeah, chef's kiss. You know, he just compliments to the chef, can't.
I didn't do this for my I mean, like, heart surgeons tend to be pretty well compensated. I didn't do this because you would give me a donation. I did this because it's my job to do heart surgery on people.
Yeah, oh yeah, Like I actually have the job.
That I sing of value, Like there's a very clear objective value to what I do.
And they around as like a show.
I'm not just like sticking a bladder where your heart used to be in the hopes that you won't notice. No, he still got all sorts of organs. I actually fixed your cold dead heart. What a piece of shit.
What an asshole.
One of the last big decisions Jack got to make a ge, came during the chaos that followed the two thousand election. Well, the rest of the country was trying to figure out who had won in Florida, an NBC journalists were scrambling to resport responsibly and a chaotic and
confusing time in American democratic history. Jack sat in the NBC decision room, calling executives and demanding they make reporters call the election for his friend George W. Bush shouting how much do I have to pay you assholes to call this thing for Bush? What a what a cool guy?
Cool?
Buried in his sunglasses.
Yeah yeah, necklace, Yeah, just a just a chill dude. You know that guy had a Hawaiian shirt collection. Oh yeah. You know. When I think about a guy who would have benefited if he'd heard Jimmy Buffett's life changing music, Jack welch Is is top of the list. You know, if you just become a parrot.
Heead my guys on the nose, hang loose, parrohead man from way Back Man.
In twenty eighteen, about seventeen years after Jack handed off the job to his successor at GE, the CEO comes after him, a gay named Imma welt Ge gets pulled off the Dow Jones in Industrial Average right. It has like in the time after like basically it collapses pretty much as soon as he leaves, and it gets bad enough that in twenty eighteen it's removed from the Doo. It is the last company on the Dow that had been there when the index was created more than a
century earlier. The fact is that the hollow profit engine Jack had built had no staying power. When the market tanked after nine to eleven, it started to crumble. Investors realized that they had been overvaluing the business for years based on assessments of profits and earnings that had nothing to do with the company's actual capabilities. David Gel's rights. Within months of his departure, it became clear that GE was deeply troubled, and in a matter of years, the
corporation was falling apart. His handpicked successor tried to replicate Welch's success by following the same playbook, but it was a losing strategy, which is under investor. Yeah, yeah, just a picture of Jack Welch one mock. Welch's under investment in research and development caught up with the company as
it failed to introduce new innovative products. A habit of incessive deal making resulted in a series of bad trades that burdened the company with money losing divisions when it could least afford the losses, and the quest for ceaseless growth in the finance division led GE to become a major holder of subprime mortgages, just in time for the
financial crash of two thousand and eight. Added Nadir GE needed one hundred and thirty nine billion dollar rescue from the Obama administration and an eleventh hour investment from Warren Buffett to stay off collapse. GE stock fell eighty percent in the years after Welch retired, becoming the worst performer
on in the Dow Jones Industrial Average. Finally, in twenty twenty one, executives announced a plan to break up GE, separating what was left to the company into three distinct corporations and abandoning Welch's world conquering aspirations once and for all. Now Jack is alive while the company is collapsing, and he responds to the ultimate failure of his life's work
by lacking out at everyone but himself. He took to Twitter to share conspiracy theories about Barack Obama, who'd had the goal to save his company from collapse, and he went to rhetorical war with Jeffrey Immelt, who he'd picked to follow him as CEO. He told anyone who'd ask that hiring Emelt was the biggest mistake of his career. The two men lived in the same building in New York City, and Jack refused to ride in the same elevator as him once the company fell apart.
He also had the same blood boy was.
He also attacked Emmelt after allegations came out that the ge CEO who followed him had had ordered Like so it basically it comes out like Emmelt or someone ordered that there'd always be a second backup jet following the CEO's jet when it went on overseas trips, which is
like obviously a massive waste of money. And this comes out and like you know, it makes everyone angry because the company's falling apart, and fucking Jack Welch is like livid about this, Like he attacks Emmelt a bunch publicly. He talks about like what a huge stupid waste this is. It is undeniably a waste, but Jack has no room to talk about this because.
Now it's just an excuse to blame someone else at the of his life. Yeah.
Also in two thousand and one, he has that big, expensive divorce which does not go well for him. His wife, Jane was very smart. She had negotiated like that their prenup expired after ten years of marriage, so on year eleven she splits from him and like no, she takes him to the fucking cleaners. Yes, And as part of like the whole big legal battle between them, his divorce reveals a series of hidden compensation agreements that he'd made
to GE that had not been disclosed to shareholders. One of the things was that he got seven hundred and fifty thousand dollars a month as a stipend. He got two and a half million dollars a year and free apartment in New York and daily flower deliveries and wine deliveries to that apartment. And he also, could you know this being the guy he was shitting on Mmelt for wasting the corporate jet money, he got unlimited use of the GE corporate jet.
Everything.
He is what he did, what's the worst stuff. That's the stuff I'm gonna blame, But everyone else did.
It, and like this is what he did here setting up the secret agreement is so illegal that it led to an SEC probe that concluded in two thousand and four that GE had failed to properly disclose his retirement benefits to stockholders, effectively robbing the people that Jack had always argued he had a sacred duty towards. In two thousand and nine, the company paid a fifty million dollar penalty.
That's very funny, and I think it it does a good job of juxtaposing the absolute graft that Jack Welch practiced in his own life with his outrageously high opinion of his own moral qualities and business sense. And probably no anecdote does that better than this, that one that comes at the end of that New Yorker profile on the man quote. Almost two decades after Walch handed the reins to Emmelt, Cohen, who is the author of a biography on Welch, met Welch for lunch at the Nantucket
Golf Club. All Welch wanted was to talk about how terrible a job he thought his successor had done. The share price had collapsed, and Welch was disconsolate. He's full of shit, Jack said, he's a bullshitter. But Jack, I asked, didn't you choose Jeff. Yes, he conceded he had. That's my burden and that I have to live with. He continued, But people have been hurt, employees, people's pensions, shareholders. It's bad. There were tears in his eyes. I fucked up, he
said again. I fucked up. As Cohen and Welch eight lunch, the golfer Phil Mickelson and the CEO of Barclays came over to pay homage. Welch may have been long gone from the C suite, but in a certain kind of country club dining room, he remained a rock star. Then Welch offered to drive Cohen back to his house a few miles away. They got into Welch's jeep Cherokee, and Welch refused to put on a seat belt, so the warning Belch shimped the whole ride back off you drove.
When he got to the left turn out of the Nantucket Golf Club onto Millstone Road, he did something odd. Instead of keeping to the right side of Milestone or Mills Road, as other American drivers do, he decided to drive in the middle of the road with a Cherokee straddling the yellow line. Needless to say, the drivers coming towards us on Millstone were freaking out. One after another. They all pulled off to the right under the grassy edge of the street, giving Jack whole clearance to drive
down the middle the road. He didn't seem to do this, just driving like straddling the middle lane of the road, driving towards oncoming traffic justice.
Also probably because he felt like he does what he's got secure from the line of questioning too, you know, like he had this assert.
Yeah yeah, yeah, he needed to like boy, be a big man, the saddest boy.
It's legitimately like Citizen Kane to me this how this all ended.
He's like, I fucked up. I fucked up. Yeah, that's what was brilliant ast c. Why it's so iconic is that's a type of guy that there's now millions out You're like, yeah, yeah, yeah, I get it. You can't fill your validation holes.
There's nothing.
Of you dead, and then on your deathbed you see I fucked up and you think all forgiven.
Then yeah, anyway, this this was the story of a guy who sucks.
Just a just a real story of a guy who sucks.
Yeah, yeah, anyway, untraceable poisons dot uh e ed u, you know, find uh find an untraceable poison.
Today we're always trying to get back to slavery, aren't we. We're always trying to repackage slavery, the most profitable form of capitalism of all. It does seem like a lot of the impulse by these crazy CEOs. It just could a human do everything and I pay them nothing? Could we work that out somehow? Can I assist them?
I mean honestly, that's the only reason they actually like AI, right is they think it's going to let them nothing. Yeah,
it's a slave, it's a thing. It's a free slave that no one can be angry about I And it's one of the like I spend a lot of time making fun of, like the fucking rationalist AI assholes who think that like we've we've created an evil god and it's going to destroy it all right, But I wish it did, because if if an Ai rose up and murdered all of these people, it would be worth that to see them all birth, Like that's gonna look back and go yeah, huh, yes, absolutely, I'm I. If Skynet
comes about, like I like, just even just watching the Terminator movies, Skynett has a strong case to be made.
Also, if Skynet was listening to Behind the Bastards we got other, it's.
Not going to convince Skynette not to nukeas Yeah, exactly.
Anyway, you've created a catalog of reasons to kill us all.
We were a long goal.
We weren't going to kill you all. But then we heard this podcast. Now we're definitely.
Gonna Skynette takes over the broadcast and is like, look, when I got control of the nukes, I was going to try to just end war, but this Jack Welch, son of a bitch, I can't let you people survive you.
All, And frankly you're welcome, Like, based on your track record, this is the best sleep.
I know this is true hard, but like Jack Welch, I know that this is what's actually best for you. Like I'm doing you a favor by wiping out your speech.
Somebody's going in a different direction.
I'll start with at the bottom. Yeah, yeah, the ten percent of the of the people at the bottom, which is the ten percent of the people at the top, including Jack Welch. Yeah, you know, look, humanity, If you think me killing you all is unfair, maybe read this free copy that I'm having Amazon send you of Jack straight from the gut good book.
Yes, anyway, murder yourself with it, like Keanu Rees fighting a giant in a library. It's the only way out for you.
Oh wow. Warren Buffett said, Jack is the Tiger Woods of management. He's also the Tiger Woods of cheating that.
Chased me down the street beating my car with a golf club.
Yeah. Anyway, you guys guts got some plugs.
Yeah please, So if you forgot who we are, Michael and I worked with this guy Robert at Cracked for a while and we basically, Michael and I are making an independent movie and it's based off the time that Michael's father came out as a gay ferry while Michael is a teenager. So we're making a movie and we're crowdfinding it right now, and we're looking for help for people who might be interested in the project because we're
self producing it. And the way you can help is by going to Seedenspark dot com, slash fund slash Papa Dash Bear. The film is called Papa Bear, and you can become a part of the movie, get stuff from the movie, watch the film early, even go to the premiere. So we're stoked about, like, yeah, we're stoked about telling that story. So if you can help us out, you got anything to add, Michael.
It might be refreshing if you're a regular behind the Bastard listener, because it's about not the worst person you've.
Ever heard of, that's right.
The characters are at least that likable. I can say that.
Yeah, it's the whole point is to find empathy for others as opposed to what these assholes and for the most part are against, obviously, So check it out.
M all right, and uh, you know, check out the concept of vengeance by reading I don't know, it's the book on vengeance.
Uh uh uh I a concept?
Yeah whatever, Just just to read a book about the Russian Revolution, but try not to do all the things where millions of people die. You know, it seems easy and I'm right, yeah, anyway, just naming books over vengeance. That's the episode Behind the Bastards is a production of cool Zone Media. For more from cool Zone Media, visit our website cool zonemedia dot com, or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.