Behind the Bastards - Part One: Frank Lorenzo: The Man Who Ruined Air Travel
Aired: 2023-08-01
Duration: 01:17:41


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[00:00:42]  My dad gave me the best advice ever.
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[00:01:56]  Ah, it's Behind the Bastards, the podcast where I talk about my sleeping habits and Miles talks about his baby.
[00:02:04]  How you doing, Miles?
[00:02:06]  I just started recording, but yeah.
[00:02:09]  I'm great.
[00:02:10]  I'm great.
[00:02:11]  So yeah, I'm good, man.
[00:02:12]  I'm good.
[00:02:12]  Thanks for having me.
[00:02:13]  It's been too long.
[00:02:14]  It's been too long.
[00:02:14]  I was wondering.
[00:02:15]  It's been too long.

=== The Unsettling Truth About Planes (03:12) ===

[00:02:16]  Yeah, when I would be a little bit more.
[00:02:17]  Selfish baby.
[00:02:19]  Yeah, I know.
[00:02:20]  Well, now that that guy's out of my way and out of the, you know, got that obstacle out of, or my career obstacle out of the way, I'm back, baby.
[00:02:28]  He hit six months and you're just like locked in now.
[00:02:31]  It's like done.
[00:02:32]  Fuck it.
[00:02:32]  Yeah.
[00:02:32]  Yeah.
[00:02:33]  You're old enough.
[00:02:34]  Find a life.
[00:02:35]  Exactly.
[00:02:36]  Yeah.
[00:02:36]  Just, you know, like sit in this cardboard box.
[00:02:39]  Yeah.
[00:02:39]  Some of my old Ninja Turtle toys and like a AirPod playing or whatever, you know, call it a home pod playing and you're good.
[00:02:46]  Yeah.
[00:02:46]  Miles, how do you feel about airplanes?
[00:02:52]  Robert.
[00:02:54]  I mean, I like, as a kid, I like going on airplanes, but you know, you never know when you're on those things.
[00:03:01]  You never know.
[00:03:02]  That's my feeling on them.
[00:03:03]  You never know.
[00:03:04]  Like sometimes you get tricked and realize you're on a plane only belatedly.
[00:03:08]  You're like, wow, what an odd, very long house with strange windows.
[00:03:14]  I'm always just thinking they're going to crash.
[00:03:15]  Oh, really?
[00:03:16]  Yeah.
[00:03:17]  I don't think that happens.
[00:03:18]  I always planes anymore.
[00:03:20]  Yeah, not as much, but I think I've seen too many like 80s movies that had like plane crashes in them that like I'll get on.
[00:03:26]  And then like when I look at the other passengers on, like music starts playing in my head.
[00:03:30]  And I'm like, these are the people that lost their lives on this plane.
[00:03:35]  Yeah.
[00:03:35]  You know, I think the thing that I that I find unsettling is less like, because planes are pretty statistically safe, except for every now and then, like that, maybe that Malaysian pilot or those guys in France, you get like a pilot who just decides to end it all and take everyone with him.
[00:03:55]  And I find that slightly unsettling.
[00:03:57]  You got to trust them.
[00:04:00]  And pilots are the kind of people who become pilots.
[00:04:04]  You know, if you've ever known a pilot, oh boy, that's not a trustworthy breed right there.
[00:04:10]  Yeah, this is an anti-pilot.
[00:04:11]  No, I feel nothing for pilots one way or the other.
[00:04:14]  So I feel nothing.
[00:04:16]  The one person I know that's a pilot.
[00:04:18]  Yes, that does.
[00:04:19]  I was like, I was like, yeah, okay.
[00:04:20]  Or maybe it is a thing.
[00:04:22]  Well, now that I think about it, yeah, I know somebody who has a pilot's license, and they're kind of like a more like a pirate than a pilot.
[00:04:30]  Okay.
[00:04:30]  Yeah.
[00:04:30]  I get the vibe.
[00:04:32]  Yeah.
[00:04:33]  Um, you know, Miles flying outside of the occasional, largely irrational fear of death, um, has become both safe and also deeply unpleasant.
[00:04:48]  Like, it sucks.
[00:04:49]  Like, I think for most people, if you have to get on a plane to go somewhere, the getting on the plane part is pretty thoroughly an unpleasant process, right?
[00:04:57]  Oh, 100%.
[00:04:59]  Yeah.
[00:04:59]  And it sucks like comprehensively.
[00:05:01]  Like, it's not just that like being on a plane sucks because you're crammed in with all these people.
[00:05:06]  And like, yeah, it's just this physically unpleasant.
[00:05:09]  I hate though now how basically they want to make seats as uncomfortable as fucking possible.
[00:05:16]  So you're like, well, we have economy plus, economy plus plus, yeah, economy plus cubed, uh, business first, diamond.
[00:05:23]  And you're like, what the fuck?
[00:05:24]  Can I just have like just slightly more room because I'm over six feet tall?

=== Why Flying Feels So Unpleasant (16:02) ===

[00:05:29]  Like, just please.
[00:05:30]  They also have the thing now where like they have the okay, you can pay less, but you don't get to pick your seat.
[00:05:38]  Yeah.
[00:05:38]  That that that used to like that doesn't used to be that used to just be the way the planes worked.
[00:05:43]  Yeah.
[00:05:44]  Everything's a fucking add-on now.
[00:05:46]  It's good that we're talking about this because today we're talking about the guy who made it that way.
[00:05:50]  Right.
[00:05:51]  We're talking about the dude who made all of that be a factor in flying, who like turned it from a process where you just bought a ticket to go to a place and you were treated like a human being to this bizarre, weird capitalist nightmare where you've got like 11 different options and all of them suck way more than being on a fucking train.
[00:06:13]  That's who we're talking about.
[00:06:15]  His name is Frank Lorenzo and he made planes suck.
[00:06:19]  Yeah, he's a fun little monster today getting some capitalism, bad guy here.
[00:06:24]  So I like this.
[00:06:26]  Okay, so good.
[00:06:26]  I don't have to deal with too much.
[00:06:28]  I can just deal with my own frustrations that are based off of being on a plane rather than something deeply, horrifically fucked up like every other time.
[00:06:36]  Yeah, I mean, he's, it's fucked up in that he's like your normal sort of, he's like your uber capitalist kind of asshole, but it's also this thing where like the whole airline industry, like all of the pilots and ground crews and stewardesses and stuff who have been working in it for a while, like blame this guy for everything that sucks with air travel.
[00:06:56]  And some of the things they blame him for are like things that they kind of did.
[00:07:00]  Like it's not, you know, it's not all on him.
[00:07:04]  Right, right.
[00:07:04]  But yeah, it's an interesting story.
[00:07:07]  And it's, it's, it's pretty bastardy.
[00:07:09]  So that's what we're going to talk about this week.
[00:07:11]  We're going to talk about Frank fucking Lorenzo.
[00:07:13]  Uh-huh.
[00:07:14]  So Francisco Anthony Lorenzo was born on May 29th, 1940 in New York City, the windy apple.
[00:07:23]  He was the third of three sons, and his parents were named Oligario and Anna Lorenzo.
[00:07:30]  Everything's fine with his name except for the Anthony as a middle name.
[00:07:33]  I don't trust people with an Anthony right in the other name.
[00:07:36]  Anthony's a first name.
[00:07:38]  Could be a last name.
[00:07:39]  It's never, it shouldn't be a middle name.
[00:07:41]  Wait, why do you still feel so fucking strongly about what a middle name is?
[00:07:44]  I don't think it's right as a middle name.
[00:07:47]  Why are you being so conspiratorial today?
[00:07:50]  What do you mean?
[00:07:51]  I think, no, it's an interesting.
[00:07:52]  I'm just, we're gaining perspective into Robert's mind.
[00:07:55]  Like, cause I think I feel like 70% of like Catholic men's middle name is Anthony.
[00:08:00]  Yeah, well, I don't trust the Papists, you know?
[00:08:03]  Like, yeah, that makes sense.
[00:08:04]  They're loyal to you.
[00:08:05]  Except for you, it's an anti-camp.
[00:08:07]  Yeah, exactly.
[00:08:07]  Yeah.
[00:08:08]  What is a good middle name?
[00:08:10]  Like, um, Tiddly Bop.
[00:08:13]  Um, anyway, okay.
[00:08:14]  So I forgot all the middle names.
[00:08:22]  So his, his dad ran a beauty salon and his mom worked at the beauty salon and they were like pretty comfortable.
[00:08:30]  Like they're not rich, but they're pretty solidly middle class.
[00:08:33]  They're doing well enough that his dad is able to play the stock market as a hobby.
[00:08:38]  He's again, he's not like, you know, fucking printing paper, but he's got a portfolio that's worth like 120 grand by the time he dies, which, you know, you're talking like the 70s, the 80s.
[00:08:50]  That's not bad.
[00:08:50]  That's not so one of the things that Oligario teaches his son about is the concept of risk.
[00:08:58]  And when we say risk in this context, we mean gambling, right?
[00:09:02]  Like when money people talk about risk, they're talking about like whether or not you have a good shot of like, you know, winning when you throw your your dice at that roulette wheel or whatever.
[00:09:14]  Frank was pretty good at this from the beginning.
[00:09:16]  He showed an aptitude for numbers and he was really fascinated specifically with how he could fuck around with numbers in order to make money.
[00:09:23]  When he was in junior high school, he ran the school betting pool on the World Series, which was illegal at the time.
[00:09:29]  But what are you, a cop?
[00:09:30]  Come on.
[00:09:31]  So wow.
[00:09:32]  So he was running, just taking bets on the fucking World Series.
[00:09:36]  Takes bets on the World Series.
[00:09:37]  Whimsical times.
[00:09:38]  Yeah, good stuff.
[00:09:41]  The single most enduring memory Frank had of his childhood was of the family apartment, which sat right under the approach for LaGuardia Airport.
[00:09:49]  As a little kid, he'd spend hours watching the different planes from various airlines land.
[00:09:54]  Now, this is a period in which flying is pretty new, right?
[00:09:58]  Like if you're watching planes fly overhead in like the 50s and 60s, we've been doing that, you know, about as long as today Paul Rudd has been alive, right?
[00:10:08]  Like that's what you got to think.
[00:10:10]  If you're watching like planes in the 60s, like planes as a concept are about as old as Paul Rudd is to us.
[00:10:17]  How old?
[00:10:17]  Wait, and what are we, when we say Paul Rudd, what are we dating that?
[00:10:20]  From his birth or his entrance into our sort of pop culture consciousness?
[00:10:26]  Yeah, I would say from his birth, but like either way, I don't remember a time without Paul Rudd.
[00:10:32]  Do you?
[00:10:33]  I mean, for me, I think Clueless is the punctuation point.
[00:10:39]  That is like, that is the point where he, that's the big bang, I would say, for Paul Rudd.
[00:10:43]  That's the big bang for Paul Rudd for me.
[00:10:45]  At least for me.
[00:10:46]  Yeah.
[00:10:46]  Yeah.
[00:10:46]  The Permian explosion.
[00:10:50]  Exactly.
[00:10:50]  You still feel the gravitational waves of that movie from when Paul Rudd came on the scene.
[00:10:56]  Yeah.
[00:10:56]  So he's watching the planes fly overhead.
[00:11:00]  He doesn't know yet about the movie Clueless because it's the 60s, but one day he presumably will watch it.
[00:11:07]  So by the time Frank is making memories, man had only been taking commercial international trips for about 25 years.
[00:11:14]  There was still a magic to air travel then, and it was only slightly dimmed by all of the people who'd gotten incinerated from the sky during World War II.
[00:11:23]  Airlines in those days were run by the same kinds of guys who'd helped invent air travel as like a thing.
[00:11:29]  So these dudes, like airline CEOs today are just like any kind of CEO, right?
[00:11:34]  But back in the day, airline CEOs were all former pilots who'd like been test pilots.
[00:11:40]  They'd like flown in wars.
[00:11:42]  And they were often crazy people, right?
[00:11:44]  Like that was just the kind of person who could get these jobs.
[00:11:47]  A representative example of the pack was Robert Foreman Six, the CEO of Continental Airlines, which was the most prestigious airline in the country during Frank's childhood.
[00:11:56]  Six became the CEO of that company in 1936 and held the job until 1980, by which point he was like senile and the company was failing because he didn't know how to do anything anymore.
[00:12:10]  He had dropped out of high school at 17 and gotten fired from his sales job for taking flying lessons on company time.
[00:12:17]  He'd received his flying license at 22 and become an air racer.
[00:12:22]  And he got like rich during World War II because he used all of his airlines planes to take U.S. troops to Europe for the Army Air Corps.
[00:12:30]  Like that was just a thing the big airlines did is they were like, I guess we're having a war.
[00:12:34]  Everybody, like take your, it's like if we were like diverting 737s to Ukraine so we could like kick explosives out of the back hatch.
[00:12:47]  I mean, why not yet?
[00:12:48]  Yeah.
[00:12:48]  With jet blue.
[00:12:49]  Yeah.
[00:12:49]  That's when you see spirit airlines flying overhead.
[00:12:52]  Yeah.
[00:12:52]  After the war, he got rich, particularly because like he was the dude who started inviting celebrities to take like, you know, trips on his planes to, you know, vacation destinations or to Europe.
[00:13:04]  Like the idea of the jet set is created in part by like Robert Six.
[00:13:08]  Like that's the dude that he is.
[00:13:10]  He makes flying sexy.
[00:13:12]  He also beat the absolute hell out of his wife and kids, but like that kind of goes without saying, right?
[00:13:18]  The different time.
[00:13:19]  Rich maniac in this part period of time.
[00:13:21]  Yeah, probably.
[00:13:22]  Holy shit.
[00:13:23]  Not great.
[00:13:24]  So you're saying that whole like, I know like there are these places in LA where it's like the inside of an old airplane where people can pretend it's like the glamorous air travel time.
[00:13:33]  That's all because of this.
[00:13:35]  Yes.
[00:13:36]  Bobby Six is the dude who like creates that cultural touchstone or helps to and then became a decrepit monkey skeleton in his latter years.
[00:13:44]  Okay.
[00:13:44]  Yeah.
[00:13:46]  For some reason, a lot of guys have trouble giving up power and influence, Miles.
[00:13:49]  Wild stuff.
[00:13:51]  Thankfully our generation will never know anything about that.
[00:13:53]  No, no.
[00:13:55]  So then there was Edward Vernon Rickenbacher, who, man, that is a pilot name.
[00:14:00]  That's a hell of a pilot name.
[00:14:01]  That's Vernon.
[00:14:03]  How about Vernon as a middle name?
[00:14:04]  I'm fine with Vernon.
[00:14:05]  Vernon's a fine middle name, you know, a little old-timey, but yeah, it works for me.
[00:14:09]  It's no tiddle-bob, though.
[00:14:10]  Yeah, no tiddlybob.
[00:14:11]  Sorry.
[00:14:12]  So obviously, Edward Vernon Rickenbacher, that's a World War I fighter pilot.
[00:14:16]  And he was, in fact, a World War I fighter pilot.
[00:14:19]  He wins the Medal of Honor.
[00:14:20]  He's actually the most decorated U.S. flying ace of the war.
[00:14:23]  And as a side hobby, is a race car driver because like, why wouldn't you be the coolest dude you could possibly be?
[00:14:30]  It wasn't shooting krauts out of the sky.
[00:14:32]  Yeah.
[00:14:34]  No, every now and then, if he saw one by the edge of the track, he'd just like run him over, you know?
[00:14:39]  Yeah.
[00:14:39]  Get a German.
[00:14:40]  Blonde hair.
[00:14:41]  Let's go.
[00:14:43]  He was born in Ohio, like most great pilots.
[00:14:46]  Yeah.
[00:14:46]  Got to get the fuck out of that state.
[00:14:50]  And his pinchant for devil, daredevilry mainly came from the fact that he was like the least lucky person on the planet.
[00:14:57]  As a toddler, he was hit by a streetcar and knocked 12 feet down into an open sewer.
[00:15:03]  His brother twice had to save him after he was hit by passing coal cars as a little kid.
[00:15:08]  One time his school caught on fire and he nearly died trying to save his coat from the building.
[00:15:15]  So yeah, like this dude just sounds like a really normal.
[00:15:20]  When was he born?
[00:15:21]  In like, I don't know, you know, late 1800s, something like that.
[00:15:25]  Yeah, that sounds like, yeah, that sounds like a very normal childhood, I think, back then.
[00:15:29]  Yeah, everyone was fucking ran over into a open fucking sewer as a baby.
[00:15:35]  Yeah, he's just, he's just like constantly like getting maimed and beaten.
[00:15:39]  And it's like, I guess the sky couldn't be worse, right?
[00:15:42]  Like German bullets aren't more dangerous than the street in 1913.
[00:15:47]  It's so the it is just such a different time because like you know you look at those old pictures of like what jungle gyms used to look like for kids like in the fucking 20s and just a gun on the ground.
[00:15:58]  Yeah, exactly.
[00:16:00]  It was like a knife pit with like a bunch of poles that were like 25 feet high with like, you know, handles and shit on it.
[00:16:07]  So kids could just sit on top and break their fucking necks.
[00:16:10]  Yeah.
[00:16:10]  Yeah.
[00:16:11]  If they if they die, they die.
[00:16:13]  So after the war, he founded a motor company and this motor company went very quickly bankrupt.
[00:16:20]  But he was famous because he'd been such a good fighter pilot.
[00:16:22]  So he was still able to create another company.
[00:16:25]  This one was an airline called Florida Airways, which collapsed because would you fly on Florida Airways?
[00:16:32]  Like, absolutely not.
[00:16:33]  No.
[00:16:34]  It sounds like you're going to get robbed.
[00:16:35]  Like they're like, you idiot.
[00:16:36]  You really thought this was a fucking airline?
[00:16:38]  Give us your fucking money now.
[00:16:40]  You're going to get robbed and you're going to have to sit next to the guy until it lands in Sarasota, right?
[00:16:46]  No, there's no flight, Robert.
[00:16:47]  There's no flight Florida Air.
[00:16:49]  That's a euphemism.
[00:16:50]  It's a code word for a fucking like armed robbery ring.
[00:16:54]  Come on.
[00:16:55]  Oh, yeah.
[00:16:55]  He's flying Florida Airways now.
[00:16:57]  Yeah.
[00:16:58]  Oh, looks like you got two first class tickets to Florida Airways.
[00:17:03]  So Florida Airways also collapses.
[00:17:06]  I'm like, that's not real.
[00:17:07]  That has to be a fake name.
[00:17:09]  No, no.
[00:17:11]  That's the real name.
[00:17:12]  And it becomes the foundation of a lot of modern air travel because he takes Florida Airways while it's failing.
[00:17:18]  And again, largely because he's just got so much famous guy clout, he's able to merge it with Eastern Air Transport to create Eastern Airlines, which becomes one of the titans of the first big age of air travel.
[00:17:32]  He also was a cartoonist, weirdly enough.
[00:17:34]  Basically, if you wanted to do it as a job when you were nine, this guy lived it.
[00:17:38]  He was in every way a cooler dude than the subject of our episode, Frank Lorenzo.
[00:17:43]  I used to be a flagpole sitter, too.
[00:17:47]  So by the time our boy Frank was in his late teens, his family was doing well enough that his father sent him to a super fancy rich kids school, Forest Hills High in Queens.
[00:17:58]  In his description of Forest Hills, Lorenzo emphasizes what a fish out of water he was.
[00:18:05]  He's this blue-collar Spanish kid in a school filled with white-collar Jewish kids.
[00:18:09]  But like his dad's like playing the market as a hobby and as a business owner.
[00:18:13]  So he's like, it's not that blue collar.
[00:18:15]  Like he overemphasizes it.
[00:18:17]  There's a little bit of like, I don't know, Jewish panic type deal where he's like, well, compared to all of these Jewish kids, I was real commoner, you know, stuff.
[00:18:28]  Come on, man.
[00:18:29]  Chill out, Frank.
[00:18:31]  So it does sound like it was an insufferable school because again, everybody there is pretty rich.
[00:18:37]  One of his classmates was John Vinicure, who went on to edit Paris's International Herald Tribune.
[00:18:43]  Simon and Garf Uncle were one year below him.
[00:18:46]  I wish there was something more interesting about that, but like that's that's the only fact I found about it.
[00:18:52]  The one real warning sign Frank exhibited in this point is that he volunteered to work as a hall monitor, which is.
[00:18:59]  Oh, you fucking cop.
[00:19:01]  No, absolutely not.
[00:19:02]  That's unacceptable.
[00:19:06]  I found out my partner, Her Majesty, was like a hall monitor.
[00:19:11]  Like when I found that out, I had like an existential crisis almost where I was like, what the like you're a cop.
[00:19:18]  Yeah.
[00:19:19]  And you wanted to do that?
[00:19:20]  It's like, yeah, and you got to wear the sash and shit.
[00:19:22]  I'm like, this is fucked up.
[00:19:25]  Yeah, that's, that's, uh, that's bleak.
[00:19:27]  You know, I, I, uh, I feel like hall monitors.
[00:19:31]  Yeah, it's, it's like the DEA for not wanting to be in math class.
[00:19:36]  Fucked up stuff.
[00:19:37]  Right.
[00:19:37]  It's, it's, yeah, it's ROTC for, you know, baby, whatever, baby cops.
[00:19:42]  I mean, you don't actually get to do anything in ROTC except look like a piece of shit in that stupid uniform.
[00:19:48]  You get to wear it, though, and fucking salute the flag.
[00:19:51]  Honor the flag, man.
[00:19:52]  Hell of a lot of fucking saluting the flag.
[00:19:54]  Jesus Christ.
[00:19:56]  So did the ROTC kids, you have I had ROTC kids like in my school that were basically like have like doing stolen valor, like wearing medals and shit, like on a weird jacket as they put the flag up.
[00:20:08]  I was like, is this?
[00:20:10]  Oh man.
[00:20:11]  In our ROTC, we got swords.
[00:20:14]  We got swords for a while, and then one of the kids drew his to like attack some other kids.
[00:20:20]  And then they were like, I guess we can't have them all wearing swords anymore.
[00:20:25]  Were they super sharp?
[00:20:26]  No.
[00:20:27]  I mean, they were like swords, but they were like parades.
[00:20:31]  They had not been sharpened.
[00:20:33]  But like, it was still a sword.
[00:20:35]  Yeah, yeah.
[00:20:36]  That was obviously how that was going to go.
[00:20:39]  Yeah, of course that's how that was going to go.
[00:20:41]  And it made me just think that everyone at school should have to wear a full saber at all times.
[00:20:46]  But that's a separate belief.
[00:20:48]  So honestly, I'd join ROTC for the sword.
[00:20:50]  Like if I heard this, like, yo, you got a sword.
[00:20:52]  A lot of people did.
[00:20:53]  A lot of people did, Moni.
[00:20:54]  I'm doing it for the sword.
[00:20:55]  Do it for the sword, y'all.
[00:20:56]  Do it for the sword.
[00:20:57]  So at this point, his life goal, Frank's life goal, was to study engineering when he went off to college.
[00:21:03]  He graduated in the late 50s and was accepted to Columbia University.
[00:21:07]  And this write-up from Texas Monthly describes his time in college pretty well.
[00:21:12]  The making of Frank Lorenzo seems to have begun at Columbia University, where he graduated in 1961 and later endowed a scholarship in his father's name.
[00:21:20]  He was well known there amid the 2,000 students.
[00:21:23]  He joined the top fraternity, Sigma Chi, and served in student government as secretary-treasurer of the Undergraduate Dormitory Council.
[00:21:30]  That worst class is a good thing.

=== Frank's Engineering Ambitions (15:08) ===

[00:21:31]  He was the worst fraternity at my college.
[00:21:33]  They like Sigma Chai.
[00:21:35]  They got like removed for doing that shit.
[00:21:37]  Oh, yeah.
[00:21:38]  He's just wait, Sophie.
[00:21:40]  He's a piece of shit in this school.
[00:21:41]  All right, cool, cool, cool.
[00:21:42]  Former classmates use words like glib and slick to describe him.
[00:21:46]  He tended to skate close to the edge, recalls classmate David C. Furman, Lorenzo's college nickname around his flat, Frankie Smooth Talk.
[00:21:54]  The moniker seems particularly well-suited and light of...
[00:21:57]  I can't look shit up right now.
[00:21:58]  No, he was Frankie.
[00:21:59]  He was Frankie Smooth Talk.
[00:22:03]  So the thing that he fucking does in college that's so funny is like he's in this campus political organization that's linked to all of the Christian fraternities like Sigma Chi to try to make sure that the Christian fraternities get a bunch of student officers.
[00:22:20]  And they're specifically opposed.
[00:22:22]  It's not like a left versus right thing.
[00:22:24]  The Christian fraternities are fighting the Jewish fraternities.
[00:22:27]  So first off, you could guess there's some problematic shit being said in the background.
[00:22:33]  Yeah.
[00:22:34]  Oh my God.
[00:22:34]  And so yeah, he's like, basically, he's their Roger Stone.
[00:22:39]  And the night before the final day of balloting for seats on the student governing board, Lorenzo meets with a bunch of other, like these Christian frat guys in a dorm room to discuss, quote, the possibility of voting twice.
[00:22:52]  So he and all of these other guys like make a list of students who probably wouldn't vote and then go vote illegally in their names to rig the election.
[00:23:02]  So he's like, he's, he's the Roger Stone or at least the E. Howard Hunt to like shady kind of bigoted college politics.
[00:23:11]  Wow.
[00:23:12]  What an entryway.
[00:23:14]  It's like, yeah, yeah.
[00:23:14]  And we had to dilute the Jewish vote by some voter fraud.
[00:23:18]  What?
[00:23:19]  Yeah.
[00:23:20]  Exactly.
[00:23:21]  Yeah.
[00:23:21]  I got this shareholder meeting covered.
[00:23:23]  What?
[00:23:24]  I feel like I'm going to get, I feel like I can guarantee you they didn't say we're going to beat like the Jewish frats.
[00:23:30]  They used a different word.
[00:23:31]  Yeah.
[00:23:31]  Oh, no, no, no.
[00:23:32]  Oh, yeah.
[00:23:33]  I was doing the safe for kids.
[00:23:36]  The polite version?
[00:23:37]  Yeah, no.
[00:23:38]  These guys are definitely a slur-heavy frat.
[00:23:41]  Oh, yeah.
[00:23:43]  One of the things I find really funny is that Lorenzo's, like, he's like their Roger Stone, but he's terrible at committing crimes.
[00:23:50]  So he is the only member of this conspiracy who gets caught voting twice.
[00:23:56]  The student paper reported.
[00:23:58]  At first, he denied everything and claimed that he had tried it as a stunt to test the election commission to see if anyone could actually get away with voting twice.
[00:24:05]  So he actually does the whole like, I was just testing to make sure that you guys had good security.
[00:24:10]  Oh, good, good.
[00:24:11]  Good to know.
[00:24:11]  Good to know.
[00:24:12]  Yeah.
[00:24:13]  That's like this shit that the fucking guys on To Catch a Predator say.
[00:24:17]  Yeah.
[00:24:17]  When they get caught, they're like, I was here to warn the kid about what can happen when you talk to people on the internet.
[00:24:24]  Yeah.
[00:24:24]  That's why I came.
[00:24:25]  Uh-huh.
[00:24:26]  Yeah.
[00:24:27]  He does that.
[00:24:29]  You know, guys, you know who else engages in anti-sen.
[00:24:37]  No, we shouldn't say that.
[00:24:39]  How do we, let's just pull the ads right now.
[00:24:44]  What's up, everyone?
[00:24:45]  I'm Ego Modem.
[00:24:46]  My next guest, you know, from Step Brothers, Anchorman, Saturday Night Live, and the Big Money Players Network.
[00:24:54]  It's Will Farrell.
[00:24:57]  My dad gave me the best advice ever.
[00:25:01]  I went and had lunch with him one day and I was like, and dad, I think I want to really give this a shot.
[00:25:06]  I don't know what that means, but I just know the groundlings.
[00:25:08]  I'm working my way up through it.
[00:25:10]  I know it's a place they come look for up and coming talent.
[00:25:12]  He said, if it was based solely on talent, I wouldn't worry about you, which is really sweet.
[00:25:17]  Yeah.
[00:25:18]  He goes, but there's so much luck involved.
[00:25:20]  And he's like, just give it a shot.
[00:25:22]  He goes, but if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[00:25:30]  If you saw it written down, it would not be an inspiration.
[00:25:33]  It would not be on a calendar of, you know, the cat just hang in there.
[00:25:40]  Yeah, it would not be.
[00:25:42]  Right, it wouldn't be that.
[00:25:43]  There's a lot of luck.
[00:25:45]  Listen to Thanks Dad on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:25:55]  10-10 shots fired.
[00:25:56]  City hall building.
[00:25:58]  A silver .40 caliber handgun was recovered at the scene.
[00:26:02]  From iHeart Podcasts and Best Case Studios, this is Rorschach, murder at City Hall.
[00:26:08]  How could this have happened in City Hall?
[00:26:10]  Somebody tell me that, Jeffrey, what did I?
[00:26:12]  July 2003, Councilman James E. Davis arrives at New York City Hall with a guest.
[00:26:19]  Both men are carrying concealed weapons.
[00:26:22]  And in less than 30 minutes, both of them will be dead.
[00:26:30]  Everybody in the chamber's ducks.
[00:26:33]  A shocking public murder.
[00:26:35]  I screamed, get down, get down.
[00:26:36]  Those are shots.
[00:26:37]  Those are shots.
[00:26:38]  Get down.
[00:26:39]  A charismatic politician.
[00:26:40]  You know, he just bent the rules all the time, man.
[00:26:42]  I still have a weapon.
[00:26:45]  And I could shoot you.
[00:26:48]  And an outsider with a secret.
[00:26:50]  He alleged he was a victim of flat down.
[00:26:53]  That may or may not have been political.
[00:26:54]  That may have been about sex.
[00:26:56]  Listen to Rorschach, murder at City Hall on the iHeartRadio app.
[00:27:00]  Apple Podcasts are wherever you get your podcasts.
[00:27:09]  There's two golden rules that any man should live by.
[00:27:13]  Rule one, never mess with a country girl.
[00:27:17]  You play stupid games, you get stupid prizes.
[00:27:19]  And rule two, never mess with her friends either.
[00:27:23]  We always say that, trust your girlfriends.
[00:27:27]  I'm Anna Sinfield, and in this new season of The Girlfriends.
[00:27:30]  Oh my God, this is the same man.
[00:27:32]  A group of women discover they've all dated the same prolific con artist.
[00:27:37]  I felt like I got hit by a truck.
[00:27:39]  I thought, how could this happen to me?
[00:27:41]  The cops didn't seem to care.
[00:27:43]  So they take matters into their own hands.
[00:27:46]  I said, oh, hell no.
[00:27:48]  I vowed I will be his last target.
[00:27:50]  He's going to get what he deserves.
[00:27:55]  Listen to the girlfriends.
[00:27:56]  Trust me, babe.
[00:27:57]  On the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:28:10]  Oh.
[00:28:11]  All right.
[00:28:12]  And we are back.
[00:28:15]  We're back and we're talking about our buddy Frank Lorenzo, the Roger Stone of anti-Semitic college election shit.
[00:28:26]  So the newspaper continues that story after he pretended to be testing the election system.
[00:28:32]  Lorenzo soon cracked under the pressure of the board's questioning and admitted to voting twice.
[00:28:37]  He and five others were banned from ever voting again in a Columbia election.
[00:28:41]  So he is, he is permanently, he is a school politics felon.
[00:28:45]  He's permanently lost his right to vote at Columbia University.
[00:28:50]  It's funny.
[00:28:51]  Now, this was before culture war politics had become as monetizable as they are today.
[00:28:56]  Like, I think there's, if, if this kid is going to school in the present, he never becomes a business guy.
[00:29:02]  He, like, joins Turning Point USA straight out of college and like tries to milk this for forever.
[00:29:08]  100%.
[00:29:09]  Yeah, he has a podcast on Daily Wire.
[00:29:11]  Oh, yes, absolutely.
[00:29:13]  So, yeah, Lorenzo, because the campus press doesn't have much to focus on, Lorenzo kind of becomes their Nixon for a while.
[00:29:21]  When classes start back up in the fall, the paper starts a campaign to make him resign from his position on the dorm room council based due to his, quote, lack of any semblance of self-respect and honor.
[00:29:32]  Now, every person.
[00:29:34]  That's the best way to insult someone.
[00:29:37]  Especially because it's like, you're on the dorm room council.
[00:29:40]  Now, I've never went to Columbia, but I did briefly live in a dorm in college before I dropped out.
[00:29:46]  And the only thing I know about our dorm room officers is that I bought liquor from them when I was 18.
[00:29:52]  Yeah, exactly.
[00:29:53]  Yeah, that's it.
[00:29:54]  They were selling you, they were selling you like diluted drugs, basically.
[00:29:58]  But I love that even for the bar to be basically subterranean, that they would still say, you're just lack of, what did he say?
[00:30:05]  What was it?
[00:30:05]  Self-respect?
[00:30:06]  Lack of any semblance of self-respect and honor.
[00:30:11]  Oh, it's so funny.
[00:30:14]  So Lorenzo eventually decides to resign and he writes a public letter announcing that he's giving up his job, but he doesn't give a specific reason for why he quit.
[00:30:22]  He just says, the political events of the past semester make my resignation mandatory.
[00:30:28]  So you can see just kind of instinctively, like this dude, this dude has what it, you know, is going to have what it takes to succeed in business or politics.
[00:30:36]  Oh, totally.
[00:30:37]  From the available information, it kind of seems like the rest of his time in school goes by without anything a podcast about shitty people can make content out of, at least.
[00:30:45]  Over the time he was there, Frank's interest veered from engineering and towards economics, a clear sign that he was going to be a shitty person.
[00:30:53]  He also started reading biographies of various famous business tycoons, like Andrew Carnegie, who once sent an army of Pinkerton detectives to launch a seaborne invasion of a mill occupied by striking workers, which sparked a massive gun battle, like a 12-hour gun battle that ended with strikers hucking dynamite into the Pinkerton boats and rolling a flaming train car at the barges in the river to break the beachhead.
[00:31:16]  Now, we can assume that when he read about this, Frank made a note of how violence with nothing but money behind it didn't work for Carnegie.
[00:31:24]  It was only once he got the government on his side that he was able to crush the strike.
[00:31:28]  And this is a thing that Frank's going to make a note of, right?
[00:31:31]  That like you can't just have guys with guns going to break up strikers, because there's always going to be more strikers than you have guys with guns.
[00:31:39]  You got to get the FEDS on your back, because they always have the most guns yeah, and the best toys, and the best toys, for sure, yeah.
[00:31:47]  Now, while he was a frat boy, Frank was not wealthy enough for his parents to pay his tuition.
[00:31:51]  He had to work odd jobs throughout school, selling ties at Macy's and, at one point, driving a Coca-cola truck, which required him to join the Teamsters Union.
[00:31:59]  If he ever commented on the pay and benefits he received due to his union membership, we have no record of it, but he does have to spend some time as a union man, which will be relevant in a little bit.
[00:32:09]  Once he graduated from Columbia, Frank applied to Harvard Business School where he wanted to get an Mba.
[00:32:15]  He was a member of it, the generation of young business executives who had become what were called corporate raiders in the 70s and 80s.
[00:32:22]  Right, this is we've talked about this in our Jack Welsh episodes this kind of period, this transitionary period from like the 60s to the 70s, is sort of the birth of the ideas that we now just see as like how capitalism works.
[00:32:35]  That like private equity.
[00:32:36]  Yeah, private equity, a company's only responsibilities to his shareholders, like you know, strip mine resources for short-term profits, lay people off to jig the stock price up so you guys could get money.
[00:32:47]  Um, you know, people died because the business became so poorly won because we were extracting all the money out of it.
[00:32:53]  Whatever, it's fine fine yeah, that that is kind of the era at least that he's going to Harvard in is like the guys who are going to preside over that that transition in capitalism are all kind of in school at the same time.
[00:33:05]  Yeah, the guys who are voting twice in college elections and after they set up an intricate system of shell companies to be able to dodge any kind of legal liability when people die yeah exactly well you, you don't want to not dodge legal liability when people die?
[00:33:19]  Miles think, think you want to be like that genius ceo of Ocean GATE.
[00:33:23]  You know, Stockton RUSH, dodge all liability by imploding.
[00:33:27]  Yeah yeah, doesn't the Stockton?
[00:33:29]  I feel like whenever I hear that name, it sounds like a fucking arena football team.
[00:33:33]  Yeah, the Stockton Rushes.
[00:33:34]  Yeah, the Stockton Rushers.
[00:33:37]  Uh, I don't know, there's a Fort Stockton.
[00:33:39]  So yeah you, you guys.
[00:33:41]  You could like pivot off this, you know make, take advantage of the SEO opportunity, make some weird joke football jerk.
[00:33:51]  So where uh Lorenzo really shined is at uh, Social Organizations at Harvard.
[00:33:55]  He's not, he doesn't love the classes, you know he does well, but like he kind of comes out of Harvard being like well, that was more or less for the name right, like to be able to say like I graduated from Harvard um, but he does do well uh, running the, the Harvard Cafeteria newsstand, which is the only store on the Business school campus.
[00:34:14]  He apparently makes bank doing this.
[00:34:15]  So, holy shit okay yeah, might as well start with grifting other Harvard kids.
[00:34:20]  His first job after graduation was at TWA, an airline that at the time was headed by Floyd Hall.
[00:34:27]  Like the other airline ceos we talked about, Hall was a two-fisted army pilot who had fought in World War Ii and then worked for the airline as a pilot before becoming ceo.
[00:34:37]  Floyd got hired away to Eastern Airlines right as Lorenzo started working at TWA, which signified signified like a new era of management.
[00:34:45]  Like Floyd kind of leaves TWA and gets replaced by a dude who's not a pilot, not a war hero.
[00:34:52]  And it's kind of part of this transition where Americans are starting to see airlines not as like these kind of symbols of progress and American greatness, but as like, you know, assets to be mined for profit, right?
[00:35:06]  It's the business is becoming more of a normal business.
[00:35:08]  It's losing its kind of prestige.
[00:35:10]  And I'm going to quote from Texas Monthly again.
[00:35:13]  As a manager of financial analysis, Lorenzo distinguished himself as a man who could push past details to the heart of the matter, but he was too ambitious to patiently work his way up the corporate ladder.
[00:35:23]  A year later, at 26, he resigned to go into business with a soft-spoken Harvard classmate from New England, Bob Carney, who worked for two New York investment houses.
[00:35:31]  The two formed Lorenzo Carney and Company, although the company at the time was a secretary.
[00:35:36]  We thought we could make some money in airlines, Carney recalls.
[00:35:39]  We had an entrepreneurial burge.
[00:35:41]  Each partner put up $1,000.
[00:35:43]  Lorenzo Carney was essentially a consulting firm in search of investment opportunities.
[00:35:48]  So they don't really have like a plan for what their business is going to do.
[00:35:51]  They just like start a business and like, if we can just get an airline to pay us for something, we'll figure it out.
[00:35:57]  So they try a few things.
[00:35:59]  They struggle to get a start like leasing out planes and shit, but they're not able to actually like make a profit.
[00:36:04]  So they spin off from this business that doesn't work to yet another business, Jet Capital Corporation.
[00:36:11]  And somehow it's kind of unclear to me exactly how this works, but like they start a company and just sort of like start going around to investors with money in 1969 and going like, isn't it a cool name?
[00:36:24]  Jet Capital Corporation?
[00:36:25]  Can we have some money?
[00:36:27]  Yeah.
[00:36:28]  Really want to get in on this.
[00:36:29]  Yeah.
[00:36:30]  I wonder, was this like the internet kind of where enough people kind of knew, but probably just weren't savvy enough?
[00:36:34]  Like, they're pretty confident.
[00:36:36]  And they're called Jet Capital Corporation.
[00:36:37]  Yeah, it's kind of one of those things, right?

=== Struggling to Make a Profit (08:05) ===

[00:36:39]  And so they get $1.4 million and they don't have really much of a business plan, but they don't need one.
[00:36:45]  And as soon as they get this pile of money, Frank, you know, there's some other stuff.
[00:36:49]  They are doing some consulting, but Frank pretty immediately is like, that's all small potatoes.
[00:36:54]  What I want to do is I want to like take this money and use it as a basis to get more money so we can just purchase an airline.
[00:37:03]  Now, basically, as he's kind of like talking this up, he's going around, he's going to parties, he's able to like make friends with some guys from Chase Manhattan Bank.
[00:37:13]  And these dudes are eventually like, hey, guys, you know, we have this boutique airline in Texas that's doing really shitty.
[00:37:21]  Like, if we can help you guys put some money together, you can buy this airline and try to rescue it and make a bunch of money.
[00:37:28]  And it's here that I should probably pause to explain how fucking airlines work in this period of time because it's weird.
[00:37:35]  Flying again, like, you know, 1918 is kind of when it first becomes a business in the United States because that's the year the post office starts doing airmail routes.
[00:37:45]  And airmail is like the first big business that like planes are involved in the country.
[00:37:51]  U.S. Army pilots are all of like the people actually flying the routes.
[00:37:57]  And they established this national system of runways and airfields that kind of, this is what eventually turns into the airports that are all over the country.
[00:38:05]  It all starts as like post office airmail like landing strips and shit.
[00:38:10]  This is all supported by something called the 1925 Contract Airmail app.
[00:38:14]  This gives the post office the right to award routes to private carriers, which kind of creates the private industry for flying and shit.
[00:38:22]  So the years that follow this are this kind of messy slurry of these new airlines flighting for routes and the government struggling to like make sure there's places for them to land.
[00:38:31]  It's really messy, but all four of the major airlines that dominate the sky today, which are like United American, Trans World, and Eastern, originate from this period, right?
[00:38:42]  Like these are the guys that all of our modern airlines are basically, the big ones at least are basically directly or kind of indirectly descended from.
[00:38:49]  Right.
[00:38:50]  Come off this tree.
[00:38:51]  Yeah, exactly.
[00:38:52]  So passenger service, you're not like flying people, right?
[00:38:55]  Because planes are terrifying death traps, like they could barely take letters places.
[00:39:00]  But this starts to change by the late 30s, under the watchful eye of Franklin Delano Roosevelt, who is like, you know, a modern dude, but also pretty bullish on regulation.
[00:39:10]  So under Roosevelt, in 1938, Congress passes the Civil Aeronautics Act, which gives regulatory authority over air travel to something called the Civil Aviation Authority.
[00:39:21]  And so the Civil Aviation Authority quickly gets a better acronym called CAB because they changed their name to the Civil Aeronautics Board.
[00:39:29]  And these are, this is like the precursor to the FAA, right?
[00:39:32]  CAB is like what we have before the FAA.
[00:39:36]  But while today the FAA basically just, it seems like their job is mostly to make sure people continue to not die from passenger flights, CAB has another role, which is to make sure that there's not competition in the air travel business, right?
[00:39:54]  Like that's, it's, it's kind of this, it's very alien to modern Americans because the government's like, all right, we're going to have planes.
[00:40:01]  This is going to be a business, but we don't want them competing, right?
[00:40:04]  If planes compete, if like airlines are competing, then like a bunch of ugly shit's going to happen.
[00:40:09]  They'll be like fighting for the bottom in order to be like the cheapest carrier.
[00:40:13]  And like, we don't want it to work that way, right?
[00:40:15]  Like that doesn't seem like a good way for planes to work.
[00:40:18]  What the kind of parallel reality is this?
[00:40:22]  Yeah, it's really strange.
[00:40:23]  It's just like such a different attitude towards all.
[00:40:25]  And part of it's because like the business is so new, right?
[00:40:28]  There's like a bunch of government subsidies.
[00:40:30]  Like if you're doing certain routes or like you will get money per flight from the government too to kind of help because there's this understanding that like, well, just kind of naturally, like a lot of shit's not going to make sense financially, like flying to a bunch of different states and shit.
[00:40:46]  There's just not going to be enough business for it to make sense.
[00:40:49]  So we want to, we want to establish, like we want to establish a network of flights and airlines.
[00:40:54]  And the only way to do that is if the government kind of helps these companies out.
[00:40:57]  But if we're going to help them out, they shouldn't just be, you know, making as much money as possible, right?
[00:41:03]  Like there should, we need to put in some limitations so that like it's, it doesn't get as messy as other things have gotten.
[00:41:09]  I think they're kind of looking at how all the nasty shit that happens with like trains during like the late 1800s and going, well, we want to avoid some of that.
[00:41:17]  So cut to.
[00:41:18]  Yeah.
[00:41:19]  Cut to today.
[00:41:20]  So things are good for a while.
[00:41:22]  You get your second world war, you know, which means that suddenly there's a lot of money going into growing the airline fleet.
[00:41:28]  A lot of it gets pressed into military service.
[00:41:31]  And then when the war ends, there's all these pilots, these guys who just like got trained up for free by the government.
[00:41:37]  And then suddenly like nobody's paying them to incinerate cities in Asia or Europe.
[00:41:42]  And then they're like, well, I guess we should buy something else to do.
[00:41:46]  All right.
[00:41:46]  Oh, can I still get drunk while I do it?
[00:41:48]  Yeah, yeah.
[00:41:49]  Absolutely.
[00:41:50]  No one said you can't be drunk.
[00:41:53]  You're just flying suits now.
[00:41:54]  Oh, okay.
[00:41:55]  All right.
[00:41:56]  For sure, man.
[00:41:57]  Pour me a martini.
[00:41:58]  Let's go.
[00:42:00]  So because CAB was fundamentally pretty anti-competitive, it works out this system with all of the major airlines.
[00:42:07]  So there's kind of two like types of airlines.
[00:42:10]  There's little ones where you're just kind of flying within a state.
[00:42:13]  And the little airlines, they're kind of, they're a lot less regulated, right?
[00:42:17]  The pilots aren't considered to be the same quality of pilots, but it means that like little airlines can do shit like offer discounted tickets and whatnot, all this shit that's going to become like standard.
[00:42:29]  Whereas big airlines aren't allowed to do this, right?
[00:42:32]  You're flying interstate and international routes, you like can't, you just have to kind of like offer one kind of ticket for a flight, um, which makes everything simple.
[00:42:43]  Like when you're booking a plane, you're just like, Well, yeah, I just want like a ticket, you know, to fucking Sarasota or whatever.
[00:42:49]  Um, but it also means the system is horribly inefficient because since the big airlines are just kind of offering one ticket price, you know, for each flight, this makes it simple, but it means that like if a flight lifts off for like, if like, you know, it's all it's about to be fly day and there's only 30% of the seats on the plane have been filled, they can't stop start offering like cheap seats to try to fill it up.
[00:43:11]  So it's horribly inefficient.
[00:43:13]  Um, and this is a big part of why you get every so often these like people posting pictures of old planes being like, wow, flying used to be so nice.
[00:43:22]  Why can't it be that way again?
[00:43:24]  Well, like part of why flying was so nice is that barely anyone was ever on planes, right?
[00:43:30]  Like, like, yeah, it was a lot nicer when nobody was on them because people suck.
[00:43:37]  Yeah, there's just like about, yeah, we have 14 seats and it looks like a living room.
[00:43:42]  Yeah, there are, there are five rich dudes on board.
[00:43:44]  Everybody is completely hammered.
[00:43:47]  Right.
[00:43:47]  Like, the, the, like, instead of getting a single ginger ale, you get like a handle of gin and a Cuban cigar.
[00:43:55]  You know, it was, it was nice.
[00:43:57]  Right.
[00:43:57]  It's like, uh, do you have seat belts?
[00:43:58]  They're like, what are you, a priest?
[00:44:00]  Take this.
[00:44:01]  This is laudanum.
[00:44:02]  Take all the laudanum you want.
[00:44:04]  Yeah.
[00:44:04]  What the fuck is this?
[00:44:06]  Our pilot made some bathtub heroin.
[00:44:08]  Everybody, chill out.
[00:44:09]  It's going to be choppy.
[00:44:12]  No.
[00:44:12]  Um, so a big part of like why flying is nice is that like most people are not able to do it.
[00:44:17]  In 1965, which is when Frank gets hired by TSA, only about 20%, a little less of the U.S. population had ever been on an aircraft, right?
[00:44:28]  And so in 60, 65, less than 20% of the country's ever even been on a plane.
[00:44:32]  By the year 2000, half of the U.S. population flies at least once a year.
[00:44:37]  So wow.
[00:44:38]  And basically everyone who gets to adulthood is on a plane at least once, right?
[00:44:42]  Very rarely.
[00:44:43]  Yeah, it's just like life now.

=== Air Travel Becomes Ubiquitous (03:16) ===

[00:44:45]  So the other thing that's happening, right, as the 70s dawn is this generation of NBAs who are Lorenzo's peers are all starting to reach high positions in their field.
[00:44:54]  So a lot of these guys are, again, the first of what we now call corporate raiders.
[00:44:58]  The best touchstone of this, if you watch the movie Hook, that's who Robin Wilson's character is supposed to be, right?
[00:45:05]  Like he's this Robin Wilson.
[00:45:06]  Or not Robin Wilson.
[00:45:07]  Jesus Christ.
[00:45:09]  Robin Williams.
[00:45:10]  Robin Williams.
[00:45:12]  I didn't sleep last night.
[00:45:13]  Robin Williams is supposed to be a corporate raider, right?
[00:45:16]  Like he's, yeah, he's like this guy whose job is to buy up companies and then like strip them for assets.
[00:45:23]  You know, he's a pirate, right?
[00:45:24]  Like that's the point of the, yeah.
[00:45:26]  So to give you an idea of the kind of men that Lorenzo called colleagues and what they're doing to the rest of American capitalism in this period of time, I want to read a quote from a summary of the book Corporate Raiders and Their Minions by John Ware Close.
[00:45:40]  Quote, The Raiders who Close describes are colorful, to say the least.
[00:45:44]  Among them, there's Robert Campu, who sought to maintain his youth with injections of fetal lambrain cells and whose blitzkrieg across the department store sector of the North American American economy ended with the bankruptcy of federated department stores in 1990.
[00:46:00]  Carl Icon, who supposedly said, if you want love, buy a dog and gutted TWA.
[00:46:05]  And Robert Maxwell, who overpaid for Macmillan, contributing to the collapse of his media empire and leading to his suicide by sea.
[00:46:13]  Thanks to these characters, companies can't coast anymore.
[00:46:17]  Close likens the Raiders effect to the West Indian slave revolts in the 1800s, saying, The new MA transformed public corporations, the establishment's repositories of power and wealth, into very public, very visible, very vulnerable sugar plantations, open to all with the will, the intelligence, and sometimes the personality disorders needed to gain entry.
[00:46:37]  The corporate raiders, explains Close, are also the ancestors of today's shareholder activists.
[00:46:42]  They don't buy underperforming companies.
[00:46:44]  They buy into them and force their managers to up their game.
[00:46:47]  So they're all crazy assholes, right?
[00:46:50]  Like, that's who gets these jocks.
[00:46:52]  Feeding lamb brain cell injection is like some fucking Peter Deal shit.
[00:46:59]  Like, what the fuck is this?
[00:47:01]  When you read about these guys, it does make it clear that, like, oh, a huge part of like the massive PR blitz to make the tech industry feel like something special was just to briefly convince people that these guys weren't the same as it ever was, right?
[00:47:17]  That like all of these tech heads weren't just like some of them can't even code.
[00:47:24]  You know, they're just injecting fetal lambra.
[00:47:27]  And I wish more of them would do the suicide by sea thing.
[00:47:32]  Also, what's what does that mean?
[00:47:34]  Is that like a is that a specific way?
[00:47:36]  Or is it just like a bunch of people?
[00:47:36]  Yeah, I think you're going out on your yacht to jump off or something.
[00:47:41]  Yeah, let's let's let's look up Robert Maxwell.
[00:47:43]  Let's do the research I should have done.
[00:47:44]  I wonder, yeah, or it's like, or is it like a thing where you wear like a meat suit and then you jump into like shark-infested waters and like just let the sea do its thing?
[00:47:52]  Oh man, this guy looks like shit.
[00:47:54]  Look at this dude.
[00:47:55]  Holy fuck.
[00:47:56]  Sophie, Google Robert Maxwell.
[00:47:59]  What a monster.
[00:48:00]  Oh, this is Gillen Maxwell's dad.

=== Tech Heads and Secret Luck (03:32) ===

[00:48:02]  Yes, I have heard of this.
[00:48:04]  Yeah, he dies mysteriously at sea, and there's probably something to do with the massage.
[00:48:09]  Yeah, this is Gillen Maxwell's dad.
[00:48:11]  Look at this fucking weirdo.
[00:48:13]  Oh my God.
[00:48:14]  Hell yes.
[00:48:15]  Those eyebrows.
[00:48:16]  We'll do an episode on this guy at some point.
[00:48:19]  He's dressed like Tucker Carlson, but he looks like if Tucker Carlson melted in the sun.
[00:48:25]  Or him and like John Taffer from Bar Rescue became one guy.
[00:48:30]  He does have the look of like a fucking Paul Verhoeven, like secondary bad guy.
[00:48:36]  So funny.
[00:48:38]  Anyway, let's all think about Gillen Maxwell, I guess.
[00:48:44]  I don't know, whatever.
[00:48:45]  Here's ads.
[00:48:48]  What's up, everyone?
[00:48:49]  I'm Ego Modem.
[00:48:50]  My next guest, you know, from Step Brothers, Anchorman, Saturday Night Live, and the Big Money Players Network.
[00:48:58]  It's Will Farrell.
[00:49:01]  My dad gave me the best advice ever.
[00:49:05]  I went and had lunch with him one day, and I was like, and dad, I think I want to really give this a shot.
[00:49:10]  I don't know what that means, but I just know the groundlings.
[00:49:12]  I'm working my way up through, and I know it's a place to come look for up and coming talent.
[00:49:16]  He said, if it was based solely on talent, I wouldn't worry about you, which is really sweet.
[00:49:21]  Yeah.
[00:49:22]  He goes, but there's so much luck involved.
[00:49:24]  And he's like, just give it a shot.
[00:49:26]  He goes, but if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[00:49:34]  If you saw it written down, it would not be an inspiration.
[00:49:37]  It would not be on a calendar of, you know, the cat just hang in there.
[00:49:44]  Yeah, it would not be.
[00:49:46]  Right, it wouldn't be that.
[00:49:47]  There's a lot of luck.
[00:49:48]  Yeah.
[00:49:49]  Listen to Thanks Dad on the iHeartRadio app, Apple Podcast, or wherever you get your podcasts.
[00:49:58]  10-10 shots five, city hall building.
[00:50:02]  A silver .40 caliber handgun was recovered at the scene.
[00:50:06]  From iHeart Podcasts and Best Case Studios, this is Rorschach.
[00:50:11]  Murder at City Hall.
[00:50:12]  How could this have happened in City Hall?
[00:50:14]  Somebody tell me that, Jeffrey Hood did.
[00:50:16]  July 2003, Councilman James E. Davis arrives at New York City Hall with a guest.
[00:50:23]  Both men are carrying concealed weapons.
[00:50:26]  And in less than 30 minutes, both of them will be dead.
[00:50:34]  Everybody in the chamber deducts a shocking public murder.
[00:50:38]  I screamed, get down, get down.
[00:50:40]  Those are shots.
[00:50:41]  Those are shots.
[00:50:42]  Get down.
[00:50:42]  A charismatic politician.
[00:50:44]  You know, he just bent the rules all the time, man.
[00:50:46]  I still have a weapon.
[00:50:48]  And I could shoot you.
[00:50:52]  And an outsider with a secret.
[00:50:54]  He alleged he was a victim of flat down.
[00:50:56]  That may or may not have been political.
[00:50:58]  That may have been about sex.
[00:51:00]  Listen to Rorschach, murder at City Hall on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:51:13]  There's two golden rules that any man should live by.
[00:51:17]  Rule one, never mess with a country girl.
[00:51:20]  If you play stupid games, you get stupid prizes.
[00:51:23]  And rule two, never mess with her friends either.
[00:51:27]  We always say, trust your girlfriends.
[00:51:31]  I'm Anna Sinfield, and in this new season of The Girlfriends...

=== The Start of Big-Time Air Travel (15:36) ===

[00:51:34]  Oh my God, this is the same man.
[00:51:36]  A group of women discover they've all dated the same prolific con artist.
[00:51:41]  I felt like I got hit by a truck.
[00:51:43]  I thought, how could this happen to me?
[00:51:45]  The cops didn't seem to care.
[00:51:47]  So they take matters into their own hands.
[00:51:50]  They said, oh, hell no.
[00:51:52]  I vowed I will be his last target.
[00:51:54]  He's going to get what he deserves.
[00:51:58]  Listen to the girlfriends.
[00:52:00]  Trust me, babe.
[00:52:01]  On the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[00:52:13]  What a terrible looking person, first of all.
[00:52:16]  Yeah, he does look like shit.
[00:52:18]  He looks terrible.
[00:52:19]  He's wearing his caramel.
[00:52:20]  He looks like when a potato starts to get moldy and sprouts.
[00:52:25]  That's what he looks like.
[00:52:26]  Yeah.
[00:52:27]  Ah, we're back and we're talking about Robert Maxwell.
[00:52:31]  What a, what a, what a weird asshole.
[00:52:33]  So these corporate raiders, these guys who like are Lorenzo's peers, sometimes what they're doing is they're finding lazy, underperforming companies that have like a lot of useless positions and have wasted, it basically coasted during the years when the American economy was like a freebie, right?
[00:52:52]  The rest of the world was destroyed by war and we just like, you could do anything as a business guy and make money.
[00:52:58]  But that's starting to end by the 70s, right?
[00:53:01]  So some of these guys are just like finding companies that were not set up well and ending inefficiencies.
[00:53:06]  But a lot of them are just like gutting good businesses for short-term gains.
[00:53:11]  A good modern example of this would be what happened to the company that makes Instant Pots.
[00:53:15]  They merged with the maker of Pyrex in 2019, right before a giant sales spurt due to the pandemic.
[00:53:21]  But since that growth wasn't sustainable, like especially since Instant Pots, you don't have to like buy Instant Pots.
[00:53:28]  Yeah.
[00:53:28]  Right.
[00:53:29]  So if corporations functioned in anything that resembled like a rational, healthy manner, this would be fine, right?
[00:53:35]  You'd be like, well, we had that nice year or two where we made a bunch of extra money and now we continue our nice steady business.
[00:53:41]  But because capitalism has been, you know, particularly because of like the kind of these corporate raider dudes are the guys who run everything now, what they do as soon as there's this big like windfall is they take on a $450 million loan.
[00:53:56]  And they kind of justify this by saying, oh, we got to build new production facilities.
[00:54:01]  We got to pay for R D on a new product.
[00:54:04]  But that's not what they do.
[00:54:05]  And I'm going to quote from Crane's Chicago business newsletter next.
[00:54:09]  That debt refinanced 294 million in existing debt, including 100 million tied to the 2019 acquisition and helped support a $245 million dividend to shareholders.
[00:54:21]  Essentially, none of the debt supported investment in the business.
[00:54:24]  So basically, the good luck of the pandemic year let them con their way into getting half a billion dollars of debt they were never going to be able to pay off, most of which they gave themselves.
[00:54:34]  Yeah.
[00:54:35]  Exactly.
[00:54:35]  Yeah.
[00:54:35]  It's like all that shit.
[00:54:36]  Like even we were just talking on Daily Zeitgeist of this guy who talks about like private equity and how, yeah, another way they do it is like when they buy these businesses, they'll force these companies they take over to sell all of their property to the private equity firm and then begin leasing it back to them so they can immediately start seeing a profit.
[00:54:56]  And you're like, that's not really business.
[00:54:58]  You're just running a con.
[00:55:00]  Yeah.
[00:55:01]  Which is you're just, yeah, you're sucking it dry from the inside.
[00:55:04]  Yeah.
[00:55:04]  So back to Frank.
[00:55:06]  He and his business partner have managed to get together the money to buy a Houston-based carrier called Texas International Airlines.
[00:55:13]  A lot of that money comes from Chase Manhattan.
[00:55:15]  Texas International Air is a small, tottering local kind of local.
[00:55:20]  It was basically in terms of its size, it was a local Texas airline.
[00:55:24]  But because it does one flight to Mexico, it's an international, which means it's regulated by CAB, which like fucks it over actually, because they can't do a lot of the shit smaller airlines are able to do to kind of like make a profit.
[00:55:38]  It was nicknamed Teeter Totter Airlines, which is because like it's such a like the flights are so shitty, right?
[00:55:44]  Like they have trash planes.
[00:55:46]  They have the worst pilots.
[00:55:47]  It's just not great.
[00:55:49]  In the last five years, the company had lost $20 million over expanding its fleet and taking on debt.
[00:55:55]  It was a long shot that Lorenzo would be able to write the ship once he bought the company, but Chase Manhattan had faith in him and he was medically incapable of doubting himself.
[00:56:05]  So there's a shareholders meeting in August of 1972 where Lorenzo gets elected president and CEO of Texas International Air.
[00:56:13]  This makes him the youngest airline president in history.
[00:56:18]  How old is he?
[00:56:19]  He's 32.
[00:56:20]  So that is pretty young to be running an airline.
[00:56:23]  A couple other cool things happen that year for him.
[00:56:25]  He gets his pilot's license.
[00:56:27]  He marries this lady who had been like a legal assistant and was the daughter of a wealthy Florida real estate mogul.
[00:56:35]  Also, around the same time, his brother, who had been a stockbroker, dies of heart failure.
[00:56:41]  His brother's like 43, which convinces Frank to become a marathon runner.
[00:56:46]  Tragic.
[00:56:47]  If only he had just continued to be very unhealthy and do cocaine.
[00:56:53]  We need like, you know how they have like campaigns in some vulnerable areas to like have people like, oh, there's a lot of heart disease in this, in this neighborhood or whatever.
[00:57:02]  We should like do these ads trying to keep people away from fast food.
[00:57:06]  We need to have the opposite for like Harvard grads.
[00:57:10]  We're like, you ever tried cocaine?
[00:57:12]  You ever just done like a shitload of coke?
[00:57:14]  And mix that stuff with downers too.
[00:57:16]  Like just grind your Valium up with your blow.
[00:57:19]  You're good, man.
[00:57:20]  The best thing to do is probably smoke like three grams of meth and then just take a bunch of benzos, man, to go to sleep.
[00:57:28]  Yeah.
[00:57:29]  You're going to feel like Superman, dude.
[00:57:31]  That's how fucking, that's how like Lee Iacoco used to do it, dude.
[00:57:33]  Like if you're trying to get like next level with it, that's how you got to do it, dude.
[00:57:37]  Split your heart in two directions.
[00:57:40]  We need to pay a new generation of influenza to spit pitch speed balls at business guys.
[00:57:48]  So under the rule of the Civil Air Board, truly local airlines are, again, subject to like fewer of these anti-competitive regulations.
[00:57:57]  And so they can do stuff like offer discount last minute fares.
[00:58:00]  Because TI is in this awkward position, they can't really do that.
[00:58:04]  And they're up against their big competitors are Southwest, which is a small local airline.
[00:58:08]  And so it's got more room to maneuver.
[00:58:10]  And Braniff.
[00:58:11]  So Lorenzo succeeds in kind of sliding in between these two competitors.
[00:58:17]  And he's able to like pull together some profitability.
[00:58:20]  He's actually pretty good at this aspect of the business.
[00:58:22]  He drops markets that weren't profitable and flights that had a poor return.
[00:58:26]  He fires a bunch of employees in order to cut payroll into something manageable.
[00:58:31]  And in 1973, the year after he takes over, TI Texas International posts its first profit in like five or six years.
[00:58:40]  He'd made a lot of big promises to his employees that like once the company was back in the black, he'd ensure that they got rewards for all the hard work they did to get TIA back into good health.
[00:58:50]  But as soon as they start making a profit, he's like, oh, no, I didn't mean that.
[00:58:54]  You guys aren't getting any more money.
[00:58:55]  Absolutely.
[00:58:56]  Did I say that?
[00:58:57]  No.
[00:58:57]  No.
[00:58:58]  That was a lie.
[00:58:59]  See?
[00:59:00]  You want to get fired for fucking lying?
[00:59:03]  Yeah.
[00:59:03]  Okay, then shut up.
[00:59:04]  I never said, I would never say some shit like that.
[00:59:07]  So obviously people are not happy.
[00:59:10]  So the Ground Workers Union, which is like, you know, the guys, it's pretty, it should be obvious what the Ground Workers Union is for planes.
[00:59:16]  They're the guys on the ground doing shit.
[00:59:19]  They start agitating.
[00:59:20]  And in December of 74, they decide to go on strike.
[00:59:24]  So airline workers are at this point the most, some of the most powerful unionized people in the country.
[00:59:31]  And when the airline workers would go on strike, the only kind of way, you know, again, so when you've got a strike, right, a company that's going to engage in strike breaking is probably going to bring in scabs.
[00:59:41]  And scabs, it's understood, always do like a shittier version of the job that regular employees do.
[00:59:47]  And, you know, when it comes to people, like that's a problem with air travel, right?
[00:59:52]  So if you've got like a coal mine and you bring in scabs, the scabs are going to make you less money.
[00:59:56]  Maybe they're a little more likely to die.
[00:59:58]  But like if you get a bunch of scabs killed in a coal mine, the coal miners aren't going to have that big an issue with it because they hate the scabs and no one else is really going to care because it's just shit happening in the coal mine.
[01:00:09]  Whereas if you bring a bunch of scabs in to the air industry and a plane crashes, a lot of people might get angry at you, you know?
[01:00:19]  So you have, as a company in this period, you have like less options for kind of fucking over your unionized employees because it's air travel, you know?
[01:00:29]  You also have to.
[01:00:31]  Yeah, what's that pool of people?
[01:00:32]  I can only imagine when you're like, all right, now the bottom of the barrel for airline workers.
[01:00:37]  Illegal plane fuelers and shit.
[01:00:39]  Yeah, they're probably not great at this.
[01:00:41]  Yeah, I could do that.
[01:00:42]  I could do that.
[01:00:42]  Yeah, I figured, yeah, I filled out my car.
[01:00:46]  Yeah, I basically do the thing that's the precursor to stealing catalytic converters in your modern times.
[01:00:53]  Yeah.
[01:00:55]  So they also, airlines also, if they're fighting a strike, have to contend with the fact that, you know, because running an airline is more expensive than most things, if you're keeping planes grounded and you're like canceling flights, it's like slightly less expensive to do that than it is to just like set fire to piles of money.
[01:01:15]  You know, like you are, you are burning so much cash whenever you're, you're knocked down by a strike.
[01:01:20]  So for years, the way airlines would handle strike threats is to just pretty much very quickly concede to the union, right?
[01:01:28]  To give them at least some of what they wanted and get folks back to work.
[01:01:31]  It was nearly always worth it.
[01:01:33]  But Frank Lorenzo hates unions.
[01:01:36]  And he's like, I don't, why the fuck are we going to concede to these motherfuckers?
[01:01:40]  Fuck them.
[01:01:41]  So depending on who you ask, he's either kind of just too proud, right?
[01:01:46]  Like he'll burn his airline to the ground rather than lose face to a bunch of strikers, or he's like a calculated risk taker.
[01:01:53]  And he's like, you know, doing the math and figuring out, ah, well, you know, we can hold out this much longer.
[01:01:57]  And, you know, these workers can only hold out this long.
[01:02:00]  And this is like a, I'm not really sure which version of Frank Lorenzo is more accurate.
[01:02:05]  probably a little bit of an A and a little bit of B. Right.
[01:02:08]  So for four and a half months after the ground workers union votes to strike, no TI plane flies.
[01:02:14]  They like he they shut down traffic entirely.
[01:02:18]  He furloughs the entire workforce pretty much.
[01:02:20]  Executive salaries are cut to the bone.
[01:02:22]  And eventually through this grinding battle of attrition, he manages to pull out a victory.
[01:02:27]  And the only reason Frank is able to survive is that when the other airlines see him actually going to war with like one of his big unions, they put together $11 million in strike aid.
[01:02:39]  Like other airlines are giving him money to be like, here you go, buddy.
[01:02:43]  Like keep up the good fight, right?
[01:02:45]  Yeah, yeah.
[01:02:46]  Fuck him over.
[01:02:47]  Yeah.
[01:02:47]  Unions do the same thing, right?
[01:02:49]  Like it's just, this is like an owner's union, right?
[01:02:52]  It's so fucking grim, man.
[01:02:54]  It is.
[01:02:55]  We love what you're doing, man.
[01:02:56]  Just vaporize your fucking will to fuck these guys.
[01:03:00]  We've got you.
[01:03:02]  Yeah, it's pretty cool.
[01:03:03]  Like, so the union comes to the table and it ends the strike with very minor concessions from TI.
[01:03:10]  And Lorenzo is now a hero of the capitalist class.
[01:03:13]  He is not only this kind of like daring corporate raider type guy who brought his company to profitability by cutting it to the bone, but when his selfish workers put his success at risk, he had like gone to war with them and won.
[01:03:25]  In an interview he gave not long after the settlement, he told a reporter, the groundworkers union has demonstrated little concern for the well-being of any of us, for that of any of our cities, and of course for the company, which must somehow pay the bill.
[01:03:39]  By 1976, TI was making more than $3 million in net profits.
[01:03:45]  It was now healthier than ever, but still too small for Lorenzo's liking.
[01:03:49]  He knew that he was going to need to introduce a major innovation to make his companies stand out from the pack.
[01:03:55]  Here's how Texas Monthly describes what happened next.
[01:03:58]  If TI was to survive, Lorenzo had to find a way to beat Southwest's low fares.
[01:04:02]  Prohibited from discounting regular fares, TI had experimented with reductions on largely unregulated standby tickets.
[01:04:09]  The airline had, for instance, promoted a new route from Houston's Hobby Field to Dallas-Fort Worth Airfield by offering standby fares keyed to the day of the month.
[01:04:17]  $1 for travel on August 1st, $6 for travel on August 6th, and so on.
[01:04:22]  Searching for a steady way to fill those empty seats, the company came up with peanut fares in which the passengers could lock into cheap fares on certain flights with light passenger loads.
[01:04:32]  This is the birth of the modern system we have of like, oh, you got the super saver seats and you've got like the extra economy and you've got like the economy plus land.
[01:04:42]  You know, this is where that all begins.
[01:04:44]  This is so triggering to like airport misery.
[01:04:48]  Yeah.
[01:04:48]  It really is.
[01:04:49]  Yeah.
[01:04:50]  This is like the start of a lot of that.
[01:04:52]  And it is, it's a mixed bag, right?
[01:04:55]  Like this is a good idea.
[01:04:57]  It works really well financially.
[01:04:59]  It's also more efficient, but it's against cab regulations.
[01:05:03]  And so Lorenzo has to lobby the agency to make his peanut fares legal.
[01:05:08]  And he succeeds.
[01:05:09]  In January 1977, TI gets granted a one-year trial to like attempt to do these new kinds of fares.
[01:05:16]  And it works really well.
[01:05:18]  Like TI passenger loads on a lot of flights go from like 30 or 40% to 90% or more.
[01:05:25]  Yeah.
[01:05:25]  And it's, it's one of those things where like Braniff starts complaining because this starts eating into their business.
[01:05:31]  And TI, they're like, TI is advertising, you know, that all of their seats are discounted and they aren't.
[01:05:37]  And the agency, like, there's some minor ruling against Lorenzo, but it doesn't actually stop him from like basically doing this shit.
[01:05:44]  And the idea, as soon as like he introduces these new kinds of like discounted fares and gets away with it, it starts spreading like wildfire throughout the rest of the industry.
[01:05:54]  And I'll say this.
[01:05:57]  What Frank does here is more of a mixed bag than we tend to get with our like corporate bastards.
[01:06:02]  There's a decent argument that Frank's innovation here, it leads to a huge drop in pricing for consumers across the market, and that this is a big part of what opens air travel up to groups of people who would never have been able to afford to fly recreationally.
[01:06:16]  Like frequent flyers hate this because frequent fly, the only people who can afford to be frequent flyers in this period are either independently wealthy or they're corporate flyers whose companies are paying for the expensive seats.
[01:06:28]  And they love that the planes are empty and nice.
[01:06:31]  But like now, the barbarian hordes are fucking there.
[01:06:34]  Yeah, exactly.
[01:06:35]  The poor have taken to the skies.
[01:06:38]  You could also argue that like, well, this is a lot less wasteful and shitty for the environment than flying in planes that are 70% empty.
[01:06:46]  Obviously, the fact that this causes air travel to explode has a net horrible increase on like carbon emissions and shit.
[01:06:54]  I don't think you can really morally put that on Frank because he's not, he doesn't, I don't think he knows much about an axon exec.
[01:07:01]  He doesn't like it.
[01:07:02]  It becomes inevitable.
[01:07:04]  Like it's ubiquity, right?
[01:07:05]  Like, it was always going to get cheaper and eventually would get to a place where other people could fly.
[01:07:10]  Yeah.

=== Deregulating the Airlines (07:27) ===

[01:07:11]  So at the same time he's doing this, a national movement has kind of coalesced around the idea of deregulating airlines.
[01:07:18]  As I mentioned earlier, this, the business of big-time air travel was deliberately not a competitive industry in the U.S. in the same way, at least that most businesses were competitive.
[01:07:28]  The sheer expense and the fact that these companies received government subsidies, you know, had allowed kind of air travel to get off the ground.
[01:07:36]  But now that we're in kind of the 70s and stuff, the late 70s in particular, a lot of these old airlines are kind of hemorrhaging money.
[01:07:43]  And this makes a pretty good case that deregulation is necessary.
[01:07:46]  The cause was opposed actually by the business, a lot of the guys that Frank considered peers.
[01:07:52]  And it was also generally opposed from owners of airlines because they're like, well, you know, there's shit that's fucked up about the business, but we understand it the way it is.
[01:08:00]  And if you like deregulate, then we're going to have a bunch of competition and a lot of our, a lot of our airlines are going to die.
[01:08:07]  If we won't be getting subsidies and shit, we're not going to be able to make this stuff work.
[01:08:11]  But this kind of alliance of free market right-wing economists and liberal Democrats get together and agree on deregulating the air.
[01:08:20]  And like Democrats like it because cheap flights will be good for the economy and like it'll open up air travel to working people.
[01:08:26]  And the free market guys like it because that's what they fucking do.
[01:08:30]  And I'm going to quote from a contemporary article in the New York Times here writing about deregulation of the air.
[01:08:35]  Equally compelling was the sense of inanity associated with so many empty seats.
[01:08:40]  In 1973, airplanes were flying from New York to Los Angeles with 37% of their seats filled, says Stephen Breyer, then a lawyer on Kennedy's staff and now a federal judge.
[01:08:50]  This assured the business flyer of an empty seat on which to place his briefcase.
[01:08:54]  But look at how high the fare had to be in order to make this possible.
[01:08:57]  What was really going on was that the briefcase was paying full fare.
[01:09:01]  The expense account said, many of them Republican businessmen who might otherwise have found government economic controls anathema, loved federal airline regulation.
[01:09:10]  Service was attentive.
[01:09:11]  Delays were rare.
[01:09:12]  Planes and airports were uncrowded.
[01:09:13]  So what if fares were high?
[01:09:15]  The company picked up the tab.
[01:09:16]  An unusual coalition of free market economists and liberal Democrats fought to loosen the reins on airlines.
[01:09:21]  As Breyer puts it, the outcome was going to favor the typical middle-class individual.
[01:09:26]  It would be very different from the subsequent deregulation of the telephone service, he says, in which the outcome favored business customers at the expense of the residential customer.
[01:09:34]  Despite practically unanimous opposition from airline executives, deregulation was signed into law by President Jimmy Carter in 1978.
[01:09:43]  Yeah.
[01:09:44]  Now, this is not going to entirely work the way they want it to, right?
[01:09:48]  No.
[01:09:50]  As we all know, as we're all living through, but it does make air travel a lot cheaper initially.
[01:09:58]  Now, we'll talk later about kind of where things go from there, but it does to some extent work the way they want it to.
[01:10:06]  So, Frank Lorenzo was initially frightened by deregulation because he doesn't know how this is going to work.
[01:10:11]  But once it becomes clear that this is happening, he starts looking for ways to make it work for him.
[01:10:16]  A lot of guys are doing that at the time.
[01:10:17]  And one of them is a dude called Donald Burr.
[01:10:20]  He's the founder of People's Express, which is like one of the first big budget airlines.
[01:10:25]  You might think of it as like Spirit or Frontier.
[01:10:29]  And kind of the big thing for People's Express is that it's a no-frills airline.
[01:10:32]  There's no luxury at all.
[01:10:34]  And every seat on the plane has the same low cost point, right?
[01:10:38]  And his plan is to, it's this weird hybrid of shit because he's Burr is like, we're going to keep costs low by cutting out luxuries and also not using union labor.
[01:10:48]  But also, in order to kind of compensate for that, Burr is like, all of our employees will get stock in the company.
[01:10:54]  That's why it's People's Express, like where all everyone like owns a part of the company.
[01:10:59]  It's an interesting vision.
[01:11:00]  You don't really have stuff like this that much anymore.
[01:11:04]  So it's legitimately like a worker-owned airline?
[01:11:07]  To an extent.
[01:11:09]  Like they had like 48% of the time.
[01:11:11]  Yeah, they're not going to actually be in control.
[01:11:14]  And this doesn't work out in the long run, although this does, I think, become frontier.
[01:11:17]  Like that is kind of where it, but anyway, whatever.
[01:11:20]  That's the idea that Burr has.
[01:11:22]  Now, Lorenzo sees this plan by Burr as fundamentally flawed.
[01:11:27]  First, fuck giving workers stock.
[01:11:29]  But more to the point, he knows that rich people are always going to want to pay more for a nice flying experience.
[01:11:35]  And Lorenzo's like, you know what?
[01:11:36]  It might actually be worth even more to rich people to pay for a nice flight if they get to watch columns of poor people file past and cram themselves into like a cattle pen, right?
[01:11:46]  Like we might actually be able to make more money on rich people if they get to see poor people having a worse time.
[01:11:51]  Yeah, we reinforce the class structure.
[01:11:53]  Yeah, that's going to make these folks thrilled.
[01:11:56]  Here's the New York Times.
[01:11:58]  The wave of the future, Lorenzo insisted, was a flexible pricing system with a wide variety of fares and services tailored to different tastes and pocketbooks.
[01:12:06]  Such a system in force today, with some passengers paying $500 seated next to others paying $150, makes it possible to extract a premium from the business flyer while simultaneously offering bargains that entice the discretionary traveler.
[01:12:18]  In Lorenzo's terms, it creates travel.
[01:12:21]  In 1980, Burr left Texas International to start People Express, taking with him Gerald L. Gittner, the marketing vice president and several other executives.
[01:12:29]  That same year, Lorenzo established Texas Air as a holding company for Texas International, a symbol of his expansive intentions.
[01:12:36]  And expand he did.
[01:12:37]  His first move was the creation of a low-fare carrier, New York Air.
[01:12:41]  Lorenzo initially set about wooing business flyers in the Boston, New York, Washington shuttle market monopolized by Eastern Airlines.
[01:12:47]  New York Air usually charged less than Eastern, but offered more in the way of reserved seats, snacks, and beverages, and enthusiastic service.
[01:12:54]  The non-union employees earned less than their counterparts at other airlines.
[01:12:58]  So like, you know, he's he's he's he's doing this mix of cutting shit to the bone and making sure there's special options for people who are willing to like pay banks so that rich people can like, you know, have a reason to be on flights too.
[01:13:12]  And this, this winds up being a lot smarter than like the, this kind of like weirdly sort of communist plan that Burr is pushing where everyone has the same seat.
[01:13:20]  And, you know, um, it's just it's more financially successful.
[01:13:24]  Uh, so, you know, as this is all going on, the 70s are drawing to a close.
[01:13:29]  The Reagan 80s are starting up.
[01:13:31]  Everything's coming up, Frank Lorenzo.
[01:13:33]  Unions are taking hits left and right.
[01:13:35]  He's making more money than ever.
[01:13:36]  Cocaine is flowing like wine.
[01:13:38]  And it was time for another bold move.
[01:13:41]  He was going to take over the grand dam of the sky, Continental Airlines.
[01:13:48]  Like, and Continental is back in the day.
[01:13:51]  So today, United Airlines uses their like logo and livery, right?
[01:13:56]  Continental back in the day is like, if you see, when you see like pictures of really nice flights, it's often continental.
[01:14:02]  They are the fucking Gucci airline.
[01:14:04]  Like, this is the nice shit, right?
[01:14:05]  This is Robert Six's airline.
[01:14:08]  Um, yeah, it is, it is like the fanciest airline out there, but it's hemorrhaging money.
[01:14:14]  And fucking Frank Lorenzo is like, I'm gonna buy this motherfucker and I'm gonna gut it.
[01:14:19]  Oh, and we are gonna talk about that and how he kind of kills a lot of uh aspects of the way unions had worked and the labor, like if labor had successfully like fought for shit.
[01:14:33]  Like, he goes to war with these people, and it's a pretty nuts experience.
[01:14:36]  But that's all in part two.

=== Buying the Fanciest Airline (03:03) ===

[01:14:38]  For right now, what I want to talk about, Miles, is your fucking pluggables.
[01:14:42]  How are they doing?
[01:14:43]  Oh, they're good.
[01:14:44]  You can plug them in, you can unplug them.
[01:14:46]  Check out the daily zeitgeist or 420 Day Fiancé or Miles and Jack on Mad Boosties.
[01:14:52]  That's trash, TV, basketball, and daily news, whichever one you want.
[01:14:56]  Hell yeah.
[01:14:57]  So there you go.
[01:14:59]  And you can also get this podcast without ads at CoolerZone Media.
[01:15:05]  If you mail Sophie, I don't know, money, probably.
[01:15:10]  This is $16 or something.
[01:15:11]  And we at CoolZone Media have a new show with Jake Cameron.
[01:15:14]  It's called Sad Oligarch.
[01:15:16]  It's fantastic on all of the apps, including CoolerZone Media.
[01:15:21]  Yeah, where you'll get it without ads.
[01:15:24]  So you won't have to hear about the Reagan coin, which fits in well with today's topic.
[01:15:29]  It really does.
[01:15:31]  And that's another fucking episode.
[01:15:35]  Behind the Bastards is a production of CoolZone Media.
[01:15:38]  For more from CoolZone Media, visit our website, coolzonemedia.com or check us out on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[01:15:48]  When a group of women discover they've all dated the same prolific con artist, they take matters into their own hands.
[01:15:56]  I vowed I will be his last target.
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[01:16:07]  Listen to the girlfriends.
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[01:16:26]  My dad gave me the best advice ever.
[01:16:29]  He goes, just give it a shot.
[01:16:30]  But if you ever reach a point where you're banging your head against the wall and it doesn't feel fun anymore, it's okay to quit.
[01:16:37]  If you saw it written down, it would not be an inspiration.
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[01:16:47]  Yeah, it would not be.
[01:16:49]  Right, it wouldn't be that.
[01:16:50]  There's a lot of life.
[01:16:51]  Yeah.
[01:16:51]  Listen to Thanks Dad on the iHeartRadio app, Apple Podcasts, or wherever you get your podcasts.
[01:16:58]  In 2023, bachelor star Clayton Eckard was accused of fathering twins, but the pregnancy appeared to be a hoax.
[01:17:06]  You doctored this particular test twice, Miss Owens, correct?
[01:17:09]  I doctored the test once.
[01:17:11]  It took an army of internet detectives to uncover a disturbing pattern.
[01:17:16]  Two more men who'd been through the same thing.
[01:17:18]  Ray Gillespie and Michael Manchini.
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[01:17:23]  This is Love Trapped.
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[01:17:27]  As the season continues, Laura Owens finally faces consequences.
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