Can Rebate Fraud Be Racist? Absolutely: Stanley Druckenmiller and James "Jimmy" Haslam

Zero Sum Empire

This week on ZSE we start out by talking about the Notre Dame fire, the hypocrisies involved in philanthropic giving, and diagnose another billionaire brain disease we’re calling Ozymandias Syndrome. Why this mania among billionaires to carve one’s name into monuments? There’s a distinction to be made between, on the first hand, securing one’s legacy by performing good acts that serve the community of which one is ostensibly a member and, on the other hand, securing one’s legacy in durable media like architecture (think of the pyramids) that implicitly recognize the fleeting fragility of any particular culture. Just another piece of evidence that billionaires by and large do not recognize themselves as members of the communities from which they extract their wealth. After Billionaires in the News we move on to our two census entries for the week: Stanley Druckenmiller and James “Jimmy” Haslam. Druckenmiller presents us with a problem that is sure to come up a lot: what happens when our random selector spits out a boring billionaire? One thing we can do is to dive into the means by which they made their fortune. Druckenmiller was a hedge fund guy, so we discuss a little of the history of hedge funds and how they are fundamentally unjust. A hedge fund, in a nutshell, is a financial instrument that allows people who are already rich to avoid paying taxes on their investment income. Once you reach a certain level of wealth, you’re essentially able to “opt out” of paying taxes like the rest of us by putting your money into things like hedge funds and taking advantage of the attending “loopholes” (they’re not loopholes, folks, they’re policies that are the result of large, sustained lobbying efforts). Then, we move on to Jimmy Haslam. You may know him as the owner of the Cleveland Browns. What you may not know is that his company Pilot/Flying J Travel Centers was involved in an investigation of fraudulent billing practices over the last several years in which seventeen of his top management people were convicted (fourteen of whom have gone to prison). This wasn’t just your run-of-the-mill fraud case, listeners. I don’t want to spoil the story for you if you haven’t heard about this, so I won’t say any more here—but be prepared to feel some serious rage. One tidbit we didn’t mention in the episode is that Haslam and his company donated $500,000 to Trump’s inauguration campaign, and you can make of that what you will. Here are the links we mentioned in the episode: Summary of Haslam scandal: https://www.theringer.com/nfl/2018/4/2/17182368/pilot-flying-j-fraud-scandal-update-jimmy-haslam-cleveland-browns (This story includes a lot of the gory details that others leave out). Extremely NSFW Secretly recorded conversations between Pilot Flying J executives: https://youtu.be/drSXVaETaag News Report about Haslam’s knowledge of scheme: https://youtu.be/WYYisW_lYjI FBI Affidavit laying out the facts of the case: https://www.documentcloud.org/documents/1672598-pilot-flying-j-affidavit.html Episode Correction: The Browns' 0-16 season was in 2017, not 2018.