You know things have gotten bad when a self-proclaimed plutocrat sees the future and doesn't like what he sees.
Coming
Speaking to other plutocrats, Nick Hanauer tells some serious truth.
Starting off by saying he's a proud and unapologetic Capitalist, he provides some history of his business acumen and wealth accumulation. He and some friends even own a bank. He's been "rewarded obscenely for that with a life none of you can even imagine".
He says his success was a combination of birth, circumstances, the ability to take huge risks, and good intuition about the future.
What he sees in the future is troubling: angry mobs with pitchforks.
While he and his fellow plutocrats are living beyond the dreams of avarice, the other 99% are falling further behind.
In 1980, the top 1% shared about 8% of national wealth, while the bottom 50% shared about 18%.
Today the top 1% shares over 20% of national wealth, while the bottom 50% share 12-13%.
If the trend continues, in another 30 years the top 1% will share over 30% of national wealth, and the bottom 50% will share just 6%.
The problem, he says, isn't just income inequality. Some inequality is necessary for a high functioning capitalistic democracy. The problem today is that inequality is at record highs and is getting worse.
He tells his fellow plutocrats to wake up and realize that this cannot last in a free and open society. It's self-defeating and bad for business, too.
You show me a highly unequal society and I will show you a police state or an uprising. The pitchforks will come for us if we do not address this. It's not a matter of "if". It's a matter of "when".
He goes on to suggest that an economy should be looked at like an ecosystem with feedback loops between customers and business. Raising wages leads to more customers which leads to business needing to produce more goods and services and that leads to more hiring. It's what has been missing in our economy lately.
He proceeds to completely destroy the mythology of Trickle Down Economics.
So, what does he suggest:
Raise the minimum wage to $15/hour.
It will help produce more customers and limit the need for the government assistance so many low wage workers depend on now. It also turns them into taxpayers. Even better, all businesses do well and all businesses can compete.
A New Capitalism.
An acknowledgement that Capitalism beats the alternatives, but the more people we include not just entrepreneurs, but as customers, the better it works.
He does make the case for government being necessary to create the conditions necessary for entrepreneurs and their customers to thrive. Balancing the power of Capitalists and workers is essential with programs like:
--- a reasonable minimum wage
--- affordable health care
--- paid sick leave
--- progressive taxation to pay for infrastructure including education, research, and development
Smaller Government
Create a smaller government not by slashing public assistance programs, but by reducing the need for them.
Invest in the Middle Class
Make our economy fairer and more inclusive.
A thriving middle class is the source of prosperity
Even the best and smartest among us are barefoot, standing at the side of the road selling fruit is that's all their customers can afford to buy.
It's well worth 20 minutes of your time to view the entire video rather than the snippets I wrote.
I'm not sure that I agree with the "smaller government" part. Government is necessary to ensure fairness, equality, and enforce the rules for everyone. It's also needed to regulate business (products and services), prevent monopolies or concentrations of power, ensure worker health and safety, regulate financial services and banks, and many other national services like transportation systems, roads and highways.
I would add one more thing to his list: unions. Workers collectively organized are the only real counter to the power of an employer or corporation. We've seen the decline in the middle class in the country mirror the decline of unions.
Watch the video and decide for yourself. While I don't agree with everything he suggests, I do agree, though, if nothing changes, the pitchforks are coming.
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