Saturday 1 July 2017

Nick Hanauer: Beware, fellow plutocrats, the pitchforks are coming

Nick Hanauer is an American billionaire entrepreneur. He was an early investor in Amazon. In 2007, he sold one of his companies, aQuantive, to Microsoft for $6.4 billion. This guy isn't rich, he's wealthy. And as he himself states: he's a plutocrat (a person whose power derives from their wealth).

Unlike the GOP and their fondness for Ayn Rand (self-interest is everything) and trickle-down economics (thanks Ronnie), Mr. Hanauer comes at the issue of capitalism from a different and interesting perspective. In a nutshell, if nothing is done to stop the growing inequality in the United States, there's going to be a revolt, with pitchforks as he puts it. The peasants will get fed up with "Let them eat cake" (misattributed to Marie Antoinette) and storm the Bastille. But more importantly, Mr. Hanauer, in warning his fellow plutocrats, states that he's not making a proposal out of the goodness of his heart. While the GOP balk at entitlements and giving anything away for free unlike their liberal, tree-hugger, socialist counterparts across the aisle, Mr. Hanauer sees profit in his ideas. A thriving economy comes from a strong middle class, not the other way around. If the wealthy would give up a little (raise the minimum wage), they would stand to make even more. A raised minimum wage would mean that more people would move into the middle class. They would require less government assistance. They would have more buying power. They would be better customers of the companies owned by the wealthy. As a nod to Ayn Rand, Mr. Hanauer is making a suggestion in his own self-interest.

What a curious take on the war on poverty. You help people, not so much because it's a good, charitable thing to do, but because it keeps the masses in check and makes you more money. He has his detractors, but I do believe Mr. Hanauer has hit upon an important concept missing in today's economic analysis.

Published on Aug 12, 2014 by TED
YouTube: Beware, fellow plutocrats, the pitchforks are coming | Nick Hanauer

Politico - July 2014
The Pitchforks Are Coming… For Us Plutocrats by Nick Hanauer
In 1980, the top 1 percent controlled about 8 percent of U.S. national income. The bottom 50 percent shared about 18 percent. Today the top 1 percent share about 20 percent; the bottom 50 percent, just 12 percent.

But the problem isn’t that we have inequality. Some inequality is intrinsic to any high-functioning capitalist economy. The problem is that inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.

Bloomberg - Jun 19/213
The Capitalist’s Case for a $15 Minimum Wage by Nick Hanauer
The fundamental law of capitalism is that if workers have no money, businesses have no customers. That’s why the extreme, and widening, wealth gap in our economy presents not just a moral challenge, but an economic one, too. In a capitalist system, rising inequality creates a death spiral of falling demand that ultimately takes everyone down.

Low-wage jobs are fast replacing middle-class ones in the U.S. economy. Sixty percent of the jobs lost in the last recession were middle-income, while 59 percent of the new positions during the past two years of recovery were in low-wage industries that continue to expand such as retail, food services, cleaning and health-care support. By 2020, 48 percent of jobs will be in those service sectors.
Raising the minimum wage to $15 an hour would inject about $450 billion into the economy each year. That would give more purchasing power to millions of poor and lower-middle-class Americans, and would stimulate buying, production and hiring.


Wikipedia: Nick Hanauer
Nick Hanauer (born 1959) is an American entrepreneur and venture capitalist living in Shoreline, Washington.

official web site: Nick Hanauer, Entrepreneur, venture capitalist, civic activist, philanthropist, author

My note: Mr. Hanauer has a number of interesting articles worth perusing.

Confronting the Parasite Economy - May 16th, 2016, American Prospect
There are two types of businesses in America today: those that pay their workers a living wage—the real economy—and those that don’t—the parasite economy. And all of us who live and work in the real economy should be royally pissed at the way the parasite economy is sucking us dry.

Is trickle-down economics science or scam? - June 1, 2015, PBS News Hour
Nick Hanauer critizes the theory that a higher minimum wage will cause increased unemployment. Going further, he suggests that economic theories in general are not science, but merely social and moral constructs. This post originally appeared on Hanauer’s blog, Civic Skunks Works and is reprinted here with the permission of Nick Hanauer.

Imagine America if Steve Jobs' father was turned away because he was Syrian - December 8, 2015, Seattle Times
According to some, America is closed for business. Our leaders responded to terror attacks in Paris and San Bernardino, Calif., with fear and xenophobia. Donald Trump issued a statement that as president — heaven forbid — he’d ban all Muslims’ entry to the United States, an outrageous statement that shocked and offended all sensible Americans.


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