"The pitchforks are coming for us plutocrats"

[TitanTiger 20,708]

Billionaire Nick Hanauer says that growing income inequality has turned the US into less of a capitalist society and more of a feudal society.

Memo: From Nick Hanauer

To: My Fellow Zillionaires

You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries—from itsy-bitsy ones like the night club I started in my 20s to giant ones like Amazon.com, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank. I tell you all this to demonstrate that in many ways I’m no different from you. Like you, I have a broad perspective on business and capitalism. And also like you, I have been rewarded obscenely for my success, with a life that the other 99.99 percent of Americans can’t even imagine. Multiple homes, my own plane, etc., etc. You know what I’m talking about. In 1992, I was selling pillows made by my family’s business, Pacific Coast Feather Co., to retail stores across the country, and the Internet was a clunky novelty to which one hooked up with a loud squawk at 300 baud. But I saw pretty quickly, even back then, that many of my customers, the big department store chains, were already doomed. I knew that as soon as the Internet became fast and trustworthy enough—and that time wasn’t far off—people were going to shop online like crazy. Goodbye, Caldor. And Filene’s. And Borders. And on and on.

Realizing that, seeing over the horizon a little faster than the next guy, was the strategic part of my success. The lucky part was that I had two friends, both immensely talented, who also saw a lot of potential in the web. One was a guy you’ve probably never heard of named Jeff Tauber, and the other was a fellow named Jeff Bezos. I was so excited by the potential of the web that I told both Jeffs that I wanted to invest in whatever they launched, big time. It just happened that the second Jeff—Bezos—called me back first to take up my investment offer. So I helped underwrite his tiny start-up bookseller. The other Jeff started a web department store called Cybershop, but at a time when trust in Internet sales was still low, it was too early for his high-end online idea; people just weren’t yet ready to buy expensive goods without personally checking them out (unlike a basic commodity like books, which don’t vary in quality—Bezos’ great insight). Cybershop didn’t make it, just another dot-com bust. Amazon did somewhat better. Now I own a very large yacht.

But let’s speak frankly to each other. I’m not the smartest guy you’ve ever met, or the hardest-working. I was a mediocre student. I’m not technical at all—I can’t write a word of code. What sets me apart, I think, is a tolerance for risk and an intuition about what will happen in the future. Seeing where things are headed is the essence of entrepreneurship. And what do I see in our future now?

I see pitchforks.

At the same time that people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country—the 99.99 percent—is lagging far behind. The divide between the haves and have-nots is getting worse really, really fast. 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.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

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.

Many of us think we’re special because “this is America.” We think we’re immune to the same forces that started the Arab Spring—or the French and Russian revolutions, for that matter. I know you fellow .01%ers tend to dismiss this kind of argument; I’ve had many of you tell me to my face I’m completely bonkers. And yes, I know there are many of you who are convinced that because you saw a poor kid with an iPhone that one time, inequality is a fiction.

Here’s what I say to you: You’re living in a dream world. What everyone wants to believe is that when things reach a tipping point and go from being merely crappy for the masses to dangerous and socially destabilizing, that we’re somehow going to know about that shift ahead of time. Any student of history knows that’s not the way it happens. Revolutions, like bankruptcies, come gradually, and then suddenly. One day, somebody sets himself on fire, then thousands of people are in the streets, and before you know it, the country is burning. And then there’s no time for us to get to the airport and jump on our Gulfstream Vs and fly to New Zealand. That’s the way it always happens. If inequality keeps rising as it has been, eventually it will happen. We will not be able to predict when, and it will be terrible—for everybody. But especially for us.

***

The most ironic thing about rising inequality is how completely unnecessary and self-defeating it is. If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—so that we help the 99 percent and preempt the revolutionaries and crazies, the ones with the pitchforks—that will be the best thing possible for us rich folks, too. It’s not just that we’ll escape with our lives; it’s that we’ll most certainly get even richer.

The model for us rich guys here should be Henry Ford, who realized that all his autoworkers in Michigan weren’t only cheap labor to be exploited; they were consumers, too. Ford figured that if he raised their wages, to a then-exorbitant $5 a day, they’d be able to afford his Model Ts.

What a great idea. My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too...

Read the rest:

http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014_full.html

[AUFAN78 4,061]

Very interesting read. Thank you!

I agree big business and the 1% could afford to implement, but I fear raising the minimum wage that drastically would kill the mom and pop dream.

Anyone have info on how mom and pop stores fared in Seattle?

[Strychnine 1,804]

Very interesting read. Thank you!

I agree big business and the 1% could afford to implement, but I fear raising the minimum wage that drastically would kill the mom and pop dream.

Anyone have info on how mom and pop stores fared in Seattle?

It's in the article: "Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle."

The premise makes business size irrelevant with a simple assertion: if a business is selling something, they can sell more of it if there are more people that can afford to buy it. I do not mind paying a little more to support a local business that employs fellow locals. However, when rising costs (and/or inflation) and stagnant income changes your priorities and spending habits, maximizing how far your dollar goes becomes far more important. When that is the case, Wal-Mart and their ilk always win, as the dollar simply goes further there. The 40+% inflation rate over the last 15 years has not been offset by wage increases, and this affects everyone.

[TexasTiger 13,559]

Commie pinko.

[Auburnfan91 1,408]

McDonald's and Wal-Mart are always hiring. We're not going to see the economy really improve until small businesses across the country are booming and hiring. Unfortunately the Affordable Care Act is going to make small businesses successs harder to achieve. Hiring people and then covering the rising costs of health insurance for employees is going to make it hard for small businesses to expand.

Policies from both sides in Washington are having the opposite effect and hurting the lower incomer and middle class in the U.S.

We can argue all day long about how bad insurance companies are but the ACA isn't going to help lower income people and make things more affordable for the people it's supposedly trying to help. It's pretty bad when you have to choose between companies and the government to help you financially. Both really aren't going to help you because they both exist to get theirs over the people. The government wants to take over everything instead of trying to fix problems, they create more problems.

Getting a part-time job is tough enough in this economy. Most part-time employers don't offer full health insurance mandated by the ACA. You have to get a full-time job to get full health insurance through your employer to meet the ACA standards of coverage.

Who's going to benefit the most from the ACA? It's not small businesses and the 99%. I think it's pretty darn sickening in this country that people who follow the rules and law get punished financially because the leaders in this country are intentionally or unintentionally sucking the life out of the 99%.

It's great that people can stay on their parents health care plans until age 26 but a lot of young people are having trouble getting full-time jobs so they can get their own health insurance plan through an employer.

[TitanTiger 20,708]

Was that meant for a different thread?

[telling tiger 156]

Seattle doesn't take effect until next April and even larger businesses have until 2018 to fully implement it. Several legal challenges have been filed that could delay it even further. Massachusetts has also announced plans for what will ultimately be among the highest minimum wages in the nation.

[TexasTiger 13,559]

Was that meant for a different thread?

They just have one script.

[Strychnine 1,804]

Seattle doesn't take effect until next April and even larger businesses have until 2018 to fully implement it. Several legal challenges have been filed that could delay it even further. Massachusetts has also announced plans for what will ultimately be among the highest minimum wages in the nation.

His point was that Seattle's minimum wage was already higher. They did not jump from $7.25/hour to $15/hour. The argument was that if higher minimum wage would kill small business, then Seattle would have already seen that. On the contrary, they have seen growth.

[Auburnfan91 1,408]

Was that meant for a different thread?

No. My post tied into income inequality because people can't afford things like insurance. College tuition isn't getting cheaper. How can anyone get ahead in this country when it's harder to succeed and the costs are so expensive.

[telling tiger 156]

Washington states minimum is already 9.32.

[Strychnine 1,804]

Washington states minimum is already 9.32.

Correct, it is already $2/hour higher than the national minimum wage, which is what everyone says business cannot afford to see raised. Business is not only dealing with it in Seattle, business is growing. That's what happens when people have money to spend.

[Strychnine 1,804]

Was that meant for a different thread?

No. My post tied into income inequality because people can't afford things like insurance. College tuition isn't getting cheaper. How can anyone get ahead in this country when it's harder to succeed and the costs are so expensive.

Insurance is a pipe-dream luxury when there are plenty of people living only a paycheck or two away from homelessness.

[telling tiger 156]

Who knew.

[alexava 6,974]

i didnt read the whole article. did he even address offshoring jobs?

[Weegle777 78]

Washington states minimum is already 9.32.

Correct, it is already $2/hour higher than the national minimum wage, which is what everyone says business cannot afford to see raised. Business is not only dealing with it in Seattle, business is growing. That's what happens when people have money to spend.

So, when people get more money from their paychecks, they spend more and the economy grows? Shocking. Been saying that for years.

[bigbird 60,702]

i didnt read the whole article. did he even address offshoring jobs?

That would be a great idea. Begin another manufacturing boom in America and you would see a boom in jobs and in the middle class. One of the biggest policy changes that they could make with little to no government intervention is to begin creating jobs that pay a middle class wage here.

[homersapien 11,812]

Was that meant for a different thread?

No. My post tied into income inequality because people can't afford things like insurance. College tuition isn't getting cheaper. How can anyone get ahead in this country when it's harder to succeed and the costs are so expensive.

First, the ACA doesn't make someone work full time to get healthcare coverage. In fact, being retired, I don't work at all and was able to get covered, even with pre-existing conditions.

Not sure what point you were making, but the status quo ante certainly didn't provide for wider coverage than we have now. Just the opposite, the status quo ante allowed insurers to exclude more people and accentuate the problems the article was actually about.

[Proud Tiger 4,261]

This isn't as clean as it might appear. Businesses may be growing with increases minimum wages and SOME people have more income to spend. But those business pass along their increased wage cost to others.......you and me.....so we have LESS to spend. There has to be some limit I the wage increase. Is it $15, $20 or what?

[homersapien 11,812]

This isn't as clean as it might appear. Businesses may be growing with increases minimum wages and SOME people have more income to spend. But those business pass along their increased wage cost to others.......you and me.....so we have LESS to spend. There has to be some limit I the wage increase. Is it $15, $20 or what?

Typical zero-sum argument. If anyone is getting more I must necessarily be getting less or otherwise having to pay for it. The tea party is founded on such logic.

[AUFAN78 4,061]

Very interesting read. Thank you!

I agree big business and the 1% could afford to implement, but I fear raising the minimum wage that drastically would kill the mom and pop dream.

Anyone have info on how mom and pop stores fared in Seattle?

It's in the article: "Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle."

The premise makes business size irrelevant with a simple assertion: if a business is selling something, they can sell more of it if there are more people that can afford to buy it. I do not mind paying a little more to support a local business that employs fellow locals. However, when rising costs (and/or inflation) and stagnant income changes your priorities and spending habits, maximizing how far your dollar goes becomes far more important. When that is the case, Wal-Mart and their ilk always win, as the dollar simply goes further there. The 40+% inflation rate over the last 15 years has not been offset by wage increases, and this affects everyone.

You are correct about the article. Problem is the article is misleading and withholds pertinent data. For ex., In looking at the Seattle SBA website, you'll notice 7 of the top 15 start up companies are no longer in business. Also, I mentioned the impact the wage hike would have on mom and pop? Care to guess how mom and pop are faring?

I will share a single link, but further research details major flaws and quite frankly debunks the entire article.

http://money.cnn.com...sees/index.html

[homersapien 11,812]

Very interesting read. Thank you!

I agree big business and the 1% could afford to implement, but I fear raising the minimum wage that drastically would kill the mom and pop dream.

Anyone have info on how mom and pop stores fared in Seattle?

It's in the article: "Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle."

The premise makes business size irrelevant with a simple assertion: if a business is selling something, they can sell more of it if there are more people that can afford to buy it. I do not mind paying a little more to support a local business that employs fellow locals. However, when rising costs (and/or inflation) and stagnant income changes your priorities and spending habits, maximizing how far your dollar goes becomes far more important. When that is the case, Wal-Mart and their ilk always win, as the dollar simply goes further there. The 40+% inflation rate over the last 15 years has not been offset by wage increases, and this affects everyone.

You are correct about the article. Problem is the article is misleading and withholds pertinent data. For ex., In looking at the Seattle SBA website, you'll notice 7 of the top 15 start up companies are no longer in business. Also, I mentioned the impact the wage hike would have on mom and pop? Care to guess how mom and pop are faring?

I will share a single link, but further research details major flaws and quite frankly debunks the entire article.

http://money.cnn.com...sees/index.html

That article focused on the competitive disadvantage resulting from a non-universal imposition of minimum wage. The only thing that was "absolute" was a statement that it would "eat into their margins".

But if the law were universal, everyone could increase their prices slightly which would address their margins without creating a competitive disadvantage.

[AUFAN78 4,061]

Very interesting read. Thank you!

I agree big business and the 1% could afford to implement, but I fear raising the minimum wage that drastically would kill the mom and pop dream.

Anyone have info on how mom and pop stores fared in Seattle?

It's in the article: "Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle."

The premise makes business size irrelevant with a simple assertion: if a business is selling something, they can sell more of it if there are more people that can afford to buy it. I do not mind paying a little more to support a local business that employs fellow locals. However, when rising costs (and/or inflation) and stagnant income changes your priorities and spending habits, maximizing how far your dollar goes becomes far more important. When that is the case, Wal-Mart and their ilk always win, as the dollar simply goes further there. The 40+% inflation rate over the last 15 years has not been offset by wage increases, and this affects everyone.

You are correct about the article. Problem is the article is misleading and withholds pertinent data. For ex., In looking at the Seattle SBA website, you'll notice 7 of the top 15 start up companies are no longer in business. Also, I mentioned the impact the wage hike would have on mom and pop? Care to guess how mom and pop are faring?

I will share a single link, but further research details major flaws and quite frankly debunks the entire article.

http://money.cnn.com...sees/index.html

That article focused on the competitive disadvantage resulting from a non-universal imposition of minimum wage. The only thing that was "absolute" was a statement that it would "eat into their margins".

But if the law were universal, everyone could increase their prices slightly which would address their margins without creating a competitive disadvantage.

A little further research addresses major flaws in the system. For ex. how it crushes mom and pop and how nearly 50% of small business start ups are failing in Seattle.

[homersapien 11,812]

Very interesting read. Thank you!

I agree big business and the 1% could afford to implement, but I fear raising the minimum wage that drastically would kill the mom and pop dream.

Anyone have info on how mom and pop stores fared in Seattle?

It's in the article: "Well, trickle-downers, look at the data here: The two cities in the nation with the highest rate of job growth by small businesses are San Francisco and Seattle. Guess which cities have the highest minimum wage? San Francisco and Seattle."

The premise makes business size irrelevant with a simple assertion: if a business is selling something, they can sell more of it if there are more people that can afford to buy it. I do not mind paying a little more to support a local business that employs fellow locals. However, when rising costs (and/or inflation) and stagnant income changes your priorities and spending habits, maximizing how far your dollar goes becomes far more important. When that is the case, Wal-Mart and their ilk always win, as the dollar simply goes further there. The 40+% inflation rate over the last 15 years has not been offset by wage increases, and this affects everyone.

You are correct about the article. Problem is the article is misleading and withholds pertinent data. For ex., In looking at the Seattle SBA website, you'll notice 7 of the top 15 start up companies are no longer in business. Also, I mentioned the impact the wage hike would have on mom and pop? Care to guess how mom and pop are faring?

I will share a single link, but further research details major flaws and quite frankly debunks the entire article.

http://money.cnn.com...sees/index.html

That article focused on the competitive disadvantage resulting from a non-universal imposition of minimum wage. The only thing that was "absolute" was a statement that it would "eat into their margins".

But if the law were universal, everyone could increase their prices slightly which would address their margins without creating a competitive disadvantage.

A little further research addresses major flaws in the system. For ex. how it crushes mom and pop and how nearly 50% of small business start ups are failing in Seattle.

What's the normal failure rate of small business start-ups? 50% doesn't sound so bad.

[telling tiger 156]

http://statisticbrain.com/startup-failure-by-industry/