When I Grow Up I want to be Like Nick Hanauer Part 1

     Greg asked me to take a look at this piece from Hanauer and David Rolf and, wow, am I ever grateful I did! Here is the piece.

     http://www.democracyjournal.org/37/shared-security-shared-growth.php?page=all

     The reason why I say I want to be like him is that my goal is to be a liberal billionaire and that is what he already is. 

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

     I know some 'progressives'-why can't we just be liberals? You can be a progressive if you must, I'm a liberal; certainly not in any sense a populist-don''t like billionaires, That's not me. Look at least Hanauer-and his fellow author and fat cat Rolf-is doing something more productive than saying 'Woe is me, pity me! The President keeps hurting my feelings!

    http://www.amazon.com/Pity-Billionaire-Hard-Times-Unlikely-Comeback-ebook/dp/B005FWPMV0/ref=sr_1_1?s=books&ie=UTF8&qid=1434930471&sr=1-1&keywords=pity+the+billionaire&pebp=1434930475889&perid=0ZV2KP3HMQ8MT6ANGMRQ

     Here is Hanauer's book.

     http://www.amazon.com/Gardens-Democracy-American-Citizenship-Government-ebook/dp/B0061S3UMA/ref=sr_1_1?s=books&ie=UTF8&qid=1434921050&sr=1-1&keywords=nick+hanauer&pebp=1434921060904&perid=189R61M0Z6XNXVW6GMZA

    Seriously, I too dream of being a liberal billionaire. And though I am still very, very far from this goal, those of you who know me a little-because you've read me for some length of time-know I'm in much better shap e than I was during the years 2009-2014 of living in my parents basement and desperate for any sort of gainful employment."

   If I were a LB tomorrow I could go to places like Greg's Georgia, Texas, or South Carolina and turn the place upside down overnight simply by making a $50 million dollar contribution to the state Democratic party so they can campaign to retake the state. Well, starting with SC might be a little amibitous but Wisconsin or Ohio could be done quite rapidly and in Georgia and similar Southern states probably quicker than you could imagine. Money really does talk. As Marx himself said it has miraculous qualities. 

   As for Hanauer and Rolf, they may be very wealthy guys but they also lead the SEIU so their hearts are in teh right place. 

   In all seriousness what I think they do is the best job I've seen of the following:

   1. Diagnosing accurately and comprehensively the travails but also the benefits and possibilities of what you might call the Morgan Warstler's Uber Economy. 

  https://twitter.com/morganwarstler/status/595288739737374721

   http://www.morganwarstler.com/post/44789487956/guaranteed-income-choose-your-boss-the-market

   2. But what is truly new and revolutionary I think-and I am careful not to abuse this word-as there are fewer revolutionary things than most folks seem to think

   http://diaryofarepublicanhater.blogspot.com/2015/06/michael-lind-on-lack-of-new-ideas-in.html

   is that they offer a comprehensive and very plausible solution for the Uber Economy. 

   I actually might argue that they are the first I am aware of to offer at least a comprehensive solution. Actually, Morgan's Right wing Auction the Unemployed is the conservative solution. Hanauer and Rolf now give us the liberal version. 

    (Doesn't Morgan truly look like a hippie in his Twitter picture?)

   First they accurately diagnose the problem:

   "The American middle class is facing an existential crisis. For more than three decades, declining wages, fraying benefits, and the rising costs of education, housing, and other essentials have stressed and squeezed middle-class Americans. But by far the biggest threat to middle-class workers—and to our economy as a whole—comes from the changing nature of employment itself.

Gone is the era of the lifetime career, let alone the lifelong job and the economic security that came with it, having been replaced by a new economy intent on recasting full-time employees into contractors, vendors, and temporary workers. It is an economic transformation that promises new efficiencies and greater flexibility for “employers” and “employees” alike, but which threatens to undermine the very foundation upon which middle-class America was built. And if the American middle class crumbles, so will an American economy that relies on consumer spending for 70 percent of its activity, and on a diverse and inclusive workforce for 100 percent of the innovation that drives all future prosperity."

     http://www.democracyjournal.org/37/shared-security-shared-growth.php?page=all

     It truly seems like another lifetime-on another planet out somewhere in a different solar system when someone left college-forget college, could leave high school-get a job, impress their boss and work their for the next 20, 30, or 40 years and never have any major economic crisis in their adult lives.   

   It isn't really that long ago-until the late 1990s there was still at least a semblance of this postwar American idea, The American Dream. 

   To go through 5 jobs in a lifetime was a lot during the postwar era till the late 90s. By then it was already frayed but the comforting ideology was that as long as you had a college education you were set. 

   Then came the recession of 2001 and things were never the same again. The trouble we face today is not jobs per se. No doubt a lot of jobs have been created since 2009 but the quality is poor. The move that begun in the 90s-but started to really show its ill effects in that 2001 recession; only then was it really clear that the American Dream as defined above was in real trouble; more a happy memory than reality anymore-was a painful move from being a manufacturing economy to a service economy. 

  We have become Ross Perot's nation of burger flippers-though there's a lot more to this than simply NAFTA. Not having passed NAFTA would not by itself have done much to stop this. Going back in a time machine today and un-signing it wouldn't give us any relief. 

  Economists always tell us that technology can't kill our jobs-if one industry is gutted by tech then other industries will be opened up for workers. Yes, but the new jobs just don't pay enough. This is what Hanauer and Rolf diagnose very impressively: life in what I'm calling the Uber-but what they call the 'sharing economy.' They discuss a prototypical worker of today, Zoe:

   "Take, for example, an American worker whose story is increasingly typical of this new age. We’ll call her “Zoe.” Zoe is a woman in her late 20s who works part time at a hotel outside Denver. She’s worked at the front desk for five years, and her supervisor says he’s happy with her performance—but he never schedules her for more than 29 hours in a single week, so she does not qualify for health insurance or other benefits that full-time workers enjoy. Her annual raises amount to a fraction of a percent increase to her weekly pay, hardly enough to keep up with inflation."

     "Between rent, automobile expenses, and buying her own health insurance (now federally subsidized, thanks to Obamacare), Zoe has needed to find additional sources of income. She’s always liked gardening, so she started auctioning her services as a landscaper on the popular work-outsourcing site TaskRabbit. The work was fairly easy and enjoyable—mostly lawn mowing and hedge trimming for elderly homeowners in her neighborhood—so she quickly abandoned the middleman and began contracting her services directly to clients. The work takes about ten hours a week, and she earns an additional $100 or so a week at it, depending on the season."

      "But those two jobs combined don’t pay enough to keep Zoe in the black. On Friday and Saturday nights, she’ll usually pick up a “shift” working as a driver for the peer-to-peer ride-sharing service UberX. Zoe ferries young people to and from bars across town, responding to calls on the app for four or five hours a night, amounting to another $150 or so a week. Occasionally, on the rare weekday off, she’ll go live on UberX to drive people to and from the airport."

       "That’s not all. During tourist season, Zoe will pick up a little spending money by renting out her apartment on Airbnb, living in her parents’ house for days or weeks at a time. And when her schedule at the hotel allows it, she’ll pick up a temp job or two, usually doing light office work at a local hospital; but her work schedule changes from week to week, and temp work is unreliable, so she can’t often coordinate jobs. Zoe would like to go back to college to finish her degree, but can’t seem to piece together either the time or the money. Besides, she has friends and co-workers with college degrees, living similar lives, only with the added burden of tens of thousands of dollars in student debt."

      "If you think all her hard work amounts to a stable lifestyle, you’re wrong. Zoe doesn’t have enough money in the bank to sustain a savings account, let alone to contribute to retirement. She’s never late with her rent, but the idea of owning a house is far out of reach. Sometimes, when she catches a bad cold, or inclement weather conspires against her part-time piecemeal work, she’s forced to put groceries, the electricity bill, or gas on her credit card. It can take months to pay that balance back down."

     "But the cost is more than just financial. Zoe can’t remember a time when she wasn’t tired. She’s never taken a vacation in her adult life. (The right and ability to take a vacation are integral parts of what it means to be middle class, yet a Google Consumer Survey found that 42 percent of all American adults failed to take a single day of vacation in 2014.) She can’t imagine ever being able to retire. She barely has time for dating, let alone settling down and starting a family of her own. She dreads the day when her car just stops running, because she knows that would destroy her financially. Zoe doesn’t have any idea what the process of bankruptcy is like, but that doesn’t keep her from having nightmares about it. Sometimes when she listens to the radio while driving between jobs, Zoe hears that America is finally pulling out of the Great Recession, that prosperity is on the rise again. She doesn’t know what to make of that, but she knows she’s not feeling particularly prosperous. In fact, she feels a little bit poorer with each passing year."

     You have to say that Zoe is doing pretty good. She seems to be able to support herself at least but she just has no savings whatsoever. So any piece of bad luck can get her in trouble. How many aren't even at this level today of their meager wages supporting them?

     I had this same experience back in Massachusetts during the 'Bush boom.' I was a new college graduate in 2001 with a Bachelor's in accounting but after working with a temp agency that got me jobs throughout the first half of 2010 in June things changed overnight. Suddenly the waste disposal company I had been doing accounts receivable and invoicing ended the job. This wasn't unexpected as the company was in Chapter 11. 

   The guy at Accountempts assure me within a day or two he'd find a new job for me. As this was the pattern in those first 6 months, I believed it. He never did get back to me though. 

   I remember George W. Bush addressing the recession. He told all of us unemployed folks not to worry. We should just go back to college and get another degree. Ok. Sure, Why not? What will that be another 4 years till we can have good jobs again?

   I did find work but it was well beneath what I had gotten my degree in-a pizza delivery driver. It wasn't bad work. I enjoyed it. It was better than working inside. Drivers actually made more than anyone inside even though they had to do the hard work.  You just drive around to people's houses with their pizza and wings. I made enough to pay my bills but no more than that just like Zoe. Then the 2008 recession hit and I ended up moving back down to NY to live with Mom and Dad for the next 6 years. 

   Zoe sounds like she's doing pretty well. In today's economy not many workers can even think about meaningful savings. If you are living hand to mouth you're doing well. Many are doing less well than that. 

   According to N&R's definition of 'middle class' there are far fewer in this class than their used to be. 

    "For the purposes of our discussion, “middle class” is less of an income distinction and more of a social one. Typically, middle-class Americans purchase homes, they educate themselves and their children, they participate in their community, they spend money on leisure and other discretionary purchases, and they save for retirement. Over the course of their lives, middle-class Americans build personal wealth, however modestly, and sometimes they start businesses. And they can do all these things because they have the confidence and the wherewithal—the economic security—to plan for the future. Or, to use a word our nation’s business leaders would surely understand, a functional middle class enjoys certainty."

    That is a very good definition that makes a key point. To be middle class you have to actually have savings. If you're hand to mouth, then you're not middle class.

    They have some very workable solutions-again the first I've seen any solutions. Until now intelligent liberals have mostly tried to simply diagnose the problem-a la Joseph Stiglitz or Lawrence Summers. 

   At this point I will cry uncle and admit this post is long enough.. In my next post we will consider the solutions. They're assumption is that in the future workers will work for more and more 'employers' and there is a need to reconstruct worker protections and laws so that they can deal with this new reality. 

   "This is the new “you’re on your own,” benefit-free, race-to-the-bottom reality for millions of American workers. And as more new innovative businesses and business models are invented, this process will only accelerate. As the sharing economy kicks into high gear, more and more Americans will become independent contractors activated at the touch of a button on an app, working for a fleet of employers. According to a 2015 Bureau of Labor Statistics report, Americans born in the late Baby Boom have held around 12 jobs in adulthood. It’s possible that 30 years from now, the average American might well work for four or five or even more different employers in a single week. This hyper-nimble form of employment means the economy will likely be even more efficient in years to come, as workers are hired for very specific tasks of a highly limited duration. But a nation of independent contractors is a nation of workers without any of the benefits that defined the decent and dignified life that gave one reason to be optimistic about the future—a gross violation of the social contract that helped create the greatest economic expansion, the most dramatic increase in living standards, and the largest, most prosperous, most productive, and most secure middle class in human history."