Nick Hanauer

You are currently browsing articles tagged Nick Hanauer.

“The Other 99 Per Cent Of Our Fellow Citizens Are Falling Farther And Farther Behind”

January 28, 2016 in Excerpts, Politics, Science/Tech | Permalink

In his great song “Pretty Boy Floyd,” Woody Guthrie, knowing that when it comes to crime a collar can be white just as easily as blue, sang these words:

Yes, as through this world I’ve wandered
I’ve seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

For those who employ the latter modus operandi, not even a stylus, let alone a pen, is necessary anymore. Over the last four decades in the U.S. (and much of the rest of the developed world), money has mysteriously moved from the middle class into the accounts of the 1%, and no one seems completely sure how it was transferred. We’re only know that it’s shifted, that it’s been shifty. Maybe it was the manipulation of tax codes or the decline of unions or the rise of the machines or the forces of globalization or the invention of outlandish Wall Street products. Probably it was all of that and more. The result is the disappearance of the prosperity enjoyed by a far greater percentage of Americans in the aftermath of WWII through the early 1970s, which was created by a humming capitalist engine paired with severe progressive tax rates that redistributed the wealth. No one need want to return to the pre-Civil Rights United States–wildly uneven in other odious ways–but there are some economic lessons to be learned there.

One thing that seems sure is the vast accumulation of riches at the top isn’t the end result of a successful experiment in meritocracy. These are the not uniformly the best, the brightest and the most deserving. Similarly, the shit-out-of-luck souls aren’t on the ever-widening bottom because of any defect of character or lack of work ethic. Some may drink or use drugs or divorce, but so do those whose wealth provides a cushion for such failings common to mere mortals. The main reason that poor people are so is because, at long last, they don’t have any money. They haven’t failed the system. Quite the contrary.

In a London Review of Books essay, Ed Miliband, the leader of the British Labour Party prior to Jeremy Corbyn, opines on the haves, the have-nots and the what-the-fuck situation we all find ourselves in, the eclipsed and the sun-kissed alike. The politician, who believes that beyond sheer unfairness, inequality ultimately inhibits economic growth, offers some prescriptions. The opening:

‘What do I see in our future today you ask? I see pitchforks, as in angry mobs with pitchforks, because while … plutocrats are living beyond the dreams of avarice, the other 99 per cent of our fellow citizens are falling farther and farther behind.’ Who said this? Jeremy Corbyn? Thomas Piketty? In fact it was Nick Hanauer, an American entrepreneur and multibillionaire, who in a TED talk in 2014 confessed to living a life that the rest of us ‘can’t even imagine’. Hanauer doesn’t believe he’s particularly talented or unusually hardworking; he doesn’t believe he has a great technical mind. His success, he says, is a ‘consequence of spectacular luck, of birth, of circumstance and of timing’. Just as his own extraordinary wealth can’t be explained by his unique talents, neither, he says, can rising inequality in the United States be justified on the grounds that it is a side effect of a broader economic success from which everyone benefits. As Henry Ford recognised, if you don’t pay ordinary workers decent wages, the economy will lack the demand to sustain economic growth.

Hanauer is in the vanguard of the ‘Fight for 15’, the campaign for a $15 minimum wage. Like Bill Gates and Warren Buffett, who have also issued loud warnings about inequality, he is heir to a long tradition of social concern among the wealthy in the US. They have reason to be worried. The last time inequality reached comparable levels was shortly before the Wall Street Crash. As Anthony Atkinson shows in Inequality: What Can Be Done?, inequality in the US fell for decades after the crash, before beginning to rise again in the 1970s.​ Since then the gap between the wealthy and the rest has grown steadily wider. The top 1 per cent now has nearly 20 per cent of total US personal income. In the 1980s, inequality in the UK went up even more sharply than in the US. Since then, overall UK inequality has been relatively stable but the income share of the top 1 per cent has increased significantly and now accounts for about 12 per cent of UK personal income. The important factors are rising inequality in wages, a decline in the share of the national income that wages represent as more money goes to corporate profits and dividends, and a reversal of redistribution from the rich to the poor.

The rise in inequality should not, Atkinson insists, be brushed aside as an inevitable effect of irresistible forces such as globalisation or developments in technology. It is driven by political choices.•

Tags: ,

“What We Require Now Is A New Framework For Thinking And Talking About The Economy”

July 13, 2012 in Excerpts, Politics, Science/Tech, Urban Studies | Permalink

From “The Machine and the Garden,” a smart New York Times Op-Ed piece by Eric Liu and Nick Hanauer which suggests that the language we use to explain the economy is all wrong:

“Call it the ‘Machinebrain’ picture of the world: markets are perfectly efficient, humans perfectly rational, incentives perfectly clear and outcomes perfectly appropriate. From this a series of other truths necessarily follows: regulation and taxes are inherently regrettable because they impede the machine’s optimal workings. Government fiscal stimulus is wasteful. The rich by definition deserve to be so and the poor as well.

This self-enclosed metaphor is the gospel of market fundamentalists. But there is simply no evidence for it. Empirically, trickle-down economics has failed. Tax cuts for the rich have never once yielded more net revenue for the country. The 2008 crash and the Great Recession prove irrefutably how inefficient and irrational markets truly are.

What we require now is a new framework for thinking and talking about the economy, grounded in modern understandings of how things actually work. Economies, as social scientists now understand, aren’t simple, linear and predictable, but complex, nonlinear and ecosystemic. An economy isn’t a machine; it’s a garden. It can be fruitful if well tended, but will be overrun by noxious weeds if not.

In this new framework, which we call Gardenbrain, markets are not perfectly efficient but can be effective if well managed. Where Machinebrain posits that it’s every man for himself, Gardenbrain recognizes that we’re all better off when we’re all better off. Where Machinebrain treats radical inequality as purely the predictable result of unequally distributed talent and work ethic, Gardenbrain reveals it as equally the self-reinforcing and compounding result of unequally distributed opportunity.

Gardenbrain challenges many of today’s most conventional policy ideas.”

Tags: ,

“It Was Too Political And This Was An ‘Election Year'”

May 22, 2012 in Excerpts, Politics, Science/Tech, Urban Studies | Permalink

"Anderson’s responses were still a good distillation of TED’s ideology." (Image by Steve Jurvetson.)

I enjoy a lot of TED lectures and have posted some here, but I highly recommend “Don’t Mention Income Inequality Please, We’re Entrepreneurs,” a smart Salon article by Alex Pareene about the wealthy organization’s unspoken politics. The opening:

“There was a bit of a scandal last week when it was reported that a TED Talk on income equality had been censored. That turned out to be not quite the entire story. Nick Hanauer, a venture capitalist with a book out on income inequality, was invited to speak at a TED function. He spoke for a few minutes, making the argument that rich people like himself are not in fact job creators and that they should be taxed at a higher rate.

The talk seemed reasonably well-received by the audience, but TED ‘curator’ Chris Anderson told Hanauer that it would not be featured on TED’s site, in part because the audience response was mixed but also because it was too political and this was an ‘election year.’

Hanauer had his PR people go to the press immediately and accused TED of censorship, which is obnoxious — TED didn’t have to host his talk, obviously, and his talk was not hugely revelatory for anyone familiar with recent writings on income inequity from a variety of experts — but Anderson’s responses were still a good distillation of TED’s ideology.”

Tags: ,