Posted on 06/26/2014 10:44:53 PM PDT by 2ndDivisionVet
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.
Doesn’t it strike everyone that all the current billionaires today are all Socialists and Globalists?
Groan. He loses all reason here:
“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”
Really discouraging. How about looking at his own success and acknowledging that improving peoples’ opportunities and not penalizing self-reliance is the path to success as opposed to a government handout or a make work program? The only ones who did well from FDRs policies were bureaucrats and cronies.
I’ll, after reading this, still vote for pitchforks.
Bingo! This guy doesn’t realize the problem is not capitalism, the problem is corporate / government fascism.
This guy is promoting fdr and what he did as the right thing to do...
inother words, he wants depression and world war...
he is nutsie cuckoo
So, the guy is for wealth redistribution......
We will have the melding of the teanparty with occupy wall street, two groups closer than their publicists think.
Both despise crony capitalism, and when the one side figures out that the government isnt the solution, but the instigator, the torchlit marches will proceed.
Income must not be taxed, wealth needs to be taxed more adequately... Yes i understand the tax structures and the rich paying their fair share, more so, but the destruction of the middle class has come because of the tax the ri h mentality and the redining down of the definition of rich.
Excaserbated by the quest of those in government to be the new rich overlords.
Rise up. End the connectivity of the rulers of government and corporations.
Flame away.
“If we do something about it, if we adjust our policies in the way that, say, Franklin D. Roosevelt did during the Great Depression—”
Such contempt for the little people-a small bribe is all that’s needed to keep these losers happy.
Ok, I have a comment and I know it won’t be received well, but here goes.
He says:
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.
I agree for the most part with what he says. But I have to add this, I believe that most humans prefer a feudal type society at a local level. Most humans are taught and are ‘comfortable’ with someone being ‘in charge’. They just want to drift from day to day in a happy “I know what I need to do” sort of haze. What they don’t like or want is change especially disruptive change.
If the vast majority of people are kept fed, entertained and safe from worry then they are just ducky in their lives.
The problem of course is that there are those born in every generation that are NOT happy with the status-quo because they want to be at the top and a feudal system is designed to prevent that. Our republican style government allows for movement status wise up and down the social ladder plus a quasi-feudal system at the local and state level where there are people who want or need to lead and ‘rule’.
As long as the excesses of those who want to lead and rule are kept at a ‘reasonable level’ the masses are happy as long as they are still ‘fed, entertained and made to feel reasonably comfortable’.
What has upset that ‘apple cart’ is that we now have some VERY power hungry people in government and by judicious manipulation of international tensions and internal to the nation tensions they are about to change the entire system so as to bring about that true Feudal system that they admire so much because that system allows for maximum freedom to indulge in their passions for power over the people.
The end result is going to be chaos and a bunch of people who remember the days of ‘good food, entertainment and a general feeling of well-being’ who are going to listen and gravitate to the one who promises a return to that.
And to get there all they have to do is tear down all of the things that allowed those things to exist in the first place. So yes the pitchforks are coming... Where, when and who they get stuck into has yet to be fully determined.
‘We will have the melding of the teanparty with occupy wall street, two groups closer than their publicists think.’
Really? You are telling me that the conservatives (non-collectivists) and the children of the collectivist 1%ers (aka OWS) have something in common? Since when did the Red Diaper Doper Babies crowd go non-collectivist?
One thing never mentioned in any of these inequality discussions is immigration.
I cannot take anyone taking about inequality seriously if they do not discuss the effect of the massive levels of immigration into the United States and other Western European countries. How can labor (and that includes anyone who works for a wage) capture a larger slice of economic growth if employers have a bottomless pool of workers?
If we want to talk about taxes, inequality, and fairness we should focus on taxes on wealth not taxes on high income (which tend to fall most heavily on the middle and upper-middle class). A lot of those ‘investment’ expenditure will find their way into the pockets of the wealthy anyway. Instead of taxing the rich to pay for government ‘investments’ why not tax to the rich to lower rates for the middle class (if that is what you are worried about).
when they realize that the government is in bed with the crony capitalists.
It never works because the right people weren’t given enough power -
this time, they’ll do it right!
Yeah, right! Big business and big government go hand-in-hand. The OWSers were promoting collectivism during their time in the news and is nothing different than what their parents do.
The issue is government regulation and taxation. The rich can get past all that but the rest cannot.
And another thing, you cannot push a radical environmentalist agenda while claiming to care about “inequality”.
Cheap food and cheap energy for the public are products of a more or less free market in energy and land use. Environmental laws will turn us all into subsistence farmers—feudal vassals.
I, too, agree in principle with what he says. I do not agree with his approach to fixing the problem.
Social programs like those of FDR, which didn’t work, are not the answer. Prosperous raging capitalism, which made the author rich, is.
I, too, agree in principle with what he says. I do not agree with his approach to fixing the problem.
Social programs like those of FDR, which didn’t work, are not the answer. Prosperous raging capitalism, which made the author rich, is.
This guy deserves what ever he gets and I hope he
gets it good and hard.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.