The passing scene: Links & comments 11/22/14

Whatever Happened to Overtime Pay? by Nick Hanauer for Politico.

Nick Hanauer, the wealthy entrepreneur who wrote “The Pitchforks Are Coming … for Us Plutocrats,” wrote a new article about how the erosion of overtime pay is a reason so many middle-class people are poorer than their parents.

In 1975, the Department of Labor’s definition of eligibility for overtime pay—time-and-a-half for overtime— applied to 65 percent of the American work force.  Now it only covers 11 percent.

President Obama could fix it with a stroke of the pen, Hanauer wrote.  Either millions of workers would get more pay raise through overtime.  Or millions of jobs would be created as employers sought to avoid paying overtime.  But Hanauer said his inside information is that this isn’t going to happen.

Bank of North Dakota Outperforms Wall Street by Ellen Brown for Counterpunch.

The Bank of North Dakota, which is the only U.S. bank owned by a state government, outperforms the big Wall Street banks while promoting the state’s economic development and financing public works.  Ellen Brown said the reason for the bank’s success is that it doesn’t gamble with speculative investments and it plows its profits bank into the state rather than into big bonuses and executive salaries.

How the Government Steals from Citizens by A. Barton Hinckle for Reason magazine.

D.C. police plan for future seizures years in advance in city budget documents by Robert O’Harrow Jr. and Steven Rich for the Washington Post.

 A reminder: The Fifth Amendment to the Constitution states that “no person … shall be deprived of life, liberty or property without due process of law, nor shall private property be taken for public use without just compensation.”  This is a principle of justice.  It should not be regarded as an obstacle to get around.

“The pitchforks are coming … for us plutocrats”

[Video added 6/28/14.  The TED organization refused to distribute this TED talk because it was “too controversial” ]

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Nick Hanauer, a billionaire who lives in Seattle, said he got rich mainly by foreseeing 30 years ago how important the Internet was going to become.  What does he foresee now?  Pitchforks—that is, revolution against people in his income class unless income and wealth are more widely distributed.   He wrote in the current issue of Politico:

The fundamental law of capitalism must be: If workers have more money, businesses have more customers.

Which makes middle-class consumers, not rich businesspeople like us, the true job creators. Which means a thriving middle class is the source of American prosperity, not a consequence of it. The middle class creates us rich people, not the other way around.  … …

During the past three decades, compensation for CEOs grew 127 times faster than it did for workers. Since 1950, the CEO-to-worker pay ratio has increased 1,000 percent, and that is not a typo.  CEOs used to earn 30 times the median wage; now they rake in 500 times.

Yet no company I know of has eliminated its senior managers, or outsourced them to China or automated their jobs. Instead, we now have more CEOs and senior executives than ever before.  So, too, for financial services workers and technology workers.  These folks earn multiples of the median wage, yet we somehow have more and more of them.

The thing about us businesspeople is that we love our customers rich and our employees poor. … …

The most insidious thing about trickle-down economics isn’t believing that if the rich get richer, it’s good for the economy.  It’s believing that if the poor get richer, it’s bad for the economy. … …

Hanauer believes that Seattle’s new $15 an hour minimum wage will be good for the local economy.

Capitalism, when well managed, is the greatest social technology ever invented to create prosperity in human societies.  But capitalism left unchecked tends toward concentration and collapse. 

It can be managed either to benefit the few in the near term or the many in the long term.  The work of democracies is to bend it to the latter.

That is why investments in the middle class work.   And tax breaks for rich people like us don’t.  

Balancing the power of workers and billionaires by raising the minimum wage isn’t bad for capitalism.  It’s an indispensable tool.

via Nick Hanauer – POLITICO Magazine.

I thank my friend David Damico for the link.