Every year I read dozens of books and provide you with a list of the "best of the best" motivational books, sales and marketing books, and management books. Many of the books I recommend (as well as those recommended by various pundits and billionaires) build on familiar themes, like entrepreneurship and leadership.
Once in a blue moon, I run across a book that forces me to think, that challenges me to re-examine my core beliefs about business and politics. The book in this case is Thomas Frank's Listen, Liberal: Or, What Ever Happened to the Party of the People. It's an eye-opener and a must-read for entrepreneurs who want to understand what's happening this year in politics and business.
Contrary to what the title seems to imply, the book is not a conservative take-down of the liberal viewpoint. In fact, conservatives are barely mentioned. Instead, it's an expose of how the Democratic party realigned itself with the professional class (that would be the elites like us) and threw the working class under the bus.
The author, Frank, is best known for his bestseller What's the Matter with Kansas? in which he pondered why working- and middle-class people in his home state continue vote Republican even though the Republican party pursues strategies that have thrown them out of work and ruined small-town America.
In Listen, Liberal, Frank answers his own question question by pointing out that, despite giving lip service to the concerns of the working and middle class, the Democratic party in general, and the Clinton wing in particular, has supported and implemented those exact same strategies.
As Frank explains it, we have two political parties that differ on social issues but which are in near total agreement on economic policy and together are pursuing strategies that shift wealth upward to the professional class, while stripping blue-collar or white-collar workers of job security and the ability to earn a living wage.
These strategies are familiar to anyone who's paying attention:
- The outsourcing of manufacturing to countries where labor is cheap.
- Regulation/deregulation that favors large companies and monopolies.
- Open immigration to reduce the cost of labor domestically.
- The replacement of full-time jobs with "gig economy" piecework.
Both Republican and Democratic politicians (and the big media that support them) position these strategies as the inevitable outcome of globalization and innovation. As Frank points out, though, these outcomes are not inevitable but the result of specific government policies.
These policies have been devastating to the non-professional worker in the United States. In the past, there were union jobs and other jobs involving physical labor (at unionlike wages) for high school graduates and even high school dropouts.
Today, though, the only jobs available are minimum-wage and part time. As The New York Times pointed out:
For young high school graduates, the unemployment rate is disturbingly high: 17.8 percent. Add in those who are underemployed, either because they would like a full-time job but can only find part-time work, or they are so discouraged that they've given up actively searching, and the share jumps to more than 33 percent.
Regardless of what you or I personally think about unions, from the perspective of the non-college-educated, unions were a Very Good Thing. However, as Frank points out, while the Democratic party has drawn on unions for donations and get-out-the-vote campaigns, it has actually done almost nothing to prevent their decline.
Rather than pursuing a union-friendly agenda, which would be against immigration and free trade and would break up monopolies, the Democrats have espoused the idea everyone should get a college education and be retrained for the "knowledge economy."
There are two huge problems with this concept. First, exactly half of the citizens of the United States are of below average intelligence (a statistical fact) and many of them simply aren't going to be able to get a college education, even if that were financially feasible for them.
Second, a college education can be a red herring. Recent college graduates are saddled with huge debts but unable to find a job that pays enough to even service that debt. In 2012, according to The Atlantic:
About 1.5 million, or 53.6 percent, of bachelor's degree-holders under the age of 25 last year were jobless or underemployed, the highest share in at least 11 years. In 2000, the share was at a low of 41 percent, before the dot-com bust erased job gains for college graduates in the telecommunications and IT fields.
That last bit is important because the high-tech sector tends to support Democratic candidates. Not surprisingly, mainstream Democrats have been greatly in favor of increasing the H1B program, which allows companies to import engineers from third-world countries and then lock them in at low wages.
Regardless of what you think about immigration, there's really no question that it increases unemployment and depresses wages. If that weren't the case, a wide range of business leaders would be against immigration rather than for it. Even if your business profits from it, it's absurd to think that the people it displaces won't become resentful.
Both parties have espoused the idea that people displaced by economic change should become entrepreneurs and start their own business. While that sounds like a good idea, both political parties have consistently favored the interests of Wall Street (and big business) over Main Street (and small business).
Far from being a refuge for the displaced, small businesses in the U.S. are hurting badly. In most cases, both regulation and deregulation turn out to favor larger firms that can monopolize a market. Walmart and Amazon (both huge donors to political campaigns) alone have destroyed hundreds of thousands of small businesses.
To make matters worse, Wall Street hasn't been serving the interests of small business that want to expand. According to Slate:
Close to a decade after the start of the Great Recession, money remains tight for many small-business owners. ... The nation's largest banks are approving less than 1 in 4 (23 percent) loans for small businesses, while smaller regional banks and credit unions are approving just under half. Forty percent can't even raise money from high-interest alternative lenders.
Not surprisingly, many small-business owners are angry at both parties and have consequently tended to support Donald Trump. Again from Slate:
In multiple polls conducted by Manta, a social-networking site for small-business owners, Trump has repeatedly come out on top. OnDeck, an online lending platform specializing in loans to small businesses, found last month that 37 percent of its small-business-owner respondents felt Trump was the most likely candidate in either party to keep their interests in mind.
Another way that the Democratic mainstream misuses "entrepreneurism" is to buy into the "sharing economy" narrative, where workers become "independent contractors." However, schlepping for Uber or subbing on eLance isn't owning your own business; it's just selling your labor on the cheap.
For example, many truckers today are "independent contractors" who rent their rigs and are responsible for all their expenses. While truckers were once highly paid, today they're lucky if they make minimum wage, even though the job is difficult and dangerous.
Here's the thing. I'm all in favor of being an entrepreneur, for those who have the stomach and brains for it, but many people, indeed most people, aren't cut out for it. It's not a solution that will create widespread wealth. And widespread wealth is important because without it, entrepreneurs won't have customers.
As Frank sees it (and I've come to agree), both political parties have screwed the working class and the middle class, which is why so many have embraced Trump and Sanders. Of all the candidates, only Trump and Sanders are willing to question the economic policy status-quo that's enriched the 1 percent and gutted the rest of the country.
Since Sanders's attempt to return the Democratic party to its roots as the "party of the people" has apparently failed, voting for Trump now becomes the only way for blue collar workers, (nonprofessional) white collar workers, and small-business owners to wrest control of the country from big business and Wall Street.