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Michael Peck's blog

Healing America’s Regressive Gene

Mortality is universal and bipartisan: black lives do matter and lower economic class, middle-aged white lives with a high school diploma or less are driving actuarial chart curves downward by dying off more quickly than they should. Causes are also bipartisan: disintegrating family cohesion, worsening job prospects in a rapidly decaying, inequality-driven culture that commoditizes the people who work, and inferior access to healthcare for the downtrodden including whites plagued by obesity, heart disease, diabetes and opiate addiction. Twenty-first century American exceptionalism and manifest destiny are marked by “deaths of despair” based on socioeconomic class with a sobering nationwide uptick in substance abuse-related deaths and suicides.

The recent Brookings Papers on Economic Activity identify an unequal and unfairly, “creatively destroyed” working class labor market as the overriding root cause for metastasizing cultural decline among America’s disadvantaged rural and urban populations. Declining individual, community and regional healthcare childhood coverage produces “income despair” after-effects impacting “marriage, child-rearing, and religion” free falling within an economic vacuum (Why the white middle class is dying faster, explained in 6 charts – Vox; White Working-Class Death Rate to Be Elevated for a Generation – Bloomberg).

America’s healthcare “regressive gene” comes in numerous mutant flavors such as generational and state coverage divides; conservative prioritizing of a freedom to choose philosophy over progressive, real-time, federally-backed minimum coverage guaranties for individuals and geographies too poor to pay upfront or even down the road; and healthcare offerings dependent on local, state and county politics of the moment. Many conservative voters with economic means do not believe in subsidizing healthcare coverage for those with less or hold that healthcare choice must be a state rather than federal decision.

As a result, states as diverse as Ohio, Tennessee and Mississippi serve as “voluntary regressive policy laboratories” for how legislative changes to healthcare delivery, availability and affordability facilitate the picking of recipient winners and losers with actuarial table curves performing as expected relative to economic class and geography. The freshly-concocted U.S. House of Representatives “replace and repeal” legislative failure proves the difficulty of separating political ideology from the facts and fiction of local and socially uneven healthcare coverage for the foreseeable future (Inside the GOP’s Health Care Debacle – Politico; A political scientist explains the real reason Obamacare repeal is so hard – Vox).

Many Red State politicians realized that the U.S. House of Representatives healthcare plan put forward by the Republican majority “risked havoc for their poorest constituents” starting by threatening the potential loss of basic medical insurance for more than 24 million working poor and elderly Americans (Trump Budget Cuts Put Struggling Americans on Edge). Pouring salt onto wounds, the bill that was withdrawn would have channeled savings into large tax cuts for the affluent (How Republicans’ new health plan would affect American incomes – The Economist). Even Tea Party Republicans want more federal spending on better healthcare coverage.

Unequal economic classes generate unequal actuarial statistical outcomes. But still power-paradigm competing political party and corporatist, “free market” hardliners remain indifferent and dismissive by insisting on freedom of choice even when embedded, no way out poverty is the prevailing and dictating local option. America risks doubling-down on here and now “purposeful Darwinism” instead of “dreamer” aspiration, picking lifestyle and life expectancy winners and losers through regressive budget allocations and healthcare policies reactivated by wrenching and lifechanging, over-the-horizon sociopolitical ideology that drone-kills from a safe distance for those whose vote mortally affects others.

In the face of regressive inequality onslaught, sustaining and transforming domestic economic development in the United States suffers from a prolonged lack of imagination, stymied by America’s founding philosophical ravine between big government largesse and private sector self-sufficiency (either “it takes a village” or “I built it all myself”). Hard-wired to circle each other like twin boxers locked into preordained and predictable struggle arcs, the “Divine Left” and “Neo-Populist Right” put partisan points on the board by trading and absorbing knock-out blows instead of using each other’s momentum to collaborate on more inclusive and greater impact levels (No easy answers: why left-wing economics is not the answer to right-wing populism – Vox).

Out of power and thrashing about in search of an authentic working class voice, the “Divine Left” continues its policy miscues by instinctively reverting to top-down, big government solutions and redistribution fantasies. In tandem, targeted large-scale federal government downsizing for both public sector employment and budgets in pursuit of “deep state deconstruction” adversely impacts hard-to-replace rural employment positions in public sector agencies.

Blue states send much more money to the federal coffers than they receive, while the reverse is true for red states where the majority of America’s rural voters reside. Insisting on ideological purity at the expense of creating jobs or protecting existing coverage on behalf of the nation’s most economically needy and vulnerable sends an unmistakable signal to rural and economically disadvantaged voters who united in 2016 to elect the current White House occupant. Both unintended and intentional regressive consequences easily and fatally affect depressive-disorder survival for this desperate constituency.

The New York Times reports that “many of the domestic programs targeted for cuts have an outsize impact on residents of counties that voted for” the current Administration and Congress. The proposed 2018 fiscal year Federal budget defunds Planned Parenthood, community development block grants, climate science in NOAA, guts the EPA, extracts all public sector monies from the nonprofit Corporation for Public Broadcasting (CPB) that provides grants to 1,500 local public radio and television stations nationwide, cripples Legal Aid Services, deprives rural Appalachia of household heating subsidies in winter and coalfield job diversification job training support, and denies Great Lakes restoration and economic revitalization measures.

Healthcare and economic opportunity serfdom are part of a standard malpractice portfolio that extends downward throughout the United States. For example, “Corporate-Owned Life Insurance” (COLI), referred to historically as “dead peasant insurance” that began in 19th century Russia where the feudal rich bought and sold their serfs as property, is common practice among America’s corporatist class. In a similar vein, the Roberts U.S. Supreme Court anointment of oxymoronic “corporate personhood” gives the same legal standing to companies with larger bank accounts and outreach potential as to ordinary people. A third example, labor commoditization exacerbated by cannibalizing global trade pacts and increasing robotic and artificial intelligence automatization, contributes heavily to America’s recycled but going nowhere, stagnant worker wage conditions and declining manufacturing hires.

Regressive austerity policies are conveniently preached by affluent Americans as a “do as I say, not as I do” proscription for economic recovery but on the backs of those without economic standing or political recourse. This is especially true in a Roberts U.S. Supreme Court, “Citizens United,” pay-to-play plutocracy where now, more than ever, one dollar equates to one vote favoring those with unparalleled access to greater amounts of invisibly-sourced funds with which to purchase more votes as efficiently as the policy marketplace demands.

Intended regressive consequences are never more predictable than during mounting public sector debt hysteria cycles. Pre-engineered, alarmist calls for austerity policies and fiscal safety net budget cuts following the 2008 Great Recession, rained down repeatedly and indiscriminately on America’s most vulnerable populations, undercutting hopes for full economic recovery. If markets once again begin to deteriorate, this ploy will flail those already hurting including rural white Americans who voted so dramatically in 2016 for searing sociocultural and economic change. Today’s intended “deep state” castration compounded by tomorrow’s macroeconomic austerity policies would “kick down while kissing up” while avoiding answers to the people’s prayers to reopen closed factories and mines in decimated rural Midwest towns and Appalachia.

Suffocating generational debt marks another regressive hurdle for sustainable civic health in the United States to overcome. USA Today reports that, “40 million Americans owe an even more whopping $1.2 trillion in student-loan debt. The amount surpasses every other type of household debt except mortgage debt.” Economic class directly predetermines not only a meaningful life or premature death but also the ability to consume in a country where fully 70 percent of GNP is predicated on individual consumption.  “Living the dream” has become a macabre, ironic throw-away line for the already sizeable and increasing percentage of American citizens who are not economically, socially, geographically or politically “free enough” to live out their fullest, best possible lives in dignity and well-being.

Healing America’s regressive gene begins with converging trends and supportive metrics connecting how workers can re-purpose themselves into competitive and profitable stakeholder equity-owned and democratic workplace enterprises. An opportune place to start transitioning to this empowering, new work culture could come from the Administration’s announced trillion-dollar infrastructure rebuilding initiative financed through both public and private capital sources and already guided by two highly complementary (to local stakeholder ownership) core principles: “Buy American and Hire American.” But there is no regressive free lunch. Usage tolling of completed rural and Midwest industrial infrastructure projects by out-of-state capital sources could easily prove counter-productive, inspiring public backlash as construction jobs faded while unabated transfer payments through user fees continued and increased over time, morphing into the locked-in image of yet another passive income annuity benefitting financial elites.

Better ways to achieve sustaining cultural and economic repurposing and balances through technology are emerging in key manufacturing industries. For example, “Fleet Logic” automotive ecosystems are rapidly evolving in both design and practice, starting in urban settings and echoing worker ownership enterprise principles through social media-intensive, transportation sharing platforms already under development.

America’s new automotive work culture challenges will not be met by one-offs or even linear scaling but instead through designing and launching worker-owned manufacturing ecosystems that mirror how transportation will be conceived, licensed or franchised, delivered and consumed. In this scenario, lifestyles and workstyles become as interchangeable in structure as they are starting to be in practice.  In such a “back to the future” realization, automotive sector-inspired economic development fall-out re-purposes and upgrades the “Sharing Economy” version of Henry Ford’s famous insight that paying his assembly-line workers enough to buy the cars they were making dramatically increased sales.

Likewise, rising stakeholder competitive enterprises in energy efficiency, agriculture, fishing, healthcare, design, technology, and professional and technical services industry sectors already demonstrate how collective flourishing is based not only on individual self-reliance, entrepreneurial bootstrapping, but also on widespread and deepened stakeholder equity, and workplace democratic practices. Thriving diversity uplifts age, geography, economic class and racial barriers into new economic formulas that transcend yesterday’s static and compartmentalized practices. Local stakeholders get to meet exterritorial shareholders on more equal economic playing fields starting with equalizing employee, worker and cooperative ownership tax incentive policies.

This is no fantasy neo-socialism or false utopia formula but rather a less predatory and more effective approach to enlighten capitalism with metrics backing up superior resiliency performance claims. If the goal is to heal  working class economic fears and disenfranchisement than no alternative model or experience, beginning with those who have withstood the test of time, should be summarily overlooked or minimized. Critics and activists genuinely looking to reset America’s regressive gene have references and choices, and can kick the tires of in-motion, inclusive and uplifting, change-agent ecosystems focusing on worker empowerment and stakeholder ownership. For example, they can visit the Cincinnati Union Cooperative Initiative (CUCI) and the Bronx Cooperative Development Initiative (BCDI) to witness hope, insights, metrics and reusable templates in the raw. Both examples are inspired by 60 plus years of Mondragon cooperative “humanity at work” principles and practices where more than 2,000 visitors annually see for themselves. To break through conventional policy conceits limiting vision and remedies, the American Sustainable Business Council’s “Ownership4All” policy campaign is steadily building a business case outlining enhanced federal support for ubiquitous and transformational worker-stakeholder ownership starting with the reason that it works.

Michael A. Peck is a co-founder and executive director of www.1worker1vote.org, an ASBC member and a founding institution of platformcoop.net. He’s served as Mondragon’s North America delegate since 1999.

“Something’s Happening Here…What It Is Ain’t Exactly Clear…”

For what’s it’s worth,” the 1967 Buffalo Springfield song as lyrical, close-up socio-economic observation, still resonates. Last week, The New York Times reported that none other than Harvard’s business professors flew out to study Gravity CEO Dan Price, of Seattle, Washington after he unilaterally capped his seven figure remuneration and raised the annual “minimum wage” for all of his employees to $70,000 each.

In “Love letters to the Gravity Boss (video)” and “A Company Copes with Backlash Against the Raise that Roared,” New York Times reporters, Erica Berenstein & Jessey Dearing, and Patricia Cohen, respectively, show that “doing well by doing good” is not a slam dunk no matter the available means and good intentions involved, but it can be a first cousin to “no good deed goes unpunished.” What’s left to resolve is the dilemma and difference between applauding the exceptional one-off and knowing how to build the sustaining ecosystem.

Mr. Price echoes nationwide movements and campaigns to push back against structural inequalities when he states in the article that, “Income inequality has been racing in the wrong direction. I want to fight for the idea that if someone is intelligent, hard-working and does a good job, then they are entitled to live a middle-class lifestyle.”  The issue is whether wealth equality can be mandated a priori or whether it adapts more fluidly when structured organically to achieve solidarity that is earned through performance.

This is not a cookie-cutter exercise. On a global scale, relatively poorer European Union members such as Greece, Portugal and even Spain and Italy, after having been deprived of the basic monetary righting tool of last resort, the ability to devalue individual national currencies, search for “breakthrough policy apps” to loosen the increasingly North-South divided, wealth inequality paradigm straightjacketing their continent. Trapped between rejecting more lopsided, externally imposed austerity as well as crisis-borrowed infusions quarantined to pay-off accumulated legacy debt, the single currency “Euro” appears to benefit imperious multilateral institutions and vulture capitalists instead of empowering ordinary citizens to survive and thrive. Think of this in biblical terms as reengineering mankind to appease the Sabbath.

Down the coast from Seattle, San Francisco city planners have learned after multiple earthquake reinvestments, costly insurance premiums, and damage control catastrophes that the saving grace accruing to bridges and buildings with integrated sliding joints and linkages is well worth any extra construction costs. It turns out that inherent flexibility through organic decision making processes that respect local values and conditions can inspire success and buy-in both up and down the performance chain as well as respond favorably to market cycles which can be crucial to overall success.

Unless the New Sharing Economy movement is content with occasional and often dramatic, “corporate reality show,” beautiful conceits (a conceit can also mask a deeply held progressive belief such as the CEO of Starbucks unilaterally implementing a “Race Together” campaign); more depersonalized, systemic approaches that are inclusive and organic from the start may very well produce better and more sustainable results. Think of this as sacrificing short-term ego for long-term impact.

In the abstract, the addictive idea of the mandatory “charismatic leader,” so attractive to American media-fueled, predatory capitalism, even when well-intended, demands a comprehensive values overhaul. Similarly, the national structural inequality debate needs to get over and beyond the “key person” optic and reflexively tossing out such limiting vocabulary traps as out of context “redistributionism” and “socialism” labels intended as slurs.

A quick comparison between the Gravity and Mondragon (the world’s largest industrial worker-owned and managed cooperative) approaches to equalizing take home pay shows how the latter’s commitment to equal equity ownership and an 8:1 pay scale may “trump” the former’s flat-lined, across-the-board wage “mandate” over time. Mondragon has been practicing Solidarity Economy innovations during the past 60 years for better and also for worse, and Gravity’s chops in this exciting new area emerged this year. As The New York Times video and article reveal, workers of all kinds and backgrounds need and deserve incentives which reflect a competitive and dynamic marketplace based on both individual and collective enterprise.

A single class equity structure combined with “one worker, one vote” styled impactful and redundant workplace democracy mechanisms also ensure that there is give and take at all levels to achieve potentially transformative decisions without damaging competitiveness. Most important, the enlightened but apparently unilateral decision that Mr. Price made on his own and then implemented with internal feedback happening afterwards would not have occurred in a Mondragon-style worker cooperative. Initial buy-in to innovation can be frustrating and difficult to achieve but once in place, consensus that is collectively internalized and in Mondragon – voted on – brings deeper, stronger and more lasting results.

Equalizing pay checks across the board still does not resolve a fundamental redefinition of labor as it relates to capital which is where the Mondragon formula gets it right. The New York Times article quotes Steve Duffield, DACO Corporation CEO also based in Seattle, as pushing back on Dan Price’s approach: “We can’t afford to do that. For most businesses, employees are the biggest expense and they need to manage those costs in order to survive.”

This is the sine qua non philosophical crossroads facing contemporary, zero-sum, debilitating capitalism: how to redefine the imploding relationship between labor and capital and whether labor is a disposable commodity or an indispensable resource. Increasingly aided and abetted by social media technologies, Sharing New Economy adherents believe each of us have the right to choose a “gig portfolio” environment that exchanges some inherent instability for more professional variety and freedom. In this brave new freelancing marketplace, the price of that freedom becomes more and more connected to lifestyle choices as well as to the earned right to gain workplace equity starting with the ownership of individual choice.

For Mondragon, labor is sovereign and capital, while necessary, is subordinate to labor. Even Abraham Lincoln, an iconic Republican President, believed that “Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” The growing nationwide community of union cooperative and other hybrid-ownership model start-ups and practitioners participating in the 1worker1vote.org distributed community believe that now is the time for Americans from all walks of life to “own our labor and rent our capital” instead of the reverse.

Traditional companies are just beginning to realize the ephemeral nature of office buildings, organizational diagrams and cubicle farms held together more by shared values, principles, ideas and culture than anything physical. Any design divide between intent and execution on the road to more wealth solidarity can prove fatal unless there is a systemic approach to integrating high impact, interactive workplace democracy practices for both individual entrepreneurs and production teams. As Dan Price and Gravity are learning, workplace equality will directly impact desired outcomes as well as deliver unintended consequences.

When shareholders equate to stakeholders, when the lions lie down with the lambs because it’s good business, then virtuous cycle capitalism may be viewed once again as a force for widespread good instead of widespread market-sanctioned exploitation to benefit a privileged few. The New Economy movement is fortunate to witness Dan Price pioneers jumping right out of the box with dramatic gestures. Now the essence of what this really is has to stick.

Connecting the dots of each localized Gravity-type example with local living economy best practices and practitioners can help to dissipate and transform structural and racial inequalities. Multiple liberating business methodologies already exist to help these gestures unfold and sustain with Mondragon serving as one example.

By daring to jump-start his vision of middle class equality, Dan Price and the Gravity corporate platform presage linked individual and collective stakeholder single class equity ownership as the ineluctable system condition of truly “free” enterprise for both consumers and workers. These two roles are completely interdependent. “For what it’s worth,” well-documented solidarity experiences such as Mondragon can be eclectically localized to construct an enlightened Gravity ecosystem as the rule and not just another newsworthy “one-off” exception.

The surest way to “defy gravity” while still profitably innovating, producing, serving, consuming, selling and buying on earth is for stock market exchanges to ring the final bell on President Lincoln’s 1863 Emancipation Proclamation. This will lower the curtain on global labor arbitraging and replace any remaining rationale for commercial human trafficking with metrics proving the liberating value of unleashed, universal worker empowerment in a more transparent and just marketplace.

Michael Alden Peck is the North America delegate for Mondragon, a board member of the American Sustainable Business Council and a co-founder of  www.1worker1vote.org.

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