John,

I'm Nick Hanauer, the founder and CEO of Civic Ventures. I wanted to take the opportunity to wish you all a happy and healthy new year, and to offer a few personal observations on the tumultuous year that’s passed. What started with an attempted insurrection and White House coup has ended with the fastest economic recovery on record, even as hopes of a vaccinated end to the COVID-19 pandemic were dashed by wave after wave of new and more contagious variants. It’s been wild. And there’s every reason to expect another wild and tumultuous year to come.

The best news is that the neoliberal consensus that had dominated our politics these past 40 years continued to crumble as the Biden administration boldly ushered in a more accurate and effective way of both talking about the economy and of governing it. “Trickle-down economics has never worked,” the president declared on April 28 in his first speech to a joint session of Congress. “It’s time to grow the economy from the bottom up and the middle out.” (Where have you heard that before??)

But the president hasn’t just adopted the middle-out narrative that Civic Ventures was founded to advance, he’s also embraced much of its theory and its program. It hasn’t been perfect. Lacking a working majority in the Senate, Biden has been unable to deliver on significant chunks of his promised agenda – including, infuriatingly, a $15 federal minimum wage. But the passage of the $1.9 trillion American Rescue Plan was truly momentous both in its groundbreaking disregard for the old trickle-down religion and in its immediate and long-term impact on workers and families. At the start of the year, new claims for unemployment insurance were still topping out at over 900,000 a week. By the first week in December, they had dropped to 184,000, the lowest weekly total since 1969 – and, adjusted for population growth, the lowest rate ever. Investing in the American people works. In fact, if all Congress had included in the Plan was the expanded child tax credit, that alone would have done more to reduce child poverty than any act of Congress since the Johnson administration.

For econ wonks like us, it’s easy to be disheartened by the excruciating details of the Beltway shitshow, but we shouldn’t lose sight of the fact that the first year of the Biden administration has been a really big deal. And I have a sense that bigger deals are yet to come.

Three long years ago, on the very first episode of our podcast, Pitchfork Economics, we talked with historian Walter Scheidel about his book The Great Leveler, which persuasively (and depressingly) argues that economic inequality has only substantially decreased in the aftermath of mass catastrophes like warfare, revolution, state collapse … and plagues. In the pre-COVID world it was tempting to shrug off Scheidel’s thesis as an overly pessimistic reading of history. But as we head into year three of this deadly and disruptive pandemic, I think it offers us a glimmer of hope.

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It’s not just political elites who are beginning to seriously rethink the economy and their role in it. Public support for raising the minimum wage and taxing the rich has rarely been higher, while organized labor is seeing a surge in popularity after decades of decline. Strikes and mere threats of strikes are pushing up wages nationwide. And in what is surely a harbinger of things to come, workers at a Starbucks in Buffalo, New York, voted earlier this month to join a union, becoming the first of the staunchly anti-union Starbucks’ 8,900 company-owned U.S. stores to unionize.

Throughout much of 2021, workers were leaving their jobs in record numbers, leading many pundits and politicians to fret over what some have dubbed “The Great Resignation.” But this too-clever label misses the point. The bulk of the resignations are coming near the bottom of the pay scale, and these workers aren’t quitting work, they’re quitting shitty jobs for better ones that are better paying. I believe that what we’ve actually seen emerge from the pandemic is a “Great Realization” – a realization that life is too precious and too short to work long hours at low wages for employers who don’t give a shit about the health of you or your family. In the wake of the pandemic and the labor shortage it created, workers are demanding to be treated with the dignity and respect that they deserve.

2022 is going to be hard. Given the gerrymandering and the voter suppression and the profoundly undemocratic structure of the Senate, the midterm elections could prove disastrous. But if we survive the pandemic and the inevitable next Trumpist insurrection with our democracy intact, historians might someday look back on the COVID pandemic and the Great Realization it inspired as the pivotal moment that led to a more broadly prosperous and equitable future.

We really do have an opportunity to build back better. So I hope you all join me and the entire team at Civic Ventures and Civic Action in working to make this optimistic vision of America’s future a reality.

Happy New Year,

Nick Hanauer

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