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The middle class is mad as hell

Op-Ed by Andrew Tisch, co-chairman of the Board of Loews Corporation
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Andrew Tisch (Photo: Loews Corporation)

“We know things are bad — worse than bad. They’re crazy. It’s like everything everywhere is going crazy so we don’t go out anymore. We sit in the house, and slowly the world we are living in is getting smaller and all we say is, ‘Please at least leave us alone in our living rooms…we’re mad as hell and we’re not going to take this anymore.’”

The speaker of that quote is Paddy Chayefsky’s Howard Beale. The movie is Network, and though it was released 43 years ago, it feels more relevant than ever.

So many Americans — especially those in our beleaguered middle class — share Howard Beale’s anger and alienation.

What does it mean to be middle class? It depends on who you ask, what people make and where they live. But I think of middle class as a state of mind.

Decades ago, the middle class mindset was defined by aspiration and by a belief that if you worked hard, you could buy a home, support your family and send your kids to a good school. And you could often do it on one salary. Life was good and getting better.

Today, middle class aspiration has curdled into anxiety. Even as wages stagnate and both spouses go to work, the basic cost of living has spiraled upward. Family health insurance premiums and housing costs growing are twice as fast as workers’ earnings; and the cost of attending a public four-year college has tripled in the last 30 years.

While this has happened, the ratio of CEO pay to that of the average worker has grown from 30 to 1 in 1978 to 278 to 1 today.

Is it any wonder that people are mad as hell don’t want to take it anymore?

The dysfunction and polarization in Washington are both a cause and a symptom of this anger. These are a cause because Washington’s decisions — and indecision — have played a direct role in the decline of America’s once-great middle class. And these are a symptom because angry citizens are electing angry and intolerant candidates who see compromise as a form of treason.

For the first time in history, wealth can be created without assets. And some people take advantage of that while others do not.

You don’t need pipelines, steel mills, factories and legions of employees to build a great company. You just need an idea and an internet connection. At its peak, General Motors employed 850,000 people worldwide and over 600,000 of them in the U.S. Today, Microsoft and Apple — the world’s two largest companies — combined employ less than one-third the people that GM did.

And America’s leaders — in government, business and elsewhere — still don’t know what to do about it.

And there is no silver bullet. There is no quick fix, and the manufacturing jobs likely are not coming back.

But here is what I do know. For too long, too many leaders have focused exclusively on today, with little regard for tomorrow.

Politicians do what they need to do to get through the next election, which typically involves peddling simple slogans to complex problems and trying to divide rather than unite just as companies do what they need to do to get through the next quarter.

This approach is failing not only this generation but those to come.

In business, there is a line item on every company’s budget called maintenance capex, which is short for capital expenditures for maintenance. This line item isn’t sexy and when a company’s finances are tight, maintenance capex is the easiest to cut because the cost of deferral does not show up immediately. That is until your ship turns into a rusting hulk of metal or the assembly line completely breaks down. Then the bill comes due and it is usually much more expensive than if you had just paid a little each year to maintain the asset.

Well, the bill for America’s underinvestment in our middle class — and our future — is coming due.

Our failure to rebuild our infrastructure, to invest in education, to deal with our national debt is just like a business endlessly deferring its maintenance capex. The bill eventually comes due and it keeps getting bigger the longer we wait.

Meanwhile, Democrats and Republicans in Washington seem increasingly focused on destroying one another to the exclusion of addressing the defining challenges of our time. A recent Brookings Institution report found one-quarter of all jobs in the U.S. could be disrupted by artificial intelligence, but AI didn’t even merit a mention in either of the official Democratic or Republican party platforms released before the 2016 election.

When Howard Beale made his primal scream over 40 years ago, it felt to many as if America was in permanent decline. We were not.

Leaders — in business and government — made bold reforms and American ingenuity was unleashed to tackle previously intractable problems.

America desperately needs its leaders to rise to the occasion once again, to stop tearing one another down and to start rebuilding a middle class that has always been, and always will be, the key to American strength and prosperity.

Andrew Tisch is the co-chairman of Loews Corporation, a co-founder of the political reform group No Labels and co-author of the book “Journeys: An American Story.”

Dana Beth Ardi

Executive Committee

Dana Beth Ardi, PhD, Executive Committee, is a thought leader and expert in the fields of executive search, talent management, organizational design, assessment, leadership and coaching. As an innovator in the human capital movement, Ardi creates enhanced value in companies by matching the most sought after talent with the best opportunities. Ardi coaches boards and investors on the art and science of building high caliber management teams. She provides them with the necessary skills to seek out and attract top-level management, to design the ideal organizational architectures and to deploy people against strategy. Ardi unearths the way a business works and the most effective way for people to work in them.

Ardi is an experienced business executive and senior consultant who leverages business organizational transformation through talent strategies. She uses her knowledge and experience to develop talent strategies to enhance revenue and profit contributions. She has a deep expertise in change management and organizational effectiveness and has designed and built high performance cultures. Ardi has significant experience in mergers, acquisitions, divestitures, IPO’s and turnarounds.

Ardi is an expert on the multi-generational workforce. She understands the four intersecting generations of workers coming together in contemporary companies, each with their own mindsets, leadership and communications styles, values and motivations. Ardi is sought after to assist companies manage and thrive by bringing the generations together. Her book, Fall of the Alphas: How Beta Leaders Win Through Connection, Collaboration and Influence, will be published by St. Martin’s Press. The book reflects Ardi’s deep expertise in understanding organizations and our changing society. It focuses on building a winning culture, how companies must grow and evolve, and how talent influences and shapes communities of work. This is what she has coined “Corporate Anthropology.” It is a playbook on how modern companies must meet challenges – culturally, globally, digitally, across genders and generations.

Ardi is currently the Managing Director and Founder of Corporate Anthropology Advisors, LLC, a consulting company that provides human capital advisory and innovative solutions to companies building value through people. Corporate Anthropology works with organizations, their cultures, the way they grow and develop, and the people who are responsible for forming their communities of work.

Prior to her position at Corporate Anthropology Advisors, Ardi served as a Partner/Managing Director at the private equity firms CCMP Capital and JPMorgan Partners. She was a partner at Flatiron Partners, a venture capital firm working with early state companies where she pioneered the human capital role within an investment portfolio.

Ardi holds a BS from the State University of New York at Buffalo as well as a Masters degree and PhD from Boston College. She started her career as professor at the Graduate Center at Fordham University in New York.