The 120% Solution

Reprinted with permission from Jason's email list

Many intelligent people I've been speaking with believe that the economic crisis facing our country today is our biggest challenge since America's inception. Intelligent folks can argue the relative risks we faced when confronted with the Civil War, Great Depression, Vietnam, two World Wars and the New Millennium Economic Crisis (what I'm calling what we're going through today), but there is no debating that the current situation is dire.

Extremely dire.

Huge companies are closing or imploding and layoffs are skyrocketing; debt levels and savings are hitting new highs and lows, respectively. It's so bad that even the most intelligent economic minds in the world can't explain what is happening, and almost everything our government does seems ineffective. We're deep into uncharted waters and we don't have a navigator.

Oh yeah, it's going to get worse.

I've been thinking a lot of what got us into this mess and how we might be able to get out of it. What follows are my extremely basic thoughts on what has caused the problem and what the solution might be. These ideas are simple, but problems and solutions typically are. Truth be told, knowing what went wrong and how to fix it is the easy part -- it's implementing the solution that's hard.

There is no silver bullet and my hope here is not to convince you I have one. Instead, my hope is that this missive starts a discussion amongst considered people about how we move our country forward.

The 20% Problem
----------

When I first learned of Google's 20% time, hours reserved for engineers to pursue technology projects they find personally rewarding, I thought to myself: "Gosh, that's brilliantly self-indulgent." Google's 20% time has served as a way for the company to recruit and inspire some of the greatest minds in our industry.

It has served them well. Who wouldn't want to work for a company that essentially says "do what ever you want every Friday!" However, using 20% of your resources to pursue random projects is highly inefficient. While it it might work well for a company like Google, with absurd margins and free cash flow, it's a fairly crazy strategy for any normal company -- or country -- to employ.*

Well, our entire country has been taking 20% time for at least the past five years. It's time for us, just as The Mighty Google did recently according to the Wall Street Journal, to reconsider.

We've overspent, taken expensive vacations, built absurd homes (in both scale and quantity), run our savings into the ground and skyrocketed our debt to record levels. Our addiction to consumption and our sense of entitlement have killed us. Sure, many of us have lived conservatively, working hard without debt. But, on average, we've:

1. Spent well over 20% more than we should have on the price of homes.
2. Built homes that are well over 20% larger than they need to be.
3. Purchased 20% more consumer electronics than we needed. (In my case, 300%).
4. Extended home ownership rates 20% beyond where they should be (to the mid-to-high risk credit folks).
5. Gotten 20% fatter than we should be.

The orgy of overspending is over and it's time to move on.

Who's to blame for all this?

Was it the greedy Wall Street Bankers who engineered this huge mess? Yes.

Was it the mid-level mortgage broker pushing high-risk mortgages on clients who should have never had a mortgage to begin with? Yes.

Was it the over-reaching consumer who got in over her head and didn't research and question the mortgage she was signing? Yes.

Was it the government that didn't regulate all the bad actors in this tragedy? Yes.

There's plenty of blame to go around, but we've got to get past the blame stage and into the solution phase. (Holding the folks responsible who behaved criminally, of course. I predict there will be
many white-collar perp walks on CNBC next year, just as there were in 2002.)

* Note: I'm not saying Google's is to blame for any of this, or that 20% time was a bad idea for them. Their 20% time is simply what lead me to thinking about what's wrong with our country. I think Google's a brilliant company, filled with brilliant people who have done brilliant things. That being said, they do need to get more focused -- and they clearly are.

The 120% Solution
----------

If we're going to have any chance of bringing America back to greatness, we're all going to have to work 20% more than we have been.

I'm suggesting that, until America takes care of its debt, untangles the housing mess and gets unemployment under control, we all commit to working six days a week. Yep, move the standard 35-40 hour work week right up to 48 hours.

For me and my team, this is a non-issue, since we only hire folks who are looking to absolutely kill it, love what they do and don't consider it a job. Of course, positions at a startup company, where stock options make for a great reward if we hit a home run, have certain advantages over normal day jobs. In the technology industry, a 48 hour work week would be, for most, a vacation.

It was our collective sloth, consumption and sense of entitlement that got us into this mess, and the only thing that will get us out of will be lots of hard work.

If you've got a good job, you should bust your butt to make your company as successful and profitable as possible. That way, salaries can increase, jobs can be created and your products and services become so world class, the phrase "Made in America" will come to mean something other than "not worth buying."

If you're working at a government job, you should be putting in extra hours to reduce government spending. Come in this weekend and make the government more efficient. (Yes, I just told a government worker to come in on Saturday.)

If you've got credit card debt, pay it down if you can.

If you've got a mortgage, pay it off if you can.

If you work in the service industry, try to work 20% faster and come up with ideas to make your team more efficient. (Side note: I was in Japan recently and was amazed at the personal productivity of each
individual when compared to the U.S. workers.)

If you're a rich person looking to take a couple of years off, don't. Instead, start a company that creates an amazingly innovative product that the world -- not just the United States -- needs. Set the goal of
trying to employ 100 Americans.

Seriously, the affluent folks in this country should start businesses now. Drag your ass out of bed and try to make this country great again. It's this country that made you affluent. Yeah, you're rich and you don't need to work, we know. Who cares? Your country needs you right now! Sell your second or third home and start a company!

If you're affluent and you can't start a company then angel invest in a bunch of smart, hard working folks at the very least.

If you're a college student thinking of getting trashed this weekend, or taking a year off, don't. Instead, take an extra class or two, do an internship at a company or get a graduate degree in engineering.

If you're in high school, go work at your parents office or start an online business. (You would be surprised at how many high school students email me every week to share with me their online businesses that make $2-3k a month.)

If you're a lazy and bitter worker who has been screwed by the system, swallow your pride and stop trying to stick it to everyone. Double down and take pride in your work effort, even if your boss is a
complete jerk.

If you're the complete jerk of a boss, check yourself and realize that the folks working for you need the job, and that if everyone doesn't get their act together, we're all going to be out of work. (This is directed specifically at the dysfunctional automakers and airlines, which seem to spend more effort fighting their customers and each other than they do taking on their global competitors!)

Everyone must step up, and we've got to do it now. I've been traveling around the world the past two years, and I can tell you that the work ethic, attitude and productivity of American workers -- white and blue collar -- is half of what I've seen in countries like Japan, China, and Korea.

We're not going to get our asses kicked. We're in the process of getting our asses kicked!

Good debt vs. Bad debt
----------

One quick point of clarification around debt: While I am advocating everyone pay down-and, in fact, stop-the debt associated with unnecessary consumption, I'm very much in favor of investment in new companies, ideas and eduction. If we're going to take on any more debt, it should into things that pay back at least two dollars for every one dollar invested.

Investment in new technology, technical training, new companies, energy independence, mass transit, high-speed trains, cheap broadband and education are critical in getting us out of this mess.

I'm not against debt; I'm against debt that is wasted. Let's invest in our future.

In summary
----------

What made America great was our ability to innovate and create world-class products, ideas and services that people around the globe fell in love with and wanted for themselves.

From health care to human rights, from democracy to dishwashers, from windshield wipers to the World Wide Web, from search engines to soda pop, we've accomplished so much by dreaming and rolling up our sleeves.

We need to put down the remote, cut our credit cards in half and start new companies with new ideas. Our entrepreneurial spirit and hard work will get us out of this mess. All we need to do is release them.

Comments

[11907281]

Wow, I saw no substance in this plan except work more !! Ohh, and rich people should try to start a company !!!! To imply the average person is as much at fault as the crooks behind all the CDS is insulting and false. Forget dealing with an unsustainable federal reserve system, work more!! This sounds like it was written by a CEO who just lost his bonus. I am going to work 20% and enjoy life 20% more, cause when you are already at the bottom there is much room to fall ... as for the "have's and have more's", ya they really would appreciate the help on stabilizing their fortunes.

[txkayrose]

Sorry, dude. I am perfectly willing to make changes in my daily life that will make the collective situation better, but this 48-hour work week isn't it. Like many others here, I already work 46-49 hours a week between 2 jobs. Let the mulit-millionaire CEO take no bonus and only a 2% pay-raise this year, and see how many extra empoyees our company can hire. That'll improve things for hundreds, even thousands of people right off the bat.
Do we, as individuals, need to not be wasteful to the point of gluttony? Of course.
Do we need to show a little more personal responsibility? Of course.
If the people with jobs come in to work for OT, there will be fewer payroll $ to go to new hiring, and if we come in to work for free, there will be less need for new hiring.
Renovate some of those absurd houses in foreclosure to provide reasonable housing for 2 families - create jobs & housing.
Lower the student:teacher ratio for all grades - create more jobs & better education.
I'm not a rocket scientist and I can figure some of this out.

[kathrynadorned]

I understand what you are saying, get up and do your part. However in Los Angeles most people spend 2 hours a day commuting, and more then 8 hours on the job. If we were to work more, that would be less time with our family, less sleep, less time for creative enterprises. I agree that the times are dire, but making us more tired, more stressed, and spending less time with family can't be the only solution.

[mayday ascension]

I already work 48 hours a week.

And I didn't even cause this mess.

So what, then? I work 57 hours and 36 minutes a day?

[Kautamiestates]

If you're going to work 20% more, then do it for yourself.... Not for your company... or for your country....
Your company will still fire you to make their return to shareholders... and your country... well... how's that working out for you so far?.... That's not to say it couldn't change.... But do it for yourself firstly, and let the rest follow.

[ThePeacemakers]

Many states have strict laws about overtime pay ...and some companies refuse to let people work off the clock, even if the person agrees at the time, because it's been known to come back to haunt them if things don't work out after all that hard work by the employee.

[ThePeacemakers]

That's because interest rates for consumers and small businesses are in the 20% range.
IT'S THE COST OF THE BORROWED MONEY with no regulation that's the problem

[odyssey58]

And what about time for exercise and taking care of ourselves? Working too much just makes us sick. I don't have health insurance. I can either work myself to death so I can afford to pay for insurance executives to get rich OR I can work a little less and take great care of myself to I don't get sick. We have to play and have fun. You don't have to spend money on a vacation but everyone needs enough down time.

[OkieMon]

why? this is the republicans fault...get the money and sweat out of their hides.....

[Overd0g]

How about we work the same, but the government stop destroying our future with its spending.

[Kristen777]

right - spending on a pre-emptive war waged on lies. Spending on the wall street bailout. Let's start with these. By the way, dog, I am middle class and I have perfect credit and live within my means.

[Articulator]

right - we dont need to keep up our roads and bridges, or educate the young, or pay the military, or have an FDA keep melamine or downer cattle out of the food chain, or the EPA keep deadly toxins out of our drinking water, or any of that stuff - frivolous. Every man/women for him/herself! much better.

[KenGirard]

Auto workers making more cars does not make more money for Ford.
Full time WalMart employees coming in on Saturday means that the part timers get fired... I mean laid off.
Having wait staff come in on thier day off means less in tips they take home.
Having workers come in on thier day off means less time to spend with family, less time to work on side buisness, less time to do charity work.

Now, having people come in and spend one day a week working on making things more efficent (Something we normally can't do due to being busy multi tasking from the moment we come in to the minute we leave) would help a lot.
Example:
It is the slow time of year here at work. I spent 3 hours today building a better data base. Likely have another 5 hours to go to finish it. When done I hope to be able to take a 2 hour a day job and make it into a 1.75 hour a day job, for each of the 10 people who use it. Total time saved = (1.25 hrs a week x 50 weeks x 10 people = 625 hrs per year). Not bad for me wasting a day playing around.
Of course if I spend a day working on a new product for the company to sell, well that might be something useful as well.

[fedupinpa]

This article brought to mind a book a read a long time ago. "Animal Farm" by George Orwell. If I remember right, a character in the book a horse I think responded to everything by saying "I will work harder".Then he died and they hauled him off to make glue.

[research]

The Problem is not the workers.

The Problem is the bankers, the Managers, the Conservatives and the GOP.

[Kristen777]

Dude, when I get a real cost of living increase, maybe I'll consider it.

Ummm, in the last 5 years we took 1 vacation that we actually paid for. Glad you understand my life and can figure it all out for me.

The middle class didn't start this mess. Greed did it. When we see some real leadership by those in power, surely, great Americans that we are, we will get behind you.

[Overd0g]

Middle class greed played a HUGE part in it.

[drkazmd65]

Wish I had gotten me some of that middle class greed,....

Then I might be able to get me some of that bailout money,....

But silly me,... I generally didn't overextend too badly,... what was I thinking!

[Articulator]

Ya, they elected King George. Oops, my mistake, he didnt actually win the election.

[southernsepia]

And furthermore, I refuse to work harder to make the company more productive.

The " that will make salaries go up" statement is totally ridiculous. If that were so then where were the raises over the last 15 years.

No working harder makes the CEO pay and stockholder shares go up.

That's the game, how much can you squeeze out of the workers.

Remember, you get what you pay for and until corporations are will to pay for excellence what you'll get from me is the fulfillment of my basic job duties and nothing else.

[Overd0g]

It's important to realize that "working hard" is utterly unimportant. "Producing more of things that people value" is what raises living standards.