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
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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
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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
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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
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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

[loril]

Well, been there and done that. I worked 2 jobs for years. This was back in "better times". Right now, you would loathe me because I stay home with my 4 year old. I am actually on the clock 100% of the time and never get a day off. (But since I "don't work" and don't make money, none of it counts for anything.) However, my being at home enables my husband to be a better "slave" to his job. He has a compassionate group of people at work...and we appreciate the more humane culture there. But, he is "on call" whenever they need him via cell phone, Blackberry and e-mail. And the calls do come in...on weekends, late at night and on holidays.

Aren't most "professionals" already working "overtime" as a rule? Doesn't everyone bring their office life home with them through gadgets? Aren't families already used to mom and dad having to drop everything at the whim of their employer? I know this is true because I am the "slacker" at home picking up the slack when work calls.

Frankly, I think our workaholic culture causes more problems than it fixes.

Be a hard worker. Be a responsible employee. But, if we are already paying lip service to the 40 hour week, when many are working 50+...can you imagine trying to mandate a 6 day week?

[dadumdee]

The day that we have a resource based economy where you can choice a living based on skills and preferance instead of fear of your family starving to death, then every last one of your suggestions will come to fruition almost naturally.

[dadumdee]

I like your enthusiasm, but there are a few problems. We have an economy that is based on monetary debt and product scarcity. Having little of something available is what gives it value and how much debt is created (ie money in circulation) is what gives our money value. Having more productivity works well in theory, but in practice all of those new found innovative products would not be valued because they wouldn't be scarce. Also, reintroducing all that equity from rich people to the money supply would pressure the dollar. You can't just have the fed creat 700 billion for wall street and then have rich people cash out of savings and real estate and not expect the value of the dollar to drop.
Also compounding the issue is that we have a political and educational systems that have been actively dumbed down. Students are taught to take tests and repeat facts, not think critically. Citizens haven't been taught how our goverment, tax code, economy, or world works, so that all they would have to make important voting decisions that affect all of us are commercials and soundbites. All I'm saying is that this is a manufactured crisis that everyone on Jekyll Island in 1910 knew would happen when they devised the federal reserve. Its the crisis that everyone from Thomas Paine to Thomas Jefferson to Abe Lincoln warned us about.

[schatsie]

Insane, just throw the children to the dogs...why don't you.....

and don't forget that 50% of the people have an IQ less than 100... THEY WERE THE ONES WHO were really suckered and they are probably already working unpaid overtime at WALMART...­.

[UnknownSoldier]

Great Point

[TrollDiddy]

"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!"

There's a typical liberal mentality. Because affluent people don't work hard, right?

I do well for myself but I also work 80 hours a week and work on my master's degree at the same time. I guess "this country" made me rich. But so does freedom, hard work, and discipline 24 hours a day. Don't take on stupid debt, forgo the plasma screen, drink in moderation and exercise.

[UnknownSoldier]

If you work 80hrs a week that only leaves 40 hours for travel to and from work, eating, sleeping and studying for Master's degree classes along with attending them.

Oh wait next you'll tell us that you don't sleep. Go Away Please and take GW Bush and the Republicans with you.

[ProfessorDuh]

Exactly. Amen.

[letsbepeaceful]

there are 168 hours in a week - not 120 - I know quite a few people working 70-80 hours - including Saturdays and Sundays - and going to school, etc. True, they don't have much time for anything else.

That being said, I think the idea of working or creating more instead of watching TV is good - for teenagers and college students. For the rest of us, unless we are using those 8-10 extra hours to do something quite different from our regular jobs, we will actually be taking jobs away from others, and with rising unemployment, this 'prescription' is a real downer. Also, if no one is buying anything, making more stuff that won't sell seems a bit counterproductive.

[ProfessorDuh]

I've got a scheme, too. Let's all work 100 hours a week for subsistence wages, and give all our tax dollars to the Republican Wall Street crooks who destroyed the world economy. Or is that Paulson's plan already?

[jennyjen]

That is exactly what I am doing now - well not quite 100 hours a week - I am actually only averaging 60. What a slacker. I hope that my taxes will go to something worthwhile - such as a swimming pool at a wall street ceo's vacation home.

Nice job regulating the bailout guys. Thanks so much for looking out for me and mine.

[ProfessorDuh]

Hang in there, Jenny. Maybe the honest people will have their day yet.

[PATina]

hahahahaha­... you hit the nail on the head !!

[jeffrey678]

"Sense of entitlement" Do you mean that we feel entitled to be represented by politicians who should be voting for our best economic interest.? Why don't you list the job opportunities on your website .

[blindjester]

There's no altruism in supply and demand.

If 100 people are doing the job of 120, somebody's getting laid off.

[fedupinpa]

Let's see. For every five people who would work an extra day a company could lay one worker off. And believe me they would. That will really help the unemployment problem! Sounds like a rich person scheming to get richer. Goodbye middle class!

[PATina]

Good point !!!

[SShaw490]

That's exactly wrong in my opinion. What we need to do is work a 4-10 schedule. Why? Because that needs to be one of the big steps to be undertaken to reduce our dependency on foreign oil. The real, fundamental problem that we have to solve is we need to find a way to unite Americans and make them feel like they're competent, and independent, and productive, and vigorous again. I've never seen America's psychology at such a low ebb - I've never seen the bulk of Americans so frightened, disillusioned, cynical, and suffering such low self-esteem. Look at the auto company bailout: No matter how you feel about the particular bailout plan, a huge number of Americans feel like America's only remaining large manufacturing industry should die. Americans hate their own industry. Our society is on a suicide watch.

Americans need to work together toward accomplishment of a goal, and that goal needs to be to cut our dependence on foreign oil. We need a set of steps to take, and we need a website that will show us how we're progressing, and we need projects for public transportation, projects to put millions of plug in hybrids on the road, projects to expand broadband access for video feeds to satellite offices thus eliminating commutes, 4/10 work schedules, strictly enforced speed limits, and an explosion of ideas about how to reduce our energy demand.

We need a project to unite us on a common goal.

[NoMoFearNoMoHate]

Like getting off of this planet?

Seems to me we already have a common goal to work towards.

The question is whether we want to admit that our long-term survival is going to be a co-dependent one and that there is no such thing as the rugged individualism that many think defines America.

[Torus34]

Oh, my!

Orwell's Boxer lives!

[listeningpost]

While there's a germ of truth here, increased productivity and creativity are going to help, I think this is a view from someone used to looking from 36,000 feet up. If you're in the information business like Jacob and leveraging intellectual capital, then sure, do some extra thinking on Saturday, do some networking. If you are closer to the ground, say a government worker, or factory, or food, or health worker, it's just not the same story. Working an extra day equals taking a 20% pay cut if you're working for a wage. Also, if you're not an entrepreneur, your life might not revolve around work, you're taking a pay cut and reducing your time with family or whatever else by cutting your weekend by 50%.
If you're self employed like myself you generally take any work whenever and where ever you can get it.
There are a lot more under employed people in the US than figures show as well and being told that you should work more grates on people who would love to be more productive if they had the opportunity. And to some it sounds like the plantation owner telling the workers if they just work more for less life will get better for us all.
It may turn out that it would be wiser to spend Saturdays growing a garden.
Our fixation on turning a buck is partially what got us into this mess, it may not be the way out.

[NoMoFearNoMoHate]

actually, doing nothing is 100% efficient

[neurolux]

How about everyone work 20% less, or be 20% less efficient. That would force companies to hire 20% more employees.

OK that might not be sustainable, but I can dream.

[booksnmore4you]

Let's take education as an example of how far off mark Calcanis is.

Force a 75% cut in upper and middle management jobs, where all the high salaries and mostly do-nothing positions are, and you will have much leaner, meaner, and better education, especially at the teaching level.

Don't force me to subsidize through extra hours an arcane and dysfunctional system designed by, for, and perpetuated by the power-holders.

[pgbaer]

Great! That means I can take a day off!

As an academic and a climate activist, I pretty much work all the time, and I don't get paid any more if I work harder. Not in the short run anyway.

On the other hand, I don't make anything anyone can really use.

On the other hand, the actual premise of your article makes no sense. The reason we're having economic problems is because there aren't any customers for the stuff we're already making. Making more won't help if there's no one to sell it to.