Do rich people create jobs?
One multimillionaire gives a controversial speech saying that only consumer demand, and not the wealthy class, will help jobs grow.
Updated 3:30 p.m. ETBy Jonathan Berr
Sorry, Republicans, but rich people are not "job creators." They never have been and never will be. No one ever invests in anything to create jobs. Employing people is a by-product of capitalism.
Those are the views of the venture capitalist Nick Hanauer, a multimillionaire who was recently invited to speak at a TED conference. The conferences are well-known gatherings featuring talks on a variety of topics and can be viewed online.
Update: Initially, Hanauer's speech was not posted online, which spurred a controversy that TED reacted to Thursday. The speech appeared on YouTube Thursday, and you can see it here.
Rich people don't create jobs, nor do businesses, large or small. What does lead to more employment is a "circle of life" like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary middle-class consumer is far more of a job creator than a capitalist like me.
Hanauer added this little zinger as well: "So when businesspeople take credit for creating jobs, it's a little like squirrels taking credit for creating evolution. In fact, it's the other way around."
The views of Hanauer, who made his fortune as an early investor in Amazon (AMZN), are not that radical.
The Republican focus on cutting taxes for millionaires and billionaires is all wrong. For one thing, wealthy people -- ones with smart investment advisers -- know to put a good chunk of money in tax-free investments such as municipal bonds. Some also minimize their tax burden by putting their money in off-shore tax havens. If those people paid less in taxes, odds are that the windfall would wind up in those accounts. Few, if any, jobs would be created.
Another flaw in the Republican argument is the idea that the rich have an onerous tax burden. As The New York Times noted earlier this year, the tax burden paid by the wealthiest Americans has fallen significantly over the past few decades. Warren Buffett, among others, has made similar points.
"Between 1985 and 2008, the wealthiest 400 Americans saw the percentage of their income paid in federal income taxes drop from 29% to 18%," the paper reported, citing data from the Internal Revenue Service.
Income inequality should become the central issue of the presidential campaign. Heck, it should be the most important issue of the 21st century. I am not holding my breath for that to happen.
After deeming Hanauer's talk too political, perhaps TED organizers should change the conference motto from "Ideas worth spreading" to "Guardians of conventional wisdom."
TED curator Chris Anderson wrote a long response to the controversy Thursday, saying essentially that the speech just wasn't very good. The audience at TED that heard it gave it mediocre ratings, Anderson said. "Our policy is to post only talks that are truly special," he added. "And we try to steer clear of talks that are bound to descend into the same dismal partisan head-butting people can find every day elsewhere in the media."
-- Follow Jonathan Berr on Twitter @jdberr.
| Tags: | incomepoliticsRepublican |
The idea by the world monetary/g8 folks is not for American job creation. "We have to much" of the wealth according to that group. So we have to share the "wealth" and let the underdeveloped parts of the world catch up. {Sound familar}
In plain terms,"We ain't gettin' nothing" cause we got too much.
OK, evreryone of you Bush, Rich haters. and anyone else who thinks the Bush Tax plan should be allowed to expire soon.
I hope you are saving some money and I hope you can read. Right now you owe $3700.00 less in yearly taxes than you will when the bush tax era expires. the Bush plan allows everyone of you $3700.00 less in taxes than the IRS show amount due.
also don't sell your house or property. that will have a new sales tax added. Thats right, a new 3% sales tax is being introduced and will take effect in 18 months. so go ahead, piss off everyone in DC off by telling them you want vote for them then watch them pass this sales tax before they leave office. Why arent you fighting for lower taxes for the middle class instead of cutting the leggs out from under YOUR boss, YOUR company the people that pays you? OR does your money come from the lower income people DO you get a crazy check from uncle sam?..
Job Creators.... trickle down economics.... buzzwords with no meaning.
Republicans do have SOME good ideas but they are so extreme it makes them look like whack jobs.
Until america calls their bluff and votes them out across the board they will keep making the rich richer.
If they wanted to be smart and truly have everyone's best interest at heart they would (1) let bush era cuts expire on the top two tiers. Then ask for a law that says you can't get back what you don't put in. Hence if you only put in $1,000 in taxes that's all you're getting back. No more 3 kids $7,500 checks to the person who doesn't work. (EIC /Child Tax Credit)
Nick Hanuaer, just another example of liberal thought process coming from a man born with a silver spoon in his mouth. He says he's started dozens of Companies and hired 1000s of employees, yet he doesn't create jobs because if his prices are too high, no one will buy and his jobs will be gone.
What a crock of SH**. He really doesn't get it.
He probably thinks we need more USPS (US Postal Service) jobs, because they continue to work even while losing millions/quarter.
Let's tax more, let the govt spend more to enable consumers to create jobs.
Is he really serious!! Jonathan Berr bought it hook, line, and sinker.
Well this shows how smart you are Jonathan. Just another political hack. Republicans aren't FOCUSED on cutting taxes for the rich. They just don't want to raise them on ANYONE rich or poor.
Second, you have one rich guy that makes a quote of his OPINION. That isn't a foundation for an argument. When that rich guys goes on vacation or buys a jet, he is spending his wealth and that creates jobs. Every dollar you take from him is one less dollar he could possibly spend as a consumer. I love small businesses. I really do. But I HATE those signs and promotions that talk about buying from a small business helps send a kid to dance class blah blah blah. You don't think the managers and employees of Wal-Mart and Home Depot have kids? It is just silly. Every time you spend $1, you are helping the workers and their families of that place as well as indirectly their suppliers and the places those workers' families shop.
True that when the government takes our money in taxes, they spend it as well. Unfortunately though they are far less efficient than a consumer. We are lucky if we see $0.50 for every $1 they take as they spend billions upon billions supporting foreign governments and pay interest on our debt of which a decent chunk goes to China and other foreign countries. True also that if I buy a TV made in Japan, part of my $1 eventually goes to Japan but on average the consumer is FAR more efficient than any government can possibly be.
Republicans fight to keep the money in the hands of those that EARN the money where it can more efficiently be spent. This is true no matter how much you EARN, rich or poor.
Facked-Up (WITH IT)
Where did you get your education? You sound dumber than I the un-educated dumb *ss as you called me. Are all the money in the bank deposit by riches. People can borrow money from friends and families too.. Riches people make money off poor/middle class people. They just carve the profit with so much greeds they ruin the "circle of life" like feedback loop between customers and businesses. After they have control of the economy they ruin this country by outsource to other countries because of their greeds. And whom bailed out who lately?
NO LAWS-lifeishell..
I almost fell out of my chair laughing at your TOTALLY un-educated, mis informed comments
You said the middle class or poor and/or consumers borrow money or get loans to create a business so they can create jobs. Where do you think they borrow money from??? the POOR or low income, middle class. Looks like the so-called rich are still creating the jobs even when only one person who is borrowing the money to start a business. What a dumb A- --
Most of my husbands customers are very well off. This creates his Business and for him to employ people which increases consumer spending. Because of the Unions we are being taxed more. Many of my husband's customers companies have left Connecticut. The Unions don't want to compromise so the companies can no longer stay in business.
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