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Thread: Who are the Job Creators?

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    Who are the Job Creators?

    A speech by Nick Hanauer, a venture capitalist from Seattle, was given at the TED University conference in March and originally deemed "too politically controversial to post on their web site."
    Here is entire speech in text form but I recommend watching the actual speech. (link below) There's some things that happen in the room that printed text can't convey. It's only six minutes long and safe for people who don't like to read novels like me.

    Link to speech: http://www.youtube.com/watch?v=bBx2Y5HhplI


    It is astounding how significantly one idea can shape a society and its policies. Consider this one.

    If taxes on the rich go up, job creation will go down.

    This idea is an article of faith for Republicans and seldom challenged by Democrats and has shaped much of today's economic landscape.

    But sometimes the ideas that we know to be true are dead wrong. For thousands of years people were sure that earth was at the center of the universe. It's not, and an astronomer who still believed that it was, would do some lousy astronomy.

    In the same way, a policy maker who believed that the rich and businesses are "job creators" and therefore should not be taxed, would make equally bad policy.

    I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.

    That's why I can say with confidence that 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.

    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.

    Anyone who's ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn't just inaccurate, it's disingenuous.

    That's why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.

    Since 1980, the share of income for the richest one percent of Americans has more than tripled while effective tax rates have declined by close to 50%.

    If it were true that lower tax rates and more wealth for the wealthy would lead to more job creation, then today we would be drowning in jobs. And yet unemployment and under-employment is at record highs.

    Another reason this idea is so wrong-headed is that there can never be enough super-rich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the median American, but we don't buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, we go out to eat with friends and family only occasionally.

    I can't buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can't buy any new clothes or cars or enjoy any meals out. Or to make up for the decreasing consumption of the vast majority of American families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.

    Here's an incredible fact. If the typical American family still retained the same share of income that they did in 1970, they'd earn like $45,000 more a year. Imagine what our economy would be like if that were the case.

    Significant privileges have come to capitalists like me for being perceived as "job creators" at the center of the economic universe, and the language and metaphors we use to defend the fairness of the current social and economic arrangements is telling. For instance, it is a small step from "job creator" to "The Creator". This language obviously wasn't chosen by accident. It is only honest to admit that when someone like me calls themselves a "job creator" we're not just describing how the economy works but more particularly we're making a claim on status and privileges that we deserve.

    Speaking of special privileges, the extraordinary differential between a 15% tax rate that capitalist pay on carried interest,dividends and capital gains, and the 35% top marginal rate on work that ordinary Americans pay is kind of hard to justify without a touch of deification.

    We've had it backward for the last 30 years. Rich people like me don't create jobs. Jobs are a consequence of an eco-systemic feedback loop between customers and businesses. And when the middle class thrive, businesses grow and hire, and owners profit. That's why taxing the rich to pay for investments that benefit all is such a fantastic deal for the middle class and the rich.

    So ladies and gentlemen, here's an idea worth spreading.

    In a capitalist economy, the true job creators are middle class consumers. And taxing the rich to make investments that make the middle class grow and thrive is the single shrewdest thing we can do for the middle class, the poor and the rich.

    Thank You.
    Last edited by Seti-Alpha 5; 05-18-2012 at 01:26 PM.

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    Quote Originally Posted by Seti-Alpha 5 View Post
    So ladies and gentlemen, here's an idea worth spreading.

    In a capitalist economy, the true job creators are middle class consumers. And taxing the rich to make investments that make the middle class grow and thrive is the single shrewdest thing we can do for the middle class, the poor and the rich.
    [/B][/SIZE]
    This was my initial response to the question posed in the title.
    Donald Newcomb

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    Quote Originally Posted by Seti-Alpha 5 View Post
    And when the middle class thrive, businesses grow and hire, and owners profit. That's why taxing the rich to pay for investments that benefit all is such a fantastic deal for the middle class and the rich.

    So ladies and gentlemen, here's an idea worth spreading.

    In a capitalist economy, the true job creators are middle class consumers. And taxing the rich to make investments that make the middle class grow and thrive is the single shrewdest thing we can do for the middle class, the poor and the rich.

    Thank You.
    In a perfect world we would actually do this.
    The reality is that this money ends up being spent on useless junk, lavish parties for government employees, social programs, or finds its way into the pockets of the corrupt politicians (and their corporate cronies) who advocated the tax in the first place.

    People these days have a cynical view of raising taxes.

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    Quote Originally Posted by i0wnj00 View Post
    In a perfect world we would actually do this.
    The reality is that this money ends up being spent on useless junk, lavish parties for government employees, social programs, or finds its way into the pockets of the corrupt politicians (and their corporate cronies) who advocated the tax in the first place.

    People these days have a cynical view of raising taxes.
    That is actually why the whole rich versus poor debate is pointless. The problem isn't so much about who pays the taxes as it is how much of our economy is consumed by those taxes.every dollar that is wasted by our government is one less dollar that rich or poor can use to move the economy forward

    Sent from my SCH-I500 using HowardForums
    what is this new feature, and how can I manipulate it in order to make myself seem superior to those around me?

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    Quote Originally Posted by every1nosme View Post
    That is actually why the whole rich versus poor debate is pointless. The problem isn't so much about who pays the taxes as it is how much of our economy is consumed by those taxes.every dollar that is wasted by our government is one less dollar that rich or poor can use to move the economy forward
    Except that everyone wants to cut government spending until you start listing the items to be cut:
    Defense (a huge budget item). "Oh no! We can't cut there we need that."
    Homeland Security: Ditto
    Veterans benefits: Double Ditto
    Prisons: "What? And let them out?" Ditto
    Courts: Ditto
    Education: Ditto
    Social Security: "Don't you dare touch my check, sonny." Ditto
    National Parks: (a drop in the bucket) "Oh, no. Not my parks." Ditto
    Agriculture: Ditto

    Somehow there is imagined to be some hidden Federal "Department of Waste" that is in charge of 80% of the budget that we can just eliminate and solve the problem. Sorry. It does not exist (or if it does, it's called "Congress"). If you cut spending, someone's ox is going to be gored. You just need to figure out how to make it not your ox.

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    Quote Originally Posted by DRNewcomb View Post
    Somehow there is imagined to be some hidden Federal "Department of Waste" that is in charge of 80% of the budget that we can just eliminate and solve the problem. Sorry. It does not exist (or if it does, it's called "Congress"). If you cut spending, someone's ox is going to be gored. You just need to figure out how to make it not your ox.
    Libertarians seem to understand that the entire ox has be cut or eliminated. The real problem facing this issue is that we have professional politicians who have vested political and financial interests not to have their ox gored. Get rid of the professional politicians and we can solve a lot of our issues with the budget.

    There is no hidden Federal "Department of Waste", but within the "Department of Waste" is whole lot of pet projects funded by professional politicians so they can line their pockets and pad their resume. It isn't the agency itself which is in charge of the 80% of the budget but it is the numerous pet projects buried under layers of government or the random "Department of Waste" for which many can't really see a legit reason to exist, all this junk adds up.
    Last edited by i0wnj00; 05-19-2012 at 04:14 PM.

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    Quote Originally Posted by i0wnj00 View Post
    Get rid of the professional politicians and we can solve a lot of our issues with the budget.
    The politicians will be there for as long as we have a government. I say we outlaw lobbyist's ability to give money to those politicians. The conflict of interest is blinding so I'm not sure why this loophole still exist.

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    Quote Originally Posted by T'Pol View Post
    The politicians will be there for as long as we have a government. I say we outlaw lobbyist's ability to give money to those politicians. The conflict of interest is blinding so I'm not sure why this loophole still exist.
    That's the problem. They have been there long enough to know how to game the system even without the lobbyists.
    Instead, of taking money from the lobbyist they'll simply double dip and take our money.
    Time for term limits.

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    Quote Originally Posted by i0wnj00 View Post
    Libertarians seem to understand that the entire ox has be cut or eliminated. The real problem facing this issue is that we have professional politicians who have vested political and financial interests not to have their ox gored. Get rid of the professional politicians and we can solve a lot of our issues with the budget.
    You will find a lot of people are very "Libertarian" about other people's rice bowls and very "Statist" when it comes to their rice bowls. I know a number of veterans who like to rail about how we need to cut everything but if veterans' benefits get mentioned in that context, you're in for a fight. I've met very few people who are equally "Libertatian" about all areas of the budget. The current Republicans in Congress seem to be "Libertarian" about everything but Defense (and their own pork barrels).

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    Quote Originally Posted by DRNewcomb View Post
    You will find a lot of people are very "Libertarian" about other people's rice bowls and very "Statist" when it comes to their rice bowls. I know a number of veterans who like to rail about how we need to cut everything but if veterans' benefits get mentioned in that context, you're in for a fight. I've met very few people who are equally "Libertatian" about all areas of the budget. The current Republicans in Congress seem to be "Libertarian" about everything but Defense (and their own pork barrels).
    1000x agree. I think this hypocrisy applies to conservatism on the whole. Most people that I've met who refer to themselves as conservative are indeed conservative to people outside of their inner circle but are willing to spend quite lavishly and allow for liberal notions when it comes to their immediate family, causes, states etc. (two cases in point, former VP, D. Cheney is quite proud of his lesbian daughter... Also, millions upon millions of out-of-state dollars are flowing into the Wisconsin Governor's recall election from Carl Rove and his fellow Republicans to keep Walker in office yet they are willing to cut the pay and benefits of teachers and firefighters in the name of balancing the budget. This defies logic.

    This is all of course just a distraction from the OP's original post and a ruse to redirect our attention away from the truth. But I would expect nothing less because they have no legitimate (specific) arguments against the reasoning. They can only spew out generalities about government waste and spending without offering specifics. If they can't dazzle us with brilliance then they attempt to baffle us with BS. It's an old tactic that's been overused by Republicans for decades. Hopefully most people can see through it.
    Last edited by MEMBER_FDIC; 05-20-2012 at 02:30 PM.
    Sensata, an auto parts manufacturer, recently made factory officials take down the American flag while the employees were forced to train their Chinese replacement workers. Sounds surreal but it's true.

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    Quote Originally Posted by MEMBER_FDIC View Post
    1000x agree. I think this hypocrisy applies to conservatism on the whole. Most people that I've met who refer to themselves as conservative are indeed conservative to people outside of their inner circle but are willing to spend quite lavishly and allow for liberal notions when it comes to their immediate family, causes, states etc. (two cases in point, former VP, D. Cheney is quite proud of his lesbian daughter... Also, millions upon millions of out-of-state dollars are flowing into the Wisconsin Governor's recall election from Carl Rove and his fellow Republicans to keep Walker in office yet they are willing to cut the pay and benefits of teachers and firefighters in the name of balancing the budget. This defies logic.

    This is all of course just a distraction from the OP's original post and a ruse to redirect our attention away from the truth. But I would expect nothing less because they have no legitimate (specific) arguments against the reasoning. They can only spew out generalities about government waste and spending without offering specifics. If they can't dazzle us with brilliance then they attempt to baffle us with BS. It's an old tactic that's been overused by Republicans for decades. Hopefully most people can see through it.
    To view either party as the sole responsible party is to close your eyes to the truth. Both parties have caused the government to continue to grow and spent money that we do not have. The democratic party had a super majority for almost two years and raised the defecit by huge amounts and I know the argument will be that they inherited a bad economy and are just trying to fix it but the facts stand that they also increased things such as defense spending that had nothing to do with the economy. The bottom line is that any politician that voted for any budget that spent one more dollar then we had failed us. What they did is the equivalent of someone on a $30k salary running up a debt of $300k and then going to the bank to borrow more while telling them you have no idea how you will pay for it but they should give it to you anyways. This has went on through many presidents aid many terms of congress with both parties continuously approving new spending and new programs. Pointing at any one party and blaming them is like telling the judge that you shouldn't be responsible for your speeding ticket because the guy behind you in court was speeding more than you were. Our politicians failed us because they refuse to do simple math. Year in and year out they argue about how much to spend when simple arithmetic provides that answer. If they want to argue about where to spend the money that's fine but the amount to spend is right in front of them in black and white but rather than either party taking a chance on alienating any group of voters they simply ignore the cap that is right in front of them and just vote to print more money. Why let things like reality stop you from buying votes? Unfortunately for the American people reality is coming due and we don't have the money to pay the check because too many of our voters played the blame the other party game and refused to hold our politicians responsible for their actions if they had the letter of the party we supported behind their name.

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    Quote Originally Posted by every1nosme View Post
    The bottom line is that any politician that voted for any budget that spent one more dollar then we had failed us. This has went on through many presidents
    Sorry but I need to interrupt your rant. First of all, no, that's not the bottom line and Clinton left office with a huge budget surplus. You're reasoning is flawed on so many levels. I know you're probably a Fox News follower and most likely subscribe to the Ayn Rand philosophy so there's no use trying to talk sense into you but here goes. If America used your logic across the board then we would need to outlaw credit altogether. No car loans, no credit cards, no mortgages. The actual facts are that the deficit was never an issue while the Republicans were racking up millions without any way to pay for it during the Reagan-Bush years. It is only now being used by Republicans (and people such as yourself) as a political football. Here's a quote from former VP D. Cheney.
    Reagan proved that deficits don't matter
    except of course when a Democrat is in the White House, then it can be used for political gain. Those long-winded analogies of yours are in the stratosphere Your pretense that it's a non-partisan, equal opportunity problem is disingenuous and just another attempt to smooth over your perplexing logic. Going off on tangents and drowning us in semantics is just taking focus away from the original subject.
    Originally posted by every1nosme
    That is actually why the whole rich versus poor debate is pointless.
    Here's where you are correct. Nick Hanauer's net worth is over 1 billion dollars so he has no war to wage or bone to pick with the middle class or poor. He simply knows that the middle class's purchasing power is what drives the economy.
    Why isn't anyone disputing anything that was said in the speech? Until someone wants to respond to the actual thread topic then I suggest you stop posting off-topic.
    Last edited by cellunIocker1; 05-21-2012 at 02:44 PM.

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    Quote Originally Posted by cellunIocker1 View Post
    Sorry but I need to interrupt your rant. First of all, no, that's not the bottom line and Clinton left office with a huge budget surplus. You're reasoning is flawed on so many levels. I know you're probably a Fox News follower and most likely subscribe to the Ayn Rand philosophy so there's no use trying to talk sense into you but here goes. If America used your logic across the board then we would need to outlaw credit altogether. No car loans, no credit cards, no mortgages. The actual facts are that the deficit was never an issue while the Republicans were racking up millions without any way to pay for it during the Reagan-Bush years. It is only now being used by Republicans (and people such as yourself) as a political football. Here's a quote from former VP D. Cheney. except of course when a Democrat is in the White House, then it can be used for political gain. Those long-winded analogies of yours are in the stratosphere Your pretense that it's a non-partisan, equal opportunity problem is disingenuous and just another attempt to smooth over your perplexing logic. Going off on tangents and drowning us in semantics is just taking focus away from the original subject.
    Originally posted by every1nosme
    Here's where you are correct. Nick Hanauer's net worth is over 1 billion dollars so he has no war to wage or bone to pick with the middle class or poor. He simply knows that the middle class's purchasing power is what drives the economy.
    Why isn't anyone disputing anything that was said in the speech? Until someone wants to respond to the actual thread topic then I suggest you stop posting off-topic.
    Since over all tax rates are what the speech was about and the defecit spending levels of our government dictate those levels then my rant was on topic. And you are right, bush and Reagan spent money, so solid Clinton for his first 6 years in office and since then both parties have voted for spending increases without building in ways to pay for them. And no, not a fox news follower but I am apperantly a mathematical genius compared to the elected officials that vote for these budgets. And credit cards and car loans are debt held by private citizens which is their right if they can find someone willing to loan it to them. Without the government's massive spending problem tax rates could be lowered across the board or at least held the same.

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    Quote Originally Posted by DRNewcomb View Post
    Except that everyone wants to cut government spending until you start listing the items to be cut:
    Defense (a huge budget item). "Oh no! We can't cut there we need that."
    Homeland Security: Ditto
    Veterans benefits: Double Ditto
    Prisons: "What? And let them out?" Ditto
    Courts: Ditto
    Education: Ditto
    Social Security: "Don't you dare touch my check, sonny." Ditto
    National Parks: (a drop in the bucket) "Oh, no. Not my parks." Ditto
    Agriculture: Ditto
    Defense: someone once said we can defend this country with a few nuclear subs and special forces units. Maybe a total of 50-75 thousand active military move armor and the majority of air forces to the national guards along with most support roles.
    Homeland Security: Make most security private cut back on drug enforcement focus on terror plots and border control.
    Veterans Benefits: My answer may have bias but they earned it fix it for the future by readjusting the military for the current threat.
    Prisons: Stop letting them sit around all day put them to work either either basic labor or some even have degrees get them using their skills without pay.
    Courts: No opinion.
    Education: start rewarding the good teachers and fire the bad get rid of tenure. Most students will tell you who is good or bad (The majority).
    Social Security: raise the age we live longer than we did in the 1930s over time shrink the amount paid and focus on individual savings.
    National Parks: such a small amount leave them alone.
    Department of Agriculture: the biggest building in Washington DC created during the civil war so soldiers would not starve private companies with basic regulation and consumer activism could nearly eliminate them with technology and the communication we have today compared to then.
    Extra EPA: Allow people to mine and frac for coal and gas I've seen what these companies have done to areas yes there is a small environmental impact but the economic impact is incredible $30-$35 an hour jobs for kids in or just out of high school even more for someone just out of college nearly half the country could see the benefits but it's limited to very small areas as of now.

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    Quote Originally Posted by every1nosme View Post
    Year in and year out they argue about how much to spend when simple arithmetic provides that answer.
    That is slightly inaccurate. While Republicans controlled the House, Senate and White House during the Bush (W) years, they voted to raise the U.S. debt ceiling seven times without arguing and without a second thought. During the Bush presidency, the current GOP leadership team voted 19 times to increase debt limit. During his tenure, the U.S. national debt doubled, fueled by the Bush tax cuts of 2001 and 2003, the Medicare prescription drug plan and the unfunded wars in Iraq and Afghanistan. Mitch McConnell and John Boehner voted for all of it and the debt which ensued.

    Quote Originally Posted by every1nosme View Post
    Without the government's massive spending problem tax rates could be lowered across the board or at least held the same.
    So where would you cut spending? Granted, some subsidies programs need to go but what are you specifically proposing? Also, should we cut taxes for billionaires? Perhaps raise taxes on the poor and middle class?

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