Results 1 to 8 of 8

Thread: How the (so-called, self-declared) "Job Creators" REALLY Spend Their Money

  1. #1
    Join Date
    Apr 2009
    Posts
    27
    Feedback Score
    0

    How the (so-called, self-declared) "Job Creators" REALLY Spend Their Money

    By Paul Buchheit, an American computer programmer and entrepreneur with a net worth of over 600 million and the creator and lead developer of Gmail.

    Wealth," Andrew Carnegie argued that average Americans should welcome the concentration of wealth in the hands of a few, because the "superior wisdom, experience, and ability" of the rich would ensure benefits for all of us. More recently, Edward Conard, the author of "Unintended Consequences: Why Everything You've Been Told About the Economy Is Wrong, said: "As a society, we're not offering our talented few large enough rewards. We're underpaying our 'risk takers.'"

    Does wealthy America have a point, that giving them all the money will ensure it's disbursed properly, and that it will create jobs and stimulate small business investment while ultimately benefiting society? Big business CEOs certainly think so, claiming in a letter to Treasury Secretary Timothy Geithner that an increase in the capital gains tax would reduce investment "when we need capital formation here in America to create jobs and expand our economy."

    They don't cite evidence for their claims, because the evidence proves them wrong. Here are the facts:

    1. The Very Rich Don't Like Making Risky Investments

    Marketwatch estimates that over 90% of the assets owned by millionaires are held in a combination of low-risk investments (bonds and cash), the stock market, and real estate. According to economist Richard Wolff, about half of the assets of the richest 1% are held in unincorporated business equity (personal business accounts). The Wall Street Journal notes that over three-quarters of individuals worth over $20 million are invested in hedge funds.

    Angel investing (capital provided by affluent individuals for business start-ups) accounted for less than 1% of the investable assets of high net worth individuals in North America in 2011.

    The Mendelsohn Affluent Survey confirmed that the very rich spend less than two percent of their money on new business startups. The last thing most of them want, apparently, is the risky business of hiring people for new innovation.

    2. The Very Rich Don't Like Taking On Risky Jobs

    CEOs, upper management, and financial professionals made up about 60 percent of the richest 1% of Americans in 2005. Only 3 percent were entrepreneurs. A recent study found that less than 1 percent of all entrepreneurs came from very rich or very poor backgrounds.

    In fact, the very rich may not care about U.S. jobs in any form. Surveys reveal that 60 percent of investors worth $25 million or more are investing up to a third of their total assets overseas. Back home, the extra wealth created by the Bush tax cuts led to "worst track record" for jobs in recorded history. The true American job creator, as venture capitalist Nick Hanauer would agree, is the middle-class consumer.

    3. The Very Rich Corporations Don't Like Spending On America

    How do corporations spend their money? To a good extent, they don't. According to Moody's, cash holdings for U.S. non-financial firms rose 3 percent to $1.24 trillion in 2011. The corporate cash-to-assets ratio nearly tripled between 1980 and 2010. It has been estimated that the corporate stash of cash reserves held in America could employ 3.5 million more people for five years at an annual salary of $40,000.

    The top holders of cash, including Apple and Google and Intel and Coca Cola and Chevron, are spending their money on stock buybacks (which increase stock option prices), dividends to investors, and subsidiary acquisitions. According to Bloomberg, share repurchasing is at one of its highest levels in 25 years.

    Apple claims to have added 500,000 jobs to the economy, but that includes app-building tech enthusiasts and Fedex drivers delivering iPhones. The company actually has 47,000 U.S. employees, about one-tenth of General Motors' workforce in the 1990s.

    The biggest investment by corporations is overseas, where they keep 57 percent of their cash and fill their factories with low-wage workers. Commerce Department figures show that U.S. companies cut their work forces by 2.9 million from 2000 to 2009 while increasing overseas employment by 2.4 million. They also tap into a "brain drain" of foreign entrepreneurs, scientists, and medical professionals rather than supporting education in America.

    One last way corporations see fit to spend their money: executive bonuses. Especially at the banks, where the extra stipends are often paid for with zero interest loans from the Federal Reserve.

    The richest individuals and corporations are really good at building up fortunes. They're even better at building up their "job creator" myth.
    Last edited by MEMBER_FDIC; 05-30-2012 at 04:28 PM.

  2. #2
    Join Date
    Nov 2007
    Posts
    89
    Feedback Score
    0
    Trickle Down Economics (or some call it Tinkle Down...) is when tax cuts to the rich create a climate that magically rains jobs all over the land. The Bush tax cuts have handed trillions to the ultra rich and corporations so far. The Federal Reserve's Flow of Funds data shows that non-financial corporate businesses had accumulated more than $2.2 trillion in liquid assets by the end of 2011, a 46 percent increase from 2007. Banks also have been stockpiling cash; the Federal Reserve estimates that banks held $1.5 trillion in excess reserves at the end of 2011. Their coffers are bursting. Just curious, where are the jobs? Can someone reveal the secret?
    Last edited by T'Pol; 06-11-2012 at 08:32 PM.

  3. #3
    Join Date
    Apr 2009
    Posts
    27
    Feedback Score
    0
    Quote Originally Posted by T'Pol View Post
    Can someone reveal the secret?
    They can't argue with the facts. The radical right's silence is deafening but speaks volumes on their shallow ideology.
    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.

  4. #4
    Join Date
    Nov 2007
    Posts
    89
    Feedback Score
    0
    You left out Swiss Bank Accounts.

  5. #5
    Join Date
    Nov 2011
    Posts
    63
    Feedback Score
    0
    Quote Originally Posted by T'Pol View Post
    Trickle Down Economics (or some call it Tinkle Down...) is when tax cuts to the rich create a climate that magically rains jobs all over the land. The Bush tax cuts have handed trillions to the ultra rich and corporations so far. The Federal Reserve's Flow of Funds data shows that non-financial corporate businesses had accumulated more than $2.2 trillion in liquid assets by the end of 2011, a 46 percent increase from 2007. Banks also have been stockpiling cash; the Federal Reserve estimates that banks held $1.5 trillion in excess reserves at the end of 2011. Their coffers are bursting. Just curious, where are the jobs? Can someone reveal the secret?
    I'm still waiting to feel the trickle since Reagan took office. I have however felt the down part.
    The true measure of a man isn’t the power he holds, but on whose behalf he wields it.


  6. #6
    Join Date
    Sep 2009
    Posts
    4,582
    Device(s)
    Samsung U430 (fully functioinal bluetooth)
    Carrier(s)
    Verizon
    Feedback Score
    0
    All good posts.

  7. #7
    Join Date
    May 2009
    Posts
    306
    Feedback Score
    0
    Quote Originally Posted by RAINIER View Post
    I'm still waiting to feel the trickle since Reagan took office. I have however felt the down part.
    Same here.

  8. #8
    Join Date
    May 2009
    Posts
    306
    Feedback Score
    0
    Quote Originally Posted by T'Pol View Post
    You left out Swiss Bank Accounts.
    Don't forget about the Cayman Islands.

Similar Threads

  1. how can i clear the lifetime call timer
    By rodedog57 in forum Panasonic
    Replies: 2
    Last Post: 08-12-2003, 03:10 AM
  2. How to check the life Call timers
    By shinichi in forum Nokia FAQ
    Replies: 4
    Last Post: 06-09-2003, 10:14 AM
  3. how do I get rid of the 'last call xx:yy'
    By bobes in forum SonyEricsson
    Replies: 1
    Last Post: 03-03-2003, 04:30 PM

Tags for this Thread

Bookmarks