Rich people don’t create jobs - demand does - millionaire entrepreneur Nick Hanauer writes....


Rich people don’t create jobs - demand does - millionaire entrepreneur Nick Hanauer writes. “When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution... it’s the other way around.” The rich should be taxed more, he says, so their money can be used to improve the purchasing power of the middle class.
Comments (88)
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    Chicken and egg fallacy.

     

    I could just as easily turn the dial another click to the right and ask what is demand? Demand only materializes after jobs are created to support it. And that comes from rich people taking chances to invest even when there is no current demand, only a distant dream.

     

    See how that works?

     

    The real catalyst is freedom and personal property rights. Remove those and it all caves in.
    2 Dec 2011, 06:14 PM Reply Like
  • Yokyok
    , contributor
    Comments (327) | Send Message
     
    delusional nonsense.

     

    jobs are created when businesses get more orders than they can fill with the existing workforce/plant capacity.
    2 Dec 2011, 06:20 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    Nope. Investment is seeing the unseen and bringing it into existence.

     

    Did Steve Jobs have demand of the iPod? No. It didn't even exist. He had a vision and executed it in the absence of anyone else's vision. Jobs are always the by-product of risk taking. And as more people take risks, jobs are created eventually. Demand is also a by product of someone's vision.

     

    Investment is the key, but only occurs when there is freedom to believe in taking a risk and enough personal property rights to ensure that the profit won't be stolen from the inventor or innovator.

     

    Sorry to break your college lecture series on John Maynard. LOL.
    2 Dec 2011, 06:23 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
     
    Wyatt -

     

    Currently the rich and moderately well to do are expressing their ample 'liberty and personal property rights' by hording a significant portion of their income rather than by consuming or investing. This is understandable given the uncertainty of the times at present Simply allowing matters slide further in a deflationary direction fiscal stimulus is needed. However, given the fear that generally exists that undue fiscal stimulus will create unsupportable sovereign debt the choice must be made to either:
    (a) defer such fiscal stimulus at the cost of allowing the resulting stagnation or deflation, or
    (b) moderate taxation of those best able to pay to show that fiscal stimulus is to a reasonable extent covered by taxation revenues.

     

    Nick Hanauer is wisely opting for plan (b) above.
    2 Dec 2011, 06:29 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (488) | Send Message
     
    Yes! Those evil hoarders! How dare they... erm... save....
    2 Dec 2011, 06:41 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    "Currently the rich and moderately well to do are expressing their ample 'liberty and personal property rights' by hording a significant portion of their income rather than by consuming or investing."

     

    There's an easy enough solution to the current capital strike and that is to, very simply, have policymakers clearly elucidate tax policy for the foreseeable future for 2013 and beyond. Will it happen? No. 535 people in DC are holding their cards close to their vest not wanting a polarized electorate to see their hands to their respective ideological bases. It will hold this country hostage in terms of investment and jobs for the entirety of 2012. Obama is a large obstacle here to structural and systematic tax reform. He had his chance at this kind of real leadership. He punted.

     

    Americans will suffer.
    2 Dec 2011, 06:42 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    The wiser approach, IMO Bob, would be for someone to stand up and educate the people that for the US there is no such thing as un-supportable soveriegn debt. Yes there is such a thing as unimaginably stupid things to spend newly created money on, and there is such a thing as pumping the economy when it is already overheated. But there is no reason now....when capacity is massively underutilized....not to deficit spend even another $1.5 trillion a year.

     

    That being said....there is no personal or political will to do it, and more importantly.....there is no one to lead the charge to spend it on things that will make a difference vs. things that will get politicians re-elected. Thus the conundrum.

     

    I, for example would advocate an Executive Order to build 200 nuclear power plants (under guise of in the interest of national security) at a cost of $1.5 trillion.

     

    I would also pursue a public private partnership to build 50 million electric cars at a cost of $1.5 trillion.

     

    Those two things would save $200 billion a year in USD spent on foreign oil.

     

    I am sure other smarter people could come up with better ideas.
    2 Dec 2011, 06:44 PM Reply Like
  • inveSTEVEN
    , contributor
    Comments (3) | Send Message
     
    Rich people are created when large sums of money end up in a smaller number of people's hands than where the money originated. Rich people are NOT directly proportional to the unemployment rate. NOR are they inversely proportional. Comparing rich people with jobs is like comparing bread with peanut butter and blaming the peanut butter when it gets all over your hands.

     

    Nick Hanauer is saying that evolution should take the credit for squirrels (obviously so) and that job creation should take the credit for creating rich people. I don't think that it's that straight forward but I seriously doubt that society places the burden of job creation on people who have simply been more successful in their fiscal ventures.

     

    Taxing rich people = excuse (bargaining power?) to lower taxes for everyone else = more money for everyone (but rich people who would still have enough for a solid gold yacht) = more liquidity on an economic scale

     

    Demand only figures in because if people have more money- they're more likely to purchase more expensive or larger quantities or goods than if they don't. That doesn't exactly factor straight into demand.

     

    If working class people are able to hold on to more of their money, then they won't feel as locked into their jobs as when they don't have that money.
    2 Dec 2011, 08:07 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    Or option C

     

    Reform the tax code. Get the government out of picking the winners and losers. And replace it with a progressive flat tax structure. So up to 30K 3%, up to 75K 7%, 150K 12%, 300K 18%, 1MM 22%, 5MM 26% - or something similar - no deductions.

     

    AND, cut spending to balance the damn budget.

     

    Yes, the tax code is nothing but stupid. And SOME rich people don't pay "their fair share". But the much larger issue is our Congress lying to people and promising them everything and spending Trillions of dollars we don't have.

     

    Our government now represents close to 40% of GDP - that is terrible Big Brother nonsense. Its led to massive corruption, fraud, graft, and waste. And it is the biggest threat to our country - bigger than Iran, Bigger than any terrorist group. Our freedoms are being crushed, our children's and grandchildren's futures are being mortgaged. And worst of all the rule of law and our economic freedoms are being reduced.

     

    So yes, lets tackle the stupid tax code, but lets not ignore the real elephant in the room which is our destructive federal government!
    2 Dec 2011, 09:28 PM Reply Like
  • Yokyok
    , contributor
    Comments (327) | Send Message
     
    yes of course Steve Jobs was the only employer in the world and the ipod is the only product in the world.

     

    pfft. yawn. repeat prior comment
    2 Dec 2011, 09:29 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    I didn't want a gun until H&K came out with the 9mm P2000SK short. Demand was created instantly. Felt like a stick of butter in my hand.

     

    I didn't want a tankless water heater until it was invented, but when it was. Boom: Demand. Its in my garage now. Rinnai, a Japanese company. Very efficient.

     

    Ultimate Fighting almost went bankrupt in 1995 until it was bought for a pittance by the Zuffa Bros. When they put it on Spike TV, demand was almost instantaneous.

     

    Demand is not some government manipulated, arbitrary concept. It materializes when real people make/invent/design real things for real people who like those real things. Not 'shovel ready jobs' and not food stamps. Cause once the food stamps are taken away, so is the (artificial)demand. Real things last. They create value. People want them. Fake things(read, government) don't.

     

    pfft. yawn. repeat prior comment
    2 Dec 2011, 11:04 PM Reply Like
  • Tack
    , contributor
    Comments (16281) | Send Message
     
    Backwards.

     

    Great ideas and products are the vision of singular people, like Henry Ford, Steve Jobs, etc., who then evangelize the ideas and literally create the demand out of whole cloth. There was (and never will be) no mob of middle-class citizens gathered in a park somewhere demanding cellular phones, flat-screen TV's or anything else that gets created by the combination of people with ideas coupled with intense concentrations of wealth (e.g., venture capital).

     

    If innovation and demand formation were left to mobs of average citizens, we'd all still be growing our own vegetables.
    2 Dec 2011, 06:17 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Tack....it's been ideas that have been the hallmark of advancement in the USA and the advancement of standard of living. The mechanical reaper, the automotive assembly line, etc. And you are right....those life altering ideas don't come from the OWS crowd.
    2 Dec 2011, 06:48 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    The reason the Wright brothers built hundreds of 'flying machines' and crashed them over and over was because they knew they would be helping to underwrite the IPO for American Airlines stock as thousands and thousands of people would flood them with 'demand'.

     

    Or, were they just stupid?
    2 Dec 2011, 06:53 PM Reply Like
  • Buddy Canuspare
    , contributor
    Comments (406) | Send Message
     
    Remember that Ford Motor Company was Henry's third try - the first two were failures - and it was launched entirely on borrowed money. With that kind of track record, I wonder if he could get a launch loan today.
    2 Dec 2011, 09:56 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (488) | Send Message
     
    With that kind of record they'd make him the CEO.
    2 Dec 2011, 10:18 PM Reply Like
  • kmi
    , contributor
    Comments (4587) | Send Message
     
    No matter how good the product is, it doesn't matter if no one can afford it.

     

    There is no demand with no money to fund it. And there's the rub.
    3 Dec 2011, 09:01 AM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    KMI.....there is no demand unless the buyers all have "credit" cards with an unused line of borrowing.
    3 Dec 2011, 12:38 PM Reply Like
  • cynic2011
    , contributor
    Comments (660) | Send Message
     
    Same with Microsoft. I don't recall demanding an operating system, as I didn't know what an operating system was. Once I learned what a computer with a decent operating system could do,I bought one.
    2 Dec 2011, 06:20 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    This is the problem with government and the left in particular. Already big believers in central command Soviet style ideology, they now too think they can centrally demand as well.

     

    All it does is create debt and manipulate existing resources. It doesn't invent. Doesn't dream. Doesn't take risk. It moves things from one place to another and it does so inefficiently while also shredding capital into payroll farm cubicles of the Alphabets. Its just a giant Vig. If anything, government spending detracts from demand. Indeed, capital investment flees whenever G spending reaches a level higher than the private sector can afford 'to give'.
    2 Dec 2011, 06:29 PM Reply Like
  • Terry330
    , contributor
    Comments (881) | Send Message
     
    No more tax cuts for wealthy, after 58 years of tax cuts we are trillions in debt and have high unemployment.
    2 Dec 2011, 06:29 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    No more unemployment extensions for the unemployed.
    2 Dec 2011, 06:37 PM Reply Like
  • wyostocks
    , contributor
    Comments (9114) | Send Message
     
    No more nonsense from Terry330
    2 Dec 2011, 06:39 PM Reply Like
  • coddy0
    , contributor
    Comments (1199) | Send Message
     
    Tax the wealthy and shred the proceeds.

     

    It makes us happy, uncorrupts our Government, resolves hi debt and unemployment problem
    2 Dec 2011, 07:13 PM Reply Like
  • Smoke Jaguar
    , contributor
    Comments (17) | Send Message
     
    No more settling SEC charges while neither admitting nor denying wrongdoing.
    2 Dec 2011, 07:39 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Smoke....yea....expeci... when the fine gets paid to the government and not to the victims.
    3 Dec 2011, 12:39 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Coddy0....yes...that's exactly what happens when tax proceeds are deposited in the IRS account....they instantly destroy previously created money.
    3 Dec 2011, 12:40 PM Reply Like
  • Jake Huneycutt
    , contributor
    Comments (1422) | Send Message
     
    Here's the thing: there's demand for all kinds of things. Things we know about. Things we don't know about. Things people have never even thought of.

     

    But most people aren't willing to buy those things unless someone takes the time and effort to make the product/service worthwhile and make it at a price that the average person can afford it at.

     

    When a government arbitrarily punishes productivity; or even worse, deliberately picks winners and losers in the economy --- then, it's less likely that anyone will dedicate their life to creating that supply to meet that "demand." Why would you if you were simply going to be punished for doing so?

     

    Besides, this entire idea that raising the income tax is a "tax on the rich" is bogus to begin with. Income taxes are middle-class taxes; and the higher you raise them, the more likely the rich will find ways to avoid them (which is exactly what happened the last time we did this --- the rich actually paid more after the Reagan tax-cuts than when the top rate was 70%!). You can raise the top rate to 90% and Warren Buffett's tax bill will barely budge --- which should say a lot about the hypocrisy of his support for an income tax hike.

     

    Increase tax arguments also conveniently fail to mention how the resources will be utilized by the Federal government vs. how they will be utilized by the private sector. The private sector tends to find ways to meet that "demand" out there. The Federal government tends to buy more military hardware and find more ways to intervene in other countries' affairs through military force. That's the difference!
    2 Dec 2011, 06:34 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    The man is self contradicting -

     

    "As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.

     

    Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate."

     

    And if no one had a job created by your "venture" they could not afford to buy anything.

     

    What man has available to sell is his time and talents. If no one wants to buy them he can resort to farming and raising animals.
    Once he finds employment, he has income to spend on stuff.

     

    My ancestors wrote in the 17th century that you had to have at least 40 acres to have a self-sustaining farm. If you had two kids and died, you did not split the land and give each kid 20 acres or you then had 2 unsustainable farms. So the 40 acres was left to one kid and the other one had to go to town and find a job as a black smith or what ever.

     

    It's been my personal experience that only after I have a job can I be a consumer.
    2 Dec 2011, 06:36 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    I have an equally good idea. Anyone on welfare has two years to get a job or be sent to a work camp. Same with the unemployed. On welfare? Get your tubes tied. I could go on and on but you get the point. Eliminate welfare, corporate and personal and watch the economy soar. Can't afford medical care? Move to Canada.
    2 Dec 2011, 07:11 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
     
    The G

     

    And who would you have doing these harsh thing to other people? An advocate of terror by the comfortable against the rest are you? And to what end?
    2 Dec 2011, 07:21 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    Well Bob, presumably the same people who administer welfare now. I only mention work camps because we know what would happen if the checks stopped before the detritus was rounded up. I jest, of course. One man's heaven is another man's hell.
    2 Dec 2011, 07:34 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
     
    The G -

     

    The forced work-camp approach was actually tied in Canada during the mid 1930s for unmarried out of work men and resulted in a march on Ottawa by camp inmates starting from the West Coast and growing in numbers along the way. Forced camps was a great recruiting catalyst for the Communist Party which organized the march (actually, many of the participants jumped the trans-continental trains from city to city along the route). The march was peaceful but was ended in Regina, the capital of Saskatchewan, by massed attack on the marchers by the RCMP which ended the march but not the public relations coup for the Communist organizers.

     

    This is the sort of thing you want to provoke?
    2 Dec 2011, 07:45 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4291) | Send Message
     
    Roosevelt tried much the same thing. CCC, WPA, etc. It took WWII to come out the other side. Governments exist to control the masses. Communists and fascists are two sides of the same coin. I predict another war w/i six months.
    2 Dec 2011, 08:18 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (488) | Send Message
     
    True enough but with one added note: The later "camps" during world war II resulted in deaths. Conscription has a wonderful ability to reduce the unemployment rate.
    2 Dec 2011, 08:21 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3498) | Send Message
     
    So you want o set up gulags, comrade Geoffster?
    2 Dec 2011, 08:28 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    Not gulags, but rather getoffyerasslags.
    2 Dec 2011, 10:53 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3498) | Send Message
     
    I just filled three fairly low paying positions. Trust me, there are a lot of We WANT to get off my asses out there. The guys I hired are super - will clean while waiting for a pump to pump or a filter to filter and not just sit there and stare at it. They give themselves fist bumps when a job is completed. All three were on unemployment before I hired them. They are thrilled to be working for me. Sure, Wyatt, there are a lot of lazy asses out there, but don't put all the unemployed in that basket.
    3 Dec 2011, 10:25 AM Reply Like
  • HiSpeed
    , contributor
    Comments (1301) | Send Message
     
    I'd wager rich people create quite a few more jobs than poor folks do!
    2 Dec 2011, 07:20 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
     
    Hi S

     

    But too few to get the economy moving again.
    2 Dec 2011, 08:06 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    The fire Obama in 2012, repeal Zerocare and reform the tax code.
    2 Dec 2011, 10:54 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Yes Bob....too few....so something else has to happen. Do you think our "leaders" have a clue?
    3 Dec 2011, 12:43 PM Reply Like
  • jmjjmj1
    , contributor
    Comments (183) | Send Message
     
    Short sighted typical GOP responses here the pendulum has swung too far inour directions. Balance is what is needed, for there are those unable to care for themselves or earn a living wage...shpould they die because they were born this way? Our society that "earns" their lofty wages have a direct resposibility to the same system that allows them to extract the lions share of wealth.

     

    I will caveat that the government is, in its current state, incapable to administer these social benefits, perhaps we can start with term limits...that may guide us to the greater good and away from the fiedoms current held in our institutions.
    2 Dec 2011, 07:34 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    and there are tons of charities that help people to provide. And I might add that its the government that is all too often discouraging and putting costs on those charities and make people more and more reliant on bureaucrats. And I"ve NEVER seen anyone's life turned around by a bureaucrat - but I've seen lots and lots of lifetime dependency created by bureaucrats
    2 Dec 2011, 11:40 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Davidbdc....I agree. Consider the above:

     

    "Our society that "earns" their lofty wages have a direct resposibility to the same system that allows them to extract the lions share of wealth."

     

    And so my question to jmjmj1 is this....are you then assuming that it's the government's job to take the money from those who extract the lions share and distribute it? Where did you ever come up with the idea that private citizens, churches and charitable organizations weren't sufficiently capable of dealing with that without government intrusion?

     

    OK...I just read your following post and I am more mellow. Locally, I see more being done for homeless privately than could ever be done efficiently by the government.
    3 Dec 2011, 12:47 PM Reply Like
  • jmjjmj1
    , contributor
    Comments (183) | Send Message
     
    or with out fat fingers...

     

    Short sighted typical GOP responses here the pendulum has swung too far in our direction. Balance is what is needed, for there are those unable to care for themselves or earn a living wage...should they die because they were born this way? Our society that "earns" their lofty wages have a direct resposibility to the same system that allows them to extract the lions share of wealth.

     

    I will caveat that the government is, in its current state, incapable of administering these social benefits, perhaps we can start with term limits...that may guide us to the greater good and away from the fiefdoms currently held in our nations institutions.
    2 Dec 2011, 07:37 PM Reply Like
  • PotentDagger
    , contributor
    Comments (12) | Send Message
     
    You know I got a Masters Degree around here somewhere, I have run my own business for almost 20 years, and for the life of me I can not fathom how taxing the rich "improves the purchasing power of the middle class" as Nick wishes us to think.

     

    Note to Nick: If you feel so strongly about it, go to the ATM, withdraw your daily limit on your gold card, then go to the local market and find somone who is middle class and give them the money, then repeat each day until you are satisfied you have given your fair share. I can assure you, you will feel better about yourself, and you will certainly be more efficient than the US Government ever could be.
    2 Dec 2011, 07:55 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    The referenced article was indeed very true and written by someone who's been there, done that, and knows what works and what doesn't.

     

    Those who take issue with his position simply don't understand what he presented or didn't really bother to truly read the article.
    2 Dec 2011, 08:05 PM Reply Like
  • realitybiter
    , contributor
    Comments (227) | Send Message
     
    Just because you have made a pile of money, successfully starting up companies, by no means, makes you an expert on how to fix public policy. Apples and Oranges. Herbert Hoover? Macnamarra? Private business genius, public office failures.

     

    I believe the premise is very flawed. Rich people capitalize new ventures. Google, which has been a monstrous job creator, completely revolutionized advertising, was initially capitalized by one of the wealthiest guys in Silicon Valley. Demand was already there. Better mousetrap plus rich person capital.

     

    The big flaw with the argument is the idea that govt can redistribute wealth effectively. It is no wonder that DC is home to more wealthy folks than nearly everywhere else....the money is looted, not redistributed.

     

    The problem with American income inequality sits alone at the flaws with large corporations and their ability to twist the tax code, create monopolies via controlling regulation, and to absurdly overpay themselves because there is no vehicle for effective shareholder oversight. You will rarely find a small business that pays their CEO 500 times more than their lowest paid employee....this is largely a corporate issue....

     

    Increasing taxation will pretty much just create more corruption, wealthier lobbyist , larger corporate monopolies, and oddly, lifetime Congressman that somehow accumulate millions, while only making a couple hundred large a year.....hmmmm. Government is already too big and too corrupt. Increasing taxation will only make it more corrupt.
    2 Dec 2011, 10:25 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    The problem with American income inequality sits alone at the flaws with large corporations and their ability to twist the tax code, create monopolies via controlling regulation, and to absurdly overpay themselves because there is no vehicle for effective shareholder oversight. You will rarely find a small business that pays their CEO 500 times more than their lowest paid employee....this is largely a corporate issue....

     

    ----------------------...

     

    Exactly Correct!! We have a huge corporate governance issue in this country. And ironically, much of this resulted from the time Congress got up in arms about "million dollar CEO's". Press reports about a couple of bad CEOs that were getting paid a million dollars or more - led to lots of idiot politicians running to the TV cameras to "punish" companies that would be so outrageous to pay their CEO's a million dollars.

     

    So what did they do? They capped salaries at a million dollars to avoid the taxes.... and began issuing tons of stock to their CEO and senior executives...... which then led those same executives to start paying more attention to short term stock prices as opposed to long term business interests. Which leads to things like closing plants in Oklahoma and moving to Mexico to earn another 4% GP on paper - remember it doesn't matter what actually happens in three years - just that the market will reward your share price this week. So Congress turned "million dollar CEO's" into "30 million dollar" CEOs!!

     

    Corporate governance reform would go a long way in restoring the earning power of those in the lower middle class and stop rewarding idiots for running companies into the ground. CEO's that get rewarded for building and growing businesses need their lower class workers.... those that get rewarded just for being CEO's with stock options fire as many of those same workers to jack up the share price by another 50 cents.
    3 Dec 2011, 01:54 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    Many of these comments seem to be angry responses to issues not addressed by the article.

     

    Read the article...

     

    In simple terms, it says:

     

    I have the money on hand to bring a product or service to market, so I do.

     

    But, unless there are consumers that like and buy my product or service, my efforts will fail.

     

    If consumers like and buy my product or service, I will succeed and expand my business.

     

    Since, as one of the ultra-rich, some of my money has no bearing on my business, taxing me more AND TAXING THE MIDDLE CLASS LESS will allow them to buy more of my product or service and allow me to expand my business even more... creating even more jobs.

     

    Entrepreneurs and innovation satisfies, but does not create, demand.

     

    Consumers create demand.

     

    And, demand creates jobs.

     

    Again, read the article. It doesn't address the multitude of issues addressed by many of the responses. It simply says 'tax me (the rich) more and the middle class less so they can spend the money to create more jobs.' No more... no less.
    3 Dec 2011, 02:43 PM Reply Like
  • Tack
    , contributor
    Comments (16281) | Send Message
     
    RBB:

     

    For the most part consumers have no idea what they want until somebody with a good idea places the option before them. It's especially so when the ideas are grand game-changers. It's also why advertising is so effective.

     

    The idea that consumers are sitting around, with all these recognized, but not satisfied, demands just isn't representative of reality. The consumers "vote" (i.e. buy or not) on the ideas, but they don't create them or even initiate the demand they induce.
    3 Dec 2011, 04:15 PM Reply Like
  • cynic2011
    , contributor
    Comments (660) | Send Message
     
    We live in Mexico,and the income inequality makes the US look like heaven. Our cleaning lady lives in a place with no electricity or plumbing but one friend is an accountant with a huge house with five or six full-time servants,a chauffeur, two bodyguards,and a private plane.

     

    Poor people in the US are a lot better off than most in Mexico. So stop complaining.
    3 Dec 2011, 04:56 PM Reply Like
  • realitybiter
    , contributor
    Comments (227) | Send Message
     
    US is making progress towards the corrupt state of Mexico. We are just a bit behind.....
    You miss the point. Mexico stinks.
    The US is simply catching up. US better than Mexico? Of course. But saying US is good simply because it is better than Mexico is like bragging about a D because your neighbor got an F.
    3 Dec 2011, 06:41 PM Reply Like
  • realitybiter
    , contributor
    Comments (227) | Send Message
     
    But wealth redistribution does not create demand. That is the argument and there is no data to support it. Wealth redistribution creates rich politicians, lobbyists, and a corrupt, inefficient economy...GE, anyone??
    3 Dec 2011, 06:43 PM Reply Like
  • Stilldazed
    , contributor
    Comments (3574) | Send Message
     
    RBB and Tack

     

    You are both correct. It takes money to produce a product and the product producer will hire a marketing manager to promote the product. The more innovating the product the better to open up new fields and incorporate old fields in new ways. As well as new target markets. Education is important also, we need the research and development people and knowledgable production line workers or people to provide the service if it is a service industry.
    3 Dec 2011, 06:49 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    I beg to differ... consumers know very well what they want. They want a better version of what they already have. Typically, the 'new' isn't new at all. It is simply a better version of what is already in use. Consumers replace the 'old' with the 'new' to accomplish the same task with a better 'mouse trap'. (And, generally, the 'new' saves work and actually reduces the number of jobs needed for 'whatever'.)

     

    The computer is a perfect example. We performed the same functions after the advent of the computer as we did before it was commonly available. We may now simply accomplish those functions much faster. (And, while the computer industry grew, many other jobs were lost. Simply look at the fantastic productivity numbers our economy produced as the computer matured.)

     

    People are confusing the supplying of 'new and improved' products and services with the demand for said products and services.

     

    Entrepreneurs don't create demand, they innovate (supply) new and better products and services. Consumers buy (demand) them. (In our vernacular of 'supply and demand', consumption is 'demand'.) And, without consumers, there is no economy.
    4 Dec 2011, 03:08 AM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    As a follow-on, let me just say that was a member of a futuristic product development team for many, many years. In a given year, we would talk with literally thousands of people, most of whom were consumers. Likewise, the businesses with whom we were affiliated did the same. The products we developed, whether they were intended for introduction in a year or ten years, were always futuristic versions of what the consumer thought they wanted.

     

    No leading business of which I am aware develops products in a vacuum. They ALWAYS develop products that are a vision of the consumer.
    4 Dec 2011, 03:09 AM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Poor people in the US are alot better off than "most" people in the world.
    4 Dec 2011, 12:42 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    Actually, ‘money flow’ is what we are talking about here.

     

    Without money moving through our economy, it will die. The more money that flows through our economy, the healthier it will be.

     

    ‘Salaries and wages’ is a type of money flow that most of us genuinely like and appreciate (including me).

     

    “Wealth redistribution’ is a type of money flow that many of us dislike very much (again, including me).

     

    But, they are both ‘money flows’. And, our economy desperately needs much more money flowing through it right now.

     

    It appears that that a yet another global recession is in the offing. And, there is no way that we can avoid being dragged down with the rest of the world. But, since local consumers represent 70 % of our economy, it is in our best interest, as a nation, to do as much as possible to give us the best chance we have to survive this mess with the least impact on our quality of life.

     

    To me, if that means tolerating much needed money flow cleverly disguised as ‘wealth redistribution’, then so be it.
    4 Dec 2011, 01:19 PM Reply Like
  • OptionManiac
    , contributor
    Comments (3498) | Send Message
     
    Sometimes you have to do what works, no matter how distasteful it is. And sometimes you won't know whether or not it will work until it is too late. The biggest mistake is let a preconceived notion in your head (ideology) keep you from trying out an idea.
    You want a "fair" tax - then a head tax, every citizen pays exactly the same tax. That is as fair as you can get, but it won't work.
    4 Dec 2011, 04:02 PM Reply Like
  • cynic2011
    , contributor
    Comments (660) | Send Message
     
    I suppose you're the expert?
    4 Dec 2011, 05:36 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    Risk takers create jobs - whether they are rich, middle class or poor.

     

    Risk takers invent things that they think other people will want, need, enjoy, desire, etc.

     

    Maybe they are correct - and they make lots of money.

     

    Maybe they are incorrect - and they lose lots of money.

     

    Maybe they are partially correct - and they make a living.

     

    You know who creates zero jobs? Those idiot bureaucrats and politicians. They take and take and take and take. They live better now than most risk takers....... which would help to explain the lack of jobs..... why take risks when you can leach off of others risk taking?

     

    And thats where we are at. And until we get rid of the leaches the blood will continue to be sucked out of our economy.
    2 Dec 2011, 09:35 PM Reply Like
  • bob adamson
    , contributor
    Comments (4560) | Send Message
     
    david -

     

    Some risk takers create jobs and some destroy them; it's all a matter of the scale and propriety of the risk. Case in point, Enron or any one of the major US investment banks whose risk excesses set the stage for the 2007/8 meltdown.
    2 Dec 2011, 09:51 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    Did you say 'leeches'?

     

    http://bit.ly/sI4DEx
    2 Dec 2011, 11:09 PM Reply Like
  • davidbdc
    , contributor
    Comments (3194) | Send Message
     
    I believe it was the large banks and the idiot politicians that combined to create the financial mess - enabled by a small percentage of our population that felt comfortable lying about their income.

     

    And if those risk takers would have been allowed to fail (including prosecutions of the politicians that received "friends of Angelo" sweetheart mortgage) the mess would have been short and sweet and we'd be growing robustly again.

     

    But thats not what happened. The bought and paid for politicians bailed out their friends (the financial elite). Then they enlarged the idiot bureaucrats that didn't do their jobs the first time around. And instead of those that took stupid risks losing their money - we ended up with a situation where those that took stupid risks received taxpayer money. So the responsible amongst us paid our children's and grandchildren's future tax dollars to these idiots today to ensure they remain rich.

     

    Enron was just plain fraud and was prosecuted as it should have been - except personally I believe even more people should have been put in jail. And Enron's real businesses were quickly picked up by other firms so I'm not sure how that is job destruction.

     

    What you should be really concerned about is that in the financial crisis the rule of law was thrown overboard, and systemically our economic freedoms have been lessened....... both done to protect the triumvirate of the bureaucrats, politicians, and financial elite.

     

    There is no substitute for freedom and liberty.
    2 Dec 2011, 11:48 PM Reply Like
  • moneyTalksBSWalks
    , contributor
    Comments (194) | Send Message
     
    We have high income inequality here at least as measured by the Gini index. Whether we address that via taxes, opportunities, regulation, education, communism, gulags, etc is all open to debate but before anything can be solved we need to acknowledge that this is an issue that needs to be solved. A lot of folks(and given the nature of the issue a disproportionately large number of wealthy folks) aren't even ready to accept this as a starting point. As measured by this index - countries that we all know to be bedrocks of communism are doing far better than us - NZ, UK, Switzerland, Canada, etc :)

     

    Perhaps we as a nation need to adopt some modesty, go easy on the "We are the greatest nation on earth" BS that every DC politician mofo spouts when they are at a loss to say anything else and be open and ready to learn a few things from others. No single society in the entire history of mankind has ever managed to stay on top forever, the sun has set on each and every empire - Romans, British, French, Japanese, etc. Hopefully we will smarten up, learn from the lessons of history and handle better our place in the new world order. A good start would be to clean house in DC next year - vote out every single incumbent mofo, no exceptions whatsoever. There are just way too many farts in DC who are comfortably sucking on the public teat and have zero incentive to change things. Even the deficit battles we saw earlier this year were all show for the masses with no real intent to change anything. The fucking weasels are now even talking about over-riding the automatic cuts. A wholesale clean up of DC is the start to anything good to happen to this country.
    2 Dec 2011, 09:59 PM Reply Like
  • coddy0
    , contributor
    Comments (1199) | Send Message
     
    Rich people don’t create jobs - demand does -
    ======================...
    Demand does not create jobs
    People create jobs

     

    They are not necessarily rich these people, who create these jobs
    They are always gifted, skilled and lucky to be able match demand with created by them supply

     

    While doing so, these people mean to enrich themselves
    Jobs are created as byproduct of their effort of converting demand into their wealth.

     

    On the other hand there are always people trying to enrich themselves by stealing other people wealth
    In their case there are no jobs created as byproduct of their successful efforts

     

    When true wealth creators are overwhelmed by wealth thieves and others who are not necessarily thieves, but rather misinformed and envy middle class enticed by wealth thieves, wealth leaves her birth country behind
    3 Dec 2011, 01:08 AM Reply Like
  • maudie
    , contributor
    Comments (488) | Send Message
     
    Re: rich should be taxed more: This would only make sense if 'the rich' literally put their money in a mattress. If Maxine Waters can better put Hanauer's income to better use than he, it only makes sense that she could make even better use of his wealth "so their money can REALLY be used to improve the purchasing power of the middle class". How about it, Hanauer. You and Buffett step up to the plate and demand a Wealth Tax, say a measly 10% per year? Maxine is waiting, big shot.
    3 Dec 2011, 09:37 AM Reply Like
  • cynic2011
    , contributor
    Comments (660) | Send Message
     
    So after all this debate I guess it's obvious: poor people create jobs.
    3 Dec 2011, 01:27 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    No. Simply stated, jobs are created when demand is greater than supply.

     

    The simple message of the article was 'tax the middle class less (and the rich more, to make up the difference) so that they spend more money on goods and services (creating jobs).'

     

    The article didn't address the other issues so angrily pontificated in many of these responses.
    3 Dec 2011, 02:43 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    RBB - So, then is it your objective to have more than the 47% of the taxpayers who already pay no Federal Income Taxes. What should the number be? 50%? 60%? 70%?. At what point to you break the entire economy? Certainly we can't have 99% of the people paying no Income Tax and 1 person out of 100 not only paying for all the government we use, but shifting income to the 99? What's the magic number.....or is it just "more". Tell me when it stops and why?
    4 Dec 2011, 12:49 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    I understand your points and actually support them all.

     

    To me, it's a matter of timing.

     

    Our country, as well as the rest of the world, is working through a horrific mess. The solutions to our problems will not be 'fair'.

     

    The first issue that I see that must be addressed is the lack of money flowing through (as I've stated in other posts, 'circulating in' would be much better) our economy WITHOUT FURTHER INCREASING OUR NATIONAL DEBT.

     

    There are a fortunate few that have a substantial amount of money that is not moving through our economy. Some of that money could be put to better use and, by doing so, it would help the entire nation.

     

    Is it fair? No!

     

    Do I like it? No!

     

    To your collective points, there are many other 'bad things' that must be corrected and many 'bad people' held accountable and sent to prison.

     

    However, to move forward, we must first preserve our economy. And to do that, we must, not only preserve, but substantially increase our nation's cash flow, by whatever means possible.

     

    As I've stated elsewhere, if that means tolerating a bit of cash flow cleverly disguised as wealth redistribution, then so be it. After we preserve our economy, then we will be in a much better position to declare war on those who caused us such pain. (May I suggest that we start in Washington D.C.?)

     

    Have a nice day? ;-)
    4 Dec 2011, 02:38 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Yes you may suggest we start in DC. Throw all the bums out. Repeat as often as necessary until they get the message they work for "We the People".
    4 Dec 2011, 07:37 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    The underlying theme of the article is best explained in the last few paragraphs and may be summarized by the following excerpts.

     

    "Shifting the [tax] burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again."

     

    "So let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class."

     

    "And let’s remember that capitalists without customers are out of business."

     

    While other issues presented by many respondents are valid and should be addressed, the article did not address them. The article was simply about shifting some of the tax burden (whatever it may be) from those who can afford it less to those who can afford it more.
    3 Dec 2011, 02:46 PM Reply Like
  • Wyatt Junker
    , contributor
    Comments (4498) | Send Message
     
    "Shifting the [tax] burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again."

     

    And using a borrowed, hapworn hippie cliche from Zucotti park doesn't help one's credibility.

     

    "So let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class."

     

    So let's give the job creators a break. Let's tax the bottom 3 marginal rate tiers more as a percentage of their income. Indeed, let's let those on the bottom rung actually begin paying an income tax not just paystub deductions so they can get some damn skin in the game. Then the rich will be able to invest again.

     

    "And let’s remember that capitalists without customers are out of business."

     

    And let's also remember that capitalists withdraw investment when debt to GDP rises to unsustainable levels which in turn craters the job market which also ruins the consumer based economy.
    3 Dec 2011, 05:27 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    A lot of anger here...

     

    Have a nice day! ;-)
    4 Dec 2011, 03:10 AM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    RBB....do you seriously think the tax burden is borne by the 99%? Certainly you know some of the facts, right?
    4 Dec 2011, 12:51 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    Yes, I am well aware of the tax burden distribution in our country.

     

    However, today, I am less concerned about that than I am the lack of money flowing through our economy.

     

    As lack of cash flow kills businesses, the lack of money flow will kill our economy as well. (Money 'circulating in' our economy would be even better. Sending our dollars to the oil producing and the 'cheap labor' countries is killing us.)

     

    I am simply in the camp of 'fix our nation's money flow problems NOW and fix the wealth re-redistribution problems LATER'.

     

    Without fixing our nation's money flow problems, wealth re-re-re-redistribution won't make much difference to most of us either way.

     

    Have a nice day! ;-)
    4 Dec 2011, 01:22 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    By the way, I periodically remind our local, state, and national government representatives of the following idea previously proposed by many rather smart individuals.

     

    Very simply stated, replace (a balancing dollar value of) corporate tax ‘loopholes’ with a tax credit, up to $40,000 per year or so, for every dollar of wages paid to a person employed in the United States. Given that it is ‘bottom line’ neutral (for those paid less than $40,000 per year), it would motivate businesses to hire people as long as the person could generate even a few dollars of profit for the company.

     

    Basically, this would be tax burden neutral for all ‘current’ tax payers and redirect the ‘loophole’ money into the lower and middle classes, powering our economy and generating massive amounts of additional tax revenues at every level of government.

     

    Granted, this idea is not original and has been presented by many respected and honored individuals with much better credentials than have I. However, that hasn’t precluded me from reminding our government of, what I believe to be, a wonderful way to spur our economy onward.

     

    Have a nice day! ;-)
    4 Dec 2011, 11:02 PM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (488) | Send Message
     
    Great, so instead of buying a machine which would make them more efficient you're creating an incentive to employ more people.

     

    When businesses stop keeping up with tech advances, especially because the government's creating incentives which will likely disappear at some stage, you set them up to fail when their (possibly international) competition realises that "hey, I can buy this $10,000 machine which will do the work of this $40k per year person and undercut these guys for years".

     

    Is this when you suggest they introduce import controls on the competing goods? Before you do, remember, someone has to buy these 4x more expensive products, and if your people can't import them, that'll be you.

     

    Instead the taxes should be cut *anyway* (alongside the spending that it pays for) so people can invest it back into their businesses. This is how you get real growth in an economy. It's the ONLY way.
    4 Dec 2011, 11:39 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    Why did you assume that I was inferring that businesses ignore good business practices and deliberately drive themselves into ruin?

     

    For the record, in one of my previous lifetimes, I was a co-owner of a very successful electronics parts company that we grew and sold for a handsome profit. So, I’ve been there, done that, and know what’s required to do so.

     

    Eliminating tax loopholes and providing incentives to hire people does not preempt or preclude good business practices.

     

    Unfortunately, replacing people with machines is what we do, it's what we HAVE to do. That’s what we have done in our country since its creation. We've continuously replaced people with machines (and in recent decades, cheaper overseas labor).

     

    I understand that from a business perspective.

     

    But, as a nation, what we have failed to do is provide jobs for those that we have displaced with technology and cheaper labor. And, THAT is what we really need to fix.

     

    Have you ever seen an industrial welding machine from a manufacturing plant buying clothes at Target? Have you ever seen an industrial high-speed assembly machine buying groceries at your local market?

     

    I didn’t think so.

     

    So, what are the people that we’ve put out of work, that are supposed to actually drive our economy, doing while we’re busily replacing them with technology and cheap labor? To keep our economy growing, as a nation, what have we done to insure that our work force remains active and strong?

     

    Yes, each business has not only the right but the responsibility to maximize profits. And we have done so extremely well. But, our individual actions have created some rather ugly unintended consequences for our nation as a whole.

     

    I’m NOT suggesting that we deny technology and good business practices for the sake of hiring people.

     

    I AM suggesting that we provide our individual businesses a financial incentive to help us solve the ‘displaced worker’ problem that we have in this country and that we level the playing field a bit by eliminating unnecessary and/or unfair tax advantages.

     

    Have a nice day! ;-)
    5 Dec 2011, 10:07 AM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (488) | Send Message
     
    Maybe you're not suggesting it but that's the incentive you're creating. You can't deny that political interference would create this incentive. That's the entire goal.
    You can't deny that businesses make decisions based on these incentives, otherwise what's the point?

     

    Why would they do it? The incentive is there, that is why they would do it? At that moment in time it makes business sense for them to employ a person. Unless this is one of those times where "this time it's different"?
    5 Dec 2011, 10:46 AM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    Are incentives a consideration?

     

    Absolutely!

     

    However, businesses make decisions based on top and bottom line growth. If whatever is being considered doesn't improve either, then it's no longer considered.

     

    It's just that simple.

     

    Have a nice day! ;-)
    5 Dec 2011, 11:03 AM Reply Like
  • Losing Paper While Gaining ...
    , contributor
    Comments (488) | Send Message
     
    Except it's not that simple.

     

    It's trying to solve a distortion of less employment as a result of taxation by making it so there's more employment solely because there's a tax incentive to do so, not because it's necessarily the best long-term business decision.

     

    Any nation's businesses which does not have the initial distortion has a competitive advantage. Why not just advocate less taxes (with associated less spending) and cut out the middle man?
    5 Dec 2011, 01:33 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    You keep insisting that I am prompting businesses to make decisions that are not in their best interest... which I am not.

     

    In my initial post on this topic, I stated "... it would motivate businesses to hire people AS LONG AS THE PERSON COULD GENERATE EVEN A FEW DOLLARS OF PROFIT FOR THE COMPANY." (Emphasis added)

     

    From my initial post, my position has been that companies make MORE money, not less money. (And, as I previously stated, this is not MY idea. It is an idea, presented and/or recommended by a number of Nobel laureates and honored economists, that I support.)

     

    Businesses are focused on what is good for them individually, as they should be. Among other things, the federal government is supposed to be focused on what is good for our nation's economy as a whole and should be providing incentives that benefit our economy as a whole.

     

    Simply stated, my position is that the federal government should provide incentives for businesses to find a way to hire people and make MORE money by hiring them. The idea that I presented is but one of many ways to do so.

     

    At this point, I don't know what else to convey and will graciously bow out of the discussion.

     

    Good day!
    5 Dec 2011, 02:06 PM Reply Like
  • WMARKW
    , contributor
    Comments (10787) | Send Message
     
    Actual money flow could be "goosed" by taking fiscal stimulus approach. IMO we need $1.5 trillion a year in stimulus for the next 5 years. The key is what it get's spent on that creates an ROI. Extending UI benefits creates no ROI. Building 200 nuke plants creates an ROI.

     

    Spending this fiscal stimulus will not impair our fiscal stimulus. We don't create debt in this country when we deficit spend. The Fed creates debt when it chooses to manipulate interest rates. This is straight forward MMT and is understood so simply by viewing the Treasury as having a printing press. Printing $1.5 trillion will not cause inflation in this environment.
    4 Dec 2011, 07:41 PM Reply Like
  • RBBeers
    , contributor
    Comments (52) | Send Message
     
    Unfortunately, the tenets of MMT have yet to be universally accepted.

     

    Hopefully, our nation's center will soon displace the extreme left and right so that we may enjoy our country once again.

     

    Thanks for the chat.

     

    Good day!
    4 Dec 2011, 11:13 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Hub
ETF Screener: Search and filter by asset class, strategy, theme, performance, yield, and much more
ETF Performance: View ETF performance across key asset classes and investing themes
ETF Investing Guide: Learn how to build and manage a well-diversified, low cost ETF portfolio
ETF Selector: An explanation of how to select and use ETFs