Venture Capitalist Nick Hanauer: Job Creation Comes From Consumers, Not Rich People

Businessweek:

Dec. 1 (Bloomberg) -- It is a tenet of American economic beliefs, and an article of faith for Republicans that is seldom contested by Democrats: If taxes are raised on the rich, job creation will stop.

Trouble is, sometimes the things that we know to be true are dead wrong. For the larger part of human history, for example, people were sure that the sun circles the Earth and that we are at the center of the universe. It doesn't, and we aren't. The conventional wisdom that the rich and businesses are our nation's "job creators" is every bit as false.

Read the whole story: Businessweek

Comments

[newleaf]

06:36 PM on 12/05/2011

And the picture is of a Target cashier. Wow, indeed the career we all strive for. I'm sure she's paid barely over minimum wage, with no benefits. You can definitely raise a family and save for your retirement on that. I've been a cashier before. Good luck paying your bills and having a decent car.

[DSciarrino]

05:29 PM on 12/05/2011

"I have 3 cars, not 3000". That simple logic dispels all the propaganda spewed by the Koch brothers and their toadys. Why is it some people choose to ignore this truth?

[dmsdzinr]

03:57 PM on 12/05/2011

BOOOOYAAAH! The TRUTH shall set you FREE!

[BlackbirdHighway]

02:11 PM on 12/05/2011

"The conventional wisdom that the rich and businesses are our nation's "job creators" is every bit as false."

Yes, that is the old Supply Side Economics. It is incredibly easy to prove that supply side is wrong. Just turn on a television and observe all the commercial advertisements. Companies spend billions of dollars to air those commercials because they increase demand. The economy is driven by demand, not by supply. If supply was the key to economic growth, companies wouldn't waste all that money on commercials.

Companies hire workers when they have increased demand and fire workers when demand drops. That is how the economy works.

[IfIonlyknew]

01:16 PM on 12/05/2011

Remember the good old day's when the rich had to create businesses and jobs to get those tax breaks.

[thefacts22]

11:48 AM on 12/05/2011

boards of Cascade Land Conservancy, The University of Washington Foundation, The University of Arizona's Mount Lemmon Science Center and the Biosphere2 climate research project. No wonder, he must be in bed with Gorito.....is the most stupid article I have read in my life.

[aainsser]

11:47 AM on 12/05/2011

I disagree with him totally. Rich people invest, which inturn creates capital for businesses to start and for businesses to hire workers---wealth creates wealth ---or at least the opportunity for wealth--The Gov't does more wasting than creating.

[Slim Dude]

01:05 PM on 12/05/2011

All of my wealthy friends are investing in emerging markets, commodities, derivatives, and currencies. None of these investments do anything to promote domestic growth; in fact, their investments in emerging markets like China actually cost American jobs.

[aainsser]

02:14 PM on 12/05/2011

yes they do -------by the way, our Gov't "invests" in Chinese emerging markets. Is this creating jobs?

[Gamerooster]

07:16 AM on 12/08/2011

I agree! I am trying to bring a product to market and it will take $250,000 to get it started in a way to manufacture them so I will be able to compete in the market I could make them in my back yard but it would take two hour's to make one, the materials will cost about $26.00 they will whole sale for $ 50.00 that would be $12.00 an hour and I havent got it to the market yet, it is still in my back yard. I would be better off staying at a $25.00 dollar an hour job. The rich may not create job's but their money does! The goverment will continue to waste, if they didnt than they would'nt need more and more and more. But do not stress anything that you will see in the coming future it has to happen! Dont get involve with the thing's of this world !! I can feel it coming in the air of nite. OH LORD

[decimus]

10:27 AM on 12/05/2011

One of the best, simple, real world explanations of the fallacy I have ever read.

[badunion]

08:59 AM on 12/05/2011

For all you wannabe Marxists on this site Google Saul Alinsky's "Rules for Radicals" and you'll find your communist bible, it is Obama's Bible too!

[wayoutleft]

10:59 AM on 12/05/2011

In calling you stupid, I am being kind.

[IfIonlyknew]

01:20 PM on 12/05/2011

So you think our country was Marxists ruled until George freed us.

[Danite545]

08:50 AM on 12/05/2011

The problem with this is that the government will just grow bigger and demand more...
Lack of production is the real problem. Taxes were higher in the 50's, but virtually everything was made here. The US prospered.
Remember how WalMart started? Everything was US made...Now they are China Mart. This is what Wall Street brings to the Party.
What we are witnessing is the pillage of America.

[satyrday]

08:43 AM on 12/05/2011

Awesome article. I've been saying exactly that for years.

[badunion]

08:42 AM on 12/05/2011

This Potus is the great divider not the uniter he said he was, he is a follower of Saul Alinsky and is a practicing Marxist and Atheist.

[IfIonlyknew]

01:21 PM on 12/05/2011

You got a link to that??

[bipolarbears60]

05:05 PM on 12/05/2011

You can't link to the non existent. Unless you're a teapublican.

[Revee]

04:49 PM on 12/05/2011

Exactly how does one "practice" atheism?

[Gamerooster]

07:23 AM on 12/08/2011

It is automatic, just dont beleive! no effort involved.

[ConservativeChampion]

11:52 PM on 12/04/2011

Government jobs are essentially middle class welfare.

[badunion]

08:57 AM on 12/05/2011

And they're up 25% in 3 years!

[wayoutleft]

11:11 AM on 12/05/2011

so you couldn't get one either... too bad you got left behind by those smart enough to work for the government. That's your problem, right? Government workers were smart enough to get good wages, job security and good pensions while you got left holding the capitalist-fairytale bag? Isn't that it? So you missed the welfare gravy train AND the government job. Right? And now your a dork trying to show off how little education you can afford with your cartoon money- right? If you can't afford a middle class civil service sector like other civilized societies, shut up and go back to work until you can. In the mean time- don't tell me my public servants- that I can easily afford without resentment- are on welfare.

[AussieHugh]

09:30 PM on 12/04/2011

It seems pretty simple
1. Tax the rich a little bit more (not a huge amount)
2. Spend the money on employing teachers / police or on infrastructure
3. The people who now have a better income spend their money (at lower income levels almost all of your income is spent) buying new stuff from shops etc
4. The Rich at the top get richer because their businesses are making more

Everyone benefits.

[ConservativeChampion]

11:55 PM on 12/04/2011

What?

We have too much money spent in education. The schools are bad not because of too little funding but because of teachers unions.

How many more police are needed? Many areas have enough or more than enough.

Infrastructure? The USA just blew a bunch of money on "infrastructure" and the Libs say themselves it didn't work.

There are more people in the work force than just government workers.

[badunion]

08:39 AM on 12/05/2011

Bad idea, the rich pay too much now, and all those teachers and cops do less than zero for growth, there pensions & benefits add to debt, Progressivism is Alinskyism, it does'nt work!

[Realist2011]

09:02 PM on 12/04/2011

The wealthy will be forced to pay much more in taxes in the near future. Right now this country is deeply in debt and we have basically a zero growth economy. We're going to have to reduce spending, but we can't reduce it fast enough to keep the deficit from climbing much higher, no matter what. The 1.2 trillion the super committee was supposed to save was still saving less than a current year's deficit, over a decade. So essentially, after the first year, your savings are already eaten up by the deficit, and the next nine will just be added to the national debt.

So essentially, the middle class and below have no real hope for increased income in the near future and the government is going to continue to spend. We simply won't be able to create enough debt to continue this path (see Greece) so more revenue is going to have to be coming in. Where will it come from? The only group that can pay higher taxes is the group that has the money. Simple proposition. They've succeeded in accumulated vast wealth in a small group. That group is going to become the target of taxation.

We need a growing economy and there's no money left in the economy to grow with. The money hoarders win, and lose. The rich don't wish to be taxed. The politicians will take care of that when they keep spending and simply have no other place to get money.

[badunion]

08:39 AM on 12/05/2011

STOP SPENDING!

[satyrday]

08:45 AM on 12/05/2011

That causes the economy to fail. Republicans know that. That's why they overspent in their years, and now demand austerity.

Please don't parrot these false talking points.

[kasnova]

03:36 PM on 12/05/2011

Sounds easy enough. Would you mind if we started with all government spending protecting your property?