Banned TED Talk: Nick Hanauer "Rich people don't create jobs"

[gpatt0n]

Published on May 17, 2012 Via Business Insider: "As the war over income inequality wages on, super-rich Seattle entrepreneur Nick Hanauer has been raising the hackles of his fellow 1-percenters, espousing the contrarian argument that rich people don't actually create jobs. The position is controversial — so much so that TED is refusing to post a talk that Hanauer gave on the subject. National Journal reports today that TED officials decided not to put Hanauer's March 1 speech up online after deeming his remarks "too politically controversial" for the site...".

Click for RECENT TOPICS click for RECENT TOPICS click for RECENT TOPICS

[mei lan]

Huh. Don't know why they'd ban it unless they have a strict policy that all their videos will be instructional or encouraging or whatever. I'd like to hear what he has to say (but not enough to run him down online and see if I can find it). I happen to disagree with him on the surface, but it may be an issue of semantics.

[mei lan]

Well, it turns out I was interested enough to look him up on Wiki. His premise is based on the income inequality argument. However, I note that he hasn't given his fortune away to those less fortunate.

[Eddie Bennett]

Well, it turns out I was interested enough to look him up on Wiki. His premise is based on the income inequality argument. However, I note that he hasn't given his fortune away to those less fortunate.

 

I don't think he's lying, in any event, mei lan! In fact he is absolutely right.

[gpatt0n]

Huh. Don't know why they'd ban it unless they have a strict policy that all their videos will be instructional or encouraging or whatever. I'd like to hear what he has to say (but not enough to run him down online and see if I can find it). I happen to disagree with him on the surface, but it may be an issue of semantics.

 

No, they banned it because the message - that the ultra-rich are not job-creators - and the rest 'takers' attacks those on the right who do control significant amounts of money and, in the current time, complain and withhold support from institutions that challenge their false meme.

 

It is the emperor has no clothes kind of thing. Nick Hanauer is in the role of the kid who says "the emperor is naked" ... and TED, in this case, says no, he has the finest, most elegant, cloth imaginable and how dare you point that out. Yes, if you point out the absurdity and destroy the meme that the ultra-wealthy shouldn't be taxed because they create jobs that illusion will vanish and it then makes sense to tax the ultra-wealthy at double the rate of regular folks instead of at a rate of half or less of regular folks.

 

pubby

[Nice Green]

"the contrarian argument that rich people don't actually create jobs"

 

 

 

Yes, if you point out the absurdity and destroy the meme that the ultra-wealthy shouldn't be taxed because they create jobs that illusion will vanish and it then makes sense to tax the ultra-wealthy at double the rate of regular folks instead of at a rate of half or less of regular folks.

 

pubby

 

It's ridiculous to claim that the rich don't create jobs. If the billionaire buys a sports car, a yacht, a mansion...someone has to build those things. That's one way they create jobs. And even if they keep most money in the bank, that's money that the banks have to invest in business, lend to consumers, etc. The return on those dollars as it relates to common folk may be harder to quantify, but it's still an impact.

 

But back to the example of the rich person who spends his/her money. Now, that sports car may roll off the assembly line if Joe Billionaire doesn't buy it immediately. The yacht factory, on the other hand, likely isn't building new vessels without demand. Same goes with new mansions.

 

Here in Georgia, a sports car would be taxed higher each year than the typical car. That's more money in state coffers, which end up paying state salaries, benefits, government contracts, etc. (Maybe it technically goes into Georgia DDS' coffers, but for the sake of simplicity, let's just say it's more tax dollars for the state.) A mansion would have a much larger tax bill attached to it than the typical home.

 

Many on the left like to make the argument that even if you reduced or eliminated income taxes on the poor, the tax system would still be regressive against them because of other taxes, like sales taxes, property taxes, etc. Yet those same folks forget that the rich have to pay those taxes, too.

 

No one with common sense is pushing the meme that "the ultra-wealthy shouldn't be taxed because they create jobs." Everyone that makes at least a living wage (and I'm not here to debate what that is) should have to pay some form of taxes.

[gpatt0n]

 

"the contrarian argument that rich people don't actually create jobs"

 

 

 

It's ridiculous to claim that the rich don't create jobs. If the billionaire buys a sports car, a yacht, a mansion...someone has to build those things. That's one way they create jobs. And even if they keep most money in the bank, that's money that the banks have to invest in business, lend to consumers, etc. The return on those dollars as it relates to common folk may be harder to quantify, but it's still an impact.

 

But back to the example of the rich person who spends his/her money. Now, that sports car may roll off the assembly line if Joe Billionaire doesn't buy it immediately. The yacht factory, on the other hand, likely isn't building new vessels without demand. Same goes with new mansions.

 

Here in Georgia, a sports car would be taxed higher each year than the typical car. That's more money in state coffers, which end up paying state salaries, benefits, government contracts, etc. (Maybe it technically goes into Georgia DDS' coffers, but for the sake of simplicity, let's just say it's more tax dollars for the state.) A mansion would have a much larger tax bill attached to it than the typical home.

 

Many on the left like to make the argument that even if you reduced or eliminated income taxes on the poor, the tax system would still be regressive against them because of other taxes, like sales taxes, property taxes, etc. Yet those same folks forget that the rich have to pay those taxes, too.

 

No one with common sense is pushing the meme that "the ultra-wealthy shouldn't be taxed because they create jobs." Everyone that makes at least a living wage (and I'm not here to debate what that is) should have to pay some form of taxes.

 

 

Before Henry Ford developed the assembly line for his Model T, there was a car industry that didn't employ very many folks and most folks still walked, took a trolly or rode a horse.

 

There has always been a highly profitable market catering to the wealthy but mass markets where 70 out of 100 Americans own an automobile instead of one in a hundred is where the jobs come. I mean you don't build a factory and employ 20,000 autoworkers to build a one-off custom automobile. Instead, you build a machine shop and hire five smart guys to build it.

 

The point that Nick Hanauer makes is that concentrating the wealth in the top one percent (or 1/10th of one percent) doesn't create many jobs ... because while that one rich person may have three homes all in need of a refrigerator, the market for refrigerators doesn't blossom into an industry employing tens of thousands to serve that need; a market matures and provides that kind of employment only when the wealth is distributed to a large portion of the population creating the need for millions of refrigerators.

 

The truth is that markets create jobs and a market where 300,000,000 American's have the wherewithall to purchase a product creates more jobs than a market where the 1,000,000 millionaires are the only one's who have the money to buy a particular product.

 

Hence, if your economic system is actively redistributing wealth to a small percentage instead of the wealth of society being distributed more broadly, then all markets are smaller because the ability to buy is more highly concentrated.

 

The only reason taxes, interest rates, acquired wealth, debt, jobs, benefits, money supply, health care etc. are important to the overall economy is because these are the factors and conduits in society that impact the distribution of wealth.

 

We can look back in history and see that markets were more vibrant when more people had more money. It is an inexact science precisely how specific things like taxes, spending, money supply, debt both public and private impact the distribution but we can, over a period of years, pretty much determine trends.

 

Do you like the trend that began in 1980? Personally I don't.

 

pubby

[Nice Green]

Your "machine shop" with "five smart guys" that build custom automobiles is still five jobs created by those who have the money to buy expensive automobiles. It's not a huge impact, but it's an impact. And those five jobs are likely going to be better paying jobs because they'll require people with expertise with those makes/models and not just a regular worker from any auto plant.

 

Yes, markets create jobs, and the markets—i.e. consumers—are the ones that have concentrated the wealth into the pockets of the few, not some "economic system." We don't visit Joe at the butcher shop anymore—we buy our meat from Kroger, Publix or Walmart. We don't buy hammers and other hardware from the Smiths' store—we buy them from Lowe's, Home Depot or Walmart.

 

No "system" puts all that wealth into the hands of the family behind Walmart, the Waltons. We as a society chose to do so, picking low prices over those offered by our neighbors who operated the local stores.

 

And if you want to consider a trend since 1980, look at all the innovations in technology, and think about which directions monies go. In the 90s, you either went Windows or Mac. In today's world of smartphones, it's Apple or Android. There are few, if any, alternatives in markets like these, so it's no wonder that the money heads to those who head up the major players.

 

Even if you redistributed the wealth, dollars would still flock into the hands of the wealthy when all was said and done. Few, if any, would open hardware stores to compete against the Home Depot in their county. Forget opening a grocery store when you have chains already saturating your community.

[gpatt0n]

Your "machine shop" with "five smart guys" that build custom automobiles is still five jobs created by those who have the money to buy expensive automobiles. It's not a huge impact, but it's an impact. And those five jobs are likely going to be better paying jobs because they'll require people with expertise with those makes/models and not just a regular worker from any auto plant.

 

Yes, markets create jobs, and the markets—i.e. consumers—are the ones that have concentrated the wealth into the pockets of the few, not some "economic system." We don't visit Joe at the butcher shop anymore—we buy our meat from Kroger, Publix or Walmart. We don't buy hammers and other hardware from the Smiths' store—we buy them from Lowe's, Home Depot or Walmart.

 

No "system" puts all that wealth into the hands of the family behind Walmart, the Waltons. We as a society chose to do so, picking low prices over those offered by our neighbors who operated the local stores.

 

And if you want to consider a trend since 1980, look at all the innovations in technology, and think about which directions monies go. In the 90s, you either went Windows or Mac. In today's world of smartphones, it's Apple or Android. There are few, if any, alternatives in markets like these, so it's no wonder that the money heads to those who head up the major players.

 

Even if you redistributed the wealth, dollars would still flock into the hands of the wealthy when all was said and done. Few, if any, would open hardware stores to compete against the Home Depot in their county. Forget opening a grocery store when you have chains already saturating your community.

 

Let me emphasize your statement: Even if you redistributed the wealth, dollars would still flock into the hands of the wealthy when all was said and done.

 

Yes, that is the way it has always been.  But the key point is that war, famine, petulance, ignorance, profligacy,  crime and revolution have all been there as tools to redistribute the wealth.  Add to that 'new lands' ... the new world ... colonialism and other games and you realize that redistribution of wealth from the wealthiest to the least is how we have been successful.

 

I mean the Pharaohs at one time had a pretty good handle on things but today, there is no wealthy pharaoh out building another pyramid.  The European aristocracy was in large part separated from their wealth in the 18th, 19th and especially the 20th Century.  I mean if you want to how literally heads can roll, look no further than the French Revolution.

 

The idea of American grew out of that dysfunctional set of societies in Europe and yet we seem to have now adopted the players and attitudes that personified that dysfunction.

 

The point is that the 'economy' is a game and it is a game that is best played as a virtuous circle instead of a vicious cycle.

 

In a virtuous circle the wealth remain wealthy but they are just not greedy as they adopt a long-term view instead of what maximizes profit in this quarter. 

 

So yes, the wealthy will likely end up with as much (and maybe more) wealth if the wealth is not only redistributed but is continuously redistributed as everyone is poor, including Scrooge McDuck if all the money in the world is sitting idle in the duck's vault.

 

And that's is what is happening now according to the WSJ:

 

 

Corporate cash holdings grew to a record in 2014, but more of that money is being concentrated among a few giants, according to a new report by Standard & Poor’s Ratings Services.

 

U.S. nonfinancial companies held $1.82 trillion of cash at the end of 2014, but only 25 companies held almost half that money. This top tier included technology, pharmaceutical and industrial giants such as Apple Inc., Pfizer Inc.PFE -0.36%, and General Motors Co.GM -1.75%

 

Cash among the top 25  grew 11% last year, S&P said, while the holdings among the remaining 1,975 or so corporations didn’t fare as well, said Andrew Chang, a credit analyst at S&P.

 

“It’s nice and sexy to say cash is growing,” he said. snip...

Although cash balances grew, so did their debt, snip...

Cheap debt is encouraging companies to borrow more ... snip ...

 

Mr. Chang noted that even the largest companies have been borrowing in the U.S. markets. Much of the money on their books is held overseas, and companies have been borrowing in U.S. markets to pay dividends and fund buybacks to avoid paying taxes on the offshore funds.

 

A well known Tech company, for example, borrowed $5 billion on Wednesday, even though it had more than $54 billion of cash on its balance sheet.

 

 

pubby

[Nice Green]

 

In a virtuous circle the wealth remain wealthy but they are just not greedy as they adopt a long-term view instead of what maximizes profit in this quarter.

 

 

And it's always greed that drives the rich, isn't it?

[gpatt0n]

 

And it's always greed that drives the rich, isn't it?

Hardly ... it is obvious that some wealthy folks are enlightened and take a longer term view.

 

That, unfortunately, is not universal.

 

pubby

[mrshoward]

Another big commission check from those greedy rich bastards...