Premier Photo Op: Your rich friends mislead

Raise Taxes on Rich to Reward True Job Creators, Nick Hanauer, Bloomberg Businessweek

“I’m a very rich person. 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 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.

“That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Theory of Evolution

“When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.

“It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do…”

Hat tip to DIGBY, one of America’s premier bloggers.

Categories: Economics, USA

3 replies »

  1. Good links. Both the federal and BC governments buy into the myth that making a few people super wealthy will somehow create worthwhile jobs even if most Canadians are struggling to survive.

    The formula to success is this: good wages create strong demand and strong demand creates growing businesses. Much of the demand in today's economy comes through growing debt, not good incomes. This is a bubble that will burst.


  2. Intresting, how all levels of government over the past few years, really pushed the idea, of small business and entrepreneurship. Seems this “nirvana” of wealth and job creation, has seen its popularity wane. Nice concept, poor execution. Most small businesses, are gone within 5 years, due to marketing issues and low sales volumes. Management expertise is usually lacking, as is financial savey.

    I agree with the previous comment, about the “super wealthy”, creating jobs. Not going to happen. Also that the “bubble” will burst.

    The current “war”, against the middle class in this country, has created an ever decreasing number of folks that are able to shoulder, the increased tax burden, placed upon them by all governments. As this group continues to shrink, due to lower wages, inadequate employment, few opportunites and ultimately less consumer demand and resources to address the demand, the results will be, a shrinking economy.

    Without good wages to be able to meet the demand, the products go unsold. This is occurring more and more, across each business sector.

    Tax breaks to businesses do not equate, to more job creation or better wages. Notice how the wealthy in this country are now generating more wealth at this point in history, than at any other time in the recent past. Wealth through debt, investment turnovers, sellouts, buyouts etc.

    Lose the middleclass and your economy will collapse. What happened to the business model of the 1950's through 1970's ? Growth was key, expanding markets, growing wages and consumer demand, and a host of policies that encourged consumers and business to thrive. Monetary policy made in Canada for Canadians, no free trade nonsense and political decisions that made sense.

    The answers are all there, they are being ignored at our peril.


  3. One more point….the cost of everything has gone up at least 600 % since “valuation day” in 1972.

    Wages however, have not kept pace with the so called “costs” of doing business…especially in the small business sector. Add part time workers, some having up to 3 jobs to exist.

    Shareholder value is the “new mantra” of the elite…as they strip workers wages, benefits, and ultimately move their businesses to jurisdictions that have fewer labour laws and ultimatley allow wages that are third world in nature. Add to this, indiffrence of federal and provincial governments, to the gutting of labour and employment standards in favor of third world alternatives, and you get the current government model of business and taxation, of the middle class driven to ruin.


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