Amazon investor Nick Hanauer gave a TED talk on income inequality and how the wealthy don’t create jobs. You’ll never see the video on TED.com. Why did TED deem Hanauer’s speech as too controversial?
It is astounding how significantly one idea can shape a society and its policies. Consider this one.
If taxes on the rich go up, job creation will go down.
This idea is an article of faith for republicans and seldom challenged by democrats and has shaped much of today’s economic landscape.
But sometimes the ideas that we know to be true are dead wrong. For thousands of years people were sure that earth was at the center of the universe. It’s not, and an astronomer who still believed that it was, would do some lousy astronomy.
In the same way, a policy maker who believed that the rich and businesses are “job creators” and therefore should not be taxed, would make equally bad policy.
I have started or helped start, dozens of businesses and initially hired lots of people. But if no one could have afforded to buy what we had to sell, my businesses would all have failed and all those jobs would have evaporated.
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 a “circle of life” like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. In this sense, an ordinary middle-class consumer is far more of a job creator than a capitalist like me.
What do you think? Is there a problem with income inequality? Do the wealthy create jobs? Should taxes increase for the wealthy? Submit your story, ideas, questions here.
“I’m inspired by the work of Peace Corps Volunteers around the world. Volunteers share their creativity and compassion with their local communities. I hope this print inspires the next generation of Volunteers.” - Shepard Fairey
Fairey has a personal connection with the Peace Corps through his sister, who served as a Volunteer in Togo.