[triardwonvada]

Venture Capitalist Nick Hanauer said on TED Talks:

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. He later said "So when businesspeople take credit for creating jobs, it's a little like squirrels taking credit for creating evolution. In fact, it's the other way around."


http://www.youtube.com/watch?v=bBx2Y...ature=youtu.be

[janeseymore09092]

Ehh... I guess I kinda see his point. Jobs get created when people with money demand products and services. Business then either upsize or pop in from nowhere to fill this desire in order to seek PROFITS!!!! But of course without entrepreneurs to start these business, and to create products and services nobody would have thought of, there wouldn't be any jobs.

In the end I give credit to businesses. Somebody has to have the balls to take the risk and get things done.

I hate Apple, but I'm going to use them as an example. They employ LOTS OF PEOPLE. If they hadn't taken the risk and created the iPhone and iPad would there be middle-class consumer demand for these products to drive job creation? No, there wouldn't. People only demand them, and thus create jobs for more people to make, sell, and service them because Mr. Jobs took the initiative. Most of these types of products had no demand before a business said "hey, look what we've made, isn't this cool."

[Jxmwzgpv]

I hate Apple, but I'm going to use them as an example. They employ LOTS OF PEOPLE. If they hadn't taken the risk and created the iPhone and iPad would there be middle-class consumer demand for these products to drive job creation? No, there wouldn't. People only demand them, and thus create jobs for more people to make, sell, and service them because Mr. Jobs took the initiative. Most of these types of products had no demand before a business said "hey, look what we've made, isn't this cool."

Not really. The demand for those devices was already there, the demand urged Jobs to make the iPhone not the other way round.

People used to spend 500 bucks on Nokia N95's and Motorola RAZR's and Blackberries. Now they spend the same money on iPhones.

The number or jobs created by Apple is nothing compared to the amount of money that apple makes.

[Ehlgamxf]

I understand what he's saying, but he gives me the impression that his speech is very one sided. I'm almost confident that someone else out there could make a similar speech arguing the opposite point and be just as right.

IMO, If you have a company owner making $500,000 a year in wages and profit, way more then what is needed to live comfortably, and has 100 employees making $30,000 a year. The owner could certainly help the economy by giving those 100 people a $1,000 raise which would get that money back into the economy, or hire 3 more people at similar wages to create more jobs. He would still be making $400,000 a year in my eyes would still be a very comfortable salary.

The main impression I get from his speech is that he is trying to justify the rich in keeping their money.

[AnIInWon]

I know that there are far too many people who will draw the wrong conclusions (90% of the European politicians for example), based on the following problem:

Where does rich start or where does the middle class end? Someone having 10m USD net worth would be classified as rich by most, but really that aren't what he would classify as rich. Those "rich" people really do buy significantly more made in USA proucts:

More expensive products that are made in the USA can often only be afforded by rich people (the 2'000 USD assault rifle, the 45'000 car). A lot of high end services can only be afforded by rich people (auto detailing, wedding planning etc.)

[DfrtYhyu]

I'm almost confident that someone else out there could make a similar speech arguing the opposite point and be just as right.

To do that you'd have have to manufacture facts and invent graphs that make the opposite point because there aren't any which do that.

IMO, If you have a company owner making $500,000 a year in wages and profit, way more then what is needed to live comfortably, and has 100 employees making $30,000 a year. The owner could certainly help the economy by giving those 100 people a $1,000 raise which would get that money back into the economy, or hire 3 more people at similar wages to create more jobs. He would still be making $400,000 a year in my eyes would still be a very comfortable salary.

Company owners don't do either of that, companies don't hire employees for hiring's sake. Like he said it's the last resort they take when the demand from the consumers demands it. So actually, it's not the company owner who has just hired some people on the whim but it's the consumers themselves which actually push the company to hire more people to satisfy that same demand.

The main impression I get from his speech is that he is trying to justify the rich in keeping their money.

What he is saying is that the best way to improve the economy is to have more equality because it creates more consumer demand and that in turn enables companies to make even more money. It's a circle which depends on consumer demand.

[sXVUOUVC]

To do that you'd have have to manufacture facts and invent graphs that make the opposite point because there aren't any which do that.

So you automatically assume no counter evidence could possibly exist and it would have to be made up. Not a good way to start a constructive argument. Finance arguments have been doing this for years. One side states one thing, with supporting facts, and someone else says something else, also with supporting facts.


Company owners don't do either of that, companies don't hire employees for hiring's sake. Like he said it's the last resort they take when the demand from the consumers demands it. So actually, it's not the company owner who has just hired some people on the whim but it's the consumers themselves which actually push the company to hire more people to satisfy that same demand.

What he is saying is that the best way to improve the economy is to have more equality because it creates more consumer demand and that in turn enables companies to make even more money. It's a circle which depends on consumer demand. I know they don't do that. My point is, most companies will try to maintain their profit margins by only hiring the minimum amount of employees at the cheapest wages they can get away with. This is a problem because the flow of money through profit is going to a few people and not back into the economy. His speech was trying to place the responsibility solely on the relation between the consumer and the business when I am offering a counterpoint that the rich / company owners can have a hand in boosting the economy by taking the extra money, well beyond what they need, and putting it back into the economy rather then hording it.

You have to have money flowing through the economy for it to grow. Where do you think the majority of the money is?


Now don't get me wrong, a lot of what he says I do agree with. I only have an issue with him saying it's completely the responsibility of the consumer to fix the economy and that the people with the majority of the money have no responsibility in helping the economy.

[Ygxejxox]

ahhhh I see....So the Squirrels created the jobs then and the buisnesspeople created evolution.

well I'll be darned

[Rategbee]

I know they don't do that. My point is, most companies will try to maintain their profit margins by only hiring the minimum amount of employees at the cheapest wages they can get away with. This is a problem because the flow of money through profit is going to a few people and not back into the economy. His speech was trying to place the responsibility solely on the relation between the consumer and the business when I am offering a counterpoint that the rich / company owners can have a hand in boosting the economy by taking the extra money, well beyond what they need, and putting it back into the economy rather then hording it.

No one is arguing that they can't. Yes they can, but the point is they don't (at least not always, or even usually).

You have to have money flowing through the economy for it to grow. Where do you think the majority of the money is?

[sadgpokx]

So you automatically assume no counter evidence.

I'm not assuming.

Where do you go about to get charts which show the opposite that the Congressional budget office charts he uses show ?

I know they don't do that. My point is, most companies will try to maintain their profit margins by only hiring the minimum amount of employees at the cheapest wages they can get away with. This is a problem because the flow of money through profit is going to a few people and not back into the economy. His speech was trying to place the responsibility solely on the relation between the consumer and the business when I am offering a counterpoint that the rich / company owners can have a hand in boosting the economy by taking the extra money, well beyond what they need, and putting it back into the economy rather then hording it.

You have to have money flowing through the economy for it to grow. Where do you think the majority of the money is?

I think we're in agreement about how things work, I just don't agree that he's trying to imply that this is only due to the relationship between the consumer and the business. I think you're reading him wrong. He's basically saying that the current taxation system is benefiting the rich because they are supposedly job creators, when it's actually not true.

Companies can definitely have a hand in boosting the economy if they realise that if they invest more locally, pay better wages and put more into society they will reap the benefits because there's more money to be spent by the consumers themselves.

But companies don't do that at all, instead they increase their profits by lobbying for lower taxes, paying the least wages, employing the least amount of people, investing very little locally and moving production out of the country. They are practically sitting on a massive pile of cash while they continue to bring in untaxed foreign profits and a move even more jobs abroad.

The only way to fix things is to revamp the tax code, increase the taxes on highest earners, remove idiotic loopholes and reinvest the money into an education system which will supply the same companies with the workforce needed to move the production back into the US.

I know that the government isn't exactly the most efficient machine out there (except maybe for Germany's) but if the people with differing economic ideas realise this and join others into pushing for these changes, then maybe government can be made more efficient.

Of course, that is a pipe dream and there's now way in hell that it's going to happen, so that only way to do it is by partisan political means.

There was an article called "79 things we can all agree on" in last February's Esquire magazine.

No 14 was "Whoever rebranded rich people as "job creators" should a) win some kind of award and b) get to work on rebranding nuclear power"

Made me chuckle.

[Grenader]

When the German Goverment gets called efficient, you know things are bad.

[wrefrinny]

When the German Goverment gets called efficient, you know things are bad.

That was more of a light observation rather than a serious point.

[WelcomeMe]

From personal experience, I have to agree with Hanauer. Creating a job (which is almost a misnomer in and of itself), is a direct result of either wanting to maintain or improve profitability. There already has to be a market for whatever product you are intending to sell, which in turn means the consumer is inherently responsible for job creation. Considering the American economy is almost entirely dependent on consumer spending, the second the general population has less liquid cash (or credit) to spend, the second we enter into a recession. The monkey wrench in our current economic climate is that many jobs are sent overseas. So even when consumer spending increases (such as buying new Apple products), only a fraction of the new "job creation" is actually seen in this country.