Billionaire says the rich are not job creators!

One of our nation's richest men, billionaire Nick Hanauer, just destroyed the GOP's economic talking points. In a testimony before the Senate Banking Committee, Hanauer explained why rich people like him are not, in fact, the real job creators. He said, “In the same way that it's a fact that the sun, not earth, is the center of the solar system, it's also a fact that the middle class, not rich business people like me, are the center of America's economy.”

Hanauer talked about a “virtuous cycle,” where middle class consumers have enough money to buy things, which stimulates the economy and creates more jobs. Nick Hanauer was an original investor in Amazon.com, and he founded the company that became Overstock.com. He said that as an investor, he helped start dozens of businesses, but he added, “if no one could have afforded to buy what we had to sell, my businesses would have all failed, and all those jobs would have evaporated.”

During his testimony, Mr. Hanauer called for higher taxes on the wealthy and corporations, and said that money should be used to invest in our middle class. He said, “Prosperity is built from the middle out.” Nick Hanauer understands that we must invest in our nation to get our economy growing again... hopefully, our lawmakers were listening.

Comments

Vegasman56 9 years 26 weeks ago
#1

Here is the much-talked-about TED talk on inequality given by Nick Hanauer. We (TED) are posting it here to promote public discussion on an important issue. For more background on this, see this blog post from TED Curator Chris Anderson:

Mark Saulys's picture
Mark Saulys 9 years 26 weeks ago
#2

An economic system is just a means of sharing everything - hopefully, in a fair and just way. We make a game of it - ostentsibly to make it easier or to motivate individuals - but we musn't take the game too seriously and make it more important than its purpose. Sometimes we have to stop playing and come back to reality.

Any economic system can fail to provide for unforseen circumstances. To cling to the fundamentals of the game when that happens is to be willfully obtuse.

ckrob's picture
ckrob 9 years 26 weeks ago
#3

If our latest whistleblower were not well intended he would have taken his pile of documents to Hong Kong secretly and gotten a couple of million dollars from the Chinese government rather than offer same to the media free of charge. To require a court order based on probable cause to tap one phone and not require the same to tap 300,000,000 is beyond absurd. Prism IS the machinery for a police state apparatus that would give the Stasi a big case of jealousy. It is just waiting for President Ted Cruz to pull the trigger, metaphorically of course.

carolonthecoast's picture
carolonthecoast 9 years 26 weeks ago
#4

I have thought long and hard about our economic situation and the only solution that seems to be right is to increase minimum wage to a living wage. If workers made more money they would pay more taxes and buy more things. Perhaps mothers could begin staying home to raise their kids again. Employers will complain that they cannot afford to pay higher wages but they will have to and they will.

KassandraTroy's picture
KassandraTroy 9 years 26 weeks ago
#5

Actually, prosperity comes from both the bottom steps of the economic pyramid. The poor HAVE to spend their money. This was amply proven by the CBO about the food stamps programs; which, of course, has been cut in the sequester.

And, of ocurse people gainfully employed paying taxes

I can sure say that austerity seems to be losing it's glamour around the world.....unless all this is, and has been from the start, just a way to send all the money to top and to hell with anyone else.

And now we find out they're spying on us to add injury to injury. I guess they figure us good Americans are going to get sick of eating dirt one day. Really creepy stuff going on and the worst, I think, is the blase` attiude of so many that this is happening to this degree and has bee ramping up since the passage of the (unread by congress) "Patriot Act"

bendigger0 9 years 26 weeks ago
#6

Nice to hear this Billionaire making sense, along with Thom... Is anyone in Washington gonna listen?

dowdotica's picture
dowdotica 9 years 26 weeks ago
#7

...just had my 77 v dub po' man restored. fresh paint and wHAt not. i wanted to "shit" when the new windshield i noticed was made in? CHINA!!!! so as i toiled toiling this weekend putsing about it seemed that every label i read said, "MADE IN FREEKIN' CHINA!!!" the rake, the weed wacker, the phillips screw driver, the razor knife, the epoxy, the pot i planted flowers in, the garden hose! the only thing i used this weekend that was made in America was the spray nozel! So then i got to thinkin' 'bout Leroy and how back in the day he worked from floor sweeper up to line supervisor at Kellog's cereal (which by the way is now made in mexico?)in my home town, "Battle Crack House" Michigan. His wife never had to work his kids had anything they wanted, they had a second home down flordy way and lived what on the outside looked like a pretty darn good working class life. Investors? Job creators? hu. wha? The tragedy of it all is that Americans have been so dumbed down to what is real that the only job creating they've done is in? CHINA!!! Tell ya what the only way America will ever be free again will be the day the pigs of industry the coporate elite and the wall street swill reinvest in America and quit holding everybody prisoner of the stock markets and the banks! IT REALLY IS THAT SIMPLE PEOPLE!! Oh and it couldn't hurt to tax the crap out of cap gains and like vegas? if you gamble in the market and you lose? tough shit! no cap loss carryover, i didn't get any on my 401k when it lost a mountain of $$$,$$$....ARGH!!!!!!! and just what our piggy politicians donig for us?

ScottFromOz 9 years 26 weeks ago
#8

The life blood of the economy is money. It's a simple fact conveniently overlooked by the money hoarders; corporations, the very wealthy and the extreme right wing ideologues. Just as in the human body, if the life blood of the economy is closed off at one point then everything downstream will sicken and die. In the economy, the money tourniquet has been applied just below the neck. That might make the head feel good for a while, but sooner or later the tourniquet must be removed or the whole patient is doomed.

How we get the psychopaths who are hoarding all the cash and refusing to pay their fair share of taxes (Yes Apple, I'm talking about you...and others) is beyond me, but it MUST be done.

RepubliCult's picture
RepubliCult 9 years 26 weeks ago
#9

Republicans remain the "Job Cremators"!

akunard's picture
akunard 9 years 26 weeks ago
#10

THIS COUNTRY NEEDS TO STOP PAYING IT'S PEOPLE NOT TO WORK!

bobhiggins's picture
bobhiggins 9 years 26 weeks ago
#11

You need to stop shouting.

Kend's picture
Kend 9 years 26 weeks ago
#12

I see this so different. There is plenty of money in the hands of US citizens already. The trick is to get them to spend it. I have read about 3.7 trillion when those with money start spending it all your problems are solved. The problem is they are scared to spend it because your government has done nothing to give them the confidence to do so. All you have to do is look up north to Canada. The government put together what they called the "Canada action plan" it gave companies and tax payers very good reasons to spend their hard earned cash with incentives. Last month, Canada created 94,000 (940,000 in US) jobs with population of 34 million compared to 175,000 with 340 million. (370 million if you cout the illegals). Our government did a great job incouraging us to spend our money and, oh do I even say it. It "trickles down" to everyone.

Gary Reber's picture
Gary Reber 9 years 25 weeks ago
#13

The reality is that the wealthy are undertaxed, and are NOT job creators. Nick Hanauer makes a good case that, more money in the hands of consumers is what creates jobs, not an undertaxed 1 percent.

The focus needs to be on generating income for the masses. They need the same income source to tap as Hanauer, which is generated from the dividend income related to the ownership of wealth-creating productive capital assets.

While Hanauer, a 1 percenter, states the obvious that full employment is not an objective of businesses, he fails to connected with the idea that the masses need to become individual owners of FUTURE wealth-creating productive capital assets. Nor does Thom Hartmann address the ownership issue and the need to create new capitalist owners who would be the FUTURE investors in a growth economy.

The reality is that companies strive to keep labor input and other costs at a minimum. In order for an economy to grow, the consumer populous must have income in order to create demand for products and services. While the rich minority systematically concentrates more and more capital ownership in their stationary 1 percent ranks, the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. And yet you can’t have mass production without mass human consumption. It is the exponential disassociation of production and consumption that is the problem in the United States economy, and the reason that ordinary citizens must gain access to productive capital ownership to improve their economic well-being.

As a result the exponential growth of the job-displacing and job-destroying non-human factor of producing and delivering products and services , the trend has been to diminish the importance of employment with productive capital ownership concentrating faster than ever, while technological change makes productive capital ever more productive. But because this is not well understood, what we as a society have been doing is to continually shift the work burden from people labor to real capital while distributing the earning capacity of capital workers (via capital ownership of stock in corporations) to non-owners through jobs and welfare. Such policies do not function effectively.

In a democratic growth economy, based on Louis Kelso’s binary economics, the ownership of productive capital would be spread more broadly as the economy grows, without taking anything away from the 1 to 10 percent who now own 50 to 90 percent of the corporate wealth. Instead, the ownership pie would desirably get much bigger and their percentage of the total ownership would decrease, as ownership gets broader and broader, also benefiting the traditionally disenfranchised poor and working and middle class. Thus, productive capital income would be distributed more broadly and the demand for products and services would be distributed more broadly from the earnings of capital and result in the sustentation of consumer demand, which will promote economic growth, which will benefit the already rich as well. That also means that society can profitably employ unused productive capacity and invest in more productive capacity to service the demands of a growth economy.

Norman Kurland of the Center for Economic and Social Justice (CESJ.org) comments:

This highly articulate businessman points out the absurdity of those conservatives advocating lower tax rates for property-based consumption incomes for the rich. Hanauer shatters the capitalist argument that the monopolistic holdings of the rich will "create jobs," their shallow justification for thousands of tax deductions, tax credits, tax loopholes and "tax expenditures" from politicians that achieve monopolistic access for the rich to future growth assets, future capital incomes, etc., perpetuating and increasing the ownership, power and income gaps between the top 1 percent and the poorest 99 percent of citizens.

The video makes the same case against monopoly capitalism as Karl Marx, Lord John Maynard Keynes and those who turn to government redistribution for creating jobs and redistributive taxation for supplying consumption incomes of the unemployed, underemployed and those who have left the workforce. On the other hand, Keynes and those following Marxist solutions offer non-productive income redistribution schemes that led to continuing increases in the costs of production and prices, plus a continuing transfer of power and income independence from the poor and middle class to the State, society's only legitimate monopoly. The monopolistic power of the State, whose power is has been shifted from increasingly powerless and manipulated voters to an elite of politicians, their rich contributors for new laws to perpetuate monopoly capitalism, and an elite of government bureaucrats to "regulate" the unjust "wage slave, welfare slave, debt slave, and charity slave system" supported by Wall Street speculators, the tiny ownership class whose power and capital incomes increases at the expense of the 99 percent, especially the poorest of the poor who are the most powerless, economically dependent and hopeless victims of the modern culture.

Conservatives not only would continue the current thousands of "tax expenditures" that concentrate capital ownership for the rich but would eliminate all income and inheritance taxes on the rich based on the false premise that this "creates jobs." Conservative policymakers would also cut government spending for the poor without offering systemic changes to "the system" that would grow the economy in ways that return economic power and provide truly equal economic opportunity to all citizens from the bottom-up through market forces, radically reduce the economic power of government, and do so without violating private property rights of current owners during their lives.

What the TED video misses is that both the left and the right have been miseducated by the "Labor Theory of Value," which the gurus of economics, including Nobel Prize winning economists like Milton Friedman and Paul Samuelson, took for granted, whether they belong to the various socialist schools of economics, or the Austrian School of Hayek and von Mises, or the Chicago Monetarist School of economics, or the Keynesian school that dominates the economic policies of the United States and other democratic developed nations. This false theory assumes that "Labor" (all human contributions to the production of marketable goods and services) is the sole source of all production, thereby totally ignoring the growing role of all non-human physical, organizational, marketing and intangible productive assets that combine with Labor to the production and and delivery of all marketable goods and services in all market economies. By ignoring "Capital" the Labor Theory of Value ignores the fact the labor-destroying technologies and other ever-advancing forms of productive capital produce enormous capital incomes for Wall Street speculators and the capitalist elite for beyond their ability to consume what they earn as capital owners. And this false Labor Theory of Value ignores the possibility that the annual multi-trillion dollar growth of new capital assets and transfers of existing capital assets could by changes in the tax system and Federal Reserve system and policies could legitimately become owned by every citizen, from the poorest to the richest, as a new right of citizenship, comparable to universal access to the political ballot.

Louis Kelso, (1) seeing the flaw in the Labor Theory of Value, (2) conceiving of a simple overall theory based on a more realistic understanding of the dynamic nature of a true economic system and (3) offering universal principles of "Economic Justice" for limiting the greed and corruption inherent in monopoly capitalism, provided the world with a "solution" that would automatically balance the two sides of the economic equation: "Production" (or "aggregate supply" for economists) with "Consumption" (or "aggregate demand" or "mass purchasing power" for economists). Thus the "Binary Theory of Economics" challenges and transcends the theories of all other schools of economics. Kelso's innovations in financing new capital assets and new capital incomes for consumption and retirement incomes for all citizens on "future savings" rather than current incomes also removes these costs from the costs of producing future goods and services. As pointed out by the late Walter Reuther, the legendary head of the United Auto Workers, in his February 20, 1967 testimony before the Joint Economic Committee of Congress, in favoring widespread democratization of capital ownership and profit sharing, profits do not add to costs. They are determined from the bottom-line, only after marketable goods and services are sold. Therefore, adoption of Kelso's Capital Homestead Act across the board for all Americans would tend to eliminate production costs and stabilize prices, while increasing not only higher consumption incomes for all Americans, but also lower prices for the goods and services they consume.

I agree with Michiel Bijkerk's's comments on how the Nick Hanauer's PET video can contribute to widespread public understanding of Kelso's theory and the Capital Homestead Act for a radical overhaul and simplification of the Federal tax system, Federal Reserve policy and role in favoring future money and credit for ownership-expanding asset-backed productive capital loans and discouraging future ownership-concentrating non-productive loans for government deficits, the need for consumer loans and other loans that create added consumption incomes backed by past, not added, marketable goods and services. Creating new dollars not backed by added goods and services is the equivalent of counterfeiting and inherently inflationary:

However, I suggest we all start by sending to each person in our personal Facebook, LinkedIn and other social media networks the Summary of the Capital Homesteading Act at http://www.cesj.org/homestead/summary-cha.htm. The most immediate emphasis should be on promoting discussions on our specific reforms to the current Internal Revenue Act, which would result in existing and new enterprises being encouraged to create new full dividend payout shares for financing their trillions of dollars of new productive assets through Capital Homesteading Accounts established by all citizens at their local commercial bank members of the Federal Reserve System. Our tax reforms would tax all consumption incomes from Labor or Capital at the same rate above individual exemption levels, eliminate payroll taxes and change inheritance laws to encourage more democratic spread of past monopolistic accumulations of capital assets. Given the failure of the Obama team and Romney team to resolve the economic fears of most voters, I believe that opening their minds to systemic change that would advance economic justice through ownership should begin with proposed tax system, followed by our Federal Reserve and other reforms to the basic institutions that today support monopoly capitalism.

SHFabian's picture
SHFabian 9 years 25 weeks ago
#14

Uh huh. The president tried the "Prosperity grows from the middle out" line as well. It's just today's flavor of trickle-down economcs. We have a stuation where we've developed a Third World workforce right here, using the usable poor as disposable, super-cheap (replacement) labor. Class mobilty from the bottom to the middle was brought to a virtual halt years ago, when we cut the rungs off of the proverbial ladder out of poverty. The number of Americans in severe poverty has doubled, not only because of the economy itself, but because there s no longer any way up for those at the bottom -- and millions of Americans are a single job loss from losing everything, with no way back up. On the other hand, pandering to the middle class sells, so go for it.

SHFabian's picture
SHFabian 9 years 25 weeks ago
#15

What should we do about those who can't work, due to health or circumstances, and those for whom there are no jobs? How do you get a job when you no longer have a home address, phone, bus fare?

2950-10K's picture
2950-10K 9 years 25 weeks ago
#16

Nick needs to take advantage of permission granted to him by Roberts, Scalia, Kennedy, Thomas, Alito, and funnel millions through one of his companies for the purpose of targeting Teabagger House members in the 2014 midterms. I bet my Teabagger Rep could be knocked out for as little as a half million buckaroos worth of glossy ads, mailings, etc., showcasing his support for the Ryan highway to hell budget plan.

Beat em at their own game and then watch how quick the scoundrels move to amend. Meanwhile Nick would go down in history as a major force in the restoration of our democracy!

mmuoio's picture
mmuoio 9 years 25 weeks ago
#17

If we continue with the fascist militaristic path we have been on for 35 years we will be destroyed. If we wise up and play smart ball and invest in ourselves we will be greater than anyone ever imagined. Our fate will be determined in the next 20-25 years which is a very short time. We are at a turning point and we remain distracted with silly controversy created by media wizards generating a buck.

Focus Focus Focus....

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#18
Thom, Louis, or someone in their staff quoting Nick Hanauer, one of our nation's richest billionaires in testimony at The Senate Banking Committee said:

Quote Nick Hanauer:“In the same way that it's a fact that the sun, not earth, is the center of the solar system, it's also a fact that the middle class, not rich business people like me, are the center of America's economy.”

Well, it sure is nice to know that somewhere out there is a billionaire with a brain. So much for greed. It is my belief that people don't get rich by greed alone. Greed is an impediment to success. Unfortunately, only the useless heirs of the rich demonstrate greed because they want to protect what they have because they have nothing to offer in return to sustain it. Therefore the owners of our government are greedy, useless brats who need to be removed from our system of lawmaking ASAP. The longer they hold the reigns of power the more corrupted and perverted our system will become. Campaign Finance Reform, and Move to Amend Now!!!

DAnneMarc's picture
DAnneMarc 9 years 25 weeks ago
#19
Quote SHFabian:What should we do about those who can't work, due to health or circumstances, and those for whom there are no jobs? How do you get a job when you no longer have a home address, phone, bus fare?

SHFabian ~ Everything we can!! After all we are all human, aren't we? Isn't it our basic responsibility to care for each other? Doesn't the recent bombings and natural disasters show how we humans are programmed to care for each other in times of need? Can't we expand that instinct to include less immediate disasters and times of need? Can we all live with anything else?

PhilipHenderson's picture
PhilipHenderson 9 years 25 weeks ago
#20

Republican leaders in Congress are not at all interested in factual information. When the facts do not suit them they make up stories. These Republicans do not represent all billionaires or millionaires, just those who are greedy and stupid. Even a rich man can be stupid.

BARBARA NECKER's picture
BARBARA NECKER 9 years 25 weeks ago
#21

If I can't afford to put food on my table, pay my rent & chip away at my auto loan, I sure ain't gonna go looking for the latest doodad to buy. That not only hurts me & my family, but, in the long run, the entrepreneur selling that unaffordable doodad.

megalomaniac's picture
megalomaniac 9 years 25 weeks ago
#22

One small step for the middle class is one giant step for the billionaires. The basic calculus was always designed that way. A high five to that billionaire to admit the middle class is responsible for his success. In America’s present social economic view that billionaire will likely be an attractive person to work for, whereas the unemployment in Republican Conservative circles (Wal-Mart types) are going to diminish.

Yes, many Republicans will begin to realize that the label of Conservative or liberal will not be driving the forces of politics. It will be just the middle class and the poor. Yes the Limbaugh days of hate radio or what Limbaugh calls “drive by media” are diminishing. The whole of the middle class and the poor are now privy to how this political jabberwocky of nonsense political talking and cable news are trying to direct society but have failed.

These Republican current right wing extremist failed America in the worst way. By deception to profiteer in war, and take advantage by torture, from my view committed a high crime.

Ladies and Gentleman of America please think hard in that squeezing data to ferret out terrorist is a lot more moral than squeezing someone’s body part in torture to get war information.

That simple design in how to make war is difficult in this new technological based society, however, can be considered brilliant in some respects by avoiding and changing histories historical approach to torturing using the human body to make deals.

Besides the industry that moves the data processing can be carefully monitored with safe guards in the best transparency way. Especially with the use of whistleblower laws anyone can actually help find a cover up. The really interesting point is the industry, that part of the telecommunications or educational system which is already loaded with tax grants itself can be very taxable to finance the war. From my view a marvelous combination which would likely make the Bush/Cheney/ Bin Laden oil baron era reveled as obvious treason. The very reason current Republicans shout scandal for anything, as they are the swindler.

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