The super rich are not "job creators"

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    May 17, 2012 9:02 PM GMT


    The "banned" TEDS talk by Nick Hanauer
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    May 17, 2012 9:05 PM GMT
    He's awesome!
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    May 17, 2012 9:15 PM GMT
    I haven't watched the video yet, but I created a bumper sticker for the back of my car that says "Consumers create jobs, not corporations."
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    May 17, 2012 9:15 PM GMT
    what I love is that what he says is genuinely self evident- if you understand it you know it´s right. Of course it´s more nuanced, but he understands that as well as anyone.
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    May 17, 2012 9:25 PM GMT
    I know it's stupid to even try to bring logic into the topic, but I'm surprised that nobody points out that any money actually used to "create jobs" is entirely tax deductible.


    Unfortunately the (*$&)(*#&$ government paperwork required to hire ONE person takes TWO people to do icon_mad.gif
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    May 18, 2012 3:16 AM GMT
    Great video.

    Simple concept that seems to escape many people.

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    May 18, 2012 5:17 AM GMT
    He speaks the truth well.
    We need economic policies that will help support the Great American Middle Class of CONSUMERS.
    That's the way to create jobs and fire up the economy.

    We do NOT need the Repub economic policies that help the rich get richer while doing nothing to create jobs or a strong economy.
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    May 18, 2012 6:28 AM GMT
    Here's the fundamental problem with his argument - which is also one of the reasons a number of the leaders of the companies he invested in have openly fought him on the issue of higher taxes:
    http://news.ycombinator.com/item?id=3989837

    His talk makes the mistake that spending money is what drives the economy. This is a fundamental error.

    What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value.

    Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it to B so B can buy things from A does not (and cannot) make A wealthier.

    The route to greater wealth for A and B is that both A and B specialize in creating things that the other wants. Then, they trade, and each winds up with a higher standard of living than if each tried to do both. Economies are built on the greater efficiency that comes from specialization, and the resulting trade.
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    May 18, 2012 12:49 PM GMT
    riddler78 saidHere's the fundamental problem with his argument - which is also one of the reasons a number of the leaders of the companies he invested in have openly fought him on the issue of higher taxes:
    http://news.ycombinator.com/item?id=3989837

    His talk makes the mistake that spending money is what drives the economy. This is a fundamental error.

    What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value.

    Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it to B so B can buy things from A does not (and cannot) make A wealthier.

    The route to greater wealth for A and B is that both A and B specialize in creating things that the other wants. Then, they trade, and each winds up with a higher standard of living than if each tried to do both. Economies are built on the greater efficiency that comes from specialization, and the resulting trade.
    I don't think its fair to describe that as a fundamental error. Rather, your explanation while OK as far as it goes is overly simplistic. Yes, its the real value not the currency that we are after, but you also have to take into account secondary effects like 'aggregate demand'. Perhaps that's an ideological bent of yours or perhaps just omission?

    Either way, the process of creating 'real value' on both sides cannot get started in some cases because neither A nor B has any confidence (or capital to support their confidence) that the other side will have the currency to buy the real value they intend to create.

    Sure, the currency itself just goes around in circles, and only acts as a catalyst to creation of the 'real value' we are after. But by injecting actual currency to one side or the other (through tax cuts or other means) we increase the aggregate demand and thus amount of flow of this currency in the economy as a whole. This could then (hopefully) increase the confidence of A and B that the other will buy their real value and thus is a way to restart the circular flows of productivity that ultimately creates jobs (and real value).

    His talk sort of just assumes you are aware of all the above. His actual point is that by giving tax cuts to the wealthy instead of workers a greater percentage of the stimulus / tax cut stays in bank accounts and thus the effect on aggregate demand is less. (from his own source LOL)
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    May 18, 2012 1:27 PM GMT
    There are so many things inaccurate about his simpleton analogies that it makes my head hurt.

    "Rich people like me are just so totally useless in society..."

    What a hysterical joke!
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    May 18, 2012 1:31 PM GMT
    mocktwinkie saidThere are so many things inaccurate about his simpleton analogies that it makes my head hurt.

    "Rich people like me are just so totally useless in society..."

    What a hysterical joke!


    Which is not at all what he said.

    Hanauer's argument is completely sound.
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    May 18, 2012 1:43 PM GMT
    www.50centsloseweight.com
    We do NOT need the Repub economic policies that help the rich get richer while doing nothing to create jobs or a strong economy.
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    May 18, 2012 2:11 PM GMT
    TropicalMark_GySgtUSMC said
    riddler78 saidHere's the fundamental problem with his argument - which is also one of the reasons a number of the leaders of the companies he invested in have openly fought him on the issue of higher taxes:
    http://news.ycombinator.com/item?id=3989837

    His talk makes the mistake that spending money is what drives the economy. This is a fundamental error.

    What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value.

    Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it to B so B can buy things from A does not (and cannot) make A wealthier.

    The route to greater wealth for A and B is that both A and B specialize in creating things that the other wants. Then, they trade, and each winds up with a higher standard of living than if each tried to do both. Economies are built on the greater efficiency that comes from specialization, and the resulting trade.
    I don't think its fair to describe that as a fundamental error. Rather, your explanation while OK as far as it goes is overly simplistic. Yes, its the real value not the currency that we are after, but you also have to take into account secondary effects like 'aggregate demand'. Perhaps that's an ideological bent of yours or perhaps just omission?

    Either way, the process of creating 'real value' on both sides cannot get started in some cases because neither A nor B has any confidence (or capital to support their confidence) that the other side will have the currency to buy the real value they intend to create.

    Sure, the currency itself just goes around in circles, and only acts as a catalyst to creation of the 'real value' we are after. But by injecting actual currency to one side or the other (through tax cuts or other means) we increase the aggregate demand and thus amount of flow of this currency in the economy as a whole. This could then (hopefully) increase the confidence of A and B that the other will buy their real value and thus is a way to restart the circular flows of productivity that ultimately creates jobs (and real value).

    His talk sort of just assumes you are aware of all the above. His actual point is that by giving tax cuts to the wealthy instead of workers a greater percentage of the stimulus / tax cut stays in bank accounts and thus the effect on aggregate demand is less. (from his own source LOL)


    If you actually understood what this guy was saying you'd actually know he doesn't contradict the fundamental flaw as pointed out by the original poster. It's also not overly simplistic. Aggregate demand takes into account value creation given that there's no demand if there isn't an opposing value that is created.
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    May 18, 2012 4:29 PM GMT
    riddler78 saidHere's the fundamental problem with his argument - which is also one of the reasons a number of the leaders of the companies he invested in have openly fought him on the issue of higher taxes:
    http://news.ycombinator.com/item?id=3989837

    His talk makes the mistake that spending money is what drives the economy. This is a fundamental error.

    What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value.

    Simply handing people money to spend is not stimulative because it does not create value. Put another way, taking money from A and giving it to B so B can buy things from A does not (and cannot) make A wealthier.

    The route to greater wealth for A and B is that both A and B specialize in creating things that the other wants. Then, they trade, and each winds up with a higher standard of living than if each tried to do both. Economies are built on the greater efficiency that comes from specialization, and the resulting trade.



    Riddler, see this?

    "What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value."

    That is exactly what drives the underground and blackmarket economies.
    Money does not exchange hands, goods and services do and no money goes to the, er, reapers of consumerism (Now who would they be?......)
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    May 18, 2012 5:43 PM GMT
    Great propagandist.icon_idea.gif
  • rnch

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    May 18, 2012 5:48 PM GMT
    RickRick91 saidHe speaks the truth well.
    We need economic policies that will help support the Great American Middle Class of CONSUMERS.
    That's the way to create jobs and fire up the economy.

    We do NOT need the Repub economic policies that help the rich get richer while doing nothing to create jobs or a strong economy.




    How VERY True icon_exclaim.gif
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    May 18, 2012 7:40 PM GMT
    meninlove said Riddler, see this?

    "What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value."

    That is exactly what drives the underground and blackmarket economies.
    Money does not exchange hands, goods and services do and no money goes to the, er, reapers of consumerism (Now who would they be?......)


    Lol - I fail to see your point. Value drives all transactions - black markets or otherwise. Value is from innovation, arbitrage or looting - the last of which is what drives much of the black markets in developed countries. Money does exchange hands - what do you suppose they typically use in the black market? Peanuts? Cows? Pixie dust? What's your point?
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    May 18, 2012 7:59 PM GMT
    riddler78 said
    meninlove said Riddler, see this?

    "What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value."

    That is exactly what drives the underground and blackmarket economies.
    Money does not exchange hands, goods and services do and no money goes to the, er, reapers of consumerism (Now who would they be?......)


    Lol - I fail to see your point. Value drives all transactions - black markets or otherwise. Value is from innovation, arbitrage or looting - the last of which is what drives much of the black markets in developed countries. Money does exchange hands - what do you suppose they typically use in the black market? Peanuts? Cows? Pixie dust? What's your point?


    I'm pretty sure the "value fairy" is a close relative of the "confidence fairy" who are first cousins of the "bullshit gnome.'
  • tazzari

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    May 18, 2012 8:15 PM GMT
    http://doonesbury.slate.com/
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    May 18, 2012 8:19 PM GMT
    Christian73 said
    riddler78 said
    meninlove said Riddler, see this?

    "What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value."

    That is exactly what drives the underground and blackmarket economies.
    Money does not exchange hands, goods and services do and no money goes to the, er, reapers of consumerism (Now who would they be?......)


    Lol - I fail to see your point. Value drives all transactions - black markets or otherwise. Value is from innovation, arbitrage or looting - the last of which is what drives much of the black markets in developed countries. Money does exchange hands - what do you suppose they typically use in the black market? Peanuts? Cows? Pixie dust? What's your point?


    I'm pretty sure the "value fairy" is a close relative of the "confidence fairy" who are first cousins of the "bullshit gnome.'


    The latter of which are close relatives to you are they not? icon_lol.gif
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    May 18, 2012 8:27 PM GMT
    riddler78 said
    Christian73 said
    riddler78 said
    meninlove said Riddler, see this?

    "What drives the economy is people creating value. When people have created value, they can exchange that value for things they want from other people who have created value."

    That is exactly what drives the underground and blackmarket economies.
    Money does not exchange hands, goods and services do and no money goes to the, er, reapers of consumerism (Now who would they be?......)


    Lol - I fail to see your point. Value drives all transactions - black markets or otherwise. Value is from innovation, arbitrage or looting - the last of which is what drives much of the black markets in developed countries. Money does exchange hands - what do you suppose they typically use in the black market? Peanuts? Cows? Pixie dust? What's your point?


    I'm pretty sure the "value fairy" is a close relative of the "confidence fairy" who are first cousins of the "bullshit gnome.'


    The latter of which are close relatives to you are they not? icon_lol.gif


    Oh, I believe that shoe is on one of your feet.
  • conservativej...

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    May 18, 2012 9:50 PM GMT
    I am so glad to hear that. That means America has absolutely no interest in my wealth. I suppose I'll just spend my days from hence forth crusing the oceans without the thought of ever doing something like creating a job.

    OBS24 will just love my further support.
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    May 18, 2012 9:55 PM GMT
    Last I knew, Orders for goods and services is what creats jobs, and those orders come about when the common man has money to spend to fill his needs, which creates the need (orders) for more goods and services .

    The wealthy will not spend their money to make more goods and provide more services without orders. Until such time as orders start increasing, their money will sit, or be circulated in Wall Street Skeems which creats nothing, but often brings profit from others ruination.

    As usual the far right 'believers' have a pie in the sky backwards view of reality. Hense they are pushing to give the wealthy more money in tax breaks at the expense of the lower income safety net programs, thereby cutting back even more on money circulating in the economy, which will further depress 'orders'. Putting more money in the hands of the wealthy who have had 10 years of this bullshit and has only proven that in fact the wealthy do not create jobs, they wait on Orders for that.
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    May 18, 2012 10:00 PM GMT
    realifedad said Last I knew, Orders for goods and services is what creats jobs, and those orders come about when the common man has money to spend to fill his needs, which creates the need (orders) for more goods and services .

    The wealthy will not spend their money to make more goods and provide more services without orders. Until such time as orders start increasing, their money will sit, or be circulated in Wall Street Skeems which creats nothing, but often brings profit from others ruination.

    As usual the far right 'believers' have a pie in the sky backwards view of reality. Hense they are pushing to give the wealthy more money in tax breaks at the expense of the lower income safety net programs, thereby cutting back even more on money circulating in the economy, which will further depress 'orders'. Putting more money in the hands of the wealthy who have had 10 years of this bullshit and has only proven that in fact the wealthy do not create jobs, they wait on Orders for that.


    But that is the problem here - the ones who have it backwards are Hanauer and the leftists who seem to be apathetic if not down right hostile to creators in our society. The irony is the Hanauer makes his money by not following his own advice - he seeks firms and founders who do innovative things because they solve problems.

    People don't buy if the value that's offered isn't greater than the cost to them. That's why every transaction requires value - that both parties must "win". That's what drives commerce - not some general demand satisfied by basic goods or services - which otherwise government could just quite simply provide and provide it quite poorly as a number of societies have shown.
  • conservativej...

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    May 18, 2012 10:16 PM GMT
    realifedad said Last I knew, Orders for goods and services is what creats jobs, and those orders come about when the common man has money to spend to fill his needs, which creates the need (orders) for more goods and services .

    The wealthy will not spend their money to make more goods and provide more services without orders. Until such time as orders start increasing, their money will sit, or be circulated in Wall Street Skeems which creats nothing, but often brings profit from others ruination.

    As usual the far right 'believers' have a pie in the sky backwards view of reality. Hense they are pushing to give the wealthy more money in tax breaks at the expense of the lower income safety net programs, thereby cutting back even more on money circulating in the economy, which will further depress 'orders'. Putting more money in the hands of the wealthy who have had 10 years of this bullshit and has only proven that in fact the wealthy do not create jobs, they wait on Orders for that.


    Those goods and services don't come about until the infrastructure to produce them is in place.