Written by: EV
The TED Talks slogan, “ideas worth spreading”, doesn’t seem to apply to all ideas. In 2012, multi-millionaire Nick Hanauer delivered a speech at TED Talks on income inequality, and while the talk drew applause from the conference attendees at the time, TED Talk curator Chris Anderson decided it wasn’t worth sharing.
During the talk Hanauer suggested that middle-class consumers, not rich people, are the real job creators, and because of this the rich should be paying more taxes. His basic thesis—economic growth is mostly driven by consumer demand:
“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.”
Hanauer goes on to point out that even when businesses do well, they still try their hardest not to create new jobs because more jobs mean higher labor costs and lower profits.
“Anyone who’s ever run a business knows that hiring more people is a capitalist’s course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn’t’ just inaccurate, it’s disingenuous.”
In Hanauer’s opinion, our current policies are upside down. We have a tax system in which most of the exemptions and lowest rates benefit the richest. This is all in the name of job creation, but the rich don’t actually create jobs—they simply get richer.
“Since 1980, the share of income for the richest Americans has more than tripled while effective tax rates have declined by close to 50%. If it were true that lower tax rates and more wealth for the wealthy would lead to more job creation, then today we would be drowning in jobs. And yet unemployment and under-employment is at record highs.”
The ban on Nick Hanauer’s talk was eventually lifted thanks to the internet. The Atlantic published the entire text of the short talk, including slides, on its website. Soon Anderson himself relented (for the most part) and posted the video of the talk on Youtube. After the folks at TED realized Hanauer had a lot of public support, he was allowed to make a second speech.
Another related issue Hanauer is trying to tackle is time-and-a-half pay for American workers. In an article written by Hanauer for PBS News Hour:
“In 1975, more than 65 percent of salaried American workers earned time-and-a-half pay for every hour worked over 40 hours a week. Not because capitalists back then were more generous, but because it was the law. It still is the law, except that the value of the threshold for overtime pay—the salary level at which employers are required to pay overtime—has been allowed to erode to less than the poverty line for a family of four today. Only workers earning an annual income of under $23,660 qualify for mandatory overtime. You know many people like that? Probably not. By 2013, just 11 percent of salaried workers qualified for overtime pay, according to a report published by the Economic Policy Institute. And so business owners like me have been able to make the other 89 percent of your work unlimited overtime hours for no additional pay at all.”
Youtube video to original TED Talks speech:
Link to second speech at TED Talks:
http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming
______________________________________________________________________
Sources:
Futrelle, David. Time. May 18, 2012. (http://business.time.com/2012/05/18/was-nick-hanauers-ted-talk-on-income-inequality-too-rich-for-rich-people/)
Hanauer, Nick. PBS News Hour. Dec 1, 2014. (http://www.pbs.org/newshour/making-sense/middle-class-cant-get-ahead/)
McAdam, Sophie. True Activist. Dec 9, 2014. (http://www.trueactivist.com/ted-banned-this-billionaire-for-exposing-capitalisms-biggest-lie/)
This is nothing new to me.
I am certainly pleasantly surprised by Hanauer’s apparent courage to openly disagree with his fellow billionaires — who “think he’s bonkers” — on the problem of inequality, his motivations for wanting to change the way things are going right now could have been much better. He still is missing the point when it comes to inequality, and he needs to look at the ROOT CAUSES. I discuss that here:
http://blog.kareldonk.com/nick-hanauer-youre-missing-the-point-on-inequality/
“So Hanauer doesn’t have a problem with inequality per se; it’s just that it’s getting a little too extreme now. And these high levels of inequality threaten his empire and his (way of) life. So Hanauer’s motivation is fear. He fears the pitchforks that are coming, and rightfully so.”
You just made it sound something you wanted to. I get the point, but you can’t be sure it’s that – yet you sound like you do. Is it impossible to think that people can change and start to think differently? Is it impossible that one day some people will just “wake up” and understand what they are doing is wrong?
“The Pitchforks are coming” couldn’t have said that better
I’ve been saying this for years. Thank you Mr Hanauer. We need more people like you running things.
It seems like the people who really keep the country going have been forgotten.
I appreciate that it takes people with money to build things & start businesses. However, without the middle & poverty classes providing the labor for the business & customers to use the business, there would be no business.
Take note, when the world comes to an end, all your money will mean nothing. You’ll be coming to us because we’ll know how to do things.
I have a crazy idea. What if we did’t tax the rich more BUT! we forced them to utilize their extra wealth in investing/creating new companies.
For example: Lets say I have a company. And in the end of the year I made 1 million in profit (after tax and expenses). It would be great to have a law that says “You can keep the 50% in cash; but the rest 50% MUST be invested in a startup or whatever”.
Wouldnt this force the rich to create new jobs; and even make them richer AND put the truth in the myth that “Rich are job-creators” ??
that’s basically taxation except you have slightly more control (according to your very rough example) of what your money goes to. Depending on the regulations that could go from being basically taxation to basically the rich using loop-holes to further exploit the capitalist system and make more money for themselves.
It seems you may not have paid attention to what he said. What good is there in “creating jobs” if what those jobs produce do not have demand from people? Suppose we “force” someone to create a business and no one buys? Should we then force people to buy?
Economics 101
Yes indeed, we should make them buy what ever the collective government decides they need. I could be bread, green shoes, or healthcare insurance. When 10% of the people are paying for almost 70% of the government, something needs to change. How about not worrying about how much we want to tax the rich, but how much government overhead costs each and every product that is sold. Democracy is a government that can be effective, but is seldom if ever efficient. Let’s tax the hell out of the rich and decide what will be produced, then we can be more like Stalin’s Russia.
It would be great if they taxed the living crap out of the churches as well. Those bastards have tens of billion. All of which they’ve siphoned out of the most gullible suckers yet. As for “collective” government using force against citizens, that crap needs to be deeply shoved out of existence. We have more than enough of that business now.
Income inequality, like “White Privilege” and Global Warming, is just another way for liberals to make themselves feel superior to the real movers and shakers of the world.
As long as there is a disparity in the amount of EFFORT contributed by the haves and have nots therw will be income inequality.
I do agree, however, that it is not the rich who create jobs. They got rich by creating jobs in the past. After they become rich they no longer create jobs, that task being passed on to the middle class who are trying to get rich so THEY can stop creating jobs.
The statement that “If there were no customers to buy my product my businesses would have failed” is reversable as well.
If there were no products to by, it wouldn’t matter how many “customers” were out there with buckets full of money.
As I was taught in the insurance industry decades ago, an agent has to go out and CREATE demand or he will never sell a single policy because people don’t get up in themorning and say “Gee, I need to go buy some insurance” unlss they ahve been convinced by SOMEBODY that they need it.
So in that case it is not demand that created the sale, it was the supply.
And the ads.
Who wories about pitchforks if they have a submachine gun?
fuck the pitchforks the rich just needs to stop being greedy