Yesterday, National Journal's Jim Tankersley introduced us to Nick Hanauer, a venture capitalist from Seattle, whose speech at the TED University
conference was deemed "too politically controversial to post on their web site." Last night, NJ produced the full slideshow to accompany the full text of the speech. Here they are:
TED 2012 More Slides Final1
And here is the speech that accompanied it:
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.
idea is an article of faith for Republicans and seldom challenged by
Democrats and has shaped much of today's economic landscape.
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.
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
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
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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.
when businesspeople take credit for creating jobs, it's a little like
squirrels taking credit for creating evolution. In fact, it's the other
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.
why our current policies are so upside down. When you have a tax system
in which most of the exemptions and the lowest rates benefit the
richest, all in the name of job creation, all that happens is that the
rich 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%.
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.
reason this idea is so wrong-headed is that there can never be enough
super-rich Americans to power a great economy. The annual earnings of
people like me are hundreds, if not thousands, of times greater than
those of the median American, but we don't buy hundreds or thousands of
times more stuff. My family owns three cars, not 3,000. I buy a few
pairs of pants and a few shirts a year, just like most American men.
Like everyone else, we go out to eat with friends and family only
I can't buy enough
of anything to make up for the fact that millions of unemployed and
underemployed Americans can't buy any new clothes or cars or enjoy any
meals out. Or to make up for the decreasing consumption of the vast
majority of American families that are barely squeaking by, buried by
spiraling costs and trapped by stagnant or declining wages.
an incredible fact. If the typical American family still got today the
same share of income they earned in 1980, they would earn about 25%
more and have an astounding $13,000 more a year. Where would the economy
be if that were the case?
privileges have come to capitalists like me for being perceived as "job
creators" at the center of the economic universe, and the language and
metaphors we use to defend the fairness of the current social and
economic arrangements is telling. For instance, it is a small step from
"job creator" to "The Creator". We did not accidentally choose this
language. It is only honest to admit that calling oneself a "job
creator" is both an assertion about how economics works and the a claim
on status and privileges.
extraordinary differential between a 15% tax rate on capital gains,
dividends, and carried interest for capitalists, and the 35% top
marginal rate on work for ordinary Americans is a privilege that is hard
to justify without just a touch of deification.
had it backward for the last 30 years. Rich businesspeople like me
don't create jobs. Rather they are a consequence of an eco-systemic feedback loop animated by middle-class consumers, and when they thrive,
businesses grow and hire, and owners profit. That's why taxing the rich
to pay for investments that benefit all is a great deal for both the
middle class and the rich.
So here's an idea worth spreading.
a capitalist economy, the true job creators are consumers, the middle
class. And taxing the rich to make investments that grow the middle
class, is the single smartest thing we can do for the middle class, the
poor and the rich.