This is excellent. It’s from a few months back but if you missed it, it’s worth the listen. Nick Hanauer is a self-made millionaire who makes the argument that “in a true capitalist economy, the true job creators are middle class consumers.”
Hanauer’s argument is based on the premise that when the tax burden resides at the top of the income ladder, then the middle class is in a position to consume thereby “starting the positive feedback loop of job creation again.”
Take a listen.
Hanauer expounds on his ideas in an Atlantic piece.
Capitalists are idea creators, not job creators.
Every business, from the mundane (“How do you make the chip taste more like BBQ?”) to the arcane (“How do we turn photons into electrons?”), is based on an idea about how to solve a problem. The process of converting great ideas into products that effectively solve fast-changing human needs is what creates a business. The essence of every business is both an idea for a product that meets an important human need and the ability to make that product efficiently in order to create profit. …
If capitalists create ideas that produce social and economic value, then it is obvious why it makes so little sense to pour more money into the already wealthy and successful. Even the best of us have only a few ideas. Steve Jobs, arguably the greatest entrepreneur of our generation, had only a handful of truly brilliant ideas. Most billionaires, it could be argued, have only one. It would be far better for our country to enable every citizen to participate in our capitalist economy by ensuring that they have the requisite education and access to capital and training to convert those ideas into products that solve the world’s problems.
Of course, the kind of problems we choose to solve is important. Finding clever ways of securitizing imaginary assets may not create a lot of social utility. Finding cheap ways of converting the sun’s rays into electricity unquestionably does.
Great success should be celebrated, but not institutionalized. When we tax working Americans at a higher rate than billionaires, it is bad for business. When we tax the small business more than our largest corporations, it is similarly bad for business. When we give tax breaks to the wealthiest while excluding those in the middle and the bottom, we slow down our economy by slowing down the rate of idea creation, because so many are excluded from the process of solving our nation’s problems.
Here’s a timely piece from Steven Pearlstein.
I am a job creator: A manifesto for the entitled.
I am a corporate chief executive.
I am a business owner.
I am a private-equity fund manager.
I am the misunderstood superhero of American capitalism, single-handedly creating wealth and prosperity despite all the obstacles put in my way by employees, government and the media.
I am a job creator and I am entitled.
I am entitled to complain about the economy even when my stock price, my portfolio and my profits are at record levels.
I am entitled to a healthy and well-educated workforce, a modern and efficient transportation system and protection for my person and property, just as I am entitled to demonize the government workers who provide them.
I am entitled to complain bitterly about taxes that are always too high, even when they are at record lows.
I am entitled to a judicial system that efficiently enforces contracts and legal obligations on customers, suppliers and employees but does not afford them the same right in return.
I am entitled to complain about the poor quality of service provided by government agencies even as I leave my own customers on hold for 35 minutes while repeatedly telling them how important their call is.
I am entitled to a compensation package that is above average for my company’s size and industry, reflecting the company’s aspirations if not its performance.
I am entitled to have the company pay for breakfasts and lunches, a luxury car and private jet travel, my country club dues and home security systems, box seats to all major sporting events, a pension equal to my current salary and a full package of insurance — life, health, dental, disability and long-term care — through retirement.
I am entitled to have my earned income taxed as capital gains and my investment income taxed at the lowest rate anywhere in the world — or not at all.
I am entitled to inside information and favorable investment opportunities not available to ordinary investors. I am entitled to brag about my investment returns.
I am entitled to pass on my accumulated wealth tax-free to heirs, who in turn, are entitled to claim that they earned everything they have.
I am entitled to use unlimited amounts of my own or company funds to buy elections without disclosing such expenditures to shareholders or the public.
I am entitled to use company funds to burnish my own charitable reputation.
I am entitled to provide political support to radical, uncompromising politicians and then complain about how dysfunctional Washington has become.
Although I have no clue how government works, I am entitled to be consulted on public policy by politicians and bureaucrats who have no clue about how business works.
I am entitled to publicly criticize the president and members of Congress, who are not entitled to criticize me.
I am entitled to fire any worker who tries to organize a union. I am entitled to break any existing union by moving, or threatening to move, operations to a union-hostile environment.
I am entitled to a duty of care and loyalty from employees and investors who are owed no such duty in return.
I am entitled to operate my business free of all government regulations other than those written or approved by my industry.
I am entitled to load companies up with debt in order to pay myself and investors big dividends — and then blame any bankruptcy on over-compensated workers.
I am entitled to contracts, subsidies, tax breaks, loans and even bailouts from government, even as I complain about job-killing government budget deficits.
I am entitled to federal entitlement reform.
I am entitled to take credit for all the jobs I create while ignoring any jobs I destroy.
I am entitled to claim credit for all the profits made during a booming economy while blaming losses or setbacks on adverse market or economic conditions.
I am entitled to deny knowledge or responsibility for any controversial decisions made after my departure from the company, even while profiting from such decisions if they enhance shareholder value.
I am entitled to all the rights and privileges of running an American company, but owe no loyalty to American workers or taxpayers.
I am entitled to confidential information about my employees and customers while refusing even to list the company’s phone number on its Web site.
I am entitled to be treated with deference and respect by investors I mislead, customers I bamboozle, directors I manipulate and employees I view as expendable.
I am entitled to be lionized in the media without answering any questions from reporters.
I am entitled to the VIP entrance.
I am entitled to everything I have and more that I still deserve.
(h/t: David Frum)