I have been using the the same blog software to run this site for a very long time, and its age is starting to show. In the near future, I’m going to have to upgrade it or the site will no longer function. Sadly, I don’t know how much of the current layout will be compatible with the new software, so the site may also get a new look to go with its software upgrade. I’ll try to get the changes made in the next week.
December 22, 2011
December 13, 2011
One of the biggest and most destructive economic myths of today is that the Wealthy Are Job Creators. We can’t tax them, inconvenience them, or demand the slightest shred of human decency from them, because then they might not save us with their precious, precious jobs. This myth (not the reality) is the mighty justification for politicians to keep cutting taxes on the rich and on big corporations, cutting regulations on business, cutting environmental protections, and cutting workers’ rights. We must all bow before our all-seeing, all-knowing, all-job-creating masters.
Which is why this trio of related articles that blow that myth to hell are all so welcome.
The first is an editorial in Bloomberg Businessweek by entrepreneur/venture capitalist Nick Hanauer, called “Raise Taxes on Rich to Reward True Job Creators”. The second is a commentary on that editorial by Henry Blodget, editor of the website Business Insider, called “Finally, A Rich American Destroys The Fiction That Rich People Create The Jobs”, and the third is another article by Blodget that defends one of his key arguments in the previous article, “No, Entrepreneurs Like Steve Jobs Do Not ‘Create Jobs’ By Inventing Products Like The iPhone”.
This trio of articles makes two key points: 1) raising taxes does not, as we are so often told, discourage business people from creating new companies or hiring more employees, and 2) the real job creator in America is the average consumer, not any businessman or entrepreneur.
The first part makes plenty of sense. If you’re a millionaire, and you can start a new business that will make you millions more dollars a year, would a small increase in your tax rate make you say, “nah, I don’t need those extra millions”? Probably not. This trio of articles makes that argument, as does this earlier one by a businessman who says that the tax rates have NEVER entered his head when starting new business.
The second argument is a little less obvious, but still rings very true. If you invent a brilliant new product like the iPhone, and get enough financial backing to bring it to market, you have created some jobs, BUT:
those jobs are all TEMPORARY if people don’t buy your product.
So Hanauer and Blodget are arguing very compellingly that entrepreneurs get the ball rolling, but that they only create a relatively small number of jobs for the country. It is the purchasing dollars of average Americans which make those jobs permanent, and allow the companies to sustain, grow, and become much larger job creators.
They then make the argument that our current economic inequality is itself a barrier to job creation. As an example, they talk about Hanauer’s post-tax income of $9 million a year:
With the more than $9 million a year Hanauer keeps, he buys lots of stuff. But, importantly, he doesn’t buy as much stuff as would be bought if that $9 million were instead earned by 9,000 Americans each taking home an extra $1,000 a year…
Despite Hanauer’s impressive lifestyle — his family owns a plane — most of the $9+ million just goes straight into the bank (where it either sits and earns interest or gets invested in companies that ultimately need strong demand to sell products and create jobs). For a specific example, Hanauer points out that his family owns 3 cars, not the 3,000 that might be bought if his $9+ million were taken home by a few thousand families…
If that $9+ million had gone to 9,000 families instead of Hanauer, it would almost certainly have been pumped right back into the economy via consumption (i.e., demand). And, in so doing, it would have created more jobs.
That’s the reality for you. YOU are the job creators, not THEM.
(Or you would be, if you had any money)
December 5, 2011
When we last left Gov. Scott Walker, he had dressed up like Santa Claus, and was preparing to descend upon the Whos of Whosconsin, to take all their presents and take their roast beast…
Wait, no, wrong guy.
Scott Walker, as you’ll recall (please!), ran for governor of Wisconsin as a Jeewhiz Folksy Downhome Republican. But after taking office, he ripped off his human outer covering to reveal the authoritarian Godzilla underneath, slashing taxes for the rich, cutting services for the poor, firing government workers en masse, and trying to end all public sector unions in the state. Understandably, the folks of Wisconsin were furious and scared, held massive protests for weeks, and are now attempting to get him ousted early (see earlier minor “recall” pun).
Walker is now unleashing his new Shut Up Hippies policy: if you want to protest against him, you have to pay money.
It’s bullshit on its face, with a few tiny fig leafs of logic, which also turn out to be bullshit after thinking about them for 40 seconds.
1) If a group of four or more people want to protest outside of any state building, they need to get a permit. And need to apply at least 72 hours in advance.
2) If more than 100 people want to protest outside the state capitol, they will have to pay for any extra police officers that are “required”, at a cost of $50 per cop, per hour. In advance.
3) Protesters could be billed for the costs to clean up any mess that government officials claim was left behind after the protest.
That’s an embarassingly self-serving rule. Who proposed it? Scott Walker. Who benefits from it? Scott Walker.
In conclusion, I am announcing that anyone who has every criticized me now owes me $10. I’ll be around shortly to collect.