Something funny happened when millionaire Nick Hanauer’s was
invited to give a TED talk on income inequality in America. He advocated
higher taxes on the rich – including people like himself. Then the good
people at TED decided his talk was too “political.” They decided not to
post it. Here’s an excerpt from Hanauer’s non-talk:
We’ve 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.
Read the full text of Hanauer’s non-talk here.
May 16, 2012 |
2:26 p.m.
Friday update: Read the full profile of Nick Hanauer, and his millionaire's case for the middle class, here.
Prepare to meet
Nick Hanauer.
He's a venture capitalist from Seattle who was the first non-family
investor in Amazon.com. Today he's a very rich man. And, somewhat
jarringly, he's screaming to anyone who will listen that he, and other
wealthy innovators like him, doesn't create jobs. The middle class does -
and its decline threatens everyone in America, from the innovators on
down.
(
RELATED: Why This Speech Was Too Hot for TED)
You'll
read a lot more about Hanauer in the next installation of Restoration
Calls, which drops tomorrow. In the meantime, check out the full text of
a speech Hanauer gave in March at the TED University conference. You
can't find the talk online, because TED officials have declared it too
politically controversial to post on their web site. You be the judge:
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.
This
idea is an article of faith for republicans and seldom challenged by
democrats and has shaped much of today's economic landscape.
But
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.
In
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
bad policy.
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.
So
when businesspeople take credit for creating jobs, it's a little like
squirrels taking credit for creating evolution. In fact, it's the other
way around.
Anyone who's ever run
a business knows that hiring more people is a capitalists 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.
That's
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%.
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.
Another
reason this idea is so wrong-headed is that there can never be enough
superrich 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
occasionally.
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.
Here's
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?
Significant
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.
The
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
We've
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.
In
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.
Thank You.
By National Journal News Desk
May 16, 2012
|
5:14 p.m.
Read the backstory here.
Too Hot for TED: Income Inequality
Jeffery A. Salter
Seattle venture capitalist named Nick Hanauer
Updated: May 22, 2012 | 4:40 p.m.
May 16, 2012 | 3:03 p.m.
If you’re plugged into the Internet,
chances are you’ve seen a TED talk – the wonky, provocative web videos
that have become a sort of nerd franchise.
TED.com is where you go to find Facebook COO Sheryl Sandberg
explaining why the world has too few female leaders, or Twitter cofounder Evan Williams
sharing
the secret power of listening to users to drive company improvement.
The slogan of the nonprofit group behind the site is “Ideas Worth
Spreading.”
There’s one idea, though, that TED’s organizers
recently decided was too controversial to spread: the notion that
widening income inequality is a bad thing for America, and that as a
result, the rich should pay more in taxes.
(
RELATED: The Speech That's Too Hot for TED)
TED
organizers invited a multimillionaire Seattle venture capitalist named
Nick Hanauer – the first nonfamily investor in Amazon.com – to give a
speech on March 1 at their TED University conference. Inequality was the
topic – specifically, Hanauer’s contention that the middle class, and
not wealthy innovators like himself, are America’s true “job creators.”
(
RELATED: The Slides That Are Too Hot for TED)
“We’ve
had it backward for the last 30 years,” he said. “Rich businesspeople
like me don’t create jobs. Rather they are a consequence of an
ecosystemic 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.”
You can’t
find that speech online. TED officials told Hanauer initially they were
eager to distribute it. “I want to put this talk out into the world!”
one of them wrote him in an e-mail in late April. But early this month
they changed course, telling Hanauer that his remarks were too
“political” and too controversial for posting.
Other TED talks posted online veer sharply into controversial and political territory, including NASA scientist James Hansen
comparing climate change to an asteroid barreling toward Earth, and philanthropist Melinda Gates
pushing for more access to contraception in the developing world.
TED
curator Chris Anderson referenced the Gates talk in an e-mail to
colleagues in early April, which was also sent to Hanauer, suggesting
that he didn't want to release Hanauer’s talk at the same time as the
one on contraception.
Hanauer’s talk “probably ranks as one of the
most politically controversial talks we've ever run, and we need to be
really careful when” to post it, Anderson wrote on April 6. “Next week
ain't right. Confidentially, we already have Melinda Gates on
contraception going out. Sorry for the mixed messages on this.”
In early May Anderson followed up with Hanauer to inform him he’d decided not to post his talk.
National Journal
e-mailed Anderson to request an interview about what made a talk on
inequality more politically controversial than, for example,
contraception or climate change. Anderson, who is traveling abroad,
responded with an e-mail statement that appeared to swipe at the
popularity of Hanauer’s speech.
"Many of the talks given at the conference or at TED-U are not released,” Anderson wrote. “We only release one a day on
TED.com and
there's a backlog of amazing talks from all over the world. We do not
comment publicly on reasons to release or not release [a] talk. It's
unfair on the speakers concerned. But we have a general policy to avoid
talks that are overtly partisan, and to avoid talks that have received
mediocre audience ratings."
You can read the text of Hanauer’s talk
here.
You can read the full story of Hanauer and his warnings about the decline of the middle class on Thursday as part of
National Journal’s
Restoration Calls series.
Update: 4:09 p.m.
In
a May 7 email to Hanauer, forwarded to NJ, Anderson took issue with
several of Hanauer's assertions in the talk, including the idea that
businesspeople aren't job creators. He also made clear his aversion to
the "political" nature of the talk.
"I agree with your language
about ecosystems, and your dismissal of some of the mechanistic economy
orthodoxy, yet many of your own statements seem to go further than those
arguments justify," Anderson wrote.
"But even if the talk was
rated a home run, we couldn't release it, because it would be
unquestionably regarded as out and out political. We're in the middle of
an election year in the US. Your argument comes down firmly on the side
of one party. And you even reference that at the start of the talk. TED
is nonpartisan and is fighting a constant battle with TEDx organizers
to respect that principle....
"Nick, I personally share your
disgust at the growth in inequality in the US, and would love to have
found a way to give people a clearer mindset on the issue, without
stoking a tedious partisan rehash of all the arguments we hear every day
in the mainstream media.
"Alas, my judgment - and it is just a
judgment, and that's why my job title is 'curator' - is that publishing
your talk would not meet that goal."
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