TCTI: Too Crazy Too Ignore
 Dave Ross

Should you be making $45,000 more a year?

May 25, 2012 @ 11:44 am (Updated: 12:52 pm - 5/26/12 )

There's a popular series of talks on the web called the TED talks -- Technology, Entertainment, and Design, where really smart, successful people get 18 minutes to explain their world-changing ideas; the audience votes, and the best ones are posted on the web:

BUT There was some controversy recently over a speech which DID NOT make the cut.

"If it was true that lower taxes for the rich and more wealth for the wealthy led to job creation, today we would be drowning in jobs," says TED member Nick Hanauer.

This is Seattle venture capitalist Nick Hanauer, who made his fortune as an early investor in Amazon. And what he said about job creation didn't sit well with the curator of the TED series. Hanauer said that the key to job creation is more money in the hands of consumers:

"In this sense, an ordinary consumer is more of a job creator than a capitalist like me. That's why, when business people take credit for creating jobs it's a bit like squirrels taking the credit for creating evolution," continues Hanauer.

The talk was originally supposed to be posted in April, but it wasn't. And when a reporter for National Journal asked why, he was told that sometimes speeches are considered mediocre, or too partisan to make the cut, but in any case -- it's been posted now:

"If the typical American family still retained the same share of income that they did in 1970 they'd earn like $45,000 more a year. Imagine what our economy would be like if that were the case," says Hanauer.

See more of the talk here.

More Dave Ross

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Comments (89)


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  • CH wrote...
    The rich are the job creators . . . .
    May 26, 2012 8:50 pm
    LOL
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  • slightlychipped wrote...
    RE: Rich are the job creators...
    May 26, 2012 9:29 pm
    When was the last time you got a job from a poor person? Moron
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  • HPD 5-0 wrote...
    He doesn't have a job.
    May 27, 2012 7:58 am
    He lives off hard working people like you and me.
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  • Ron_Spins wrote...
    The rich includes Small business owners
    May 26, 2012 10:34 pm
    That's why this effort to divide by class warfare is going to fail.
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  • sportsguru wrote...
    Ron_Spins
    May 27, 2012 6:28 am
    Thank you, these people think business owners are all rich like Mitt Romney. Jeez, people are stupid,lol.
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  • rational wrote...
    The rich includes Small business owners
    May 27, 2012 1:37 pm
    You are correct, a great many small businesses are sole proprietorships. So even if they have a million dollars in income, once you deduct business expenses, such as cost of product, rent, utilities, salaries of employees etc many make in the range of $50k to $100k...so lets make sure to soak them as if they actually clear a million.

    The problem with socialism is their idea of equality is to bring everyone down to the lowest common denominator.

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  • SickofSeattleite wrote...
    while everyone seems to be talking about taxes and fees
    May 27, 2012 7:40 am
    don't forget about mandatory healthcare if your an unemployed loser you will get it free everyone else will be forced to pay not to mention all the other taxes that go into effect after the next presidential election,....capital gains, death tax at 50% etc etc America is in massive debt and nobody seems worried about this...they are more worried about a Romney Unicorn... really? Wake up people.
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  • HPD 5-0 wrote...
    "mandatory healthcare"
    May 27, 2012 8:02 am
    It will never happen. Auto insurance is "mandatory" too. You know how many people drive around w/out insurance daily? What will happen is it will quickly bankrupt our country, force us all to have rationed health care and our quality of health will decline even more. All brought to you by the Dimocratic Party and Owebama.
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  • sportsguru wrote...
    Right
    May 27, 2012 8:40 am

    As if our healthcare has not been in decline for the last 30 yr now with the massive amount of money it cost just to have insurance,lol.

    People need to get a clue, if you think that the healthcare system that we have now is the best that can be offered, boy, the U.S. will be bankrupt.

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  • It's me! Ha ha! wrote...
    With the defeat of ObamaCare and getting government out of the private healthcare industry
    May 27, 2012 8:58 am
    We will get private healthcare back.

    Our healthcare is the best in the world. The problem is government intrusion and regulations.

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  • ron prevost wrote...
    All of which shows that ObamaCare is...
    May 27, 2012 9:39 am
    less than 6 degrees separation form unicorns. ............... But unicorns are more reasonable.
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  • Chuck Gould wrote...
    False economic theory: "Lower taxes on corporations create more jobs".
    May 27, 2012 10:03 am
    Taxes and payroll are both "expenses". One doesn't go out and just gleefully increase one category of expense (payroll) because another category (taxes) has been reduced. When expenses are reduced in one category or another, the proper economic response is to move more money to the bottom line. Executive compensation, stockholder dividends, etc are the natural economic destinations of any money saved in taxes, not the increase of another expense.

    Corporations will increase the expense of payroll only when the increase in expense will result in more productivity and greater profits. Not for any other reason. Certainly not to "celebrate" a lower tax rate.

    In order for increased productivity to result in greater profits, there has to be downstream *demand* for whatever is produced. If you are building 1,000 widgets per week and the market for widgets is so saturated (or depressed) that you are working your butt off to sell 990 of them, why would a decrease in taxes inspire you to hire additional workers and produce 1500 instead? Why produce 1500 widgets, for a 990 widget market?

    Over the last 15 or 20 years, there has been a huge transfer of wealth in this country. It has been transferred *upward*, with the top couple of percent of the population controlling a huge percentage of the national wealth- and this trend is accelerating. The rich are getting richer, the poor are getting poorer, and as the middle class shrinks more of the middle class moves down than moves up.

    I won't try to judge whether the transfer of wealth upward is "good" or "bad"; it just is. It has happened in most historic economies.

    The tough aspect is that when a disproportionate share of the wealth is controlled by a very small number of people, their small numbers fail to provide the "critical mass" of demand required to stimulate employment. Even if you're uber-wealthy, there are only so many goods and services you can consume.

    Like Mr. Hanauer observes, put more money in the hands of people who *must* spend it in order to maintain a middle class lifestyle and that money will change hands more often within the economy. The amount of times a dollar changes hands is more closely related to job creation than the number of dollars squirreled away in an offshore bank account by some multi-billionaire.

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  • rational wrote...
    Chuck Gould
    May 27, 2012 1:51 pm
    Over the last 15 or 20 years, there has been a huge transfer of wealth in this country. It has been transferred *upward*, with the top couple of percent of the population controlling a huge percentage of the national wealth- and this trend is accelerating. The rich are getting richer, the poor are getting poorer, and as the middle class shrinks more of the middle class moves down than moves up.

    There is some classic failed Keynesian economics there...your header of false economic theory applies to your own post.

    The truth is the rich get richer, and the poor get richer as well, although not at as great a rate as the rich. Most poor in the US now have at least 1 tv, cable tv, cell phones, cars, air conditioning etc. That isn't poor in world standards, that's wealthy. And it's wealthy by histoical standards from 20 years ago as well. So it's inaccurate to say the poor are getting poorer...wealth is not a zero sum game...and failure to grasp that is one of the reason why Obama is a terrible president.

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  • tlmbrt wrote...
    The "poor"
    May 27, 2012 7:49 pm
    in this country are wealthy by standards of most countries. And you can blame liberals for the destruction of the middle class. They are the ones who caused the businesses who HAD the middle class jobs to FLEE THE COUNTRY to avoid HIGH TAXES and OPPRESSIVE REGULATIONS! A liberal believes the wealthy should be forced to give their wealth to the government, who then decide how to dole it out (DEPENDENCY and ECONOMIC SLAVERY!) A conservative wants to make MORE PEOPLE WEALTHY. "Give a man a fish, he eats for a day. TEACH a man to fish, he eats for a LIFETIME."
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  • Ron_Spins wrote...
    Yes , very well said
    May 27, 2012 10:27 pm
    The poor in this country are actually well fed (most everyone is obese)the poor in this country have cars,phones, TV sets,cigarette and booze habits... The poor in this country ain't poor.
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  • Fuego wrote...
    I wonder how many...
    May 27, 2012 10:13 am
    people got hired from a poor person?
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  • sportsguru wrote...
    Fuego
    May 27, 2012 10:59 am

    You don't have to be rich to create a job for someone, I am a small business owner, I AM NOT A MILLIONAIRE and I have been creating jobs for people.

    I think your way of thinking is the problem, you expect rich people to create a job for you and they are in the business of creating wealth, not jobs, they only create jobs if they can create wealth from that job.

    And by the way, poor people are consumers, so they do create jobs as well.

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  • HPD 5-0 wrote...
    That's why you are a realist, sports.
    May 27, 2012 11:42 am
    You live, work etc in the real world. Not the one inhabited by Chuckie, CH and wrongway etc.
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  • kata wrote...
    if you make more than $200K a year you are "rich"
    May 27, 2012 3:35 pm
    $250K if you are a "household". That is, if you're a politician vying for taxes. Of course in metropolitan areas that number falls horridly short.
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  • It's me! Ha ha! wrote...
    And by the way, poor people are consumers, so they do create jobs as well
    May 27, 2012 1:43 pm
    Don't you think that if they had more of their money (Not Mine!) they would buy more of your product and others? If I had more of my money I could and would buy more!
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  • ron prevost wrote...
    I hate getting serious on this post BUT.......
    May 27, 2012 4:03 pm
    didn't Oz tell us that unemployment and food stamps create more jobs than real employment ?
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  • Realitycheck wrote...
    Ok, just to keep it simple for everyone
    May 27, 2012 1:44 pm
    If it is really true that 85% or the American economy is consumer consumption based, meaning us buying, cars, houses, other toys etc. then everybody with half a brain should get it that more money in our pockets will achieve a strong economy. In fact, the more secure we feel about our current and future income, the more we are willing to spend on all kinds of things, therefore boosting the economy. The same thing was true for the bank bail-out. Giving the banks money did little to help our economy and certainly won't teach them to be more responsible, but if victims (that does not include people with 25K income buying 500K homes btw.)of the bank fraud would've have been given money to stay current on their mortgage payment or even pay off 100K or more it would've made a huge difference in the recovery. But greed of the rich is getting in the way of that very logic solution. And both parties have their own agendas and it is not justice for the average American, that is for sure.
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  • It's me! Ha ha! wrote...
    Realitycheck I think that you are pretty much on target.
    May 27, 2012 2:35 pm
    I do take exception with your last sentence. I am sure there are some greedy rich folks and they are no different than anyone else. I feel that the achievers have been vilified by other rich people in this nation. With what we have and are seeing from this current government, I am certain and sure that the best thing will be to remove the old blood and try some new. Nobody can do any worse than Obama and the Liberals have.
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  • William Lawn wrote...
    Yeah, let us get the R's back
    May 27, 2012 3:24 pm
    Start a couple of more off budget wars.

    That would create some "new blood".

    Fireman, you think the "achievers have been vilified" because you aren't one.

    Reducing the capital gains taxes on investment income CAN create jobs but it doesn't ALWAYS create jobs.

    How does a stock sale for a capital gain create "jobs"? Be specific now.

    And tell me why capital gains income is taxed at a lesser rate than your pay check? No payroll tax, either.

    Sweet, isn't it?

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  • kata wrote...
    and I have some arguments with that as well
    May 27, 2012 3:46 pm
    while I do believe that a little greed is good -- I think that a "change of guard" or "let's do something even if it's wrong" is hardly the way to pick a candidate.

    I also agree that achievement has been vilified. Who doesn't want to do better in life? But those who have "made it" are continously berated about not paying that mysterious and highly argued dollar amount called "a fair share".

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  • William Lawn wrote...
    Kata, we have the lowest top marginal tax rate since 1935, I believe
    May 27, 2012 3:55 pm
    During the "golden years" of our country, top tax rates were 70% plus percent, sometimes approaching 90%. Now that would be top. And the top then (in inflation adjusted dollars) is a lot higher than the top rate now.

    But here you go, enjoy.

    http://visualizingeconomics.com/2011/04/14/top-marginal-tax-rates-1916-2010/

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  • kata wrote...
    Mr Lawn
    May 27, 2012 4:12 pm
    I was actually directing my comment to "It's me! Ha ha!". Your chart does not argue my point. Can you tell me something though - back then, did people actually pay that 90%? Or were there gentlemen such as Mr. Buffet who strategized their earnings so as to escape those rates.
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  • William Lawn wrote...
    I am sure some was "strategized".
    May 27, 2012 4:30 pm
    I very much doubt it was like it is today, though.

    As a young man I was TOLD raises were turned down because it wasn't "worth it".

    Was it true?

    Well, I hope my dad was being straight with me.

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  • kata wrote...
    well ...
    May 27, 2012 5:51 pm
    I'd much rather see a some figures demonstrating the average person's effective tax rates in that era.
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  • William Lawn wrote...
    I gave you the tax rates
    May 27, 2012 8:01 pm
    I'll leave the rest up to you. About the only real facts that have been offered on this page anyway.
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  • kata wrote...
    well I do know
    May 27, 2012 9:28 pm
    Tax revenue weaves between %15-20 of GDP no matter what the tax rate is. So I don't expect there to be anything too magical about a change in tax brackets as long as the people who are supposedly being targeted to pay more taxes, are provided ways out of paying them. I found old tax forms at the IRS website. Should prove to be a fun exercise.
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  • HPD 5-0 wrote...
    Willie...
    May 27, 2012 5:06 pm
    What I suggest is this; You take a calculator and figure out what you owe your left-wing gov't for your entire adult life's gross income....at the 80% tax level to be "fair". Then send send in a check. In the note line just right "My Fair Share". It will alleviate your left-wing guilt. Here's the address: Department of the Treasury 1500 Pennsylvania Avenue, NW Washington, D.C. 20220
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  • William Lawn wrote...
    Well Half Pint, since I have been a earner since 1969
    May 27, 2012 6:39 pm
    That would put me through a number of governments. I think Reagan and Nixon were in there somewhere, little guy. A couple of Bush's too. A Ford (hint not an F150).

    And no Half Pint, I dodge it with the best of them. Like Willard, no "left wing guilt" here. Mostly through capital gains. No payroll tax required.

    Sweet!

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  • CJtheDJ wrote...
    Where's the connection?!?
    May 27, 2012 4:47 pm
    Let me get this straight? If everyone earned $45,000 more per year, that would help the economy? Well I would think so. Establishing world peace would also reduce the murder rate, but what of it? Mr. Hanauer makes no attempt to link how taxing him more is going to increase my income by $45,000 per year. I think that's a pretty big gap he needed to spend some time on. Or more likely, he knows there is no link. I'm all for taxing everyone the same, if that's what he's saying. But even that isn't going to earn me any more money. It will be fair, efficient and simple though. And that's good enough for me.
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