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It is a tenet of American economic beliefs, and an article of faith for Republicans that is seldom contested by Democrats: If taxes are raised on the rich, job creation will stop.

Trouble is, sometimes the things that we know to be true are dead wrong. For the larger part of human history, for example, people were sure that the sun circles the Earth and that we are at the center of the universe. It doesn’t, and we aren’t. The conventional wisdom that the rich and businesses are our nation’s “job creators” is every bit as false.

I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. (MSFT) in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc. (AMZN)

Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

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 the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Theory of Evolution
When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.

It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.

That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.

And that’s what has been happening in the U.S. for the last 30 years.

Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007, from 42 percent at the peak of U.S. productivity in the early 1960s, and about 30 percent during the expansion of the 1990s. In my case, that means that this year, I paid an 11 percent rate on an eight-figure income.

One reason this policy 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 average 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, I go out to eat with friends and family only occasionally.

It’s true that we do spend a lot more than the average family. Yet the one truly expensive line item in our budget is our airplane (which, by the way, was manufactured in France by Dassault Aviation SA (AM)), and those annual costs are mostly for fuel (from the Middle East). It’s just crazy to believe that any of this is more beneficial to our economy than hiring more teachers or police officers or investing in our infrastructure.

More Shoppers Needed
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 enjoy any meals out. Or to make up for the decreasing consumption of the tens of millions of middle-class families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.

If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.

It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again. Shifting the burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again.

Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.

Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high.

We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and 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 let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class. And let’s remember that capitalists without customers are out of business.

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Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high.

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I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. (MSFT) in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc. (AMZN)

Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

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 the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

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Originally posted by SIGNYM:
Look at the European governments: They're doing what the banks want them to do- cutting spending and slashing government programs to reduce government deficit and it's driving them into recession.

Greece, Spain, and Britain are all falling into significant economic contraction, thanks to the bankers' demands and the w/drawal of $$ from the middle class.

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Originally posted by Geezer:

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Originally posted by SIGNYM:
Look at the European governments: They're doing what the banks want them to do- cutting spending and slashing government programs to reduce government deficit and it's driving them into recession.

Greece, Spain, and Britain are all falling into significant economic contraction, thanks to the bankers' demands and the w/drawal of $$ from the middle class.

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Whereas prior to cutting spending they were all being driven towards bankruptcy.

Also note that Greece, Spain, and Britain all have significantly higher tax rates than the U.S., and much lower defense spending.

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Originally posted by Niki2:
Wow. Absolutely GORGEOUS! Of course, our righties here won't get it, but that's okay; the rest of us DO!

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Originally posted by HERO:

He also noted he has the capital, he has the idea, he starts the business, he creates the jobs.

The success or failure of the business is not based on the consumer, it's based in how well he executes each of those parts.

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Originally posted by HERO:

The success or failure of the business is not based on the consumer, it's based in how well he executes each of those parts.

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Originally posted by Kwicko:

Betamax. HD-DVD. American Motors (Mitt Romney's dad ran that one, and it failed). Microsoft Zune.

Good products, no customers.

"Build a better mousetrap, and the world will beat a path to your doorstep." Nobody ever coined the adage, "Build a better mousetrap, and you don't need customers or consumers."

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Originally posted by chrisisall:

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Originally posted by HERO:

The success or failure of the business is not based on the consumer, it's based in how well he executes each of those parts.

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Ummm, I'm thinking here that you really don't understand the meaning of the word 'based'. As in, we are carbon-based-? Capitalism is consumer-based... get it?
No. I guess not.
In your world the business controls the consumer, and that is true to a degree, but not like you think it is. Simplistic seems to be your middle name these days, H.

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Hero...must be right on all of this. ALL of the rest of us are wrong. Chrisisall, 2012

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This makes me very sad for you, dude. But, whatever it takes to feel like a not-asshole, I guess.

Yes, you're right Chris... I sometimes feel like the character Rico from Judge Dredd... twisted, needing to see things the way I need to... sometimes, I just feel like crying endlessly -Hero, 2007 *post deleted*

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Originally posted by Kwicko:
Hey, Chris - Feel free to borrow my sig if you'd like. It's one of "Hero's" greatest hits, and I think it's a classic.



"I supported Bush in 2000 and 2004 and intellegence [sic] had very little to do with that decision." - Hero, Real World Event Discussions

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Actually you are wrong. The lack of customers means it was the wrong product or the wrong plan or was not capitalized properly or marketed properly and so on. The business failed because one or more parts of the business model were not executed properly. In each of your examples the consumers existed and chose other similar products that were properly executed.So consumers are not a function of the process but rather a measure of success. Jobs come before consumers in any successful development model. Just look at towns killed from factory or base closures.

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Originally posted by Niki2:
See Chris? That is the danger in EVER agreeing with Hero (If that ever happens...) or even saying something positive sarcastically. He'll mischaracterize or clip it and wear it like a badge of honor for the rest of time.

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Originally posted by SIGNYM:

It's hard to believe that you're the best that our civil service has to offer.

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Originally posted by chrisisall:
That is such a slam to civil servants everywhere...

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Originally posted by Hero:

We disagree, its as simple as that.

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Originally posted by Kwicko:
And yet, without customers, factories close, jobs are gone.

I thought you said that if you build the factory, jobs will magically appear, as will customers. "Happens every time," you said.

Generally speaking, you don't get to build a factory without customer demand for your product.

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So now he's claiming it was his idea all along. Which is bullshit--yes, they needed restructuring, and they got it, but the important point is there was no money available from the private sector, and would not have been.

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All through the 80's and 90's regulations put in place after the Great Depression started were dismantled under Reagan, Bush and Clinton. Barney Frank and Chris Dodd should be tarred and feathered for their hand in this too. Massive collusion between banks and government set the stage for a perfect storm of economic disaster.

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Originally posted by CaveTroll:
Nope, forgot Gramm. Get another bucket of tar and a feather pillow. We can probably add the executives in charge of Fannie Mae and Freddie Mac while we're at it.

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Originally posted by Kwicko:
And Dubya

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Originally posted by Kwicko:
Just look at Romney's company, Bain Capital, and see how much they were willing to invest in Detroit.

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Originally posted by SIGNYM:
Don't forget, this was not just a USA bank problem, this was a first world bank problem,

Did you know that banks create money out of nothing every time they write a loan? Did you know that the money supply in Britain TRIPLED between 1998 and 2007? Did you know that the government had no control over how much money was being created, and that MOST of this increased money supply came from private banks, not government?

Until you understand this, you will never understand the genesis of this latest crisis.

Here is another link explaining the problem:

http://www.positivemoney.org.uk/97percent-owned-documentary/

"IF INDIVIDUALS CAN'T PRINT MONEY, WHY CAN BANKS?"

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Originally posted by two:

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Originally posted by Kwicko:
Just look at Romney's company, Bain Capital, and see how much they were willing to invest in Detroit.

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The Purpose of Spectacular Wealth, per Mitt Romney's Bain partner -
www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-
a-case-for-inequality.html
“There’s also the fact that Conard applies a relentless, mathematical logic to nearly everything, even finding a good spouse. He advocates, in utter seriousness, using demographic data to calculate the number of potential mates in your geographic area. Then, he says, you should set aside a bit of time for “calibration” — dating as many people as you can so that you have a sense of what the marriage marketplace is like. Then you enter the selection phase, this time with the goal of picking a permanent mate. The first woman you date who is a better match than the best woman you met during the calibration phase is, therefore, the person you should marry. By statistical probability, she is as good a match as you’re going to get. (Conard used this system himself.)”

“In 2000 Romney put Detroit-native Conard in charge of Bain Capital’s New York office and he’s now qualified to explain why what’s good for him and other members of the top 0.1% — his net worth is estimated in the hundreds of millions of dollars – is in the best interests of everyone else.” www.forbes.com/sites/petercohan/2012/05/02/three-reasons-bain-capitaln
omics-fails/

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