According To The 1%, The 1% Are NOT The Job Creators

The best, most well explained, explicit demolition of the Job Creator myth that I have ever read.

From the National Journal:

As Hanauer puts it, he and his rich friends, for all their lavish parties and jet-away vacations, don’t buy enough shirts, cars, and restaurant meals to match the spending that would occur if, say, their wealth was divided up among thousands of poor families. Studies on what economists call “marginal propensity to consume” bear out this idea.

Hence Hanauer’s claim that middle-class consumers, not innovators, create jobs. Amazon didn’t create a new group of book buyers; it just peddled a more convenient way to buy books. Its success created lots of jobs in Seattle, Amazon’s hometown, but it also killed lots of jobs in strip malls across the country. Increasing the number of book buyers would boost sales and jobs in the industry, with no downside.

And…

The middle class incubates entrepreneurs because it offers a good combination of time, resources, and motivation to invest in skills and climb the innovation ladder. Put it this way: The comforts that flowed from the Pacific Coast Feather Co., his then-modest family business, provided Nick Hanauer with a house full of books and days full of time to explore big ideas. Think of those comforts as an investment. The eventual return was Hanauer’s venture-capital portfolio. Poor families just scraping by at the margins can’t make those investments, so their children struggle to achieve in school and pursue higher education. Children from rich families may, thanks to their extreme childhood comforts, lack the desire to build wealth and climb the economic ladder, which the Kauffman study found to be a key motivation for would-be entrepreneurs.

The economy sags when kids who could have grown up to be physicists end up spending their lives brewing lattes at Starbucks. Or when a young woman born to be a teacher finds herself babysitting, for peanuts, while she waits for a classroom to open up.

Read the whole article here.

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