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May 17

The Controversial Talk That “TED Won’t Show You”

Categories:

Business

by Eric Pfeiffer

You’d expect a poor person to say:

When the rich take credit for creating jobs, they are like “squirrels taking credit for evolution.”

But, in fact, it’s out of the mouth of venture capitalist Nick Hanauer, who was an early investor in Amazon and is a rich, very rich man. In March he gave a speech at a TED University conference that lambasted income inequality in America and the widely held belief that wealthy Americans should not be taxed at a higher rate because they are great job generators.

“We’ve had it backward for the last 30 years,” says Hanauer. “Rich businesspeople like me don’t create jobs.”

According to an article in the National Journal, the speech was so controversial that the folks at TED decided not to post it on their web site. (UPDATE: Read Ted’s response to the controversy). But you can watch it on FORA.tv:

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    • John Stephen Veitch

      Excellent.

      It’s very obvious that the lack of money in the hands of consumers restricts the size of the market.
      Failure to tax the rich is clear failure to put the right prices on things. The failure to tax carbon production, is a failure of exactly the same kind. Once you begin to look for these failures of the pricing mechanism, you realise that government has been asleep at the wheel for the last 60 years.

      There is a good case for eliminating taxation on wages, perhaps eventually eliminating all income taxes, and basing revenue gathering on taxing resouse use, taxing “bads”.

      • Thinker

        The money system we use is a Fiat base money. It isn’t finite like a gold standard. When the government wants to spend more money they can create more out of thin air. When they spend that money they got the full current value of that money at that moment. But as it trickles down through the system  to the people, banks, business etc. It devalues due to inflation. Because it came out of nowhere.  This is a “hidden” tax on the people.  This is the main source of inflation.

        As for eliminating taxes, good luck. The government is forever in need of more money for more projects to waste money on. They are like a spoiled rich kid that don’t know the value of the dollar and keeps wanting their credit limit on their credit card raised.  Unless we don’t force our leaders to curtail spending, they will never will. No manner how much revenue they take in they will never be satisfied.

        As for the past 60 years, try since 1913, the year of the creation of the Federal Reserve? That would put it closer to the past 99 years.

    • John Stephen Veitch

      Excellent.

      It’s very obvious that the lack of money in the hands of consumers restricts the size of the market.
      Failure to tax the rich is clear failure to put the right prices on things. The failure to tax carbon production, is a failure of exactly the same kind. Once you begin to look for these failures of the pricing mechanism, you realise that government has been asleep at the wheel for the last 60 years.

      There is a good case for eliminating taxation on wages, perhaps eventually eliminating all income taxes, and basing revenue gathering on taxing resouse use, taxing “bads”.

      • Thinker

        The money system we use is a Fiat base money. It isn’t finite like a gold standard. When the government wants to spend more money they can create more out of thin air. When they spend that money they got the full current value of that money at that moment. But as it trickles down through the system  to the people, banks, business etc. It devalues due to inflation. Because it came out of nowhere.  This is a “hidden” tax on the people.  This is the main source of inflation.

        As for eliminating taxes, good luck. The government is forever in need of more money for more projects to waste money on. They are like a spoiled rich kid that don’t know the value of the dollar and keeps wanting their credit limit on their credit card raised.  Unless we don’t force our leaders to curtail spending, they will never will. No manner how much revenue they take in they will never be satisfied.

        As for the past 60 years, try since 1913, the year of the creation of the Federal Reserve? That would put it closer to the past 99 years.

    • Isabel Blondet

      It has disappeared. The video is no longer available at your page. 

    • Isabel Blondet

      It has disappeared. The video is no longer available at your page. 

    • Tom-hendricks

      There is a grass roots idea that would create thousands of jobs in one day. National Hiring Day idea suggests that every corporation hire one or more to help the nation recover, that would in turn help those corporations that hired, through an invigorated economy. The idea is voluntary, but most corporations owe the country a lot, and even more when they ask for lower taxes, subsidies, less regulation, etc.

    • Tom-hendricks

      There is a grass roots idea that would create thousands of jobs in one day. National Hiring Day idea suggests that every corporation hire one or more to help the nation recover, that would in turn help those corporations that hired, through an invigorated economy. The idea is voluntary, but most corporations owe the country a lot, and even more when they ask for lower taxes, subsidies, less regulation, etc.

    • Dfvboulder

      Controversial?  I say common sense.

      Why would anyone believe such garbage in the first place?

    • Dfvboulder

      Controversial?  I say common sense.

      Why would anyone believe such garbage in the first place?

    • Thinker

      He is looking at it one sided. Consumers do not create jobs, they create demand. When there is demand, people will try to fill that demand with the motive of enriching themselves. If you slice too deeply into the profit motive, then the “job creator” will say why bother? Ever wonder why the Great Depression lasted longer here than other countries? FDR tried to hire too many people, tax more and more to cover the paychecks. The highest record for income tax was during FDR’s days. If you had a factory and they told you was allow to keep 7 cents out of the dollar. (tax 93%), would you keep the factory open? Most rich people sat on their money, waiting for FDR to leave office. It took the bombing of Pearl Harbor to motivate capitalists back in action, putting people to work. This was when we really started to come out of the depression.

      • ACKman

        “Consumer do not create jobs, they create demand”….
        No-shit Sherlock.  What was your 1st clue…and what is the basis of ALL economic activity.  Supply & Demand.  Without demand there is no supply that is not provided by nature (i.e. sans human endeavor).  Therefore, without demand there are no jobs, no prices, no wages, no profits, no taxes, and on and on.

        Of course Hanauer is looking at it one sided, because it is one sided, and that side is called demand.  The magical “thinking” (and I use that term very loosely here) of the Trickle-Down economic idiots shows the complete separation from reality that began with the Chicago School of Economics Gang that threw their support behind a B-movie actor named Reagan.  

        Producers of ‘Snake Oil’ and related fantasies throughout history have needed their dancing/singing pitchmen.  The economic neo-liberal clowns of the Chicago School found theirs in Reagan.

        • Thinker

          True I may have to have stated the obvious. There can be demand and it doesn’t magically create product/jobs. If people who would normally fill that demand feels like it is too costly due to taxes/regulation then that is all you got….. demand. Or if the demand is met, it very likely create mostly jobs overseas due to the hostile environment here. True there  is two sides and we don’t need too much friction in between.  There is such a thing as killing the goose with the golden egg.

          Also a capitalist can create demand. When a person creates a better service or a new “must have” product he can generate demand.  Wait, that is what a venture capitalist like Nick Hanauer normally looks for. He looks for the next new great “thing” invests and if all goes well it grows and creates jobs. True he is enriching himself but for the work to get done, jobs are created. The people who invested in a couple “crazies” in a garage ended up creating thousands of jobs. The two guys were building & selling  home made computers. And that grew into the Apple computer everyone knows today. Without the venture capitalist, it most likely would have falter because, there was no way they could grow fast enough to meet the demand (small compared to how it grew once they was able to expand). 

          There is a saying, a rising tide floats all boats, great and small. In other words, here in America, our economy has made some people rich, and others better off etc. I seen “poor people” who are below the poverty level and yet they are to have a microwave, stove, tv, indoor plumbing etc. Their counterparts in other countries don’t have that and may not even have a real floor but a dirt floor. I know people in other countries that are considered by others in their country as well off. But if we were to live like them we would be considered as living a very spartan lifestyle by our peers in this country. The one thing about our country is that we have a chance to make a change in our life. (We have the right to “pursue” happiness not a guarantee.) I have traveled and lived in other countries and know from first hand.

          I believe in sharing the wealth. But I believe in doing by buying goods, services, investments, and charity. if I have money like Nick Hanauer, I would give a lot more to charity than I able to do now. If Nick feels like he has too much money and it should be used for betterment of his fellow man then he is free to use his money in how he sees fit. He could even use it in creating jobs here. From what I seen of our government’s track record I beleve people could do a better job with their own money. Take a look the government’s record.  Post Office (runs in the red), Amtrak (again in the red)  Fanny Mae/Freddie Mac? (created the economic bust)  And what about investments? What about Solyndra losing over half billion dollars?  A venture capitalist would have research the Solyndra, and made his decision based on the company’s viability, not what is politically expedient.

          What do you think would be a fair amount to take from the rich people’s
          income? 50%?  75%? or 93%? more?  On what basis you think the amount
          would be fair. Is it to “prune the rich” to cut them down some? Or it is
          not fair for some to be rich when other are not?    FDR in an executive order  capped the amount of money people could take home to $25,000. Everything over that would go to the government. Fortunately Congress did resend that part of the E.O. In a letter to the Ways and Means Committee he explained “Discrepancies between low personal incomes and very high personal incomes should be lessened;”  and  “no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year.”

          I remember one person saying to me…..  If we can’t make everyone equally happy, lets make everyone equally miserable.
          This feel good sentiment is detrimental to the good of the country. It would kill the incentive  for growth, betterment etc.

    • Thinker

      He is looking at it one sided. Consumers do not create jobs, they create demand. When there is demand, people will try to fill that demand with the motive of enriching themselves. If you slice too deeply into the profit motive, then the “job creator” will say why bother? Ever wonder why the Great Depression lasted longer here than other countries? FDR tried to hire too many people, tax more and more to cover the paychecks. The highest record for income tax was during FDR’s days. If you had a factory and they told you was allow to keep 7 cents out of the dollar. (tax 93%), would you keep the factory open? Most rich people sat on their money, waiting for FDR to leave office. It took the bombing of Pearl Harbor to motivate capitalists back in action, putting people to work. This was when we really started to come out of the depression.

      • ACKman

        “Consumer do not create jobs, they create demand”….
        No-shit Sherlock.  What was your 1st clue…and what is the basis of ALL economic activity.  Supply & Demand.  Without demand there is no supply that is not provided by nature (i.e. sans human endeavor).  Therefore, without demand there are no jobs, no prices, no wages, no profits, no taxes, and on and on.

        Of course Hanauer is looking at it one sided, because it is one sided, and that side is called demand.  The magical “thinking” (and I use that term very loosely here) of the Trickle-Down economic idiots shows the complete separation from reality that began with the Chicago School of Economics Gang that threw their support behind a B-movie actor named Reagan.  

        Producers of ‘Snake Oil’ and related fantasies throughout history have needed their dancing/singing pitchmen.  The economic neo-liberal clowns of the Chicago School found theirs in Reagan.

        • Thinker

          True I may have to have stated the obvious. There can be demand and it doesn’t magically create product/jobs. If people who would normally fill that demand feels like it is too costly due to taxes/regulation then that is all you got….. demand. Or if the demand is met, it very likely create mostly jobs overseas due to the hostile environment here. True there  is two sides and we don’t need too much friction in between.  There is such a thing as killing the goose with the golden egg.

          Also a capitalist can create demand. When a person creates a better service or a new “must have” product he can generate demand.  Wait, that is what a venture capitalist like Nick Hanauer normally looks for. He looks for the next new great “thing” invests and if all goes well it grows and creates jobs. True he is enriching himself but for the work to get done, jobs are created. The people who invested in a couple “crazies” in a garage ended up creating thousands of jobs. The two guys were building & selling  home made computers. And that grew into the Apple computer everyone knows today. Without the venture capitalist, it most likely would have falter because, there was no way they could grow fast enough to meet the demand (small compared to how it grew once they was able to expand). 

          There is a saying, a rising tide floats all boats, great and small. In other words, here in America, our economy has made some people rich, and others better off etc. I seen “poor people” who are below the poverty level and yet they are to have a microwave, stove, tv, indoor plumbing etc. Their counterparts in other countries don’t have that and may not even have a real floor but a dirt floor. I know people in other countries that are considered by others in their country as well off. But if we were to live like them we would be considered as living a very spartan lifestyle by our peers in this country. The one thing about our country is that we have a chance to make a change in our life. (We have the right to “pursue” happiness not a guarantee.) I have traveled and lived in other countries and know from first hand.

          I believe in sharing the wealth. But I believe in doing by buying goods, services, investments, and charity. if I have money like Nick Hanauer, I would give a lot more to charity than I able to do now. If Nick feels like he has too much money and it should be used for betterment of his fellow man then he is free to use his money in how he sees fit. He could even use it in creating jobs here. From what I seen of our government’s track record I beleve people could do a better job with their own money. Take a look the government’s record.  Post Office (runs in the red), Amtrak (again in the red)  Fanny Mae/Freddie Mac? (created the economic bust)  And what about investments? What about Solyndra losing over half billion dollars?  A venture capitalist would have research the Solyndra, and made his decision based on the company’s viability, not what is politically expedient.

          What do you think would be a fair amount to take from the rich people’s
          income? 50%?  75%? or 93%? more?  On what basis you think the amount
          would be fair. Is it to “prune the rich” to cut them down some? Or it is
          not fair for some to be rich when other are not?    FDR in an executive order  capped the amount of money people could take home to $25,000. Everything over that would go to the government. Fortunately Congress did resend that part of the E.O. In a letter to the Ways and Means Committee he explained “Discrepancies between low personal incomes and very high personal incomes should be lessened;”  and  “no American citizen ought to have a net income, after he has paid his taxes, of more than $25,000 a year.”

          I remember one person saying to me…..  If we can’t make everyone equally happy, lets make everyone equally miserable.
          This feel good sentiment is detrimental to the good of the country. It would kill the incentive  for growth, betterment etc.

    • Thinker

      If everyone in the neighborhood was saying it’s hot, I wish I had something cold to eat, someone may have the idea of fulfilling that demand.  He starts with a cart selling snowcones, expands to ice creams etc. But he soon finds the demand is just as great in the next neighborhood. He has the idea of buying another cart and putting his out of work brother on it. Soon he bought more carts and running out of relatives he started to hire others. He created the jobs not the people wishing for ice cream. He could have continued sitting on his can and the not created the jobs. But he didn’t continue sitting because he thought Hey, maybe I can make some money.

      But the city soon started coming out with more and more taxes. They came up with a cart tax, a special permit (another tax) etc on top of the sales tax and his income tax, and wages etc. At the end of the summer he decides to shut down for good because the fine balance of “cost of business” had tipped to where he decided it wasn’t worth it. I am not saying it is wrong to tax, but there is line to where, if crossed it will mean that the business owner may decide it would be better to close down or in the case of many large companies, move overseas. Many companies may have moved for cheaper wages but a lot of them move because the cost of business (besides wages) is higher here. To build a factory here in America can costs millions more. This is after all the regulations, fees, permits, etc. etc.

      “I can tell you definitively that it costs $1 billion more per factory
      for me to build, equip, and operate a semiconductor manufacturing
      facility in the United States,” – Intel CEO Paul Otellini

    • Thinker

      If everyone in the neighborhood was saying it’s hot, I wish I had something cold to eat, someone may have the idea of fulfilling that demand.  He starts with a cart selling snowcones, expands to ice creams etc. But he soon finds the demand is just as great in the next neighborhood. He has the idea of buying another cart and putting his out of work brother on it. Soon he bought more carts and running out of relatives he started to hire others. He created the jobs not the people wishing for ice cream. He could have continued sitting on his can and the not created the jobs. But he didn’t continue sitting because he thought Hey, maybe I can make some money.

      But the city soon started coming out with more and more taxes. They came up with a cart tax, a special permit (another tax) etc on top of the sales tax and his income tax, and wages etc. At the end of the summer he decides to shut down for good because the fine balance of “cost of business” had tipped to where he decided it wasn’t worth it. I am not saying it is wrong to tax, but there is line to where, if crossed it will mean that the business owner may decide it would be better to close down or in the case of many large companies, move overseas. Many companies may have moved for cheaper wages but a lot of them move because the cost of business (besides wages) is higher here. To build a factory here in America can costs millions more. This is after all the regulations, fees, permits, etc. etc.

      “I can tell you definitively that it costs $1 billion more per factory
      for me to build, equip, and operate a semiconductor manufacturing
      facility in the United States,” – Intel CEO Paul Otellini

    • Ron B in Roanoke, VA

      oh boy, just write a check to the govt if you really want to pay more taxes already. then i guess you’d write a smaller check to your favorite charity, which means they will be yelling and screaming, which THEN means the govt will have mercy on them and throw the NPO’s more money… blah-blah-blah. Money, money, money, money. It’s the thing liberals hate so much but want the most of. So, be the change you want to see in the world. Give it away. No one is stopping you. Oh, BTW, i tried hiring people, but they told me “no way” since i could only pay them a fair percentage of a completed project. no one seems to be interested in that. they all want a regular salary and benefits. go figure. a poor man cannot employ people. what a revelatiion.

      • Thin-ice

        Hey Ron, how about, instead of boring us with your obvious worldview presuppositions, you give us critique of Nick Hanauer’s talk, and tell us where he is wrong. Then, and only then, you have a chance of convincing us that your view is more objective than his. Otherwise, we can get your viewpoint daily on Glen Beck or Rush Limbaugh or FOX News.

        • Ron B

          twas from experience, mine and other vendors’ in real life, not tv. so if it was boring, perhaps you can tell us about your exciting business life. besides, aren’t consumers complaining about too much consuming already? maybe there’s an app for that. but why get angry with me? i am not manufacturing in china or anywhere off-shore. i am not a financial paper trader. this hanauer guy doesn’t know anything outside his little tech bubblet. ask him where his iPhone was made. why isn’t he addressing that publicly?

    • Ron B in Roanoke, VA

      oh boy, just write a check to the govt if you really want to pay more taxes already. then i guess you’d write a smaller check to your favorite charity, which means they will be yelling and screaming, which THEN means the govt will have mercy on them and throw the NPO’s more money… blah-blah-blah. Money, money, money, money. It’s the thing liberals hate so much but want the most of. So, be the change you want to see in the world. Give it away. No one is stopping you. Oh, BTW, i tried hiring people, but they told me “no way” since i could only pay them a fair percentage of a completed project. no one seems to be interested in that. they all want a regular salary and benefits. go figure. a poor man cannot employ people. what a revelatiion.

      • Thin-ice

        Hey Ron, how about, instead of boring us with your obvious worldview presuppositions, you give us critique of Nick Hanauer’s talk, and tell us where he is wrong. Then, and only then, you have a chance of convincing us that your view is more objective than his. Otherwise, we can get your viewpoint daily on Glen Beck or Rush Limbaugh or FOX News.

        • Ron B

          twas from experience, mine and other vendors’ in real life, not tv. so if it was boring, perhaps you can tell us about your exciting business life. besides, aren’t consumers complaining about too much consuming already? maybe there’s an app for that. but why get angry with me? i am not manufacturing in china or anywhere off-shore. i am not a financial paper trader. this hanauer guy doesn’t know anything outside his little tech bubblet. ask him where his iPhone was made. why isn’t he addressing that publicly?

    • http://www.facebook.com/profile.php?id=100000761086579 Clive Warner

      Excellent, makes perfect sense.

    • http://www.facebook.com/profile.php?id=100000761086579 Clive Warner

      Excellent, makes perfect sense.

    • Guest

      Pfft… All he does is convincingly overturn the dominant myth of our economic system that drives both political parties. TED needs something special, like grannies in leather pants complaining her young lovers are too raunchy.

    • Guest

      Pfft… All he does is convincingly overturn the dominant myth of our economic system that drives both political parties. TED needs something special, like grannies in leather pants complaining her young lovers are too raunchy.