There has been an interesting back and forth over the past few days about Nick Hanauer's recent TED talk about the idea of "job creation." Apparently TED had decided not to run the segment, and Hanauer cried "censorship," after which TED decided to go ahead and relase it. You can see the piece above.
The key element of his talk is the following passage, from an editorial he wrote on the topic:
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.”
What he says here shouldn't be controversial. It's black letter economic principle: "job creation" come about ultimately through consumer spending, in other words, it's stimulated by demand, so giving ordinary consumers more money to spend has a greater stimulative effect than giving rich people more money to spend, because the rich are probably already spending near the top of their capacity. Giving Nick Hanauer a 10% tax cut won't stimulate the economy nearly as effectively as giving someone with realtively little money one, since Nick Hanauer has almost everything he might need, whereas an ordinary middle class American will take that money and immediately spend it on goods and services that they otherwise wouldn't have been able to purchase. Again, really not controversial.
It's become controversial because of the ideological capture of the idea of "job creator" to mean "enormously wealthy." The idea is that the wealthy create jobs through their investments, which to be fair, is true to a point. But the stimulative effect on the economy of low taxes for the rich is far less potent than benefits for the poor and middle class would be. In fact, because the low taxes on the rich have necessitated deep cuts in programs to the poor and middle classes, as well as cuts in education and infrastructure around the country, the low taxes on the wealthy have actually had a counter-stimulative effect. They've actually made the economy worse, or at least, haven't helped it get better.
I'm glad to see Hanauer and a few other members of the hyperwealthy in the United States beginning to push back against this ideology, precisely because, as Hanauer notes, as a matter of social policy, it's not only good for the poor and middle classes, but it is also ultimatley better for the wealthy to live in a well-managed, just, relatively equal society with a well-maintained infrastructure and a sound educational system.