*** Editor's Note: Yesterday, the National Journal's Jim Tankersley had introduced the multi-millionaire Nick Hanauer, a venture capitalist from Seattle, to the audience. But as one of the first non-family investors in Amazon.com, Hanauer's speech at the TED University conference was at first deemed too politically controversial to post on their web site. Below is the video of his 5 minute speech and the full text. An important message for those who think the rich are America's job creators:
"It is astounding how significantly one idea can shape a society and its policies. Consider this one.
If taxes on the rich go up, job creation will go down. This idea is an article of faith for Republicans and seldom challenged by Democrats, and has indeed shaped much of the economic landscape. But sometimes the ideas that we are certain are true, are dead wrong.
Consider that, for thousands of years humans believed that the earth was the center of the universe. It's not, and an astronomer who still believed that it was, would do some pretty terrible astronomy.
Likewise, a policy maker who believes that the rich are "job creators", and therefore should not be taxed, would be equally terrible policy.
I have started, or helped start, dozens of companies -- and initially hired lots of people. But if there was no one around who could afford to buy what we had to sell, all those companies and all those jobs would have evaporated.
That's why I can say with confidence that rich people don't create jobs, nor do businesses, large or small. Jobs are a consequence of a circle of life-like feedback loop between customers and businesses. And only consumers can set in motion this virtuous cycle of increasing demand and hiring. 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 little bit like squirrels taking credit for creating evolution. It's actually the other way around.
Anyone who's ever run a business knows that hiring more people is a course of last resort for capitalists. It's what we do if, and only if, rising customer demand requires it. And in this sense, calling yourselves job creators isn't just inaccurate, it's disingenuous.
That's why our existing policies are so upside down. When the biggest tax exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer.
Since 1980, the share of income for the top 1% of
Americans has more than tripled, while our effective tax rates have gone
down by 50%. 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. And yet, unemployment and under-employment is at record highs.
*** Editor's Note: This speech was originally posted at The Atlantic, but was wrongly transcribed. I downloaded the video, played it back, and re-wrote his speech verbatim. There's a related article at the Huffington Post.