Businessweek - Raise Taxes on Rich to Reward True Job Creators: Nick Hanauer
Nick Hanauer is a founder of Second Avenue Partners, a venture capital company in Seattle specializing in early state startups and emerging technology. He has helped launch more than 20 companies, including aQuantive Inc. and Amazon.com. He's written an op-ed in BusinessWeek that's required reading for anyone who wants to understand why demand is the key to solving the economic crisis we're in:
"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. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.
"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."
It's that same virtuous cycle we're aiming for with regards to helping the 99ers - the only way the economy will recover is when more people can put more money into circulation by buying goods and services.
Remember that roughly 71% of our gross domestic product comes from consumer spending:
It's clear that if we want a healthy, growing economy, we want more people spending, not fewer.
Look at it from a different perspective: think of the difference between one billionaire and 1,000 millionaires. They both have the same amount of wealth, but the 1,000 can purchase much, much more than the one.
Now imagine that it's 4,000 people with a quarter million dollars each. Or 10,000 people with 100,000 dollars each. Or 20,000 people with 50,000 dollars each.
More consumers means more demand for goods and services. More demand means more sales, more work, more jobs... a growing, healthy economy.