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 shaped
much of today's economic landscape.
But sometimes the ideas that we are certain are true are dead wrong.
Consider that for thousands of years
humans believed that earth was the center of the universe.
It's not, and an astronomer who still believes 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 do equally terrible policy.
I have started or helped started 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 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 consumer demand requires it.
And in this sense, calling ourselves job creators isn't just inaccurate,
That's why our existing policies are so upside down.
When the biggest tax exemptions and the lowest tax 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... thank you... (applaud)
and yet unemployment and under-employment is at record highs.
Another reason this idea is so wrong-headed
is that there can never be enough super-rich people to power a great economy.
Somebody like me makes hundreds, or thousands of times as much as the median American,
but I don't buy hundreds or thousands of times as much stuff.
My family owns three cars, not 3,000.
I buy a few pairs of pants and shirts a year, like most American men.
Occasionally we go out to eat with friends.
I can't buy enough of anything to make up for the fact
that millions of unemployed and underemployed Americans can't buy any new cars
any clothes or enjoy any meals out.
Nor can I make up for the falling consumption of the vast majority of middle class families
that are barely squeaking by, buried by spiraling costs
and trapped by stagnant or declining wages.
Here's an incredible fact.
that if the typical American family still retain the same share of income they did in 1970,
they would earn like 45,000 dollars more a year.
Imagine what our economy would be like if that were the case?
Significant privileges have come to people like me
capitalists, for being perceived as "job creators"
at the center of the economic universe,
and the language and metaphors we use
to defend the current economic and social arrangements is telling.
It is a small jump from "job creator" to "The Creator".
This language obviously wasn't ... (laugh)
This language was not chosen by accident,
and it is only honest to admit that when somebody like me calls themselves a "job creator"
We're not just describing how the economy works
but more particularly, we're making a claim on status
and privileges that we deserve.
Speaking especially privileges,
The extraordinary differential between a 15% tax rate that capitalists pay,
on carried interest, dividends, and capital gains,
and the 35% top marginal rate on work that ordinary Americans pay,
it's kind of hard to justify without a touch of deification.
We've had it backward for the last 30 years.
Rich people like me don't create jobs.
Jobs are a consequence of an eco-systemic feedback loop
between customers and businesses.
And when the middle-class thrives, businesses grow and hire, and owners profit.
That's why taxing the rich to pay for investments that benefit all
is such a fantastic deal for the middle class and the rich.
So ladies and gentlemen, here's an idea worth spreading.
In a capitalist economy, the true job creators are middle class consumers.
And taxing the rich to make investments that make the middle class grow and thrive,
is the single shrewdest thing we can do
for the middle class, for the poor and for the rich.
Thank You. (applaud)
Transcript & translation: https://twitter.com/lihlii