"Sorry, Folks, Rich People Don't Create The Jobs"

[applegrove]

Sorry, Folks, Rich People Don't Create The Jobs

by Henry Blodget at Business Insider

http://www.businessinsider.com/rich-people-dont-create-jobs-2014-6

"SNIP...................


Yes, entrepreneurs are an important part of the company-creation process. And, yes, so are investors, who risk capital in the hope of earning returns. But, ultimately, whether a new company continues growing and creates self-sustaining jobs is a function of the company's customers' ability to pay for the company's products, not the entrepreneur's vision or risk-tolerance or the investor's capital.

Saying "rich people create the jobs" is like saying that seeds create trees. Seeds do not create trees. Seeds start trees. But what actually grows and sustains trees is the combination of the DNA in the seed and the soil, sunshine, water, atmosphere, nutrients, and other factors in the environment that nurture them. If you think seeds create trees, try planting seeds in an inhospitable environment. Plant a seed in a desert or on Mars, and the seed won't create anything. It will die.

So, then, if what creates the jobs in our economy is, in part, our companies' customers, who are these customers? And what can we do to make sure these customers have more money to spend to create demand and, thus, jobs?

The customers of most companies are ultimately American's gigantic middle class — the hundreds of millions of Americans who currently take home a much smaller share of the national income than they did 30 years ago, before tax policy aimed at helping rich people get richer created an extreme of income and wealth inequality not seen since the 1920s.


Read more: http://www.businessinsider.com/rich-people-dont-create-jobs-2014-6#ixzz35zMoN6Ra




...................SNIP"

[Warpy]

1. Not these days. At the top, they are using their money to generate money

while trying to eliminate risk through derivatives and other financial scams.

Invest in a startup industry? Are you mad? If their product doesn't take off, they could LOSE.

And they've stripmined so much money away from labor and the middle class that no product is going to take off, they've made sure of that. And they've bought the government off to make sure it stays this way.

Demand is the engine that drives any economy and wages are the fuel. We're not living with a viable economy any more. We're living with bare subsistence. Soon we'll have to go to barter.

[ErikJ]

2. And most startups begin in middle class garages

or kitchens or basement etc. I think they are referring to the very rich who already have successful companies. It seems if you go right down the line of famous co. names they all started by middle upper middle class outsiders often being bought by established big businesses. So it seems the bigger the middle class and the better educated they are the more "seeds" will be created.

Although its the govt. that does the basic research and development of high tech products like the transistor, smart phone and internet.

[JDPriestly]

6. Yes. I think that is the point.

[ErikJ]

7. No the author was referring to the middle class CONSUMERS.

as if only very rich people can create start-ups. Thats BS as clearly seen from Apple, Nike, Google etc and the millions of small businesses that were started by middle class. In fact I would say 99% of companies both large and small are clonceived and begun by the 99%.

[clarice]

11. Exactly RIGHT !!!! nt

[calimary]

3. Whoa! Another one!

There's the one about "the pitchforks are coming, fellow plutocrats" that argues the same thing.

http://www.politico.com/magazine/story/2014/06/the-pitchforks-are-coming-for-us-plutocrats-108014.html#.U6-QWV58v1o

We hear this stuff from Paul Krugman all the time. He's been a veritable lone voice crying in the wilderness for years about this. But now, we have stuff like this starting to break through. Well, how 'bout that.

Here's the DU thread about it, too:

http://www.democraticunderground.com/10025158130

[AdHocSolver]

4. Whoever controls trade controls an economy.

An economy functions through the "circulation" of goods and services aided by the flow of money.

One of the biggest problems for the U.S. today is the outsourcing of jobs by corporate conglomerates. Most of the goods Americans purchase today are manufactured in low wage countries such as China, depriving Americans of a source of jobs and income. To maintain the fiction of a viable economy, the U.S. has to "borrow" money from those countries to buy their goods causing our trade deficit.

Trade agreements such as NAFTA and the WTO have taken control away from the people (through their government representatives) and handed any public authority to the corporations. The proposed TPP and its European counterpart are NAFTA on steroids.

Once independent and competing manufacturers are now horizontally and vertically integrated corporate behemoths that have a stranglehold on economic activity. Mergers and acquisitions by vampire capitalists destroyed competition that used to provide a semblance of a level playing field, and replaced risk taking with a "too big to fail" mentality.

This merger of corporations that once were competitors also made a hash of government regulation in the public interest.

Just realizing that "rich people don't create jobs", jobs are created as a response to the demand for goods and services, is all well and good. The next step is to develop a method to regain some control of the economy from the plutocrats before the entire U.S. economy collapses, as it eventually will if economic activity continues on its present course.

[clarice]

12. 100%. nt

[Spitfire of ATJ]

5. The REAL rich don't even know what companies they have. They leave that to their lawyers.

[grahamhgreen]

8. Anyone can buy cheap crap in China and sell it at a profit here. Only the wealthy can corner the

market to push put small businesses.

[Alex P Notkeaton]

9. Enthusiastic K&R

[clarice]

10. As an entrepenour AND a small business owner....

I couldn't disagree more. The first thing is..and I've always wondered this....
Why are successful entrepeneurs always cast in a disparaging light? I wonder how many jobs Mr. Blodget has created? Secondly, the entrepeneuur supplies an idea or service that people either DO or DON'T want. Your seeds/trees analogy is misleading. Seeds may not technically "create" trees
but try to grow one without the seed. As well, any smart business person would not plant his/her seed in infertile ground. Research and EFFORT on the business persons part would preclude this. It's almost like you are saying that when a person decides to start a business, they just cast their seeds up into the air
and see where they land. If they land on fertile soil, he/she was just lucky and so, are obligated to share all of their crop with those who were "unlucky". I believe that you and Mr. Blodget have thing bass ackwards.

[Gothmog]

13. Supply side economics have been a failure

The rich are not job creators and tax cuts are not magical