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Do the wealthy really create more jobs?

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http://finance.yahoo.com/blogs/daily-ticker/finally-rich-american-destroys-fiction-rich-people-create-152949393.html

 

Just one guy's opinion, but it does buck the notion of trickle down economics.

 

 

Hanauer takes home more than $10 million a year of income. On this income, he says, he pays an 11% tax rate. (Presumably, most of the income is dividends and long-term capital gains, which carry a tax rate of 15%. And then he probably has some tax shelters that knock the rate down the rest of the way).

 

With the more than $9 million a year Hanauer keeps, he buys lots of stuff. But, importantly, he doesn't buy as much stuff as would be bought if that $9 million were instead earned by 9,000 Americans each taking home an extra $1,000 a year.

 

Why not?

 

Because, despite Hanauer's impressive lifestyle — his family owns a plane — most of the $9+ million just goes straight into the bank (where it either sits and earns interest or gets invested in companies that ultimately need strong demand to sell products and create jobs). For a specific example, Hanauer points out that his family owns 3 cars, not the 3,000 that might be bought if his $9+ million were taken home by a few thousand families.

 

If that $9+ million had gone to 9,000 families instead of Hanauer, it would almost certainly have been pumped right back into the economy via consumption (i.e., demand). And, in so doing, it would have created more jobs.

 

Hanauer estimates that, if most American families were taking home the same share of the national income that they were taking home 30 years ago, every family would have another $10,000 of disposable income to spend.

 

That, Hanauer points out, would have a huge impact on demand — and, thereby job creation.

 

It's time we stopped mouthing the fiction that "rich people create the jobs."

 

Rich people don't create the jobs.

 

Our economy creates jobs.

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Trying to build a reasoned case on an anecdote is only compelling to people who have not been trained to think.

 

It is, however, a favorite "argument" practice in the press.

 

The unproved part, which they hope you will falsely fill in yourself (since they cannot directly claim it and be truthful) is this: and all "rich people" are like him.

 

 

The argument (fallacy) goes like this. We will choose something non-emotional to make sure the point is made.

 

Claim: Middle class people have household servants.

Proof: This guy Bob, who lives down the street from me... he works for IBM as an engineer, and he has two household servants... a maid, and a cook.

 

Q.E.D

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From months ago: Oprah Winfrey is an opportune example of a rich person creating jobs. Winfrey's TV studio operations have employed about 400 people for many years; her wealth and presence in Chicago transformed the West Loop from blight to *enterprise which invited consumers and created even more jobs.

 

 

From NPR May 24, 2011:

 

After 25 years on the air, Oprah Winfrey, the queen of daytime television, brings her show to an end Wednesday. It's a bittersweet moment for Chicago, the city where Winfrey brought plenty of attention — and money.

 

Winfrey's Harpo Studios is a landmark in Chicago's West Loop: The facility takes up a full block in a neighborhood of loft condos, restaurants, art galleries and the remnants of a Chicago market district of food processors and manufacturers.

 

Harpo opened in 1990, in a neighborhood that had been on the decline for years, says Phil Ashton, a professor of urban planning at University of Illinois-Chicago. The studio was a cornerstone of the neighborhood's revival, and it "introduced a population of employees and consumers who were there on a day-by-day basis," Ashton says.

 

Chef Ina Pinkney, owner of Ina's Restaurant, a Harpo executive hangout, knows full well the before-and-after Oprah effect. Before Pinkney moved her restaurant into the West Loop, she used to buy produce in the area. "I remember the neighborhood as incredibly rough," Pinkney says. "It was just a place you came to buy your stuff and go home."

 

But after Winfrey built Harpo, Pinkney says, the neighborhood underwent a gradual metamorphosis. "She began to buy up some buildings right around the neighborhood and she began to stake a claim," Pinkney says. Winfrey was essentially saying, "I'm here, and everything is going to change."

 

Once Oprah was syndicated, people began pouring into the neighborhood: There were hundreds of Harpo employees and crowds of audience members — more than a million over the 25 years of the show as Winfrey became a media mogul and international superstar. Oprah crowds have been out in full force this month — more than 20,000 fans from across the country showed up for the tapings of her last two shows.

 

"She's put this place on the map more so than any other individual celebrity," says Chicago resident and Oprah fan Wade Childress. "Well, OK, Barack [Obama] maybe," he concedes, "but she's done it over a longer period of time and reinforced it over and over again like nobody could."

 

Shortly after Winfrey opened Harpo Studios in 1990, she said she would never move her production facility or her show out of the city. Winfrey was inducted into the Illinois Broadcasters Association's Hall of Fame in early May. As she accepted the honor, she recounted her experience coming to Chicago in 1983 to audition for what was then a local talk show: "On my way to the audition I was just loving the vibe of the city so much," she said. Winfrey says she told herself, "If I don't get the job, I've got to find a way to get back."

 

But she got the job and created a media empire, becoming a global brand headquartered in Chicago. And an appreciative Chicago has been saying thanks as Winfrey closes down her show. During the last days of his tenure, Chicago's former mayor Richard Daley stood outside Harpo Studios to present Winfrey with an honorary street sign: Oprah Winfrey Way. "She's been a great ambassador for our city," Daley said. "It makes me very, very proud to have your name on one of Chicago's city streets," he told her.

 

Winfrey said the honor was better than winning an Oscar ... or an Emmy. And then a woman who has won plenty of Emmys lifted her very own Chicago street sign high: "This place is my Tara," Winfrey told the crowd. "Scarlett O'Hara should have known about Chicago."

 

Oprah will soon be gone with the wind; the show officially ends Wednesday. Harpo Studios will continue to be busy, though. Rosie O'Donnell will tape a one-hour daytime talk show set to launch in the fall on the Oprah Winfrey Network.

 

 

*en·ter·prise (ntr-prz)

n.

1. An undertaking, especially one of some scope, complication, and risk.

2. A business organization.

3. Industrious, systematic activity, especially when directed toward profit: Private enterprise is basic to capitalism.

 

 

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Today: My intuition spurs me to say that the wealthy do create "more jobs," but I could not find evidence that validates my intuition; I do not think that wealthy individuals create enough jobs to significantly and consistently lower the unemployment rate.

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Successful people create jobs.



Successful people usually have lots of money.  why?  Because they were successful.  Because they served their neighbor, their fellow man. 



 



I have mostly worked for successful people.  Most of them had lots of money.  Many gave me lots of money.


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Anybody here ever worked for a poor man? Doubtful.

The "rich" leave a trail of employed folks in their wake, from domestic help to lawn and garden companies, to restaurant workers and drivers. Each of these workers buys goods and services , more jobs. Trickle down works and I have personally benefitted from working for the rich, my business is 16 years old and, thank God, doing well. May the rich get richer is a toast we make regularly!

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Absolutely amazing, ain't it? The class warfare/OWS hawks will go any lengths to cast doubt on even the most basic and obvious pillars of capitalism. To even suggest that jobs aren't created by the rich goes beyond stupid. My God, protect us from such idiocy!!!:rolleyes::dismay:

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Successful, hard working people should and do makes lots of money. Agreed and they are entitled to everything they earn and all the toys they own. Heck, my business is almost 100% dependent on successful people so God bless them. They also create jobs, which is good for the economy. I get it...But without a solid customer base for their products and services, can they continue to increase their wealth? CEO salaries are up 27 or 36% this year (depending on the survey) while unemployment remains stubbornly high. Furthermore, marginal tax rates for the wealthy are in the historically low range. We prospered quite well as a nation in second half of the 80's and into the 90's. In fact, some of the very best years followed a tax increase. In Mexico, 60 families own 90% of the nation's wealth. How's that working out? I'm not sure the concentration of wealth that is occurring is good for the overall economy (it's not creating enough jobs right now) nor do I think it's the job of the government to take that wealth and give it away to unproductive people. I'm not sure what the answer is, but things are broken the way they are now...

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We can't give Washington DC more money.  Its insane.  Insane.



Look at whats happening, its right in front of your eyes.  More money won't make anything better in Washington, it will make our lives worse, not better.



Gami, ask yourself, then answer.  What if someone rounded up 10 or 20 billion dollars from "the rich (whoever the **** that is)"  and gave it to Tim Geitner next week.  Would your life be better?  No it wouldn't would it?



Tim Geitner doesn't know what you need or want.  Nor does he care.


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Quote:


Agreed and they are entitled to everything they earn



Then why consider taking so much of it away?  Why even consider?


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Our system of governing is broken, thats whats broken.  Not people.  Not rich people, not poor people.  Not really anybody (save the insane or the rapist or thief).  Mexico has problems too, but its the system of governance, not some person.


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By creating massive government centers of distribution (be it wealth, education, healthcare, employment, unemployment, retirement, etc...) eventually the incentive to be a contributing "taxpayer" at any level is irradicated.

 

 

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