Tuesday, April 29, 2014

Do the Rich Create Jobs

Harnessing Power

     It is a messy democratic process we have. Political parties want to be in power. Party members can derive strength and power by unifying behind common messages and themes in hopes of attracting like-minded followers. Party leaders test different messages seeing which ones resonate with the most voters to gain their votes and help their candidates get elected. Office holders have authority which translates into power.

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The Message

     A common message reiterated many times throughout the Great Recession by the Republican Party in their pursuit of power has been the notion that raising taxes on the rich would kill job creation. For them, it is an unshakable belief that people with money invest in businesses to make more money. Jobs are the fortunate byproduct of the process. Following this reasoning further, it is the rich who are responsible for creating jobs and we as voters should be grateful. This message rests on the idea that if the rich build the business, the consumer will come.

Real Job Creators

     However, in an article with Bloomberg News, Nick Hanauer, a successful entrepreneur, venture capitalist and author, disagrees. He argues this Republican message has the investment process backwards. According to Hanauer, businesses are started and new workers hired when consumer demand is present.  For Hanauer, raising taxes on the rich makes much more sense. He sees it is as a way of rewarding the true job creators, those middle-class consumers who create demand first out of which investment opportunities for the wealthy emerge to make more money. 


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