"Rich people don't create jobs"

[William Hummel]

Multi-millionaire and entrepreneur Nick Hanauer in a TED talk this past March said:

 

"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 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 middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it’s a little like squirrels taking credit for creating evolution. In fact, it’s the other way around.

Anyone who’s ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn’t just inaccurate, it’s disingenuous.

That’s why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer."

 

For the complete talk, see http://www.theatlantic.com/business/archive/2012/05/here-is-the-full-inequality-speech-and-slideshow-that-was-too-hot-for-ted/257323/

[Mark Bachmann]

William,

 

That's a pretty desperate analogy, William!  Then any country in the world should be able to boom its economy by dumping fiat money on consumers, thereby creating "demand".  A robust business sector is necessary (a) to research and produce products that enough people want to buy, and (b) produce and market them in a cost-effective enough manner that consumers can afford the prices.

 

In the old Soviet Union, consumers generally had plenty of money, i.e., there was demand. But the economy was dead in the water because there wasn't much on the shelves beyond obsolete and often useless goods. Defence was a huge part of their economy, but the weapon's didn't work very well for the same reason: the system had no incentives for effective supply.

 

Let me try a different analogy: for politicians and government bureaucrats to claim credit for creating jobs is like doctors claiming credit for public health.  They can indeed help help if they do their jobs right, but healthy patients get to where they are usually because of healthy habits. And to carry the analogy a little further, doctors only make people sicker when intrude themselves on the lives of patients without the skill to do so effectively. (Crude fiscal stimulus oiled by loose monetary policy can do more harm than good). 

 

     Mark Bachmann

[Joe Leote]

Mark,

Your reasoning about the old Soviet Union is not sensible, unless there were price controls, which may be the case. If there is plenty of money to fuel demand and not enough supply of goods then it should result in inflation.

The analogy of finance to ecosystems is inherently reasonable. Biological populations can explode, such as the legendary plagues in the Bible ... after hurricane Floyd the hog waste pits in parts of the South fueled a nitrogen-rich wetland solution which led to a plague of flies followed by a plague of frogs.

Financial instability in bubbles which burst is mathematically similar to the overshoot and collapse functions one sees in the explosions of biological populations under specified conditions. The problem in finance is we do not yet understand how to specify the conditions that generate overshoot and collapse functions.

Germany has produced and saved, but in doing so, it had to accept liabilities of regions that did not produce and save to sell to Germany, now when the savings associated with Germany goes bad in bankruptcy, the lesson is that production and saving does not merely create financial wealth, it creates the illusion that one is gaining financial wealth when in reality one is merely putting others into debt which may or may not be sustainable depending on the financial (abstract ecosystem) state.

Joe
��

On 5/19/2012 6:41 PM, Mark Bachmann wrote:

William,

�

That's a pretty desperate analogy, William!� Then any country in the world should be able to�boom its economy by dumping fiat money on consumers, thereby creating "demand". �A robust business sector is necessary�(a) to�research and produce products that�enough people want to buy, and�(b) produce and market them in a cost-effective enough manner that consumers can afford the prices.

�

In the old Soviet Union, consumers generally had plenty of money, i.e., there was demand. But the economy was dead in the water because there wasn't much on the shelves beyond obsolete and often useless goods. Defence was a�huge part of their economy, but the�weapon's didn't work very well for the same reason: the system had no incentives for effective supply.

�

Let me try a different analogy: for politicians and government bureaucrats to claim credit for creating jobs is�like doctors claiming credit for public health.� They can indeed help�help if they do their jobs right, but healthy patients get to where they are usually because of healthy�habits. And to carry the analogy a little further, doctors only make people�sicker when intrude themselves on the lives of�patients without the skill to do so effectively.�(Crude fiscal stimulus�oiled by�loose monetary policy can do more harm than good).�

�

���� Mark Bachmann

On Sat, May 19, 2012 at 5:53 PM, William Hummel <wfhu...@ca.rr.com> wrote:

Multi-millionaire and entrepreneur Nick Hanauer in a TED talk this past March said:

�

"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 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 middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it�s a little like squirrels taking credit for creating evolution. In fact, it�s the other way around.

Anyone who�s ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn�t just inaccurate, it�s disingenuous.

That�s why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer."

�

[Mark Bachmann]

Joe,

 

The Soviets did everything in their power to created a fully planned economy. Production was based on quotas and, yes, prices were rigidly controlled. As a result, the supply side of their economy was a disaster, with unusable surpluses of some goods and disastrous scarcity of others. There was no mechanism for allowing supply and demand to influence one another.You had no inflation and you had full employment too, for what it was worth, but there was a good reason that Soviet citizens came to envy even the poorest citizens in Western countries.

 

    Mark Bachmann

[William Hummel]

Mark,

 

Hanauer was referring to capitalist free market economy, not some command economy where unemployment basically doesn't exist. Without a broad middle class with adequate purchasing power, producers remain very reluctant to hire new workers for increased production regardless of the large cash hoards they have accumulated. That's precisely what ails the US and European economies today, now in danger of another recession by the austerity movement.  The effect of weak aggregate demand on our economies is too evident to deny. 

 

William    

[Mark Bachmann]

William,

 

If that's the only problem, it would be easy to remedy through greatly expanded welfare or make-work programs. This isn't done because any sudden boost in aggregate purchasing power would quickly over overwhelm supply systems and lead to debilitating inflation for key items and services, even though other stuff - oversized houses and big-screen TVs maybe - might continue glutting the markets and remain cheap.

 

Production over-capacity in the U.S. is in large part illusionary in my estimation,  because it includes a growing mass of obsolete plant infrastructure and an increasingly ill-trained and unmotivated workforce. This, for practical purposes, is not production capacity at all,  even though it shows up as such on the charts that ivy league economists look at when they proclaim insufficient demand to be the only problem. Production capacity becomes viable only in the hands of a robust business class with both the ability and incentive to analyze complex markets and handle complex decisions about what to produce, how to keep it cost-effective for consumers, and where to market. Real jobs - i.e. jobs producing goods and services people actually need and want - are a natural outgrowth of this process when it's working properly.

 

I'm not trying to make heroes out of business people here, because in fact I believe that  the corruption and failure of  our business class - most glaringly in finance -  is indeed an important part of our current crisis. What I am saying is that government policymakers are deluding themselves if they believe the can somehow micro-manage solutions. Again like doctors, they can help, but only if they understand the limitations of their function.

 

   Mark Bachmann

[William Hummel]

Mark,

 

A market economy is a symbiotic relationship between producers and consumers. It needs competent management and a workforce which earns enough in the aggregate to purchase the output. In the US there is no shortage of entrepreneurial spirit or financial assets available. The fundamental problem is the highly skewed income structure in which the "rich" capture most of the financial benefits, and grow ever-richer while the average consumer has barely enough to cover living expenses. The debt that the average consumer took on over the past three decades by trying to maintain living standards grew enormously. Its inevitable collapse was a large part of what caused the financial crisis of 2007-2009, and the resulting loss of millions of jobs.

 

Now the issue is how to get the economy back on track with normal levels of unemployment and a more equitable distribution of wealth. That is not going to happen by further increasing the wealth of the rich. No one is suggesting that the Federal government should micro-manage solutions, and few are proposing make-work programs or welfare expansion. By contracting with private industry, the Federal government can significantly reduce unemployment and thereby increase aggregate demand in the private sector.

 

There are any number of infrastructure improvements and repairs needed to keep the economy running efficiently. Compared to western Europe, our infrastructure looks pretty bad. We have plenty of wiling workers and funding is no problem. In addition the Federal government should grant funds to the states on a per capita basis to help them balance their budgets. The loss of state revenues has caused a large part of the job losses. When the economy is in the tank, these are the things most needed. Reducing taxes on those with no inclination to spend more will not help.

[Terry Hammonds]

For at least ten years we have been told that America has a consumer economy while middle class incomes have been stagnant, due to several issues such as manufacturing jobs outsourced to other countries and automation. There was demand but not enough disposable income, so credit cards and home equity loans became the new currency. Consumer credit reached record levels as people bet that better jobs and wages would return before bankruptcy and eviction notices. When credit dried up and the housing bubble burst, credit supported demand disappeared and recession started. Excessive wealth held by a few can not provide the demand necessary to support our economy. Without a prosperous majority, we can not have a robust economy. 

Sent from my iPad

[Jean Erick]

     There is really nothing new going on here except the Republicans are in power longer than usual.  And the Reason for that was Lyndon Johnson's Civil Rights

program which turned the South.  They are just doing the same thing they always do.  They are corporatists, facists.  And most Congressional democrats sold out too.

 From the facist view, anything not facist is communist.  William is right on.

 

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Saturday, May 19, 2012 3:41 PM

Subject: Re: "Rich people don't create jobs"

[Jean Erick]

     The Russians equalled or surpassed us at somethings (Sputnick) and did it at a Canandian latitude.

 

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Saturday, May 19, 2012 8:23 PM

Subject: Re: "Rich people don't create jobs"

[Jim Blair]

Hi,

Three comments here:

A- the Soviets were the equal (or better) to the west in many things, mostly military.� They made excellent tanks and the AK-47 is still the "gold standard" for assault rifles.� It is used all over the world even today� and is on the flag of some groups.� But they could not run an economy.

B- As for space, this was a "tortoise and hare" replay.� They jumped to a big lead, with Sputnik and then a man-in-space. � They were confident that the first man on the moon would be a Soviet citizen.� When America finally woke up and JFK set the course, we beat them to the moon by so much that they denied that a "race" even existed.� They were so impressed and shocked by the US space program that when Reagan started that "Star Wars"� space based missile defense system� they assumed that it would work and render their nuclear rockets useless.� Most experts say that it would not have been effective, but like a bluff in poker, it did not need to actually work, it was enough that they THOUGHT that it would.

(but now we must thumb a ride from the Russians to supply the International Space Station :-(�

C- The title of the thread is not accurate.� It is not that "Rich People Create Jobs" . It is that "People Become Rich by Doing Things that Create Jobs".� Even Steve Jobs was not Rich until� he created many jobs.




On 5/21/2012 9:24 AM, Jean Erick wrote:

���� The Russians equalled or surpassed us at somethings (Sputnick) and did it at a Canandian latitude.

�

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Saturday, May 19, 2012 8:23 PM

Subject: Re: "Rich people don't create jobs"

Joe,

�

The Soviets did everything in their power to created a fully planned economy. Production was based on quotas and, yes, prices were rigidly controlled. As a result, the supply side of their economy was a disaster, with unusable surpluses of some goods and disastrous scarcity of others.�There was no mechanism for allowing supply and demand to influence one another.You had no inflation and you had full employment too, for what it was worth, but there was a good reason that Soviet�citizens�came to envy even the poorest citizens in Western countries.

�

��� Mark Bachmann

On Sat, May 19, 2012 at 6:41 PM, Mark Bachmann <mbach...@gmail.com> wrote:

William,

�

That's a pretty desperate analogy, William!� Then any country in the world should be able to�boom its economy by dumping fiat money on consumers, thereby creating "demand". �A robust business sector is necessary�(a) to�research and produce products that�enough people want to buy, and�(b) produce and market them in a cost-effective enough manner that consumers can afford the prices.

�

In the old Soviet Union, consumers generally had plenty of money, i.e., there was demand. But the economy was dead in the water because there wasn't much on the shelves beyond obsolete and often useless goods. Defence was a�huge part of their economy, but the�weapon's didn't work very well for the same reason: the system had no incentives for effective supply.

�

Let me try a different analogy: for politicians and government bureaucrats to claim credit for creating jobs is�like doctors claiming credit for public health.� They can indeed help�help if they do their jobs right, but healthy patients get to where they are usually because of healthy�habits. And to carry the analogy a little further, doctors only make people�sicker when intrude themselves on the lives of�patients without the skill to do so effectively.�(Crude fiscal stimulus�oiled by�loose monetary policy can do more harm than good).�

�

���� Mark Bachmann

On Sat, May 19, 2012 at 5:53 PM, William Hummel <wfhu...@ca.rr.com> wrote:

Multi-millionaire and entrepreneur Nick Hanauer in a TED talk this past March said:

�

"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 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 middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it�s a little like squirrels taking credit for creating evolution. In fact, it�s the other way around.

Anyone who�s ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn�t just inaccurate, it�s disingenuous.

That�s why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer."

�

[helge nome]

If we remain stuck in the paradigm that an individual needs to have a job in order to derive an income, a technology based society like ours will come to an untimely end:
More and more goods and services are provided with less and less input from human hands, and even brains.

Now, it is only possible to consume so much with any time left over to sleep.
So, to compensate, more jobs are created to enforce rules as to what we are allowed to do and how to do it, rather than endlessly creating jobs to produce more goods and services.
Example: It now cost the average household some $30,00 for a septic service, communal or private, based on complex rules, when a hole in the ground used to suffice.
Where will all this end? When 10 professional people tell Joe how he should conduct his life from hour to hour and another 10 are waiting to look after him with corrections programs
when he ends up in jail for having broken one of 30025673 laws?
Something's gotta give!

Helge

---

Date: Mon, 21 May 2012 19:18:55 -0500
From: jeb...@wisc.edu

Subject: Re: "Rich people don't create jobs"

To: understan...@googlegroups.com

Hi,

Three comments here:

A- the Soviets were the equal (or better) to the west in many things, mostly military.  They made excellent tanks and the AK-47 is still the "gold standard" for assault rifles.  It is used all over the world even today  and is on the flag of some groups.  But they could not run an economy.

B- As for space, this was a "tortoise and hare" replay.  They jumped to a big lead, with Sputnik and then a man-in-space.   They were confident that the first man on the moon would be a Soviet citizen.  When America finally woke up and JFK set the course, we beat them to the moon by so much that they denied that a "race" even existed.  They were so impressed and shocked by the US space program that when Reagan started that "Star Wars"  space based missile defense system  they assumed that it would work and render their nuclear rockets useless.  Most experts say that it would not have been effective, but like a bluff in poker, it did not need to actually work, it was enough that they THOUGHT that it would.

(but now we must thumb a ride from the Russians to supply the International Space Station :-( 

C- The title of the thread is not accurate.  It is not that "Rich People Create Jobs" . It is that "People Become Rich by Doing Things that Create Jobs".  Even Steve Jobs was not Rich until  he created many jobs.

On 5/21/2012 9:24 AM, Jean Erick wrote:

     The Russians equalled or surpassed us at somethings (Sputnick) and did it at a Canandian latitude.

 

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Saturday, May 19, 2012 8:23 PM

Subject: Re: "Rich people don't create jobs"

Joe,

 

The Soviets did everything in their power to created a fully planned economy. Production was based on quotas and, yes, prices were rigidly controlled. As a result, the supply side of their economy was a disaster, with unusable surpluses of some goods and disastrous scarcity of others. There was no mechanism for allowing supply and demand to influence one another.You had no inflation and you had full employment too, for what it was worth, but there was a good reason that Soviet citizens came to envy even the poorest citizens in Western countries.

 

    Mark Bachmann

On Sat, May 19, 2012 at 6:41 PM, Mark Bachmann <mbach...@gmail.com> wrote:

William,

 

That's a pretty desperate analogy, William!  Then any country in the world should be able to boom its economy by dumping fiat money on consumers, thereby creating "demand".  A robust business sector is necessary (a) to research and produce products that enough people want to buy, and (b) produce and market them in a cost-effective enough manner that consumers can afford the prices.

 

In the old Soviet Union, consumers generally had plenty of money, i.e., there was demand. But the economy was dead in the water because there wasn't much on the shelves beyond obsolete and often useless goods. Defence was a huge part of their economy, but the weapon's didn't work very well for the same reason: the system had no incentives for effective supply.

 

Let me try a different analogy: for politicians and government bureaucrats to claim credit for creating jobs is like doctors claiming credit for public health.  They can indeed help help if they do their jobs right, but healthy patients get to where they are usually because of healthy habits. And to carry the analogy a little further, doctors only make people sicker when intrude themselves on the lives of patients without the skill to do so effectively. (Crude fiscal stimulus oiled by loose monetary policy can do more harm than good). 

 

     Mark Bachmann

On Sat, May 19, 2012 at 5:53 PM, William Hummel <wfhu...@ca.rr.com> wrote:

Multi-millionaire and entrepreneur Nick Hanauer in a TED talk this past March said:

 

"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 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 middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it’s a little like squirrels taking credit for creating evolution. In fact, it’s the other way around.

Anyone who’s ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn’t just inaccurate, it’s disingenuous.

That’s why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer."

[William Hummel]

Helge,

 

Yes, because of technology far fewer individuals are now needed to produce the goods society requires , even though the population has grown significantly.  But technology itself does why more laws exist today than a century ago. The reason is the growth in urban population, with people living in much closer contact than in rural areas. Many more rules are needed to mitigate the conflicts that can arise under such conditions.   

 

With fewer people needed to produce the goods we use, the service sector has become the principal part of the economy.  That's great!  It means many more comforts are now available, including earlier retirement. However what we have not solved in the technology revolution is the equitable distribution of income.

 

William  

 

 

 

From: helge nome

To: understan...@googlegroups.com

Sent: Monday, May 21, 2012 8:35 PM

Subject: RE: "Rich people don't create jobs"

[Mark Bachmann]

While it's true that fewer people are needed to produce the physical goods we need, our chronically unbalanced trade means that this phenomenon is less pronounced than it seems. If China and other foreign countries become less willing to go on warehousing Dollars in exchange exporting real stuff to us, then our attenuated manufacturing base would have to be revived. The growing rigidities of our system would likely make this transition more difficult than it sounds.

 

   Mark Bachmann

[helge nome]

Good point Mark.
But the problem still remains: What are all those Chinese hands going to do if they don't make "stuff" for us and the rest of the world?
During the Great Depression unemployed workers here in Alberta, Canada, were made to move dirt and rocks by hand for a daily pittance while
bulldozers remained idle. Political agitators were having a field day and WWII probably stopped things from slipping out of control of the ruling class of the day.

Are we going to have to go through that all over again?

Massive technological change without a corresponding change in the social/financial realm is a potential recipe for disaster.

Helge

---

Date: Tue, 22 May 2012 15:21:13 -0400

Subject: Re: "Rich people don't create jobs"

From: mbach...@gmail.com
To: understan...@googlegroups.com

[mbach...@gmail.com]

Helge,

Yes, governments in the past have made use of idle hands by conscripting them into armies and threatening neighbors. I like to think that history has carried us beyond this point, but I'm not entirely certain about this, especially where China is concerned.

Mark Bachmann

On , helge nome <helg...@hotmail.com> wrote:
>
>
>
>
>
>
>
>
> Good point Mark.
> But the problem still remains: What are all those Chinese hands going to do if they don't make "stuff" for us and the rest of the world?
> During the Great Depression unemployed workers here in Alberta, Canada, were made to move dirt and rocks by hand for a daily pittance while
> bulldozers remained idle. Political agitators were having a field day and WWII probably stopped things from slipping out of control of the ruling class of the day.
>
> Are we going to have to go through that all over again?
>
> Massive technological change without a corresponding change in the social/financial realm is a potential recipe for disaster.
>
> Helge
>
>
>
>

[William Hummel]

Mark,

 

China and some other countries have a trade surplus with the US because they value dollar credits more than the goods they send us.  Most of that is with China, and it's pretty good deal.  We get goods while they get paper and assume all the risk. That's likely to continue until China floats its yuan. 

As long as foreigners run a trade surplus with the US, their dollar assets will increase. That effectively expands the dollar-denominated economy beyond our geographic borders, and strengthens the dollar as the world reserve currency as a result. We greatly benefit from that. 

 

William

[Mark Bachmann]

William,

 

A growing storehouse of Dollar credits is of value to them only to the extent the credits can eventually be used for something. The relationship has indeed benefited us greatly from the perspective of subsidizing our consumpsion, but it's inherently unstable. The longer the imbalance continues, the harder the adjustment is gong to be for us when balance reaserts itself, since our manufacturing base will have become even more diminished than it is now.

 

   Mark Bachmann

[Jean Erick]

     "Lights in the Tunnel" talks about the possible paradigm change in income shifting from work based to "good works" based.  Income based on constructive activity.

I had the thought that the current grant proceedure is an example of that.  Non-profits.

        Our own litle hole was alright until all the holes started contaminating the drinking water.  Which means that your complaint is the classic one of not having

a pot to pee in.  :-)

 

James

----- Original Message -----

From: helge nome

To: understan...@googlegroups.com

Sent: Monday, May 21, 2012 8:35 PM

[Jean Erick]

     I agree with your comments.  But it still comes down to systems of the distribution of decision making power.  Bernstein had a graph showing the curve of freedom relative to

productive output.  But he did not relate it to a real world standard.

 

James

----- Original Message -----

From: William Hummel

To: understan...@googlegroups.com

[Jean Erick]

     Interesting comments.  Thank you.

        It's not a matter of rich.  It's simply when the money mechanism of the distribution of decision making power impinges to much on the free political system of the distribution of decision making power.   And how people should be ruled was the (Athens-Sparta) classic argument, reoriented by a neccessary level of freedom for modern GDP growth about 1600.  Add the aspirations exemplified by the Magna Carta.

    I don't know.  Time to watch South Park.  ;-)

 

James

 

----- Original Message -----

From: Jim Blair

To: understan...@googlegroups.com

Sent: Monday, May 21, 2012 5:18 PM

Subject: Re: "Rich people don't create jobs"

Hi,

Three comments here:

A- the Soviets were the equal (or better) to the west in many things, mostly military.  They made excellent tanks and the AK-47 is still the "gold standard" for assault rifles.  It is used all over the world even today  and is on the flag of some groups.  But they could not run an economy.

B- As for space, this was a "tortoise and hare" replay.  They jumped to a big lead, with Sputnik and then a man-in-space.   They were confident that the first man on the moon would be a Soviet citizen.  When America finally woke up and JFK set the course, we beat them to the moon by so much that they denied that a "race" even existed.  They were so impressed and shocked by the US space program that when Reagan started that "Star Wars"  space based missile defense system  they assumed that it would work and render their nuclear rockets useless.  Most experts say that it would not have been effective, but like a bluff in poker, it did not need to actually work, it was enough that they THOUGHT that it would.

(but now we must thumb a ride from the Russians to supply the International Space Station :-( 

C- The title of the thread is not accurate.  It is not that "Rich People Create Jobs" . It is that "People Become Rich by Doing Things that Create Jobs".  Even Steve Jobs was not Rich until  he created many jobs.

On 5/21/2012 9:24 AM, Jean Erick wrote:

     The Russians equalled or surpassed us at somethings (Sputnick) and did it at a Canandian latitude.

 

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Saturday, May 19, 2012 8:23 PM

Subject: Re: "Rich people don't create jobs"

Joe,

 

The Soviets did everything in their power to created a fully planned economy. Production was based on quotas and, yes, prices were rigidly controlled. As a result, the supply side of their economy was a disaster, with unusable surpluses of some goods and disastrous scarcity of others. There was no mechanism for allowing supply and demand to influence one another.You had no inflation and you had full employment too, for what it was worth, but there was a good reason that Soviet citizens came to envy even the poorest citizens in Western countries.

 

    Mark Bachmann

On Sat, May 19, 2012 at 6:41 PM, Mark Bachmann <mbach...@gmail.com> wrote:

William,

 

That's a pretty desperate analogy, William!  Then any country in the world should be able to boom its economy by dumping fiat money on consumers, thereby creating "demand".  A robust business sector is necessary (a) to research and produce products that enough people want to buy, and (b) produce and market them in a cost-effective enough manner that consumers can afford the prices.

 

In the old Soviet Union, consumers generally had plenty of money, i.e., there was demand. But the economy was dead in the water because there wasn't much on the shelves beyond obsolete and often useless goods. Defence was a huge part of their economy, but the weapon's didn't work very well for the same reason: the system had no incentives for effective supply.

 

Let me try a different analogy: for politicians and government bureaucrats to claim credit for creating jobs is like doctors claiming credit for public health.  They can indeed help help if they do their jobs right, but healthy patients get to where they are usually because of healthy habits. And to carry the analogy a little further, doctors only make people sicker when intrude themselves on the lives of patients without the skill to do so effectively. (Crude fiscal stimulus oiled by loose monetary policy can do more harm than good). 

 

     Mark Bachmann

On Sat, May 19, 2012 at 5:53 PM, William Hummel <wfhu...@ca.rr.com> wrote:

Multi-millionaire and entrepreneur Nick Hanauer in a TED talk this past March said:

 

"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 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 middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it’s a little like squirrels taking credit for creating evolution. In fact, it’s the other way around.

Anyone who’s ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn’t just inaccurate, it’s disingenuous.

That’s why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer."

[Jean Erick]

     The one aspect that I think inhibits your judgment is the lack of perspective that would be provided by entertaining he possibility of pressures to move from our 400 year old work based distribution of rersources to a, for lack of a better term, "good works" based system.    "Lights in the Tunnel", applies to the topic as applied to basic structure of products in a market economy.  I suspect that non-profits, grants may be an example.  Keynes and several others have rung this "labor is an endangered specie" bell before.  The author of "Lights" thinks computerization is going to finally accomplish the paradigm.

[Mark Bachmann]

James,

 

It sounds like an interesting book, although I haven't read it. The problem with any such system would be establishing incentives that energize people and ensure their labors are usefully focused.

 

   Mark Bachmann

[helge nome]

Now, the interesting thing here is that the aristocrats of yesteryear had no problems in utilizing all their time for the purpose
of maintaining status and keeping the rumps of the working class in the air and their noses close to their assigned tasks.

So, why not simply move the bar down one notch and ensure that the "work-bots"  (as in "robots", "spybots", etc) do the same thing
and so provide us all with desired goods and services?

The problem, as I see it, is that the vast multitude has bought into the idea that "work" is a necessary condition for receiving an income,
and the term "working class" has been invented and pushed down the throat of the common man to the point where he feels guilty in
receiving any money "for nothing".

That has never troubled members of the "ruling class", of course, because they are not expected to "work" for a living. Just being there
is sufficient for receiving an income.

So, it's all about mind control.
Elementary, my dear Watson.
(Gosh, I feel really sorry for all the pyramid building slaves of ancient times.
Fancy moving all that stone just to please the Sun!)

Helge

---

Date: Thu, 24 May 2012 12:07:33 -0400

Subject: Re: "Rich people don't create jobs"

From: mbach...@gmail.com
To: understan...@googlegroups.com

[Mark Bachmann]

Helge - the fact  some members of the "ruling class" might be untroubled by their own lack of productivity doesn't make it a good idea for everybody else!

[helge nome]

OK Mark, so what do we do with all the drones, whichever class they happen to belong to?
I guess we could go back to building pyramids?
Helge

---

Date: Thu, 24 May 2012 14:54:42 -0400

[Jean Erick]

     Oh yeah!?  Well, I kind of like the idea!   ;-)

[Jean Erick]

     Try "Birth of Plenty" by Bernstein.  He relates freedom to productivity and even has a graph, freedom making a dome shape.  But he doesn't reference the shape

to any standard of freedom.  Pyramids .... been there, done that.  You come up with something do or or you will be doing what somebody else came up with.

And that person might be Mark!!!    '-)

[Jean Erick]

     I agree.  The author definitely felt the same thing.  That the idea was not to equalize things but to leave some income disparity to provide incentive.  I guess it might be

looked as an improvement over the masses of people in crummy jobs that Toffler?, "Future Shock"? surmised.

[Jim Blair]

On the subject that "Rich People Don't Create Jobs" did you notice the successful docking of the Spacex rocket to the space station?� Spacex was founded by that rich guy Elon Musk, who became a billionaire by founding another company, PayPal.

Spacex employs thousands of people (AKA "jobs") and with NASA dropping out, it may be the way Americans will be able to supply the international space station withing thumbing rides from the Russians (or soon the Chinese).� And PayPal also employs people.

So maybe some "Rich People" do create jobs?

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Thursday, May 24, 2012 11:54 AM

Subject: Re: "Rich people don't create jobs"

Helge - the fact� some members of the "ruling class" might be untroubled by their own lack of productivity doesn't make it a good idea for everybody else!

�

� Mark Bachmann

�

�

�

On Thu, May 24, 2012 at 1:22 PM, helge nome <helg...@hotmail.com> wrote:

Now, the interesting thing here is that the aristocrats of yesteryear had no problems in utilizing all their time for the purpose
of maintaining status and keeping the rumps of the working class in the air and their noses close to their assigned tasks.

So, why not simply move the bar down one notch and ensure that the "work-bots"� (as in "robots", "spybots", etc) do the same thing

and so provide us all with desired goods and services?

The problem, as I see it, is that the vast multitude has bought into the idea that "work" is a necessary condition for receiving an income,
and the term "working class" has been invented and pushed down the throat of the common man to the point where he feels guilty in
receiving any money "for nothing".

That has never troubled members of the "ruling class", of course, because they are not expected to "work" for a living. Just being there
is sufficient for receiving an income.

So, it's all about mind control.
Elementary, my dear Watson.
(Gosh, I feel really sorry for all the pyramid building slaves of ancient times.
Fancy moving all that stone just to please the Sun!)

Helge

---

Date: Thu, 24 May 2012 12:07:33 -0400

Subject: Re: "Rich people don't create jobs"

From: mbach...@gmail.com
To: understan...@googlegroups.com

James,

�

It sounds like an interesting book, although I haven't read it. The problem with any such system would be establishing incentives that energize people and ensure their labors are usefully�focused.

�

�� Mark Bachmann

On Thu, May 24, 2012 at 11:46 AM, Jean Erick <jean...@sbcglobal.net> wrote:

���� The one aspect that I think inhibits your judgment is the lack of perspective that would be provided by entertaining he possibility of pressures to move from our 400 year old work based distribution of rersources to a, for lack of a better term, "good works" based system.�� �"Lights in the Tunnel", applies to the topic as applied to basic structure of products in a market economy.� I suspect that non-profits, grants may be an example.� Keynes and several others have rung this "labor is an endangered specie" bell before.� The author of "Lights" thinks computerization is going to finally accomplish the paradigm.

�

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Tuesday, May 22, 2012 7:52 PM

Subject: Re: "Rich people don't create jobs"

William,

�

A growing storehouse of Dollar credits is of value to them only to the extent the credits can eventually be used for something. The relationship has indeed�benefited us greatly from the perspective of subsidizing our consumpsion, but it's inherently unstable. The longer the imbalance continues, the harder the adjustment is gong to be for us when balance reaserts itself, since our manufacturing base will have become even more diminished than it is now.

�

�� Mark Bachmann

On Tue, May 22, 2012 at 6:22 PM, William Hummel <wfhu...@ca.rr.com> wrote:

Mark,

�

China and some other countries have a trade surplus with the US because they value dollar credits more than the goods they send us.� Most of that is with China, and it's pretty good deal.� We get goods�while they get paper and assume all the risk. That's likely to continue until China floats its yuan.�

As long as foreigners run a trade surplus with the US, their dollar assets will increase.�That effectively expands the dollar-denominated economy beyond our geographic borders,�and strengthens the dollar as the world reserve currency as a result.�We greatly benefit from that.�

�

William

�

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Tuesday, May 22, 2012 12:21 PM

Subject: Re: "Rich people don't create jobs"

While it's true that fewer people are needed to produce the physical goods we need, our chronically unbalanced trade�means that this phenomenon is less pronounced than it seems. If China and other foreign countries become less willing to go on warehousing Dollars in exchange exporting�real stuff to us, then our attenuated manufacturing base would have to be revived. The growing rigidities of our system would likely make this transition more�difficult than it sounds.

�

�� Mark Bachmann

On Tue, May 22, 2012 at 11:38 AM, William Hummel <wfhu...@ca.rr.com> wrote:

Helge,

�

Yes, because of technology far fewer individuals are now needed to�produce the goods society requires , even�though the�population has grown significantly.� But�technology�itself does why more laws exist today than a century ago.�The reason is the growth in urban population, with people living in much closer contact than in rural areas.�Many more rules are needed to mitigate the conflicts that�can arise�under such conditions.� �

�

With fewer people needed to produce the goods�we use, the service sector has become the�principal part of the economy.� That's great!� It means many more comforts are now available, including earlier retirement. However what we have not solved in the technology revolution is�the equitable distribution of income.

�

William��

�

�

�

From: helge nome

To: understan...@googlegroups.com

Sent: Monday, May 21, 2012 8:35 PM

Subject: RE: "Rich people don't create jobs"

If we remain stuck in the paradigm that an individual needs to have a job in order to derive an income, a technology based society like ours will come to an untimely end:
More and more goods and services are provided with less and less input from human hands, and even brains.

Now, it is only possible to consume so much with any time left over to sleep.
So, to compensate, more jobs are created to enforce rules as to what we are allowed to do and how to do it, rather than endlessly creating jobs to produce more goods and services.
Example: It now cost the average household some $30,00 for a septic service, communal or private, based on complex rules, when a hole in the ground used to suffice.
Where will all this end? When 10 professional people tell Joe how he should conduct his life from hour to hour and another 10 are waiting to look after him with corrections programs
when he ends up in jail for having broken one of 30025673 laws?
Something's gotta give!

Helge

---

Date: Mon, 21 May 2012 19:18:55 -0500
From: jeb...@wisc.edu
Subject: Re: "Rich people don't create jobs"
To: understan...@googlegroups.com

Hi,

Three comments here:

A- the Soviets were the equal (or better) to the west in many things, mostly military.� They made excellent tanks and the AK-47 is still the "gold standard" for assault rifles.� It is used all over the world even today� and is on the flag of some groups.� But they could not run an economy.

B- As for space, this was a "tortoise and hare" replay.� They jumped to a big lead, with Sputnik and then a man-in-space. � They were confident that the first man on the moon would be a Soviet citizen.� When America finally woke up and JFK set the course, we beat them to the moon by so much that they denied that a "race" even existed.� They were so impressed and shocked by the US space program that when Reagan started that "Star Wars"� space based missile defense system� they assumed that it would work and render their nuclear rockets useless.� Most experts say that it would not have been effective, but like a bluff in poker, it did not need to actually work, it was enough that they THOUGHT that it would.

(but now we must thumb a ride from the Russians to supply the International Space Station :-(�

C- The title of the thread is not accurate.� It is not that "Rich People Create Jobs" . It is that "People Become Rich by Doing Things that Create Jobs".� Even Steve Jobs was not Rich until� he created many jobs.

On 5/21/2012 9:24 AM, Jean Erick wrote:

���� The Russians equalled or surpassed us at somethings (Sputnick) and did it at a Canandian latitude.

�

James

----- Original Message -----

From: Mark Bachmann

To: understan...@googlegroups.com

Sent: Saturday, May 19, 2012 8:23 PM

Subject: Re: "Rich people don't create jobs"

Joe,

�

The Soviets did everything in their power to created a fully planned economy. Production was based on quotas and, yes, prices were rigidly controlled. As a result, the supply side of their economy was a disaster, with unusable surpluses of some goods and disastrous scarcity of others.�There was no mechanism for allowing supply and demand to influence one another.You had no inflation and you had full employment too, for what it was worth, but there was a good reason that Soviet�citizens�came to envy even the poorest citizens in Western countries.

�

��� Mark Bachmann

On Sat, May 19, 2012 at 6:41 PM, Mark Bachmann <mbach...@gmail.com> wrote:

William,

�

That's a pretty desperate analogy, William!� Then any country in the world should be able to�boom its economy by dumping fiat money on consumers, thereby creating "demand". �A robust business sector is necessary�(a) to�research and produce products that�enough people want to buy, and�(b) produce and market them in a cost-effective enough manner that consumers can afford the prices.

�

In the old Soviet Union, consumers generally had plenty of money, i.e., there was demand. But the economy was dead in the water because there wasn't much on the shelves beyond obsolete and often useless goods. Defence was a�huge part of their economy, but the�weapon's didn't work very well for the same reason: the system had no incentives for effective supply.

�

Let me try a different analogy: for politicians and government bureaucrats to claim credit for creating jobs is�like doctors claiming credit for public health.� They can indeed help�help if they do their jobs right, but healthy patients get to where they are usually because of healthy�habits. And to carry the analogy a little further, doctors only make people�sicker when intrude themselves on the lives of�patients without the skill to do so effectively.�(Crude fiscal stimulus�oiled by�loose monetary policy can do more harm than good).�

�

���� Mark Bachmann

On Sat, May 19, 2012 at 5:53 PM, William Hummel <wfhu...@ca.rr.com> wrote:

Multi-millionaire and entrepreneur Nick Hanauer in a TED talk this past March said:

�

"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 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 middle-class consumer is far more of a job creator than a capitalist like me.

So when businesspeople take credit for creating jobs, it�s a little like squirrels taking credit for creating evolution. In fact, it�s the other way around.

Anyone who�s ever run a business knows that hiring more people is a capitalist's course of last resort, something we do only when increasing customer demand requires it. In this sense, calling ourselves job creators isn�t just inaccurate, it�s disingenuous.

That�s why our current policies are so upside down. When you have a tax system in which most of the exemptions and the lowest rates benefit the richest, all in the name of job creation, all that happens is that the rich get richer."

�