Nick Hanauer Archives

Another Billionaire Warns of the Dangers of Capitalism

A few months ago, we highlighted this article by billionaire Nick Hanauer as he skillfully shed some light on the false Republican claim that rich people are job creators. Now, we bring you a piece by another billionaire who warns that capitalism will be our downfall.

His name is Jeremy Grantham, a British investor who manages a hedge fund worth more than $100 billion, and he had this to say;

It gets worse, for what capitalism has always had is money with which to try to buy influence. Today’s version of U.S. capitalism has died and gone to heaven on this issue. A company is now free to spend money to influence political outcomes and need tell no one, least of all its own shareholders, the technical owners. So, rich industries can exert so much political influence that they now have a dangerous degree of influence over Congress. And the issues they most influence are precisely the ones that matter most, the ones that are most important to society’s long-term well-being, indeed its very existence. Thus, taking huge benefits from Nature and damaging it in return is completely free and all attempts at government control are fought with costly lobbying and advertising. And one of the first victims in this campaign has been the truth.

If scientific evidence suggests costs and limits be imposed on industry to protect the long-term environment, then science will be opposed by clever disinformation. It’s now getting to be an old and obvious story, but because their propaganda is good and despite the solidness of the data, half of the people believe the problem is a government run wild, mad to control everything.

Billionaire Says Rich People Are Not “Job Creators”

He is a billionaire. He is responsible for starting, or contributing to getting many corporations off the ground. If anyone knows about job creation and who creates them, it’s him. His name is Nick Hanauer, and it is his belief that tax cuts to the rich does not create jobs. And I agree with him 1000%!

I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.

Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That’s why 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 the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Still, we’ll hear the Republican talking point that the only way to create jobs in America, is for the rich to continue getting tax cuts and subsidies. Since George Bush became president, he went on a tax cutting frenzy for rich people, and during his entire eight years in office, only 1.09 million jobs were created. This, after the rich saw their taxes drastically reduced during the time Bush was in power.

But don’t tell this to Republicans in Congress. Although the facts don’t back up their claims, Republicans will go to their graves demanding more tax cuts for the rich in order to “create jobs.”