Relevant and even prescient commentary on news, politics and the economy.

Seattle University Symposium on Inequality, Nick Hanauer

The following video was posted in Ed’s Post by Marko.  I thought it deserved a wider audience.

The symposium included a discussion regarding raising the minimum wage to $15.  Mr. Hanauer, being an honest to goodness real billionaire talked about what that would mean for his situation.  I like the way he put it.  He earns 1000 times the median wage and yet he still only needs 1 pillow when he sleeps at night, not 1000.

You might also know of him from his TED talk that was originally  refused for posting.  He has been talking for a while about the wrongness and dangers of income inequality.

Now, if only he would team up with one or 2 more billionaires and start fighting against the Koch et al’s money in the political arena.  Then we just might see some balance.

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Taxes and job creators

Via Robert Waldmann Richard Thaler at Bloomberg provides a different take on innovators and job creators:

A recurring theme of this year’s presidential campaign is the need to encourage the formation of new businesses. Republicans in general, and Mitt Romney in particular, have stressed that the best way to stimulate such startups is via low tax rates on high-income earners.

In other words, this is a strategy that emphasizes maximizing the after-tax returns if and when you hit it big. Yet if you think about the way most new businesses are started, it should be clear that these tax incentives have very little to do with the decisions facing most new entrepreneurs.

The typical business startup (think Joe the Plumber) begins with an initial stake that has been saved or borrowed, and 97 percent of small-business owners make less than $250,000 a year. It is a good bet that when Bill Gates, Steve Jobs and Larry Page were creating their new businesses in their proverbial garages, they weren’t giving much thought to the tax rate they would have to pay if they struck it rich.

The essence of Stewart’s idea goes to the heart of why our economy is largely organized around limited-liability public corporations. When successful entrepreneurs decide to take their businesses public, they are selling some of the upside to other shareholders in return for making sure that they can’t lose all their wealth if something at the company goes wrong.

So-Called Reform

What about smaller startups that don’t begin their lives as corporations? One thing that would help stimulate this sort of business creation is making sure that a business bankruptcy is not ruinous to the entrepreneur’s family. But the Republican- sponsored bankruptcy “reform” law of 2005 changed the rules in the opposite direction. For someone who uses a credit card to help open a bakery or landscaping business, this law raised the cost of failure.

Austin Goolsby speaks to the issue on the Jon Stewart Show,  and Jon is spot on.

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Explaining Class Warfare

 
Last month one hundred and fourteen thousand unemployed moochers…suddenly yank the government teat out of their mouths, get off the couch for forty hours a week? Why?
 
 
I say follow the money; cause I found out, that right around the time those people got those jobs…they started getting paid!
 
And just where does that money come from? Right out of the pockets of the job creators. How’s that for your socialist redistribution of wealth? Folks, it’s called class warfare.
 
 
Mr Colbert has created a new party that will issue a certificate to sooth the hurt of the job creators. The Certificate of Richness issued by:
Protecting Industry Titans and Yachtsman party. The P.I.T.Y. party.
 
And right on cue:
 
 
If President Obama is re-elected and raises taxes, Westgate Resort’s David Siegel says he will have to lay off workers and downsize his company — or even shut it down.
 
 

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