This article developed during a discussion with Rainbow Camouflage and his post. It was his post and the ensuing discussion that spurred my research and inspired the below post. I hope it is cogent and that my many references are integrated in an understandable fashion considering this post was by no means a linear creation. Thank you.
I recently read an article titled “Raise Taxes on Rich to Reward True Job Creators”, by Nick Hanauer. In his piece he makes the argument that rich people do not create jobs but it is the middle class that creates jobs. What he is claiming is that the demand the middle class has for consumer goods is what creates jobs and that the top 1% of income earners should pay more in taxes in order to help the middle class spend more on pants, shirts, shoes, TVs, and all manner of disposable consumer goods. While I agree that in a free market the consumer is boss I think it is short-sighted to focus only on the middle class consumers when in it comes to the overall economy. If you want jobs and the middle class to have more disposable income, the only long-term solution is to grow the economy.
I think the author has missed a key ingredient that has got our economy to where it is today – Capital accumulation. There is no doubt that in a free market economy, the consumer is boss. That is a great thing and something we should all be protecting. That is also what is plainly obvious. There’s more to the story. Read the rest of this entry »