As a response to "tax the rich", many say that the "rich create jobs". Hm! How many jobs has Paris Hilton created? Certainly lots of jobs for paparazzi and tabloid writers. How many real jobs have the Wall St. manipulators created?
Today's Star Tribune had an interesting article on how graduate students are being affected the jiggling of grants. See "Debt deal nicks grad students, not others", Jenna Ross.
Given the cuts in Pell Grants, Congress in its great wisdom cut grants for graduate and professional students. Some will say that students shouldn't get "charity". But if we limited education only to those who could afford it, would we have enough educated people to do the innovation that we need to sustain our economy.
Abou Amara is president of the Graduate and Professional Student Assembly at the University of Minnesota. He was quoted as saying, "There's a disconnect here. The narrative now is about jobs and innovation. Well, people in graduate and professional school are the people who are going to be creating jobs. We're the people who are going to grow the economy." See "If you want to grow, you have to spend money for seeds."
In the rush to avoid "taxing the rich" and "cutting spending", many ignored that they cut jobs with government shutdowns. The rich hardly noticed, but many small businesses noticed. For example, highway projects were shut down, the contractors laid off workers, and the contractors had shut-down costs that they may never get paid for. The laid-off workers had be be paid unemployment benefits and some had to pay more for their health insurance. Isn't this increased spending and taxing the middle class?
I've seen several articles recently about immigrants starting businesses, especially in the cities. I don't know what portion of new, local businesses are created by immigrants, but I sense it is out of proportion to their numbers. If so, why might this be?
Some of them took risks to be here, and so the risk of starting a business is just one more. They are not accustomed to having health insurance and other benefits, and so they don't consider lack thereof as an impediment to starting a business. Finally, they often have large networks of friends and relatives from whom to draw financial support.
I have two ideas that could encourage more people to start businesses.
The first is universal healthcare. Too many consider this a cost rather than an investment. If more people were freed of the need for a job with "benefits", wouldn't more people risk starting a business? If more people started businesses, wouldn't there be more jobs? If there were more jobs, wouldn't there be more taxes and less costs?
The second is more neighborhood banks. Not only neighborhood in the sense of being located closer to the customers, but neighborhood in being staffed by people from the neighborhood. With the larger banks, one can never be sure who will be in the locally-sited bank from one month to the next. If the staff were more permanent, they would develop closer relations with their customers.
I know this certainly helped me in keeping a business growing. I ran around the track at a YMCA with the president of a local bank. Never mind that it was owned by Carl Pohlad, a Twin Cities billionaire, as part of a small empire of banks; the people were the same month after month and year after year. Because the president got to know me and feel he could trust me, he extended a line of credit to me. I drew on it, I paid it back, I drew on it, I paid it back. I never really succeeded in the business, but how many others who had similar, local treatment succeeded.
Then Pohlad consolidated his banks under one brand, and the personality went out of the local bank. He probably got even richer, but the community was poorer for it.
In summary, it's not the rich in dollars who create jobs; it's the rich in experience and education who create jobs.
