A lot of ideas are being bandied about especially with this being an election year. Some have merit and others, the economic myths are just outlandish. We investigate a few of these and will update the list as new ones make their appearance.
Economic Myth number 1:
Businesses alone create jobs.
The demand from consumers creates jobs as businesses respond to that new increased demand. Without increasing consumer demand businesses have no reason to hire workers.
This is the view of the venture capitalist Nick Hanauer, a multimillionaire who was recently invited to speak at a TED conference. The conferences are well-known gatherings featuring talks on a variety of topics and can be viewed online.
“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.”
An afterthought provided by Seeing the Forest was, “if debt is bad, why is giving free money to banks so they will lend (put you in debt) better than giving free money to people to pay off debts?”