Wealthy investor Nick Hanauer says the US economy mints billionaires while many Americans are struggling, and there's no excuse for it

nick hanauer

  • Nick
    Hanauer
    is a wealthy, Seattle-based investor, author, and
    progressive activist who thinks significantly raising taxes on the
    rich will help correct structural deficiencies in the economy.
  • Fed chairman Jerome Powell has called for policies that will
    address income inequality, to improve economic mobility in
    America.
  • This article is part of Business Insider’s ongoing series on
    Better
    Capitalism
    .

As the 2020 presidential race gains momentum, Democrats running
against President Donald Trump are pushing alternatives to his tax
cuts, focusing on asking more of the wealthiest Americans.

But beyond politics, even
Federal reserve chairman Jerome Powell
recently identified
income inequality as the greatest challenge to overcome in our
economy over the next decade. “We want prosperity to be widely
shared. We need policies to make that happen,” Powell said. “The US
lags now in mobility. And that’s not our self-image as a country,
nor is it where we want to be. … We have some work to do to make
sure that the prosperity we do achieve is widely spread.”  

Progressives have been using variations of the phrase “every
billionaire is a policy failure” to capture the way the share of
national income has risen for the top 1% as it’s lowered for the
bottom 50%,
famously chronicled by French economist Thomas Piketty
, author
of “Capital
in the Twenty-First Century
.” It’s an idea that investor,

author
, and activist Nick Hanauer has taken “very seriously,”
he told Business Insider.

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Hanauer said he is not a billionaire, but he and his wife are
signers of the Giving Pledge, meaning that their combined wealth at
least approaches $1 billion. He’s not a self-loathing rich guy,
though. He just wants the economy to work better, and he’s
passionately against the neoliberal
policies that reigned in America for the past 40 years.

He said, “in a country where so many people are barely getting
by, or not getting by at all, an economy that mints billionaires is
structurally deficient. There is no reasonable moral or practical
justification for these disparities in wealth and income.”

The most common critique of proposals like Sen. Elizabeth
Warren’s 3% wealth tax for fortunes over $1 billion or Rep.
Alexandria Ocasio-Cortez’s 70% marginal income tax rate for income
above $10 million is that they would hurt the economy by punishing
innovation and success. Hanauer dismisses that critique, explaining
that we’re in a position where the American Dream isn’t working
because of a reluctance to abandon failed trickle-down
economics.

“The inequality that our economy produces is not reflective of
our relative talents or contributions, but more of deep, embedded,
structural dynamics that create this winner take all result. We
could easily make adjustments in how we allocate the value our
society collectively creates that would spread these benefits more
broadly,” he said. 

Read more:
‘This is going to end badly for everyone’:

Wealthy venture capitalist Nick Hanauer is on a mission to fix the
American economy before it’s too late

Hanauer noted that even with significantly higher taxes,
America’s wealthiest would remain on top, and their buying power
would remain relative.

“I also feel strongly that the neoliberal contention that me
getting immensely wealthy does not harm you, and that your
objection to it is just petty jealousy is also wrong. The richer
the rich get, the farther apart the rungs of opportunity are
stretched. An economy dominated by a few people with infinite
wealth is characterized by arms races for status that benefit no
one and harm most people.”

SEE ALSO: Calls
to ‘abolish billionaires’ raise eyebrows, but they’ve been a long
time coming


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Source: FS – All – Economy – News
Wealthy investor Nick Hanauer says the US economy mints billionaires while many Americans are struggling, and there's no excuse for it