The myth that's killing America

A lot has been written in the last few weeks about the American economy, the growing wealth divide, and how best to address debt. The most controversial aspect is, of course, taxation of the very wealthiest.

One argument that's repeatedly trotted out is that taxing the wealthy means fewer jobs. After all, it's the wealthy who create jobs, and if the government takes their money away, they won't be able to help people get back to work. And, by extension, poor people don't create jobs.

That's a myth, and I call bullshit.

Wealthy corporations have just one aim: to make profit for their stockholders. Yes, they create jobs, but they create the cheapest possible jobs. That means laying off expensive American workers and offshoring as much as possible to the developing world.

By contrast, the poor and the middle classes do create jobs. Not in huge numbers at a time, but there are millions of small entrepreneurs who are creating jobs for themselves, bringing on help, and starting small businesses. Every little shop, every small service industry, every roadside stall, every family diner, every business who employs a cleaner - they're all creating jobs, one and two at a time.

Take the guy who fixes our air conditioning. He's just taken on an assistant, and is teaching him a trade. There's the lawn guy who used to be a one-man outfit two years ago and now has a crew of three working for him. There's the pest control guy who set himself up in business last year. The auto repair guy we got our car from has recently taken on a part-time helper. Our friends who run a boutique employ part-time shop assistants. Our friends who started their own spa employ therapists, nail techs, and reception staff. There's the lady who runs her own dance studio and employs teachers. There are the tattoo artists, the comic shop guys, and the web designers. Our own promotion business helps local artists sell their work.

In fact, very few of the people I know in Orlando work for companies started or owned by wealthy people. Nearly all of them work for themselves or for small businesses, often started by friends or family.

It's not even just the middle classes who start businesses and employ people. Every food truck, every repairman, every cleaner - they're all creating jobs, usually from absolutely nothing. Millions upon millions of jobs, right here, on our doorstep.

It's a dangerous myth, and it's killing the economy.

While the rich get bailouts and handouts and exemptions, the middle classes and working classes are getting squeezed even further. As a result, we're seeing small shops closing, small businesses failing, and entrepreneurs giving up before they even start.

Of course, the wealthy are only too happy to see this happen. It gets rid of the competition. When the small businesses are gone, the consumers have no choice but to go to the massive national chains and franchises. We're paying our tax money to concentrate wealth even more in the hands of the wealthy than it is already.

Even the poor have been brainwashed into believing this is a good thing. They want the rich to get richer. The only future they can see for themselves is big companies opening up new plants or offices and giving them work. But it's not happening that way, is it?

This myth needs busting, and it needs busting now.

The truth is simple.

It is high taxes on the wealthy that create jobs, not low taxes. Raising taxes sends a clear message to the rich: use it or lose it.

Don't take my word for it. Look at the facts, as presented by none other than billionaire investor Warren Buffett. "I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation."

Let's face it, Buffett knows more about capitalism, investment and job creation than you or I ever will. He knows these people personally. He knows this is a myth, and he knows how damaging it will be - for him as well as everyone else - if the economy continues to skew further and further in favor of the elite.

It is small business that creates the overwhelming majority of local jobs, and it's small entrepreneurs who should be stimulated and rewarded, not millionaire investors who pump money into offshore schemes that actually destroy local jobs.

Rework

Are you an entrepreneur? Managing a small software company? Thinking about getting into a start-up? Frustrated by the way your work/life balance is shot to hell?

Then get a copy of Rework, put it in your bathroom, and read a few pages every time you have a few moments. It's full of short, insightful essays, typically a page long, that add up to a different vision of how you can do business, and what a successful company can look like.

Some of it's pretty obvious advice. Meetings are toxic. Don't hire too many people too early. Love what you're doing or it'll show.

Some of it's slightly utopian, and only suitable for certain sorts of companies. Hire people who don't need managers and will just get on with whatever needs doing. It's OK for everyone to work from home, scattered round the world as long as they communicate online every day. Make sure you can do every job in the company yourself. Keep your product really simple.

Well, that's all fine if you're building a small software product, and you only need a few talented programmers to create it and refine it step by step. That doesn't always work so well if you're building a complex product that requires a lot of people working together. Or, come to that, opening a restaurant. Sometimes, you need a roomful of grunts and a manager just to get through the sheer volume of labour and ensure everyone's working effectively. And if they're highly specialised grunts, you can't really expect anyone else to be able to do their job. That, after all, is why you hired them.

However, there are some pieces in Rework that challenge orthodox business thinking, particularly in the modern tech start-up. These are the bits you need to read and think about. The five that stuck in my mind this time were:

Planning is guessing. No plan I have ever made for a business has come to reality. And, probably, neither have any of yours. All those optimistic budget forecasts, sales forecasts, hiring plans, release schedules, marketing plans - all bollocks. They looked impressive, and people signed up to them, but the truth is they were my best guess, nothing more, and they all turned out to be wrong. Hell, I can rarely even plan for what I'm going to do next week. Things change too fast in modern business. So, they advise, stop wasting your time making pointless plans, set some goals, and just do the damn job. Or, if you do have to make a plan, make sure you and everyone else knows they're only a guess.

Don't write down the procedures. Forget sheets of diagrams and documents explaining you do everything in the company. You won't stick to them anyway. A release checklist or similar, fine. But don't waste your time writing down stuff that either everyone knows, or which will be ignored in the heat of the moment.

Don't plan for an exit. This one's anathema to investors. After all, you only build a company so you can sell it, right? Well, that's one view of business. Alternatively, you could build a company that you can stick with for ever, and do it because you love it.

No to-do lists. Actually, I don't agree with this one. I'm a to-do list person. But I do like their suggestion not to waste time going through and prioritising everything 1, 2 or 3, and giving everything a target date, importance, and so on. Instead, just pick the most important thing, put it at the top of the list, and do that. Then, when you've gone as far as you can with that, pick the next most important thing, and do that.

Don't be a hero. If you're the guy working until 11pm every night, you're not doing anyone any favours. You're going to be tired and unproductive, and guilt-tripping your colleagues into working longer hours isn't going to endear you to anyone. More to the point, if what you're working on is really taking that much effort, then you should seriously consider whether you're going about it the right way.

The main themes of Rework are that in most companies we waste too much time on unnecessary management, and we'd all get a lot more done if we just got on with what was most important to delivering a great product to our customers. As I said, not all of this applies to everyone, but it should certainly get you thinking about how you and your company could work more efficiently, get more done, and spend less time doing it.