COMMENTARY
My comment on the Forbes essay:

peterburgess 18 minutes ago Thank you … a good overview of this bit of turmoil. I would, however like to take exception to your headline … Hanauer’s presentation may have been somewhat ‘shoddy’, but his thesis was not ‘dumb’.

Hanaouer is absolutely right when he says that employment goes up when increased employment is needed to meet demand ... otherwise the primary operating agenda is to reduce employment so that costs are reduced and profits increased.

A big part of the economy over the past thirty years has been the use of financial instruments, new and old, to keep demand pumped up. Effectively this enabled people and organizations to but more than they could afford.

Another part of the economy is advertising ... another way to create want and therefore demand for goods and services for which there is really no need.
Peter Burgess

The Real Reason That TED Talk Was 'Censored'? It's Shoddy And Dumb

IMAGE Nick Hanauer onstage at TED

The Web’s abuzz about the alleged censorship of Seattle venture capitalist Nick Hanauer’s March 2012 TED talk on why the rich are soul-sucking tax cheats don’t create jobs. Turns out it was not a case of censorship at all. It was just a case of the TED organizers deciding that this particular presentation was categorically mediocre, a conclusion with which I firmly concur. TED talks are initially seen only by the people who go to its two live conferences each year. The general public only gets to see the talks that TED chooses to post (one a day) on its website. It has 250+ to choose from in its video archive.

Hanauer’s talk, given on March 1 at the TED University program (a shorter-form warmup for the main stage), argues that the rich have benefited disproportionately over the last couple of decades. I wouldn’t argue with that. Income disparity is at an all-time high. But Hanauer begins his talk spends most of his time trying to explain why the rich don’t create jobs. And that’s just stupid. TED curator Chris Anderson went to his blog to explain why Hanauer’s talk, despite tapping into some timely and pressing issues, wasn’t picked:

…it framed the issue in a way that was explicitly partisan. And it included a number of arguments that were unconvincing, even to those of us who supported his overall stance. The audience at TED who heard it live (and who are often accused of being overly enthusiastic about left-leaning ideas) gave it, on average, mediocre ratings.

According to Anderson, when Hanauer found out his talk wasn’t picked, he ”hired a PR firm to promote the talk to MoveOn and others, and the PR firm warned us that unless we posted he would go to the press and accuse us of censoring him. We again declined and this time I wrote him and tried gently to explain in detail why I thought his talk was flawed. So he forwarded portions of the private emails to a reporter and the National Journal duly bit on the story.”

Nice move. Trash the rich in front of the rich (a practice I fully support) but then react to rejection like a spoiled schoolkid. The National Journal called the talk “too hot” for TED. I think too lame is more like it. Hanauer’s thesis is that rich people and entrepreneurs don’t create jobs because it’s the consumers who create jobs by creating demand. Jobs, he says, are not created by rich people or by business large or small. They’re created by “a circle of life-like feedback loops.” Say what? Companies big and start-up size almost always hire people before they have a clue if they’re going to sell X quantities of something.

But you know what the worst thing about the talk was? Hanauer’s charts. Look at this slide from Hanauer’s talk and see if you can spot what’s wrong with it. Any dual-axis chart is a dangerous matter, and this one falls deep into the trap. The number scale is completely awry, leading us to parse how a 22.4% tax rate can fall below a 9.3% unemployment rate.

Hanauer's chart. Unemployment is in blue.

Actual U.S unemployment. Source: Bureau of Labor Statistics

But what’s worse is that his unemployment line looks nothing like the real thing. I pulled the data from the Bureau of Labor Statistics (right) and you can see what really happened to unemployment between 1995 and 2009.

It refutes Hanauer’s point, if anything. Unemployment didn’t keep going up. It FELL twice (once from 1995-2001 and again from 2003-2007). Sure, it soared in the Great Recession, but did that have anything to do with low taxes on the rich? I went ahead and added the two years since Hanauer’s chart cuts off so you can see how it has come back down. His work is complete junk and dangerously misleading. As my data editor Jon Bruner said, it looks like Hanauer “just took the unemployment rate in 1995 and the unemployment rate in 2009 and drew a random squiggly line between them.”

You can see his talk for yourself here Someone posted it on YouTube.

The text and the slides included in the TED talk are here

Hanauer defended himself in an email to Business Insider, saying that he “got a sensational reaction to the talk at the conference itself, including a big standing ovation.” Maybe so, but I can tell you, having been to a few TEDs. that those people clap at almost anything.