"Kardashians And The Cult Of Growth"
by John Wilder
“The economy grew at an annualized rate of 4.9% in the third quarter of 2023.” And my response: so what? There is a Cult of Growth in the world. In the United States, at least, that growth was literally in the DNA of the young country – there was lots of space and it was only filled with some pesky Indians who didn’t have a lot of resistance to smallpox or lead, some buffalo, no zoning, and lots of empty land to build Blockbuster Video® stores.
So, off my ancestors went. The idea was simple – fill the country from sea to sea with farms and businesses, eventually mines and mills and railroads and factories and highways. No one really planned it, and there weren’t economists reporting on unemployment figures to Rutherford B. Hayes.
The growth that the United States experienced was amazing, and it was real. People built those farms and businesses and mines and railroads and factories and highways. That sort of growth allowed the creation of amazing wealth and prosperity because it was enduring and built upon itself. In those decades of growth, the United States experienced not diminishing returns but increasing returns as the steel mills fed the oil boom which fed the creation of the automotive industry and interstates.
Add in a few thousand nuclear weapons, and this growth of actual productivity and wealth production allowed the country to achieve tremendous national prosperity during a time of relative safety. Some would maintain that this prosperity peaked in 1973, but when you look at the relative availability of exceedingly cheap “stuff” – it was probably later than that. Perhaps a good case could be made for the 1980s when Blockbuster Videos™ roamed the land like a great majestic beast, spewing properly rewound videotapes and Raisinets® to all. Regardless of when that exact date is, it is likely past.
What was once achievable on a single income now requires (in many cases) two incomes. People of the past always thought that new labor-saving devices would accrue benefits to the worker, and we’d see a two- or three-day work week. Instead, we see people working more hours for less (relative) pay.
Why is that? I mean, the economy grew, right? Yes, it did. But the way the economy grew, fueled by illegal aliens contributed to lower wages. The argument could be made that that the economic activity, the growth from these added workers helped everyone. Well, no. Illegals are certainly a net negative when everything is accounted for – welfare, roads, schools, medical care, voting GloboLeft, and Kardashian body hair.
And the “growth” that we saw in many cases was the productive bit of the economy being hollowed out and shipped off overseas. Why? Because regulation increased in the United States (it never goes down) and it was easier to start and run a factory in Malasia than it is in Maine. And if iMegaCorp® can ship the factory over and increase corporate profits by 2%, they’ll do it.
Why? They’re owned by the people who make bad growth. What’s bad growth? Well, the financial sector. It should be set up not as a casino or a place where the businesses make money selling money. Growth is not always good. And it’s not always desirable. Let’s take an example: if I decided I wanted to gain a pound of weight next week, the healthy way to do it would be to put on a pound of muscle through exercise. But the easy way to put on a pound would be to pound some beers and milk shakes.
The United States could do the same – we could increase the size of the economy by producing more and better cars or computers or flat panel displays, or bulldozers. Or, we could increase the size of the economy by ChaseCitiFargo™ charging extra fees on overdrafts and GoldmanBlackRock© buying a company, loading it up with debt that it can’t pay, and then selling it piecemeal for a 15% profit. One of these makes a more productive society. The other is the equivalent of two people selling a house back and forth for 10% more each time and talking about all the wealth that they created.
So, not all growth is good, and not all increased profit is increased wealth. One economy can make stuff, the other just makes magical made-up profits. I’ve made the argument for some time that China’s economy is fine. It is. They know how to make stuff, so they are fundamentally more stable than the United States because the growth in China wasn’t in financial shenanigans, it was in productive stuff.
Does China have all sorts of debt? Yes, yes they do. Have they produced a lot of suspect crap in the past, especially for internal consumption? Yes, yes they have, and probably still do. Doesn’t matter. Their economy isn’t based on “growth” that occurs only on paper, and only due to paper even though people smoke in China to get fresh air. They don’t worship the Cult of Growth. Do I want to live there? Nope. Again, there’s good news – this system can’t last, so it won’t. The ride, however may be bumpy . . . as we get to rebuild it – on healthy growth this time."
No comments:
Post a Comment