Monday, October 25, 2010

Economics 104, the Creation of Wealth

I know it’s Monday and maybe our mathematics synapses aren’t fully functional yet, but I ran across another video by Bill Whittle the other day over at Big Government that’s worth your time. It’s short and sets out to dispel the myth that capitalism has somehow failed, or doesn’t work, or does nothing but make the rich richer and the poor poorer. If you believed any of those fallacies, you probably wouldn’t be reading this blog in the first place.

Actually, this is pointed more at the likes of noted economist Paul Krugman. The only reason he’s noted these days is for his wild declarations and overall lack of knowledge about free market economics. So this is a type of indirect fisk of his latest column. I could perform a full-fledged, point-by-point refutation of his false notions, but I’d rather let someone else do it for a change.

Cue our cousins from across the Pond: Will someone please shut Krugman up?

We're trying, we really are. Perhaps this video will help.



I’ll try to keep this next explanation simple so that maybe Mr. Krugman can understand it.

Here’s our problem: one day, someone somewhere in the dark recesses of Washington decided to “help guide” our society. This person decided that we would move away from an economy that made things to an economy that didn’t make anything. This not-making of things was called a “service economy.” People would no longer get dirty doing things like making cars and washing machines and computers and tires and desks and clothes and roofing shingles. Their logic was, if people were making money doing things for other people instead of making things, then everybody would be happy. The planet would be cleaner and all the animals would be happy.

The whole world would be one big, happy world and we would all live happily ever after.

But what about all those things we used to make that people wanted? People still want them, but someone else can make them, then they will have more money and the planet will be cleaner and the whole world will be one big, happy world and we can all live happily ever after in a global economy.

So they set about to make sure that we didn’t make anything anymore for anyone. So we stopped making things like cars and washing machines and computers and tires and desks and clothes and roofing shingles. And we started doing things for other people like, uh, cooking. That’s right, we started cooking for each other. And doing each other’s taxes. And doing each other’s’ lawyering. Oh, and gambling, we started gambling. And growing marijuana so we could tax it. And in the case of Paul Krugman, we started doing each other’s confusing for them, too.

And this worked, at least for a while, until we ran out of the money we used to have back when we made things. Now, things are bad. How bad, you ask? This bad.




We now have people with advanced degrees who once created things in Silicon Valley who wonder where their next meal will come from.

So we get to ask ourselves some questions: Are we happy? Is the planet cleaner? Are we better off than when got dirty making all those things we made? Are all the other people in the world happy that we don’t make anything for anyone anymore? Do we have plenty of money to pay for things like retirement, or new roads and bridges and airport runways like we used to?

Is Paul Krugman happy?

Is the person in Washington who thought we would be happy with a global economy happy?

Well, the rest of the world seems to be happy. They have the money that we used to have back when we made things. They love us for that and they would never think of being mean to us since we gave them all our money. They make all the things we want now like cars and washing machines and computers and tires and desks and clothes and roofing shingles.

And we have Paul Krugman.

And Nancy Pelosi, who says "We really haven't gotten the credit for what we have done."

Yay.

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