Roy W. Spencer, Ph. D:
A persistent misconception about our economy is that the same amount of stuff is going to be produced, no matter what government policies are implemented. If that was indeed true, then the political debate only becomes one over how all that stuff is divided up. And that is indeed what many people spend their time debating.
But economic productivity can vary tremendously between countries, and even within a country over time. In fact, there are many poor countries with much lower unemployment than the United States…yet they remain poor.
What really matters for a prosperous nation is what is produced for a given amount of labor. We could have near-zero percent unemployment tomorrow if the government mandated that half the people should dig holes in the ground and the other half fill them up again. But we would be a very poor country, with a very low standard of living.
A high standard of living requires efficiency of production of goods and services that the people want, which in turn requires large investments in facilities, machinery, raw materials, etc. In a competitive free market economy, those investments involve risk…risk that your investment will be lost if someone else figures out a more efficient way to build 10 million smartphones than you figured out.
Now, why would anyone choose to invest large sums of money? Only if they have some hope of receiving much more in return if they are successful. If that incentive provided by the hope for profit is lost, then they will not invest in new business enterprises. No business enterprise for them means no jobs for you.
Our number one priority should be to ensure that producers are allowed to produce, and that they are not penalized for their success. Jobs happen from the top-down (not from the middle-out) when businesses with the money to hire people are allowed the opportunity to succeed.
Yes, a few of them will become rich in the process…but their riches pale in comparison to the greater riches enjoyed by society as a whole through the higher standard of living the good ideas of the rich have enabled. And those profits aren’t kept under a mattress…they are reinvested in the economy, either through expanding the business, hiring more people, or even just buying more stuff which supports other businesses.
Well Dr Spencer deviated from his normal climate issues, but they are related. The 99% want to increase taxes on those who would improve their standard of living by creating job opportunities for the 99%. The 99% want green energy, no pesticide foods, and hundreds of other things that they want someone else to pay for. Dr Spencer should be considered for the Director of the EPA in the Romney Administration.
This article is spot on!!!!!!!!!!!!
The 99% can pound sand. We need a “head-tax” where, as the water-walker says, EVERYONE HAS SOME SKIN IN THE GAME!!!
$1,000 per person, per family.
Ante up, slum-dogs.
I’m tired of the poor and their tyranny of the majority.
Can’t afford the tax? That’s fine, you don’t get to vote or feed off the teet. Let’s make this country one for the productive, like it used to be.
One often assumed fallacies on the Left is that the economic pie is of a static size.
When that falsehood is assumed this next one always follows: IF the rich get anything, it is by STEALING from the poor.
The concept of the pie growing is missed.
Back when Mao ran China he wanted everyone working.
So, if you were old or disabled you were, at the very least, responsible for sweeping the street where you lived.
A probably apocryphal story about the Communist Chinese was told that they used people power, shovels and picks to build their dams.
Machinery would put too many people out of work.
Sort of like Dr. Spencer’s illustration of useless work leading to 100% employment BUT no wealth.
China had to dump its communism with regard growing food early on…..or there wouldn’t have been much food grown.
Later, it has been dumping many of its communist ideas while keeping many industries nationalized.
Central planning has cause China to totally waste millions of man-hours of work building cities that remain empty….ghost towns.
Central planning is an enemy of innovation and incentive.
But central planning is what Obama is all about.
The 99%’ers could work digging holes OR filling in holes, but they would remain poor.
OR those 99%’ers could say ”screw central planning, let’s build a better fill-in-the-blank.”
Working for the person willing to risk his own wealth on the bet that people might want that better thing-a-ma-jig will lead to higher pay and a better life for those workers.
Even Henry Ford knew you must pay your workers enough so that they could buy a car.