It’s often said that “bad money drives out good.” In the same way, unproductive financial speculation, outright gambling, and usury (i.e., credit cards), if it is allowed, makes productive enterprise look like a poor investment. Of course, it’s a tautology that consumption can’t take place without commensurate production, so over the long run, the fraudulent nature of the profits from speculation is inevitably revealed. Accordingly, the resources devoted to such endeavors are wasted.
So then, do you think the stock market is declining more a result of the fact that vast swathes of the real US and global economy have been replaced by parasitic hedge funds, investment banks, credit card companies, and subprime mortgage lenders? Or is it because of the Obama administration’s “negativity” on the prospects of the economy?
And, to those who answer with the latter, do you honestly believe we can go on never producing real stuff? Do you seriously feel that we can just think our way to prosperity, and that the market will magically take care of production on its own? If so, why did it not prior to the collapse?
“GDP is not speculation it is real money that is produced.”
“Real money” is a contradiction in terms. Regardless of whether it’s a commodity or fiat currency, money is inherently fake – it is an abstraction devised to facilitate production. Unfortunately, we have come to view money as an end unto itself, rather than simply a means.
As for GDP, it is Consumption + Investment + Government Spending + Net Exports. Most of the “value” of the American economy supposedly comes from importing cheap crap from China, and then selling it at outrageous markups in the US. So, say company x imports a widget for $10 dollars, and then sells it for $50; the affect to GDP is + $40, as the import expenditure subtracts $10, while the sale to the consumer adds $50.
“Assembly lines aren’t the only way to make money.”
True, but you miss the point; making money proper is useless. Physical production – mining, farming, manufacturing – is what has utility, and it is the ONLY source of real value.
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