Posted on 11/04/2012 11:12:52 AM PST by mdittmar
Beat me to it. Wealth is created by creating new wealth. Amazing how many people can't understand such a simple concept.
if they rebuild with the same philospy used to rebuild WTC there will be a lot of people without a home for a long time. WTC should have been finished, not still building.
I’ll give ya’ Kudlow, I don’t listen to Varney. I like Levin because he frames his econ discussions in terms of liberty.
Not quite true (unless I misunderstood you). Provision of services can create wealth just like the manufacturing of goods, or mining, etc.
I just threw your comment in over there. I’ll try to remember to look in later to see if I get any comments back, or if it gets deleted.
Services do not create ADDITIONAL wealth. It is simply a transfer of wealth from the buyer to the seller. Without creating ADDITIONAL wealth, it is impossible to create ADDITIONAL economic value.
You will notice I did not include health services in my list of services. That is because this service helps us recover from health problems and that means more productive time is available to us. But this activity is not a big contributor to wealth creation.
BS. Say I’m a chemical engineer, and and and I create a new method to process those vaunted ores . . . have I created wealth, or not?
LOL! Thanks. I’ll check it out. :)
$50 Billion?? Pffttt!! Just wait’ll Obama’s army hits the streets on Wednesday. We’ll have jobs galore rebuilding after they are finished.
Of course, not a whit of this adds to our nations wealth or well-being. If it did, we could burn down all the cities and rebuild them.
No wonder our economy is in the shape it is if people believe this irrational garbage. I guess when the democrats burn down their cities after Odumbo looses that will bring about prosperity with all the new spending to reconstruct. God save us from fools and tyrants.
I figure I’ll ease in the Broken Windows Fallacy aspect later.
Rush does pretty good on economics considering he didn’t finish college and hasn’t studied economics. He clearly has a strong interest, is widely read, and I’m sure lots of smart people have privately tutored him. But you are right — he often gets in way over his head. Example: his explanation of work force participation rate is close, but not dead-on.
However his reach is huge and he does yeoman’s work in this area even if not always 100% right.
I just responded to you over there. I supported your brilliance. :)
If you invent a new process which is more productive over existing methods, then you ARE CREATING additional wealth.
That falls under the 4th item in my list of wealth creators.
In summary ANYTHING which increases productivity is a wealth creator.
I spent many years (23 to be exact) in an outfit which designed and manufactured heavy machinery. My contribution was to computerize many engineering activities and computerize manufacturing processes, which were all done manually before. The productivity jumped by orders of magnitude, especially in manufacturing. In the engineering area, my computer programs generated enough details to purchase long delivery items such as forgings, castings and steel plates 3-4 weeks sooner, which helped my company promise delivery of machines 3-4 weeks sooner, which was a competitive advantage over competitors when customers needed the machines ASAP..
Spending ones way out of debt is like trying to screw ones way out of aids
money spent on fixing damage means less money available to spend on other things.
I’ve followed your side discussion with some interest; please allow me to weigh in. I’ll cut right to the chase.
1rudeboy is right and entropy12 is wrong.
Services* do indeed create wealth.
To begin with, every one of the items in entropy12’s list includes many embedded services. Mining companies use lawyers and accountants. These services may be embedded (provided by employees), or they may be purchased from contractors. Either way, they contribute to the mining activity.
The same thing applies to the other three items on the list. We can also add retail services (and wholesale, etc.)
Furthermore, “services” include such things as transportation. What good would mining do, if there were no means of transporting the minerals to the manufacturers? Does it matter whether the transportation service is embedded withing the mining company, or contracted out to independent trucking companies? Of course not!
entropy12 is correct about the repairing of hurricane-damaged properties. That’s an example of the “Broken window fallacy”, which has been explained quite well in other posts. However, that’s not what you two have been debating — and it absolutely does not belong on entropy12’s list. It’s in a different category altogether.
*Assuming that we’re discussing services provided by the private sector (i.e. willing buyers and willing sellers), and not the government sector, where anything can be wasted.
many economists have shown that over time the “broken window” affect is not a net plus to an economy
if it is not “more of benefit to the economic health” of you and your neighbors to all have to fix broken windows, diverting either income or savings, or both, you would have spent more effectively somewhere else
it cannot be beneficial on an even wider scale
When I re-read this post, it became obvious that your disagreement centers around the definition of “wealth creation”.
entropy12 is focused on “growth” — not all “wealth creation”. 1rudeboy is discussing all wealth creation, and is using the terms correctly.
Exactly...
Don’t vote him out. Just a few more national disasters and he’s golden.
Not much stinks worse than the byproducts of Democrat desperation.
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