The economy of the United States has expanded since before we were a country. This constant expansion came to be part of the norm, the expected, and so has led to people believing their children should be better off than them. But economic expansion is dependent upon certain things in society and when those things change, the ability to expand also changes. One of those things is investment in production.
When an economy is growing and savings are invested in production facilities and processes, the economy continues to grow because new employees are needed to run the facilities, who are then paid from the cash flows of these companies, giving them money to spend on consumer goods, perhaps money to save, which they spend, driving up demand, creating a need for new production facilities and so the cycle continues. This part of the economy will continue so long as producers seek to make their profits by controlling and lowering their costs.
Unfortunately, the history of civilizations tells us that mindset will change at some point (see Carroll Quigley’s “The Evolution of Civilizations”) and the producers, instead of seeking to reduce costs through efficiencies will seek to increase prices. According to Quigley this is the institutionalization of the method of expansion. We can see that in many industries where the participants seek restriction to entry or competition through government action. Needing a license to operate a taxicab, or a tanning parlor, or a beauty salon are all examples of this. They are no different than tariffs and restrictive quotas that keep foreign goods out of the country in order to maintain the price for domestic producers. A perfect example is sugar, where the international price is usually one-half the domestic price. The $3.5 to $4 billion this costs the US consumer annually flows directly to the sugar producers. Is Duke Energy any different? Are the car company bailouts or the cash-for-clunkers program any different? These are all examples of the change in an economy from one of growth to one that Quigley calls an age of conflict.
We see evidence of this conflict almost daily. Jobs don’t exist and are not being created, so people are upset. Instead of creating new productive, more efficient facilities, businesses and individuals seek solace from the government, and those who are opposed to such comfort become their enemies. Where once the people were united in seeking new ways and opportunities, where all would be lifted by the common rising tide, they become divided as one group seeks to maintain or increase its position, not by hard work and the implementation of new ideas, but by government control and transfers, by what is commonly called “rent-seeking.”
There is another side to lack of investment in production, which has to do with spending on non-productive edifices whose main purpose is for show. Large public buildings become monuments to the officials in charge when they are built. Libraries are overbuilt, adding nothing to their function but wasted, non-productive investment in their pleasant lobbies. Court buildings are among the worst. This is not limited to public building, but occurs in the private sector as well. The Panther’s football stadium is a perfect example. Built with a combination of public and private savings, its function is solely one of entertainment. It will produce nothing, yet the investment there could have built a new factory, producing goods and jobs.
Because this waste of investment is detrimental to economic expansion and thus job growth, intellectual arguments must be made about why it is a good thing. In this case from the uptown paper, Mr. Steve Luquire, who owns an advertising company, performs that function for the Carolina Panthers and their bid for looting the taxpayer. His is the typical argument about why this is an investment in a positive economic facility. His is the typical propaganda of an advertiser. There is enough truth to make one believe, but the fact is the facility is nothing but entertainment, producing nothing, and reflects the change of a growing, expanding economy to a static one where those who have try every avenue they can to maintain their position. What Mr. Luquire argues for is government taxing of the people to transfer to this monument of wasteful investment. What would be better for the economy is letting the people keep their money to be spent on things that are to their personal benefit, which might encourage a factory to stay open or a new one to be built. What Mr. Luquire and friends propose is the slow deterioration of our economy while saying otherwise.
The fact is government has become complicit in the lack of expansion of the economy; the tax transfer to the Panthers is just another nail in the coffin. If we want the people to have jobs, the economy will have to expand; and that will not happen so long as those who seek a free ride from government are in charge.
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