That old saying is wrong; money does grow on trees
In his State of the Union address, President Obama stated, “A growing economy that creates good, middle-class jobs, that must be the North Star that guides our efforts.” These words are empty rhetoric unless the speaker understands the job-creating process. In his Republican rebuttal, Sen. Marco Rubio stated that free enterprise is the source of our middle-class prosperity.
Both men talked in vague terms without understanding the economic history of the United States. In recent years, the political talk has been about budget cutting, not about increasing wealth to make the pie bigger. Rubio ignored the fact that a prosperous middle class arose when unions prevailed against laissez-faire enterprise and before the era of outsourcing.
The North Star being touted for Western New York seems to be the medical corridor and casinos. The health care industry and casinos are examples of service jobs that only shuffle what is already created. What created the money in the first place?
The old saying “money doesn’t grow on trees” is wrong. It does. When the product of nature is monetized, it creates true new wealth. A recent Super Bowl ad featured a long-ago quote by Paul Harvey about the American farmer. This was from the twilight era of the family farm. Secretary of Agriculture Tom Vilsack has said rural America is becoming less and less relevant. That relevance is what neither Obama nor Rubio understand. The bio-factories of the countryside were paid less and less adequately for their production, so the creation of new wealth from nature shifted to the borrowing into existence of thin-air money. Twenty-five years before Harvey spoke, the new wealth created by the bio-factories of rural America was 14 percent of the GDP. Sixty-five years later, it has shrunk to 1 percent.