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| Authored by: Imaginos1892 on Tuesday, March 26 2013 @ 02:48 PM EDT |
Stegu is talking about the difference between primary and secondary
economic activity.
Manufacturing, construction, mining, farming, logging/lumbering are
all examples of primary economic functions - they create value and
provide the foundation of any viable economy.
Advertising, sales, accounting, administration, and (sorry PJ) law
are secondary functions that do not create value, but must be
supported by a large, stable foundation of primary functions.
Thus we get "bubbles" - attempts to expand secondary economic
effects beyond what the existing primary functions can support.
The "internet bubble" was an attempt to build a huge secondary
economy composed of advertising and sales on top of too small a
manufacturing base. It did not work. The "housing bubble" was the
same thing - trying to expand the economy not by building houses,
but by buying and selling them over and over. That too proved to
be unsustainable.
There are two main things wrong with the US economy. First, most
of the highest-paying jobs are secondary functions. Second, there
are perverse incentives to those secondary jobholders to "offshore"
the primary jobs. They're getting huge bonuses for knocking the
foundation out from under our economy, and wondering what's wrong.
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Don't open that!! It's the original can of worms![ Reply to This | Parent | # ]
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