I have an electric stream behind my house. Water flows down the rocks, offering a drinking fountain for the dog, birds and wasps that live here, and soothing sound for me. There is a pump submerged at the bottom of the stream to raise the water back to the top. Even with the pump running, I must regularly add water to replace what the critters and the sun take from the system during the day.
Money, I’ve noticed, is like my backyard stream, in reverse. Money naturally flows uphill. We buy stuff, and the profits become part of the company owners’ new home, cars and toys. Food stamps given to a single mom mean more profits for the grocery chain CEO. Subsidized oil becomes price stabilization for Exxon and BP. That’s not a bad thing; it’s just the way it is. Without the profit motive, we would have no iPads, or Mexican strawberries in Pennsylvania winters.
As long as I pump water uphill, and financial magnates pump money downhill, all is well. The dogs remain hydrated and my neighbors have money with which to buy stuff, which employs people who make stuff, and offers encouragement to entrepreneurs to continue their efforts to create more stuff to be made and bought.
But the systems fail when the pumps stop, and that, I submit, is what has happened to our economy. It’s as though the money-pump has been turned off. Though some complain that printing more money is not a good thing, if a portion of the water/money is continually siphoned off at one end of the stream, soon there is none left.
That, from this side of the keyboard, is the root of our current predicament. Beyond the rhetoric about fiscal cliffs and debt ceilings and (the other side) can’t just print money to kick the fiscal can down the road, is the simple fact that those at the very top of the economic food chain seem to have lost sight of the fact that when all the water is removed from the stream, the pump burns up and repair is way more costly.
In probably over-simplified terms, that was the source of the Great Depression of the 1930s, when the Vanderbilts and Rockefellers and (JP) Morgans and Carnegies had all the money. It is said that John D. Rockefeller, J.P. Morgan and Andrew Carnegie together controlled more personal wealth than the 40 richest people in the world today. The pump – the workers who made real the entrepreneurial dreams of electricity, railroads and gasoline – ran dry. Those who made steel and lay track had no money to buy passage on the train they had sweated and died to build.
Instead of blaming schools for not educating our youth while, according to a recent “60 Minutes” story, more than three jobs go unclaimed for lack of qualified workers, we should ask schools to teach history and math, and business to teach workers to fill those needs, rather than, as Exxon does, demand simply that we “solve this.”
Instead of refusing to raise taxes on the wealthy while we search for ways to tax Internet purchases made by folks at the other end of the financial spectrum, we should find ways to tax money the former groups hide in the Caymans.
Instead of measuring the state of the economy by its Gross National Product – how much money is taken in by manufacturers and service providers, without regard to reductions in costs from more profits on fewer workers – we should measure our fiscal health by how much the nation’s wealth is spread.
Instead of blaming the government for unemployment, we should acknowledge that business has found it can profit by laying off workers.
And lest anyone think I am in favor of taking from the rich and spreading it equally among the poor – there must be profits. There must be enticement for those with ideas to bring them to fruition.
But when those at the top of the fiscal food chain chastise those at the nether end for being sick and hungry, and a drain on the financial resources of their employers, we are headed for problems.
Water does not naturally flow upstream, and money does not naturally flow down.
Photo by Donald Lee Pardue
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