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• Tuesday, December 2, 2008 09:48 AM

  Consumers are irrelevant

  I would go farther than the author of this article and say: what we need more of in the US is production, not consumption. Consumers are, qua consumers, irrelevant to any market. No one can act purely as a consumer, without any wealth to give him purchasing power. Production *must* come first.

  Our government is essentially using up all the "store seed" of our economy through pathetically short-sighted solutions, especially with the bailouts. What the government is doing by bailing out inefficient producers, such as the auto industries, is giving them unearned advantages in the market over efficient producers who could succeed in a free market, but cannot compete with government favored businesses. The government doesn't produce anything itself, it only redistributes what its tax-paying citizens produce; so when it builds roads, dams, etc., it is misallocating resources from where the consumers who produced, or earned, that money would be spending that money of their own free will. This creates further economic "bubbles" to burst in the future. We don't need more government spending--we need infinitely less! The closer we move to a pure laissez-faire capitalist system, the fewer boom-and-bust cycles--created through government dislocations of wealth--we will see in the economy.

  (For a great discussion of this, see Ayn Rand's "Egalitarianism and Inflation.")

  —persepolis Read persepolis's other letters
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