Cross-posted at Nontrivial Pursuits
.
Rich people are so stupid.
Of course, there are exceptions, but the unfortunate truth is that a significant majority of rich people are really, really stupid when it comes to their political judgments and their understanding of the economy they dominate.
As a teacher, I realize that it may not be their fault that they are so stupid, but you know something? Innocently stupid is still stupid and that's what rich people are.
The only question that really matters is whether or not they will continue to act stupid and do stupid after it has been explained to them why they have been so stupid. After all, a lot of stupid people do a lot of stupid things merely out of habit, don't they?
One really stupid thing that many rich people are guilty of is listening to---and giving financial support to---Republican politicians.
Sure, The Republicans are always making legislative proposals that would seem to benefit many, if not all rich people, and so it kind of makes sense that rich people would identify with the Republican Party, but unfortunately for them, Republican politicians are among the stupidest of all people in our culture.
Republican politicians see their situation in the simplest of terms: in order to succeed in politics, it is absolutely essential that they get their hands on a lot of money to spend on their campaigns. And so The Republican Politician targets the individuals who have the most money to spend on politics, the filthy rich.
In their enthusiasm to earn the financial support of the rich, they come up with all sorts of initiatives, like tax cuts, that will put lots and lots of dollars in the pockets of rich people. It is a very simple calculus, the kind of calculus you would expect from people with simple minds.
If these stupid people had a more sophisticated understanding of how the economy functions, they would understand that there is a big difference between financial wealth and real wealth.
To better understand the distinction, simply imagine what it would be like if everyone were to somehow become extremely rich in dollars one day and then we all decided to retire and live off of our accumulated 'wealth.' (Yes, this is the ultimate goal that The Republicans say we should all strive for.)
What we would soon discover is that we would actually possess no real wealth at all, because no one would be producing anything of value that we could buy.
The only reason why money has any value to us is because it gives us a claim on the productive efforts of others. How wealthy you actually are depends more on what others are doing than it does on your personal accumulations of paper notes.
The Real Economy is the productive behavior of people; it is the actual goods & services that people are producing and trading and consuming.
When economists speak of the "Wealth of Nations" (at least those economists who are not stupid Republicans), they are not talking about the amount of currency that is in circulation; they are talking about the productive capacity/output that various nations enjoy.
If we want to have an optimally wealthy economy/country, we need to get all of our people optimally productive.
The only economic question that should ever matter to us, as a society, is how might we act to increase our production of real wealth? Unfortunately, stupid Republican politicians and the stupid rich people who give them financial support do not understand this.
They focus all of their efforts instead on increasing the financial "wealth" of all rich people, efforts that actually do nothing to improve the amount of real wealth the rich are able to enjoy. Indeed, they frequently serve only to make rich people poorer, in real terms.
(To be continued...)