There's a popular myth out there that jobs and wealth are created by businesses. This isn't true. Jobs and wealth are created by demand. I could open a business selling something for which there is zero demand and all the people I hired would be out of work again as soon as I went under. Consumers create jobs and wealth, not suppliers. It always gets me when people talk about business owners and CEOs as "job creators" -- they're not.Likewise, Wall Street doesn't create wealth. Wall Street trades on wealth. Wealth comes from the creation of objects for which there is a demand. These objects can be solid and tangible, like a boat or a hamburger, or they can be more conceptual, like a newspaper column or a novel. But it has to be a noun. Value is added to things that already exist by labor. The dead cow becomes the hamburger, the blank page becomes the novel. No one pays money for something they could easily find lying around. As Abraham Lincoln put it, "Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration."
In the bailout debate, we're left arguing over whether the product of labor is worth more than the business of capital. Granted, the auto industry has pulled a lot of boneheaded maneuvers, but the fact is that the root of their problem is identical to the banking industry's problem -- a credit crunch. Car sales are just as dependent on loans as Wall Street. When it's hard to get a loan, it's hard to buy a car...
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