“Backbone of Our Economy Indeed!
I just wanted to take quick note of a comment that I heard on a talk show as I was surfing the stations while driving. Unfortunately I don’t even remember the fellow’s name or the position he held—not even the station I was listening to.
The purpose of my doing so is not to suggest that this is the position of our government. It’s only to take issue with the remark and suggest that anyone who thinks this way is wrong-headed.
In any case, the offending phrase was that the financial industry is the backbone of our economy!
There are far too many people who don’t really understand what the “backbone of our economy” really is. This parallels the notion that investing in diamonds, bonds, art, etc. is productive when it’s not. The “backbone of our economy” is truly anything that adds value or creates something of value out of something that had less value before.
Agriculture can be referred to by that epithet. Thanks to the beneficence of our Creator, a seed in the ground emerges as something of value that wasn’t there before. Ore is something of value that is taken from the dirt. Metal is of value and is refined from the ore. Automobile parts are something of value, fashioned from the metal, and the completed automobile is the same. And, the automobile salesman can provide a service of value because he does everything needed to educate the consumer and provide a perception of value to the buyer.
The common characteristic of all of these industries is that they add value that someone else is ready, willing, and able to pay for with the fruits of their labors. And it is the tokens of the value of those products or services that provides the coin of the realm.
Financial institutions do nothing to add genuine value to anything. They are simply a service that facilitates the commerce that injects those tokens of value, the money, into the economic mainstream to be used to reward others for the value added. We get into real trouble when we think that moving the money around adds value.
While it performs a useful service when it enables everyone to benefit from the fruits of adding value, it is hardly the basis for the growth of our national treasury and our collective wealth.
