This virtually proves that economic growth, and job growth, is all about demand. And of course all that demand for a Tesla car---that has yet to be invented---would not have materialized were it not for president Obama's stimulus programs and the trillions of brand new dollars the Fed has created over the past few years, right?
Well, wrong. And of course I was kidding: there hasn't been 500,000 orders for a mid-priced electric sedan that has yet to be invented. However, Tesla will build the battery plant and create thousands of jobs nonetheless. Musk, that filthy rich one-percenter (along with some unnamed filthy rich one-percenter investors), has the vision, the passion, the courage, the confidence and the resources to risk going where no automobile manufacturer has gone before.
Quite frankly, today's Keynesian simply has it wrong. While he credits what little growth we've seen these past 5 years to an historically mammoth amount of government intervention, the fact of the matter is that simply giving away newly created (and other peoples') money in an effort to increase consumption does not---as the economy's performance over the past 5 years attests---a growing economy make.
Growth/prosperity/jobs comes by way of the risk-taking of seers who, like Ford, Kroc, Walton, Gates, Jobs, Musk---and millions of small business owners---invest their (and others') capital beyond what's required to produce yesterday's products. Not that ongoing, or increased, demand for yesterday's products mustn't be met---it indeed must. However, the emphasis is on doing so by employing evermore efficient means (I have used the self checkout lanes at my neighborhood supermarket). It's the life-improving stuff of tomorrow, produced in a free, competitive marketplace, that requires the kind of investment that expands industry and creates lasting employment.
Here's Andrew Beattie on Sam Walton:
Sam Walton picked a market no one wanted and then instituted a distribution system no one had tried in retail. By building warehouses between several of his Wal-Mart (NYSE:WMT) stores, Walton was able to save on shipping and deliver goods to busy stores much faster. Add a state-of-the-art inventory control system, and Walton was lowering his cost margins well below his direct competitors. Rather than booking all of the savings as profits, Walton passed them on to the consumer. By offering consistently low prices, Walton attracted more and more business to where he chose to set up shop. Eventually, Walton took Wal-Mart to the big city to match margins with the big boys - and the beast of Bentonville has never looked back.
"A market no one wanted" means there was no "demand" for what Walton had in mind. While producing under a model that no one demanded, Sam Walton's enterprise turned into the greatest employer of human beings this world has ever seen.
Here's CNN/Money on Steve Jobs:
Perhaps the most astonishing fact about Jobs was his view that market research and focus groups only limited your ability to innovate. Asked how much research was done to guide Apple when he introduced the iPad, Jobs famously quipped, "None. It isn't the consumers' job to know what they want. It's hard for [consumers] to tell you what they want when they've never seen anything remotely like it."
Instead, it was Jobs' own intuition, his radar-like feel for emerging technologies and how they could be brought together to create, in his words, "insanely great" products, that ultimately made the difference. For Jobs, who died last year at 56, intuition was no mere gut call. It was, as he put it in his often-quoted commencement speech at Stanford, about "connecting the dots," glimpsing the relationships among wildly disparate life experiences and changes in technology.
It's a safe bet to assume that none of Apple's blockbuster products, from the Macintosh to the iPod and iTunes, from the iPhone to the iPad, would have come about if Jobs had relied heavily on consumer research.
Fittingly enough, on the day Jobs launched the Macintosh, a reporter from Popular Science asked him what type of studies Apple had conducted to ensure there was a market for the computer. In a nearly offended tone, Jobs retorted, "Did Alexander Graham Bell do any market research before he invented the telephone?"
There were no stimulus programs, no Cash for iPads or First-Time iPhone-Buyer Tax Credits, that resulted in the employing of 63,000 people and---along with Apple's competitors, and all the ancillary industries (employing thousands more)---the enhancing of the human condition in ways unimaginable a few short years ago. Politicians, lacking the vision, the passion, the instincts, the integrity and the skin in the game, cannot even begin to deploy capital in a profitable, economically-stimulating, job-producing, life-improving manner. Which brings me to my main point:
Not only has government's meddling not stimulated the U.S. economy, as Fortune stresses below, it has, alas, hindered it:
How much is Washington dysfunction harming the U.S. economy? Policymakers' disaccord could be doing major behind-the-scenes economic damage. According to economists Juan Sanchez and Emircan Yurdagül at the St Louis Federal Reserve, U.S. companies are hoarding loads of cash specifically because of policy uncertainty. As a result, corporate spending habits could be costing the country millions of jobs.