I've long doubted the "SUPPLY side" orthodoxy that "wealth creates jobs." Earlier on, I quoted George Soros's evaluation of Adam Smith's "Invisible Hand," saying: "Far from combining all the available knowledge in the market's movements, as economic theory claims, financial markets are ruled by impressions and emotions." So, I asked myself what emotions and impressions characterize *my* attitude toward wealth? After all, through a lot of luck, a smidgen of hard work and fierce aversions to risk and debt, I now have some "wealth" -- or at least so it seems to me. And my main attitude is DEFENSE! In other words, I think wealth first seeks to defend itself against loss, and then seeks to accumulate more wealth. (All of this comports with the observation that "Humans are programmed for scarcity.") Only then, if wealth perceives (or misperceives) opportunity for more wealth through creation of jobs, are such jobs created.

They say: "If you build a better mousetrap, the world will beat a path to your door." Well, not necessarily. First, one has to have mice! Then, he has to want to get rid of the mice. Only then, if he doesn't have a cat, will he shop for a mousetrap. Finally, he has to be able to afford the mousetrap, which generally means he has to have a means of earning money. In other words, wealth comes from the bottom up.

Henry Ford got it right, I think. A brilliant engineer, he figured that the road to real wealth was not through the production of another Duesenberg or Rolls Royce, but through a BASIC car that he could produce cheaply and in volume. So he engineered such a car, invented the production line necessitating a large workforce, and then paid those workers enough to *buy* his cars -- and thus became one of the wealthiest men on the planet! In other words, DEMAND creates wealth, not the other way around.

Now, the question is how to create viable demand: i.e., demand that can be satisfied with purchasing power. Here, I think John Maynard Keynes got it right. If, for example, because of misperceptions like "derivatives" based on inflated real estate values, the financial system collapses in such a panic that it's frozen, then government must step in to restructure the system. And then, having done that, government must stimulate DEMAND by (as in FDR's time) investing treasury funds in work projects that can employ people who can then buy things. Then, and only then, can private wealth take over -- as it should -- from big government's heavy-handedness.

However, the Bush team and later the Obama team did EXACTLY the opposite! They first gave the stimulus to the banks(!), then failed to re-structure via the anemic Dodd-Frank bill -- and here we are. Demand is essentially nil because people aren't working, and wealth is essentially protecting itself, as, of course it will.

I'm truly amazed at the stupidity of the whole mess. Aren't you?