A small item in the October 31st edition of The Economist caught my attention:
“Norway’s huge oil reserves had cushioned it against the effects of the severe global downturn”
It started me thinking, so I searched for more about Norway’s economy. An old New York Times article reported:
“In the midst of the worst global downturn since the Depression, Norway’s economy grew last year by just under 3 percent. The government enjoys a budget surplus of 11 percent. By comparison, the United States is expected to chalk up a fiscal deficit this year equal to 12.9 percent of its gross domestic product and push its total debt to $11 trillion, or 65 percent of the size of its economy. Norway is a relatively small country with a largely homogeneous population of 4.6 million and the advantages of being a major oil exporter.”
So the picture was becoming clearer, it was exploitation of its natural resources, namely off shore oil and gas exploration that accounted for Norway’s economic prosperity. Surely there must be a heavy environmental price to be paid or the United States would be similarly exploiting its vast energy reserves.
So I next researched the Environmental News Service and came across the results of this 2008 Study by the World economic Forum:
“DAVOS, Switzerland, January 23, 2008 (ENS) – A ranking of 149 countries based on indicators of pollution control and natural resource management released today at the World Economic Forum puts the United States in 39th place, behind Ecuador and Albania.
The top four countries are all European, with Switzerland ranked first and Sweden, Norway and Finland in the next three slots.”
In December the White House will be hosting a conference on jobs and the economy to “talk about how we can work together to create jobs and get this economy moving again.” That’s not an easy task, but it’s not a complicated one either. Real job creation is dependent on wealth creation. We can’t stimulate or consume our way to prosperity.
There are only three ways to create wealth; mine it, manufacture it or grow it. If we want to rejuvenate the US economy and lower unemployment, we’ll never do it by re-distributing wealth or manipulating wealth. We won’t do it by encouraging increased consumption of wealth. We must create it. In a land blessed with great natural resources and more freedoms ever known to man, we used to be pretty good at doing that.
Don’t confuse wealth manipulation (Wall Street), wealth redistribution (Washington) or wealth consumption (easy credit) for wealth creation. There is a role for Wall Street to facilitate the creation of wealth, a role for Washington to promote the general welfare and a need for reasonable financing to let individuals and corporations to pursue opportunities, but if we don’t rejuvenate our ability to create wealth, those roles will be diminished as other nations go about the important work of creating the wealth of nations (something that the United States used to be very good at).
We currently pay our farmers not to grow food, we limit exploration of natural resources and we hinder our manufacturing industries. Changes those policies in a responsible manner and you will see an explosion of prosperity. It won’t be easy, wealth creation is hard work. But it’s a simple choice. Create wealth and prosper, or manipulate, redistribute and consume our way to mediocrity.