Is the Economy Stupid?

We -- meaning Wall Street and the government -- put a huge amount of importance on "housing starts." Instead of homes, shouldn't we be manufacturing something we actually need and/or use?
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It's the economy, stupid.

Yeah, right. That's the famous phrase created by the Clinton team that supposedly got him elected president. Gotta remember the economy. I've been thinking about the economy a lot lately and the problem I have is that the way we look at our economy seems stupid, at least to me.

Consider this. We -- meaning Wall Street and the government -- put a huge amount of importance on "housing starts," the number of new home construction begun each month. The stock market goes up or down based on housing starts, people get depressed about it, economists talk about it to no end. The message is clear -- gotta keep those housing starts up...or else.

But here's where I begin to lose the gist of this argument. Right now (according to the census), there are 18 million vacant homes in America. Eighteen million homes sitting empty. Roll that one around your brain for a moment and you immediately begin to wonder -- why are we building any homes? Why aren't housing starts dead flat? Everyone knows that the demand for homes, new or otherwise, has dried up, that it's very tough to get a mortgage even if you have good credit, etc. etc.

Instead of homes, shouldn't we be manufacturing something we actually need and/or use?

So then consider this: Nearly everyone I know has some type of Apple product. In New York City, iPhones are ubiquitous. Apple products are everywhere. I have never bought a Mac computer in my life and I don't have an iPhone but even I have an iPod. Apple is one of the sexiest and most high-profile, profitable companies out there and, yet, just about all of its products are manufactured overseas, chiefly in China.

At the same time, America is starving for manufacturing jobs. Forget building unnecessary housing. Imagine if we could open whole factories devoted to building Apple products? Our economy in terms of jobs would be much healthier. Yes, all those Apple products would cost more but so what? Don't you want to create jobs for Americans?

What I wonder is why Apple -- a publicly-traded company and darling of Wall Street -- faces virtually no pressure from anyone about building all its products overseas. I remember when foreign car companies were so pilloried that they were forced to open manufacturing plants in the U.S. Apple faces no such pressure AND it's an American company!!

In the meantime, we focus on adding to the stockpile of vacant homes; why don't we just build more Apple products here at home? Until that makes sense, I guess I really don't understand the economy...or maybe it is just stupid.

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