Economics 101

[TalkRadio]

Some more contemporary examples then:

• Queerbait alts
• AJ cut-n-pastes
• Busybody rants

If supply truly did produce demand, you three would be wealthy.

But it doesn't, and you aren't.
#HeTriesSoooHard

You're losing, Rob.

You'll always be AJ's & Que's bitch.

 

[RobDownSouth]

Little shrimptoast is trying desperately to convince us that "produce" is not a synonym for "create".

Shades of AJ trying to convince Butters that "less than human" was not a synonym for "subhuman"!

All together now, class, loud 'n proud:

That....THAT....THAT'S DIFFERENT!

#HeTriesSooooHard
#ICanHazBellyRubNowAJ?

Edited to add:
http://i1239.photobucket.com/albums/ff502/Soonyigump/Derp1_zpsce0xwmpw.jpg
http://i1239.photobucket.com/albums/ff502/Soonyigump/Derp2_zpsvvhvtj9m.jpg

 

[TalkRadio]

Little shrimptoast is trying desperately to convince us that "produce" is not a synonym for "create".

Everyone mocks and laughs at you, Rob.

You'll never be elected into the GB Hall of Fame.

 

[hznh]

Everyone mocks and laughs at you, Rob.

You'll never be elected into the GB Hall of Fame.

STFU, Connie!

 

[DrDelirium]

I know politics is getting more confusing all the time, but seeing a Texas Republican spouting what sounds an awful lot like Soviet economic theory is still kind of surprising.

If you don't mind, I'd appreciate an explanation of how this is like Soviet economic theory.

 

[hznh]

If you don't mind, I'd appreciate an explanation of how this is like Soviet economic theory.

^ Definitely Underguy.

 

[DrDelirium]

^ Definitely Underguy.

Sorry, no. I'm new in these parts, but I notice a strange fascination with accusing people of being other people. I'm not sure what this is about, but at first glance it seem to be a convenient way of rejecting unwelcome views without actually paying any attention to them.

 

[Libsam]

Keynes was the one who condensed Say's Law to "supply creates demand", then built his whole theory on that fallacy.

Perry just threw it back in their face with a different spin. I think he was dog whistling.
_______________

In the Oliver Stone Putin thread the debt-to-GDP ratio was brought up. In 2016, the USA's debt-to-GDP ratio doubled, the highest we've ever seen, and past the threshold some economist say is the point of no return. (All Americans should be very thankful that we are the 800 pound gorilla, and not, for example, Greece.) The debt-to-GDP ratio tells us that we are spending more than we produce. Keynesians believe that government spending will jump start the economy. Unfortunately it didn't work this round.

In a politics board thread someone brought up the income inequality in the USA. That's true, it's been getting worse for almost 50 years now, and even average income is low.

In the politics board version of this thread, someone brought up the global petro glut.

So low production + low income + cheap energy.... I believe those are ingredients we can work with to Make America Great Again. We have to stop spending and we have to start producing.

 

[hznh]

Sorry, no. I'm new in these parts, but I notice a strange fascination with accusing people of being other people. I'm not sure what this is about, but at first glance it seem to be a convenient way of rejecting unwelcome views without actually paying any attention to them.

Yep. Underguy. I'd recognize that smarmy condescension anywhere.

 

[DrDelirium]

We have to stop spending and we have to start producing.

The difficulty is that our production is not limited by a lack of anything. We have vast amounts of unemployed capital. We have vast numbers of unemployed people. We have vast amounts of idle capital equipment. We have significant supplies of most raw materials.
Capitalism, however, requires that profits be realized via the medium of exchange, and more precisely, exchange for money. If 'consumers' do not have money, demand falls, and production then falls. Since 'consumers' are largely the working people who make things, this cycle rapidly leads to massive contraction, which we call 'depression.' Keynes attempted to thwart this problem by simply paying non-productive elements of society so they could buy things and thus fuel demand, which might conceivably work if A) per-person productivity did not grow; and B) rich people were content with the profit levels they already had. Neither is the case, so Keynesianism fails.
Unfortunately, Keynes' failure does not show us how to 'stop spending and start producing' in the context of advanced capitalism with a surplus of everything but markets.

 

[butters]

It really should read "If and when he or she gets paid for that work, and is then able to use that pay to demand other goods and services

^ this

one of the first things i learned in economics was demand creates supply, and well before that my mother taught me necessity's the mother of invention

 

[doowdniw]

Flawed logic. A in no way implies B.

No implication necessary for the statement to be correct. Perry is an idiot. Trump is also an idiot.

 

[Libsam]

Hayek on Keynes's Ignorance of Economics

Just an intro, this video is 5 mins long. There is more you can look for if interested.

 

[Nipples_Mcgee1]

The difficulty is that our production is not limited by a lack of anything. We have vast amounts of unemployed capital. We have vast numbers of unemployed people. We have vast amounts of idle capital equipment. We have significant supplies of most raw materials.
Capitalism, however, requires that profits be realized via the medium of exchange, and more precisely, exchange for money. If 'consumers' do not have money, demand falls, and production then falls. Since 'consumers' are largely the working people who make things, this cycle rapidly leads to massive contraction, which we call 'depression.' Keynes attempted to thwart this problem by simply paying non-productive elements of society so they could buy things and thus fuel demand, which might conceivably work if A) per-person productivity did not grow; and B) rich people were content with the profit levels they already had. Neither is the case, so Keynesianism fails.
Unfortunately, Keynes' failure does not show us how to 'stop spending and start producing' in the context of advanced capitalism with a surplus of everything but markets.

What an economics moron.

 

[Que]

Little shrimptoast is trying desperately to convince us that "produce" is not a synonym for "create".

Shades of AJ trying to convince Butters that "less than human" was not a synonym for "subhuman"!

All together now, class, loud 'n proud:

That....THAT....THAT'S DIFFERENT!

#HeTriesSooooHard
#ICanHazBellyRubNowAJ?

Edited to add:
http://i1239.photobucket.com/albums/ff502/Soonyigump/Derp1_zpsce0xwmpw.jpg
http://i1239.photobucket.com/albums/ff502/Soonyigump/Derp2_zpsvvhvtj9m.jpg

No, I'm saying they mean the same thing and BOTH are wrong.

You STILL don't understand. Supply neither PRODUCES nor CREATES demand. Demand FOLLOWS supply. If you build it, they might buy it.

 

[Liar]

No, I'm saying they mean the same thing and BOTH are wrong.

You STILL don't understand. Supply neither PRODUCES nor CREATES demand. Demand FOLLOWS supply. If you build it, they might buy it.

"Demand might follow supply" and "demand follows supply" are also not the same thing.

If you build it, they might buy it. That is true. Or they might not. That is also true.

What detemines if one or the other happens, after you've built it? Not supply, it's no longer a variable.

 

[Que]

"Demand might follow supply" and "demand follows supply" are also not the same thing.

If you build it, they might buy it. That is true. Or they might not. That is also true.

What detemines if one or the other happens, after you've built it? Not supply, it's no longer a variable.

We are on the same page. What is 100% not true is the presence of supply creates, produces or drives demand. Which is not what that idea is suggesting.

The means to create the supply of something has to be there for any potential demand to be anything but a wish list. Buyers don't supply. The profit incentive did.

Producers are guessing that there will be demand when they produce a supply of something. Some of those guesses are more educated than others.

All that is needed is a source of supply. One needn't keep some massive backlog of inventory. If inventory is increasing faster than sales you already know that you're overproducing.

Demand also does not create supply, it simply gives incentive for some producer to produce, or produce more. Whether supply rises to the level of demand is dependent entirely on the production capacity of whoever is creating the supply.

If we want to assume that Perry has any idea what he's talking about his experience is most likely with oil and oil production. As we have increased supply of oil it has created more demand for oil. It brought the price of gasoline down which made gas guzzlers once again viable. Whole separate argument whether that's good for the environment the economy and all other sorts of things in he future but increasing supply did in fact increase demand.

Increasing the supply of smartphones brought down the price with lower price there's more demand. It happens. just because it would be foolhardy to assume that that is going to happen every time you increase supply of every item you can think of doesn't mean that it's not true in situations where it makes sense.

 

[Liar]

We are on the same page. What is 100% not true is the presence of supply creates, produces or drives demand. Which is not what that idea is suggesting.

The means to create the supply of something has to be there for any potential demand to be anything but a wish list. Buyers don't supply. The profit incentive did.

Producers are guessing that there will be demand when they produce a supply of something. Some of those guesses are more educated than others.

All that is needed is a source of supply. One needn't keep some massive backlog of inventory. If inventory is increasing faster than sales you already know that you're overproducing.

Demand also does not create supply, it simply gives incentive for some producer to produce, or produce more. Whether supply rises to the level of demand is dependent entirely on the production capacity of whoever is creating the supply.

If we want to assume that Perry has any idea what he's talking about his experience is most likely with oil and oil production. As we have increased supply of oil it has created more demand for oil. It brought the price of gasoline down which made gas guzzlers once again viable. Whole separate argument whether that's good for the environment the economy and all other sorts of things in he future but increasing supply did in fact increase demand.

Increasing the supply of smartphones brought down the price with lower price there's more demand. It happens. just because it would be foolhardy to assume that that is going to happen every time you increase supply of every item you can think of doesn't mean that it's not true in situations where it makes sense.

Look. My scholary level when it comes to economics is one mandatory high school semester that I spent most of my attention and thought proccesses on inconspiciously observing tits. But to me this looks like Keynes 101 insisting "I'm totes not Keynes, guys."

"Demand also does not create supply, it simply gives incentive for some producer to produce, or produce more." Yes? That's what the term means. It's like saying Lee Harvey Oswald didn't kill JFK, the wound from the bullet he shot did.

Am I missing some obvious nuance here?

 

[DrDelirium]

Look. My scholary level when it comes to economics is one mandatory high school semester that I spent most of my attention and thought proccesses on inconspiciously observing tits. But to me this looks like Keynes 101 insisting "I'm totes not Keynes, guys."

"Demand also does not create supply, it simply gives incentive for some producer to produce, or produce more." Yes? That's what the term means. It's like saying Lee Harvey Oswald didn't kill JFK, the wound from the bullet he shot did.

Am I missing some obvious nuance here?

Yes. The point is that if gold goes to a million dollars an ounce, there's still no way to create gold. The supply is inelastic. More digging, sure, but the amount of gold found is ultimately limited, and the amount of gold available in a year is very nearly identical to the amount available now, regardless of demand. While this may be less obvious with manufactured goods, it's still the case that they all have various degrees of inelasticity due to constraints on know-how, capital infrastructure, competing demands for labor and materials, and so on. So, many factors besides demand are required to create a supply of anything.

 

[Que]

Look. My scholary level when it comes to economics is one mandatory high school semester that I spent most of my attention and thought proccesses on inconspiciously observing tits. But to me this looks like Keynes 101 insisting "I'm totes not Keynes, guys."

"Demand also does not create supply, it simply gives incentive for some producer to produce, or produce more." Yes? That's what the term means. It's like saying Lee Harvey Oswald didn't kill JFK, the wound from the bullet he shot did.

Am I missing some obvious nuance here?

It's kind of one of those things that's an economic principle but useless. As I pointed out in an earlier post Perry probably had no idea about that particular (mostly useless) principle and simply mispoke.

the only way what he was saying would mean anything meaningful would be "Hey, let's turn on the spigot of energy supply" which would be of course popular in his home state, demand would go up because it's going to be more affordable as we scale up production. Where that makes sense in the Long Haul spending natural resources is debatable.

The idea behind the previous administration was to deliberately choke down energy production where possible or at least not openly encouraged it in an effort to make it more precious which would reduce consumption and reduce emissions. That didn't work because people found ways to ramp up supply anyway.

The only reason I'm jumping in here is because people are acting like he said something to the effect that was bassackwards. He didn't, but is was, as I think you are pointing out, innane.

 

[Hypoxia]

Community vendors in Central America offer vast arrays of craftworks (fabrics, ceramics, carvings, jewelry, etc) of brilliant beauty. And all much alike. In any marketplace I'll walk past a booth filled with blindingly gorgeous stuff, and another, and another, and another... and I'll ignore those after the first few, because there's nothing new. Talented People have slaved to produce sumptuous goods... but they earn shit because they're not differentiated enough to appeal to me. Their supply does not provoke my demand.

"If you build [produce] it, they will come [buy]," is bullshit. Look in any 99-cent store. How much of what's offered is bought? How many shelves, warehouses, showrooms, are overloaded with inventory that will never be bought for more than scrap value? "Supply drives demand" is crap.

 

[Que]

Thats the third attempt to, once again, COMPLETELY get the principle wrong.

Supply does not CREATE demand. Supply does not PRODUCE demand. Supply also does not DRIVE demand.

No economist says it does. Says law does not say it does. Perry did not say it does.

YOU are characterizing it as such.

Next someone do, "Supply does not FORCE demand" folliwed by "Supply does not INSTILL demand..."

Rob went so far as to post tge warning that people often mischaracterize the dynamic as "Supply creates demand" then went on to say," You see?!?? Supply does not produce demand!!" No, duh.

 

[Libsam]

Community vendors in Central America offer vast arrays of craftworks (fabrics, ceramics, carvings, jewelry, etc) of brilliant beauty. And all much alike. In any marketplace I'll walk past a booth filled with blindingly gorgeous stuff, and another, and another, and another... and I'll ignore those after the first few, because there's nothing new. Talented People have slaved to produce sumptuous goods... but they earn shit because they're not differentiated enough to appeal to me. Their supply does not provoke my demand.

"If you build [produce] it, they will come [buy]," is bullshit. Look in any 99-cent store. How much of what's offered is bought? How many shelves, warehouses, showrooms, are overloaded with inventory that will never be bought for more than scrap value? "Supply drives demand" is crap.

One thing you are not considering, the difference between Luxury and Necessity. They are different, and move and react different.
You can't compare jewelry to energy.

 

[Libsam]

Also, just a friendly reminder to all in this thread. Rick 'abolish the DOE' Perry is now Secretary of Energy.

 

[IrezumiKiss]

Also, just a friendly reminder to all in this thread. Rick 'abolish the DOE' Perry is now Secretary of Energy.

How's that working out for you?