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Author Topic: Rick Perry's version of supply and demand  (Read 517 times)

Offline Dallasbeek

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Rick Perry's version of supply and demand
« on: July 10, 2017, 12:50:27 pm »
Okay, so our former governor, now secretary of energy, says if you build X number of widgets (supply), the demand will follow {that's an approximation of what he supposedly said}.  Severe shaming of Texas' favorite-for-some son followed.

Apple regularly sells something like 15,000,000.00 iPhones, iPads or iWidgets on the first day they are offered for sale.  And they sometimes sell all of the iWidget supply, don't they? 

What I want to know is (1) does that at least partially support what Rick Perry was saying, or not?  and (2) what genius marketing expert comes up with the idea of ordering plants in China to build 15 MILLION iWidgets to be delivered on or before launch date, when nobody knows the iPeople will really want another iWidget?

Maybe Rick Perry and I need to go back and relearn basic economics, but it does seem to me that modern practices by some companies have turned the law of supply and demand upside down.  Is the herd instinct stronger than economic laws or what?

"Liberty lives in the hearts of men and women; when it dies there, no constitution, no laws, no court can save it." - Judge Learned Hand, 1944

Online kathyp

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Re: Rick Perry's version of supply and demand
« Reply #1 on: July 10, 2017, 01:05:59 pm »
I like him.  He's not the most eloquent of all who have run, but he's one of the smartest.  He was one of my top 2 for president.  You also did not link to exactly what he said and the context.

I am not sure icrap is a good example because they hype the product to a particular group of people who are 1. willing to buy the hype and 2. willing to put up with a product that is proprietary in design and development to the detriment of the product.    Just my HO  ;-)
And maybe rather than willing, I should say the people who buy icrap are eager to overpay for the stuff. 

Supply and demand are not equal.  If a company guesses wrong, they have too much or too little of a product.  Too little is better usually because it creates a demand.  If the company can quickly meet the demand, they are golden.  If not, people are disappointed and move on.  Demand depends on a lot of things and guessing what consumers want and what they are willing to pay is an industry in itself.

Basic economics is that people will pay for good products, or products they are convinced are good IF they can afford them. If you want people to buy stuff they have to have money.  Money comes from working and being paid.  Jobs come when a business can expand and hire.    Most government people don't even have the cart hooked to the horse. 
They are so divorced from their own interests that even when their own security and that of their children is finally compromised, they do not seek to avert the danger themselves but cross their arms and wait for the nation as a whole to come to their aid. Yet as utterly as they sacrifice their own free will, they are no fonder of obedience than anyone else. They submit, it is true, to the whims of a clerk, but no sooner is force removed than they are glad to defy the law as a defeated enemy. Thus one finds them ever wavering between servitude and license.
Alexis de Tocqueville

Offline Dallasbeek

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Re: Rick Perry's version of supply and demand
« Reply #2 on: July 10, 2017, 01:35:59 pm »
Yeah, I took that course, too.  But then things like iCrap and the Beanie Babies come along and I question people's sanity and the workings of the laws of economics.  I keep intending to read Adam Smith's work for myself instead of filtered through generations of economists.

Actually, I believe the basic laws of economics work, but the anomolies give me pause.  I thought it made for a good jumping-off point for a conversation.
"Liberty lives in the hearts of men and women; when it dies there, no constitution, no laws, no court can save it." - Judge Learned Hand, 1944

Online kathyp

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Re: Rick Perry's version of supply and demand
« Reply #3 on: July 10, 2017, 02:17:51 pm »
Most rules have exceptions.  When you are factoring in humans, the exceptions are endless   :cheesy:
They are so divorced from their own interests that even when their own security and that of their children is finally compromised, they do not seek to avert the danger themselves but cross their arms and wait for the nation as a whole to come to their aid. Yet as utterly as they sacrifice their own free will, they are no fonder of obedience than anyone else. They submit, it is true, to the whims of a clerk, but no sooner is force removed than they are glad to defy the law as a defeated enemy. Thus one finds them ever wavering between servitude and license.
Alexis de Tocqueville

Offline Dallasbeek

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Re: Rick Perry's version of supply and demand
« Reply #4 on: July 10, 2017, 03:05:30 pm »
In all honesty, I've always wondered what effect dating my economics professor's daughter had on my grade.  When I'd ask to see my paper in his office, he'd say it was at his home.  When I'd go to pick up his daughter, it was at the office. :rolleyes:
"Liberty lives in the hearts of men and women; when it dies there, no constitution, no laws, no court can save it." - Judge Learned Hand, 1944

Online kathyp

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Re: Rick Perry's version of supply and demand
« Reply #5 on: July 10, 2017, 03:23:23 pm »
Quote
In all honesty, I've always wondered what effect dating my economics professor's daughter had on my grade.

Lol.  Did you get a good grade?

Of all the economic theories capitalism is the easiest to understand the most natural. 

Free markets are the natural progression from the barter system of our ancestors.  Unfortunately, we have not seen real capitalism in this country for a long time.  If the government is in the middle of it, the market is not free. 
They are so divorced from their own interests that even when their own security and that of their children is finally compromised, they do not seek to avert the danger themselves but cross their arms and wait for the nation as a whole to come to their aid. Yet as utterly as they sacrifice their own free will, they are no fonder of obedience than anyone else. They submit, it is true, to the whims of a clerk, but no sooner is force removed than they are glad to defy the law as a defeated enemy. Thus one finds them ever wavering between servitude and license.
Alexis de Tocqueville

Offline Acebird

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Re: Rick Perry's version of supply and demand
« Reply #6 on: July 10, 2017, 05:55:37 pm »
Money comes from working and being paid.  Jobs come when a business can expand and hire.

Money does not have to come from work.  Those that make the most do not work.  Businesses expand when they can make and sell more goods.  And there too they can make more money with less jobs in two ways, buy there products from someone else and then resell them or automate lowering their cost of manufacture.  Companies usually automate because they can get the sales but can't produce enough of the product to meet the demand.  Automation always increases jobs in the long run because it allows a company to grow.
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Online kathyp

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Re: Rick Perry's version of supply and demand
« Reply #7 on: July 10, 2017, 09:07:45 pm »
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Those that make the most do not work.

you need to get out more and meet people who are successful.  I don't know one of them who didn't work really hard to get where they are.  Those who don't work hard, fail.  Those who inherit and are stupid and lazy, lose it all.  The only people getting money and not working/having worked, are those who are dependent on government. 

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Businesses expand when they can make and sell more goods.  And there too they can make more money with less jobs in two ways, buy there products from someone else and then resell them or automate lowering their cost of manufacture.  Companies usually automate because they can get the sales but can't produce enough of the product to meet the demand.  Automation always increases jobs in the long run because it allows a company to grow.

You got the first sentence right.  Yes companies buy and resell, but they still need a workforce UNLESS it becomes less expensive to automate than to hire. 
Amazon is highly automated, but the new warehouse and facility they are building here will employ 1500 full time and many part time workers.  Amazon both resells and automates, but the expansion will create jobs. 
They are so divorced from their own interests that even when their own security and that of their children is finally compromised, they do not seek to avert the danger themselves but cross their arms and wait for the nation as a whole to come to their aid. Yet as utterly as they sacrifice their own free will, they are no fonder of obedience than anyone else. They submit, it is true, to the whims of a clerk, but no sooner is force removed than they are glad to defy the law as a defeated enemy. Thus one finds them ever wavering between servitude and license.
Alexis de Tocqueville

Offline Eric Bosworth

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Re: Rick Perry's version of supply and demand
« Reply #8 on: July 10, 2017, 09:21:34 pm »
Dallas I have to say you make some interesting points. The Dutch tulip mania comes to mind. The thing is that individual stupidity may have an effect on the overall economy but typically it only effects a few people. When government gets involved it effects everybody. From what I have seen, there is no abundance of intelligence in government. I don't have any iCrap. I can't stand the proprietary nature of it. I do think that Apple is a great technology developer. I just won't be a customer.

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Offline Acebird

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Re: Rick Perry's version of supply and demand
« Reply #9 on: July 11, 2017, 09:17:14 am »
you need to get out more and meet people who are successful.
You have no idea who I have met and how successful they are.  I did not say never worked I said you can make money without working.  My father in law has not worked since he was in his late fourties, got cancer, got fired, and is now at age 88 still making nearly six figures without the governments help.  And for the most part he is small potatoes.
 
Quote
I don't know one of them who didn't work really hard to get where they are.  Those who don't work hard, fail.  Those who inherit and are stupid and lazy, lose it all.  The only people getting money and not working/having worked, are those who are dependent on government. 
This is total nonsense.  Actually those that haven't worked and are dependent on the government are working very hard to take advantage of the system.  We let them.  They are a minority in a system of good people so why don't we stop them?
Quote
You got the first sentence right.  Yes companies buy and resell, but they still need a workforce UNLESS it becomes less expensive to automate than to hire. 
Amazon is highly automated, but the new warehouse and facility they are building here will employ 1500 full time and many part time workers.  Amazon both resells and automates, but the expansion will create jobs.
Amazon is an internet retailer they don't make anything.  All automation is more expensive then hiring, no exceptions.  It takes time to first balance the scale and then the investment pays off.  It is no different than for an American company building a plant in Mexico or China.  There is a huge investment up front.  The real big difference is one method increases revenue to our country and supports its citizens and the other method supports another country.  What is completely stupid for most of us is not encouraging the better option for this country.  The one percent at the top makes out like a bandit because they are bandits.
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Offline bwallace23350

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Re: Rick Perry's version of supply and demand
« Reply #10 on: July 11, 2017, 10:26:31 am »
Generally demand comes before supply. No one builds things hoping for a market. Often the demand is not out in the open but is guessed at. That is why you have so many failed products. People are not rational economic actors.

Online kathyp

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Re: Rick Perry's version of supply and demand
« Reply #11 on: July 11, 2017, 11:19:54 am »
Quote
Generally demand comes before supply. No one builds things hoping for a market. Often the demand is not out in the open but is guessed at. That is why you have so many failed products. People are not rational economic actors.

Demand can come from need and/or want.  I hear the new iphone may be over 1000 dollars.  No one needs that.  They have enough info to belive people want it.  people didn't know they "needed" electricity, gramophones, washing machines, or motor cars.  Those things started as matters of convenience and entertainment for the wealthy, and then became wants, now they are needs. 

 
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All automation is more expensive then hiring, no exceptions.

up front, yes.  Over the long run and as tech increases and improves, no. 

Quote
The real big difference is one method increases revenue to our country and supports its citizens and the other method supports another country.  What is completely stupid for most of us is not encouraging the better option for this country.  The one percent at the top makes out like a bandit because they are bandits.

Automation is increasing everywhere.  This is the same argument Marx was having over factory automation over 100 years ago.  Times change.  If you want tech for yourself, you can't expect companies not to use it.  They are in business to make money.  Every company looks for ways to cut expenses and maximize profit.  Human labor is a part of the equation.

What, exactly, do you think our country needs with more revenue to the government??  this kind of thinking is the 1st thing that needs changing.  People make money.  People should keep what they make except for those very few things the federal government is mandated to do.
The only place you should be fighting taxes or encouraging higher taxes, if that is your wish, is in your state. 

They are so divorced from their own interests that even when their own security and that of their children is finally compromised, they do not seek to avert the danger themselves but cross their arms and wait for the nation as a whole to come to their aid. Yet as utterly as they sacrifice their own free will, they are no fonder of obedience than anyone else. They submit, it is true, to the whims of a clerk, but no sooner is force removed than they are glad to defy the law as a defeated enemy. Thus one finds them ever wavering between servitude and license.
Alexis de Tocqueville

Offline Dallasbeek

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Re: Rick Perry's version of supply and demand
« Reply #12 on: July 11, 2017, 02:18:26 pm »
I refer you to Howard Roark's courtroom speech, Ace. 

http://www.workthesystem.com/getting-it/howard-roarks-courtroom-speech/


Most people with wealth work smart, but also work hard for years until they have accumulated enough money to simply work smart.  People who work hard without also working smart rarely succeed in building large estates.  Consider the day laborer who dropped out of school at 15, versus someone who studied hard through graduate or professional school.  In Cuba under Castro they were paid about the same monthly wage.  Is that the world you long for?  I consider it theft.
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Offline Acebird

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Re: Rick Perry's version of supply and demand
« Reply #13 on: July 11, 2017, 03:41:26 pm »
I refer you to Howard Roark's courtroom speech, Ace. 

http://www.workthesystem.com/getting-it/howard-roarks-courtroom-speech/


Most people with wealth work smart, but also work hard for years until they have accumulated enough money to simply work smart.

So Trump and any other billionaire who inherited their wealth from their parents are flukes, right?
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Online kathyp

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Re: Rick Perry's version of supply and demand
« Reply #14 on: July 11, 2017, 03:48:13 pm »
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So Trump and any other billionaire who inherited their wealth from their parents are flukes, right?

They are the exception to how most people accumulate wealth.  They are the exception to how many keep what they have inherited.

This says 70% lose it by 2nd gen, and somewhere I read 90% by 3rd gen.  They are not keeping wealth by sitting around doing nothing.

http://time.com/money/3925308/rich-families-lose-wealth/
They are so divorced from their own interests that even when their own security and that of their children is finally compromised, they do not seek to avert the danger themselves but cross their arms and wait for the nation as a whole to come to their aid. Yet as utterly as they sacrifice their own free will, they are no fonder of obedience than anyone else. They submit, it is true, to the whims of a clerk, but no sooner is force removed than they are glad to defy the law as a defeated enemy. Thus one finds them ever wavering between servitude and license.
Alexis de Tocqueville

Offline bwallace23350

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Re: Rick Perry's version of supply and demand
« Reply #15 on: July 11, 2017, 04:16:21 pm »
Quote
Generally demand comes before supply. No one builds things hoping for a market. Often the demand is not out in the open but is guessed at. That is why you have so many failed products. People are not rational economic actors.

Demand can come from need and/or want.  I hear the new iphone may be over 1000 dollars.  No one needs that.  They have enough info to belive people want it.  people didn't know they "needed" electricity, gramophones, washing machines, or motor cars.  Those things started as matters of convenience and entertainment for the wealthy, and then became wants, now they are needs. 

Yes you perfectly elucidated my point. Thanks. Demand was there before their was a supply. Sometimes it is guessed at as you stated because people did not know they had a need or even a want for something they knew nothing about. Wants/needs are all demand and someone has to supply them and people try to supply them better than the others.



Someone mentioned reading the Wealth of Nations by Adam Smith. Interesting thing to study. You will find that it only mentions the invisible hand once, it calls for doing things for the common good, gives benefit for the government to regulate the market place but the true catch is you have to read the Theory of Moral Sentiments by Smith first to understand that he really only thinks that this will work with a moral people.

 

Online iddee

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Re: Rick Perry's version of supply and demand
« Reply #16 on: July 11, 2017, 05:41:21 pm »
Ace, PLEASE, a link to where Trump inherited BILLIONS. The story I heard was he borrowed a million and turned it into billions. Please show where that is wrong.
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Offline Acebird

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Re: Rick Perry's version of supply and demand
« Reply #18 on: July 12, 2017, 08:15:51 am »
Ace, PLEASE, a link to where Trump inherited BILLIONS. The story I heard was he borrowed a million and turned it into billions. Please show where that is wrong.
https://www.washingtonpost.com/politics/2016/live-updates/general-election/real-time-fact-checking-and-analysis-of-the-first-presidential-debate/fact-check-how-much-help-did-trumps-father-give-his-son/?utm_term=.8157ca2bdd8c
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Trump joined his father?s thriving real estate business after college and that he relied on his father?s connections as he made his way in the real estate world.
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Trump also benefited from three trusts that had been set up for family members. In 1976, Fred Trump set up eight $1 million trusts, one each for his five children and three grandchildren, according to a casino document. (That today would be worth about $4 million in inflation-adjusted dollars.)

If you live on 10% of that alone you never have to work and you will never lose it.  Most likely it will grow enough to support more brats without even going to a financial planner.  So way back when he was given a million dollars, a job he didn't have to earn and before he became pres he was deep in debt.  Some call that success!  I don't.  He is no different than a gangster so using the presidency I expect his financial situation is now changing.
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Offline Michael Bush

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Re: Rick Perry's version of supply and demand
« Reply #19 on: July 12, 2017, 09:17:54 am »
>I keep intending to read Adam Smith's work for myself instead of filtered through generations of economists.

I highly recommend Adam Smith's "The Wealth of Nations".  A modern followup would be "The Ascent of Money" by Niall Ferguson.
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Online iddee

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Re: Rick Perry's version of supply and demand
« Reply #20 on: July 12, 2017, 09:28:38 am »
Yep, Ace, you got it.  Borrowing 10 or even 20 million equals inheriting billions. You are a real smart mathematician, Ace.
"Listen to the mustn'ts, child. Listen to the don'ts. Listen to the shouldn'ts, the impossibles, the won'ts. Listen to the never haves, then listen close to me . . . Anything can happen, child. Anything can be"

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