Perrynomics: law of "if you build it they will come"

[Arcade22]

Speaking at a coal-fired power plant in Maidsville, W.Va., on Thursday, Energy Secretary Rick Perry made a strange argument about supply and demand, seeming to confuse the relationship between two of the essential forces in the economy.

“Here's a little economics lesson: supply and demand,” Perry said, according to Taylor Kuykendall of Standard & Poor's. “You put the supply out there, and demand will follow.”
People often talk about supply and demand in economics, but not in the way Perry used the terms. In essence, supply refers to whether goods and services are readily available on the market, and demand refers to how badly consumers want those products. Just supplying a product does not create demand for it.

If Perry was suggesting that no matter how much coal the industry produces, there will be demand for it, he was clearly mistaken. Of course, demand for coal — or any other item — is not infinite. People will only buy so much of it at a given price, and producers will only be able to sell more if they bring down the price.

https://www.washingtonpost.com/news...-little-economics-lesson-it-didnt-go-so-well/

Oh look Rick Perry continues to be an ignorant idiot. How utterly unexpected. I'm glad Trump scraped the bottom of the barrel to staff his agencies with terrible people.

 

[The Great Zaganza]

I have a lifetime supply of dandruff and boogers.
Oddly enough, no one is beating a path to my door to buy them.

 

[snoop_doxie]

I got the story from a blog called "Slog" and posted it in another thread.


I wonder if they fired up the plant and started churning out the product.
It creates the demand.


ETA TheGreatZ's answer was much better!

 

[Civet]

I sometimes find myself most annoyed by bad political decisions that can't be dismissed as mere partisan blindness. I personally know Republicans who have advanced knowledge of economics and energy issues. People who'd be infinitely more qualified than Perry to be Energy Secretary. And I live in Los Angeles. How the heck is this the best Trump could find?

 

[The Don]

I sometimes find myself most annoyed by bad political decisions that can't be dismissed as mere partisan blindness. I personally know Republicans who have advanced knowledge of economics and energy issues. People who'd be infinitely more qualified than Perry to be Energy Secretary. And I live in Los Angeles. How the heck is this the best Trump could find?

Depends on what you mean by "best". If you mean "most likely to be a loyal toady and continue to pursue the GOP's apparent policy of maximising profits for business in general and the fossil fuel industry in particular at the expense of the deficit, the environment and workers' rights" then maybe he is the best...

 

[Cleon]

What's funny is that conservatives will still condescendingly speak as though they're the only ones who understand economics.

 

[Skeptic Ginger]

I can't believe how stupid that statement was. How was this idiot ever a governor?

 

[FenerFan]

Actually, Perry's comments could go over well in West Virginia. He just needs to put it in terms the people can relate to.

"Look, if Biily Bob gets a big shipment of Oxy, everyone in the county will beat a path to his door. The more Billy Bob has to sell, the more people will want it. Supply and demand y'all."

 

[The Great Zaganza]

Actually, Perry's comments could go over well in West Virginia. He just needs to put it in terms the people can relate to.

"Look, if Biily Bob gets a big shipment of Oxy, everyone in the county will beat a path to his door. The more Billy Bob has to sell, the more people will want it. Supply and demand y'all."

elastic vs. inelastic demand.

 

[Stacko]

What's funny is that conservatives will still condescendingly speak as though they're the only ones who understand economics.

Depressingly more people believe it.

 

[fuelair]

Depends on what you mean by "best". If you mean "most likely to be a loyal toady and continue to pursue the GOP's apparent policy of maximising profits for business in general and the fossil fuel industry in particular at the expense of the deficit, the environment and workers' rights" then maybe he is the best...

Got it perfect!!!!!!! Perry is the best toady Trumpf could buy for that!!!!!!!!! May he be sealed in a room 25% full of coal smoke!!!!!!!!!!!

 

[fuelair]

I can't believe how stupid that statement was. How was this idiot ever a governor?

It was Texas. They just do that kind of crap. And their reputation drops lower and lower every year as they continue to sink slowly into the Slough of Despond!!!!!!!!!

 

[Belz...]

https://www.washingtonpost.com/news...-little-economics-lesson-it-didnt-go-so-well/

“Here's a little economics lesson: supply and demand,” Perry said, according to Taylor Kuykendall of Standard & Poor's. “You put the supply out there, and demand will follow.”

Oh, my. That's side-splitting. "Here's a little lesson for you plebs" and then he completely mucks it up. What an idiot.

 

[fuelair]

For those unfamiliar with Pilgrim's Progress:
http://www.covenantofgrace.com/pilgrims_progress_slough_of_despond.htm

 

[fuelair]

Oh, my. That's side-splitting. "Here's a little lesson for you plebs" and then he completely mucks it up. What an idiot.

On the bright side if you reverse the idea, you can make a lot of money (i.e. find something for which there is a demand but no supply and create a supply)!!!!!

 

[Ethan Thane Athen]

https://www.washingtonpost.com/news...-little-economics-lesson-it-didnt-go-so-well/

Oh look Rick Perry continues to be an ignorant idiot. How utterly unexpected. I'm glad Trump scraped the bottom of the barrel to staff his agencies with terrible people.

Actually this can be true - the luxury market often produces stuff where there was no demand (or at least not explicitly recognised) and the creation of the product itself (or the advertising around it) creates the demand (or exposes it). You could potentially argue that for the ipad.

Of course it's nonsense when applied to coal.

 

[The Don]

Actually this can be true - the luxury market often produces stuff where there was no demand (or at least not explicitly recognised) and the creation of the product itself (or the advertising around it) creates the demand (or exposes it). You could potentially argue that for the ipad.

Of course it's nonsense when applied to coal.

Unless the result of increasing the supply of coal is that price of coal gets so low that it's considered for completely new uses (though demand for a flammable aggregate is likely to be low). Of course with prices that low, it's not clear how money would be made.

 

[bonzombiekitty]

Unless the result of increasing the supply of coal is that price of coal gets so low that it's considered for completely new uses (though demand for a flammable aggregate is likely to be low). Of course with prices that low, it's not clear how money would be made.

Yeah, I think that was the sort of argument he was trying to make. But as you said, if the supply is so highthat it drops the price low enough to make people want to use it for various purposes (including power generation), there may be no money to be made.

So you would need to decrease the cost to extract a ton of coal. How do you do that? Increase productivity by increasing automation, slashing wages, and/or killing environmental and safety regulations. Those aren't good things.

 

[The Don]

Yeah, I think that was the sort of argument he was trying to make. But as you said, if the supply is so highthat it drops the price low enough to make people want to use it for various purposes (including power generation), there may be no money to be made.

Off the top of my head I was having a lot of difficulty trying to find uses for coal that didn't involve burning it as a fuel.

So you would need to decrease the cost to extract a ton of coal. How do you do that? Increase productivity by increasing automation, slashing wages, and/or killing environmental and safety regulations. Those aren't good things.

Even then, it would likely only help the open cast/strip miners out West. Deep mining is an order of magnitude more expensive.

 

[Skeptic Ginger]

Actually this can be true - the luxury market often produces stuff where there was no demand (or at least not explicitly recognised) and the creation of the product itself (or the advertising around it) creates the demand (or exposes it). You could potentially argue that for the ipad.

Of course it's nonsense when applied to coal.

I think this misinterprets demand. If the rich have money to waste, that is demand there may be supply opportunities to fill.

If people in a society have extra cash to spend on innovative inventions or bigger better faster stuff, that again is a demand that exists first.

There are some exceptions: Advertising, on the other hand, can definitely create demand where is wasn't. And maybe corn subsidies are an example of supply creating demand. No economic model is a perfect representation of the real world.