Supply And Demand @ MindSay 
- I subbed for the third graders again. Their teacher told me that they were excited because they liked when I am their sub. :) The teacher had me go over supply and demand with them and they ate the lesson up! After explaining why the price of things go up because of scarcity, one of the children remarked, "Ugh! We did this yesterday! Why do we have to learn this again?" I looked at him pointedly and said, "Because now when your parents complain about the price of gas and how it took $60 to fill up their tanks you'll know why." "It took MILLIONS of years for dinosaur carcases to decay and form what we now call oil. Once it's gone, it's gone. We don't have another million years to wait until more oil is made." He had the look of stark terror on his face and replied. "I don't feel safe anymore." LOL! I told him, "That's why it's up to you and your generation to study your social studies and science classes so one day you'll come up with a viable, alternative fuel source. The previous generation and mine are too busy enjoying the profits they make to care."
Geez! It seems like I scare a couple kids everytime I have to teach social studies. This just cracks Environgirl up. Before the bell rang, one of the kids left me this note:
Isn't that just precious? :D
- Yesterday I visited my dad at his new house. He was happy to see the kiddo and me. It's a nice house and so far very well decorated. I expected nothing less from him. He's always been good at decorating and matching curtains and furniture. Taurean males tend to have a bit of a girly side and a lot of them tend to use too much cologne...but, I digress. Anyway, I didn't see the Ghetto Assed Trick and thank God for that. I was not in the mood to go to jail! I also didn't see much evidence of her living there other than a couple of outfits in the closet. Dad's been in his new house for a week. I saw no dual sets of toothbrushes or hair brushes, etc. Hmmmm....
We watched Casino Royale together and then the kiddo and I went home. The visit was nice, but surreal, if that makes any sense. That numbness thing came in handy.
- I've been listening to a lot of South African music lately. For some reason I find the call and response and the drum rhythms soothing, even when I listen to Zulu War Dance music. When I'm angry it really calms me down (yes, even the war chants!) LOL!
African Women - Call and Response.
Here are some quotes:
"The advocates of a "gas tax holiday" are exaggerating the benefits to consumers from their proposal. If the Illinois experience is a guide, there is likely to be some reduction in the price of gas, but it would fall well short of the size of the tax reduction. In order to pay for the tax cut, the government would have to cut back on highway construction and maintenance or find some other way of plugging the shortfall in revenues to the Highway Trust Fund."
"There's another catch to the McCain and Clinton proposals. Currently, the gas tax is deposited directly into the Highway Trust Fund, which is used to pay for upgrades to roads and bridges. The American Society of Civil Engineers estimates that the three-month gas tax holiday could cost as much as $8.5 billion.
McCain has responded by pledging to fund the Highway Trust Fund out of general revenues. That, of course, means adding another $8.5 billion in federal debt, which in turn means adding as much as $383 million per year in interest payments."
"Clinton campaign spokesperson Geoff Garin said in a conference call this week that the proposal would save each driver $70. The Clinton campaign did not respond to our request to clarify how it arrived at that figure. But the non-partisan American Association of State Highway and Transportation Officials estimates that the total savings for the average American motorist works out to about $28; for a two-car household, that would be $54.
That's IF prices actually dropped 18.4 cents per gallon. However, there's every indication that they wouldn't. Here's why: According to the basic principles of supply and demand, cutting the price of an item causes people to buy more of it."
"For all the legislative prowess of McCain and Clinton, we’re doubtful that either candidate can rewrite the laws of supply and demand. That 18.4 cents per gallon won't go to consumers. Instead, the proposal will simply shift that money from government coffers to the oil companies. We're willing to grant that if the laws of economics themselves took a holiday and the price did drop that much, the amount saved might be meaningful to many motorists, particularly those who are low-income and those who drive a lot. And there would likely be all kinds of ancillary benefits involving price reductions for food and other products that have to be transported, as well as airline tickets and the like.
But we can't find any economists who think we'll actually see that drop in the price of gasoline. Others have tried and failed as well. And the Clinton campaign hasn't produced one, either."
"Another economist, Jeffrey Perloff, of UC-Berkeley, agreed that a federal tax moratorium would likely have less impact on consumer gas prices than a state moratorium. He said his models showed that a suspension of the 18.4-cent federal tax on gasoline would likely result in a temporary 9- to 12-cent reduction in the cost of a gallon of gas to the consumer, with the remainder of the reduction coming in wholesale prices."
"The Obama campaign says that's a key reason why he opposes McCain's plan: there is no mechanism to make sure that consumers, rather than oil companies, reap the benefits of the tax holiday.
So on this point — how Obama voted in 2000 — the RNC glosses over an important detail. Yes, he voted for the tax holiday the first time, but he opposed an extension of it because he said consumers weren't getting the benefit."
Bernard Weinstein writes that high gas prices are not about price gouging (Dallas Morning News, June 1, 2007). They’re nothing but the result of the law of supply and demand working. Trouble is it takes him 728 words to say it, and it’s purebred bull.
Economists educated in American universities are under the delusion that economics is a science, a social science. When I was studying philosophy and mathematics, all the students I knew called it pseudo-science, and it still is. Ask ten economists to make a prediction about an economic event based on their scientific knowledge, and you won’t get unanimity. I learned that decades ago watching Wall Street Week with Louis Rukeyser and soon gave it up as a waste of time. Contrast that with what ten chemists will tell you will happen if you combine certain chemical elements. So economics a science? Not by a long shot. Yet American economists never seem to learn this lesson. And that is very suspicious.
But consider supply and demand. That so-called law is based on a primitive agricultural model built before the time that agricultural products could be easily preserved. If growers had a bumper crop of apples, selling them all might require lowering an apple’s price; most of the apples not sold would rot and have to be discarded. But what does demand mean in this situation? The number of buyers willing to pay the going price of apples. Presumably, if the price were lowered, more buyers would be willing to buy. But there is nothing necessary about it. In a small community, for instance, everyone could very easily have had his overfull of apples, in which case the sellers would not even be able to give them away. So much for the law of supply and demand.
Consider another example. Suppose a seller of electronic products knows that a new model of a radio he has in stock is about to be delivered in two weeks, but he still has a few of the last model still available. He knows that the new radio is only cosmetically different from the old. After all, it has been a long time since basic radio circuit technology has been improved upon. So he says, if I lower the price, I may be able to get rid of them before the new models arrive. But I really don’t have to; radios don’t spoil. So instead of lowering the price, he decides to raise it ten percent and put a “for sale, ten percent off” on the radios. And even if he still has some of these available when the new model arrives, he merely raises the price on the new model so that it is ten percent higher than the raised price of the older model. Since he knows that a lot of buyers buy by looks, he knows that some buyers will buy the newer model even if its price is higher, and that others will decide to buy the older model because of its “lower” price. Under this scenario, the seller increases his profits on both models. Law of supply and demand be damned!
And what can we say about the price of satellite tv? The supply of transitions to homes is virtually infinite; yet the demand is decidedly limited. If the law of supply and demand were really a law, satellite tv would be virtually free. But damned, it isn’t.
Poor Mr. Weinstein! Either he knows he’s full of purebred bull and is deliberately spreading propaganda or he’s incredibly stupid. Take your pick; I don’t think he’s stupid.
Gasoline prices are a function of many factors, the price of crude being only one of them. Other factors are the costs of refining crude into gasoline, and oh that ubiquitous thing called profits. Oil companies can manipulate all three, but especially the latter two. Shut down a refinery for maintenance when the demand is high, and they’ve reduced supply and have an excuse to raise prices citing “supply and demand.” Shut almost all of them down at the same time, which for some reason, the oil companies do, and we have a crisis. Oh, what a wonderful excuse to call upon the law of supply and demand.
John H. Seesel, associate general counsel for energy at the FTC, may not be able to define "price gouging" but there are two definitions implicit in the previous paragraph. If Mr. Weinstein can find them, he can send them to Mr. Seesel.
©2007, John Kozy, Jr.
So what do those few people get for all their troubles? A bug-ridden, overpriced, first-issue gaming system that doesn't have many games developed for it yet. This year we've seen a new kind of "bug" with the Nintendo Wii systems. The motion detection game controller allows people to step even further into the games than ever before. Playing baseball? Swing the remote like a bat to make the game respond. Fishing? Cast your line with the controller and the game mimics your movements. Drawbacks? If you become too engrossed into the game and a bit overzealous with your movements, the wrist strap can break, sending the remote sailing across the room. Several people have been left with broken household items, injuries, and even shattered their television sets. Although Nintendo has taken steps to correct the issue, it makes one wonder if it was really worth all that trouble. (See Wii Have a Problem for stories and photos of the damage.)
Those who didn't manage to get their new toys at the store, there's always eBay. But hot items generally sell for a ridiculously inflated price, which is a further testament to the idiocy prevalent in society today. And beware of sellers who like to take advantage of the hype or you may end up paying $500 for an empty box. (Side note: I have a low tolerance for stupidity. If you don't take your time and fully read the description of the item on the auction block, then you are a moron and you deserve an empty box. Whoever started that trend is brilliant, and I wish I'd thought of it.)
In this day of instant gratification, people don't want to wait for anything. A little bit of common sense will tell you that after the Christmas rush is over, the systems will be more widely available. A few months after that, the major bugs will have come to light and later releases won't have the issues seen in earlier versions. By the time summer rolls around and students on break have more time to spend playing games, the choice in available games will be greater. And by next Christmas, when people have focused on the next "must-have" toy or item, the price on these consoles will drop a considerable amount. Especially in these cases, there's a lot to be said for restraint and patience. Save your money, your trouble, your television, and possibly your life, and just buy a new game for last year's model instead. What have you got to lose by waiting?
Don't forget what happened to dear Veruca Salt and her "I want it NOW" mantra. It rarely pays off in the end.
I have a major test in economics tomorrow, chapters 1-4.
I have been reading the book, studying the power point presentations, watching the videos. But the supply and demand curves, meeting with their little equilibrium point, were just boggling my mind. THEN, I remembered some economics software that I purchased months ago...
I plopped the cd into the cdrom drive of my computer and poof..interactive supply and demand curves that I move around and it tells me what happens to the equilibrium point. Then I can do a pre-test.
Made my day. I was almost about to give up.