Rick Perry offered a ‘little economics lesson.’ It didn’t go so well.

[untermensche]

The lesson of the pet rock is missed by all who bring it up in this kind of conversation. The pet rock was a clever idea and it had it's day, a very short day. It did not increase the aggregate demand for aggregate.

If Perry's economic plan were actually put into place, the price of coal would fall, which might increase consumption, but it would not decrease costs of production. Mine owners would quickly be losing money on every ton mined. Unless Perry can find a way to force the price if natural gas up, coal will remain the ugly stepchild of the energy industry.

The aggregate demand for aggregate?

The pet rock is an example of supply causing demand.

No demand is infinite.

 

[Jimmy Higgins]

The lesson of the pet rock is missed by all who bring it up in this kind of conversation. The pet rock was a clever idea and it had it's day, a very short day. It did not increase the aggregate demand for aggregate.

If Perry's economic plan were actually put into place, the price of coal would fall, which might increase consumption, but it would not decrease costs of production. Mine owners would quickly be losing money on every ton mined. Unless Perry can find a way to force the price if natural gas up, coal will remain the ugly stepchild of the energy industry.

The aggregate demand for aggregate?

The pet rock is an example of supply causing demand.

No demand is infinite.

The Pet Rock marketing increased demand for a Pet Rock, a new product. It did not increase overall demand for aggregate. It was a gimmick. Gimmicks create temporary demand (see fidget spinner).

Increasing production of coal would lower the price of coal, but it still would have issues competing with natural gas. And because coal isn't a gimmick, it won't see that temporary marketing demand.

 

[Bronzeage]

The lesson of the pet rock is missed by all who bring it up in this kind of conversation. The pet rock was a clever idea and it had it's day, a very short day.

And I really wonder if Pet Rock created a demand for Pet Rocks, or if it took advantage of an existing demand for 'novelties'? I imagine the stick figure families could have slotted into that same demographic if they'd been developed back then.

The pet rock was a clever idea, but the market is very shallow. As a person who has a lot of clever ideas, I can testify that it is very difficult to sell one and even more difficult to predict if one will sell at all.

If Perry's plan to increase coal production actually happens, it would quickly increase coal surpluses. When coal yards were full, production would be forced to cease until inventories were drawn down. This would result in very high lay-offs in coal mines, reducing active coal mine employees to levels lower than now.

There's really no way to sugar coat this one. Perry is an idiot and Trump hired an idiot. It remains to be seen if Trump knows the difference. It's possible that Perry had two qualifications, Trump owed him a favor, and he was willing to take the job.

 

[untermensche]

The lesson of the pet rock is missed by all who bring it up in this kind of conversation. The pet rock was a clever idea and it had it's day, a very short day.

And I really wonder if Pet Rock created a demand for Pet Rocks, or if it took advantage of an existing demand for 'novelties'? I imagine the stick figure families could have slotted into that same demographic if they'd been developed back then.

The demand for novelties was a created demand.

Demand being short lived or lasting a little longer has nothing to do with anything.

 

[coloradoatheist]

Is there any chance there is a link to his whole speech and not just the one quote? He may or may not have expanded on what he meant by this quote.

 

[Bronzeage]

The lesson of the pet rock is missed by all who bring it up in this kind of conversation. The pet rock was a clever idea and it had it's day, a very short day. It did not increase the aggregate demand for aggregate.

If Perry's economic plan were actually put into place, the price of coal would fall, which might increase consumption, but it would not decrease costs of production. Mine owners would quickly be losing money on every ton mined. Unless Perry can find a way to force the price if natural gas up, coal will remain the ugly stepchild of the energy industry.

The aggregate demand for aggregate?

The pet rock is an example of supply causing demand.

No demand is infinite.

The gravel in concrete is referred to as "aggregate." The aggregate demand for gravel was not increased by the pet rock craze. Your example is not relevant to this discussion, since coal is not sold as a novelty gift item.

 

[untermensche]

The aggregate demand for aggregate?

The pet rock is an example of supply causing demand.

No demand is infinite.

The gravel in concrete is referred to as "aggregate." The aggregate demand for gravel was not increased by the pet rock craze. Your example is not relevant to this discussion, since coal is not sold as a novelty gift item.

It is relevant to the claim that it is always supply that follows demand.

As far as coal, it is not a comment about coal.

As a kid I had no demand for a computer. Only a few people had that demand.

Then when the computer was here I realized I had a use for one. So the utility of something created the demand. The demand was manufactured not innate.

 

[Keith&Co.]

Is there any chance there is a link to his whole speech and not just the one quote? He may or may not have expanded on what he meant by this quote.

It's not a speech. He answered a question from the press following him on a tour through a plant.

 

[Bronzeage]

Is there any chance there is a link to his whole speech and not just the one quote? He may or may not have expanded on what he meant by this quote.

For Perry's statement to make any sense at all, there would have to be pent up demand for coal, thus increased production would satisfy that demand. If this were a fact, coal prices would be higher.

 

[coloradoatheist]

Is there any chance there is a link to his whole speech and not just the one quote? He may or may not have expanded on what he meant by this quote.

It's not a speech. He answered a question from the press following him on a tour through a plant.

It would be nice if the article writer had included the question and the surrounding talk.

 

[Keith&Co.]

It's not a speech. He answered a question from the press following him on a tour through a plant.

It would be nice if the article writer had included the question and the surrounding talk.

http://www.cbsnews.com/news/rick-perry-on-economics-supply-it-then-demand-will-follow/

 

[ZiprHead]

I'm amassing a huge supply of boogers and snot. Awaiting my upcoming fortune.

 

[coloradoatheist]

Is there any chance there is a link to his whole speech and not just the one quote? He may or may not have expanded on what he meant by this quote.

For Perry's statement to make any sense at all, there would have to be pent up demand for coal, thus increased production would satisfy that demand. If this were a fact, coal prices would be higher.

Yes and no. Would you make the argument that if eneergy prices were lower people wouldn't consume more energy?