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View Full Version : Rand Paul, You Failed Econ 101. Supply, Demand and the Minimum Wage




CaseyJones
02-04-2014, 01:06 PM
http://www.huffingtonpost.com/joe-driscoll/rand-paul-you-failed-econ_b_4719735.html


Econ 101

When you raise the price of something, the supply;

a.) decreases

b.) may stay the same

c.) increases

d.) it depends

e.) Rand Paul is wrong

In his January 28th interview with CNN's Wolf Blitzer, Rand Paul stated that, "If you increase the price of something, you get less of it." Really. Perhaps he learned this from his investment guru, and advisor to his father, Peter Schiff - whom I'm hoping will become a regular on Jon Stewart's The Daily Show - spouting the same nonsense to Samantha Bee in a must-see interview . Let's take the econ question at hand.

Much to the chagrin of efficient market theorists, who believe economics is a pure science and live in an abstract world, markets are often neither rational nor efficient. There are no laws of economics. In reality, economics falls somewhere between a social science and a liberal art. Let's plug housing between 2001 and 2008 into the above problem. As the prices of housing increased, supply increased, we got more houses.

Increasing prices can create new demand. As housing prices increased, we got more mortgage-backed securities (MBS), more collateralized debt obligations (CDOs), more synthetic MBS and CDOs at increasingly higher prices. We created homebuyers. During the same period, the average pay for Wall Street bankers rose substantially, but did we get fewer bankers? No. We got more bankers, many more bankers, and banking's share of GDP nearly doubled.

angelatc
02-04-2014, 01:16 PM
In reality, economics falls somewhere between a social science and a liberal art. Let's plug housing between 2001 and 2008 into the above problem. As the prices of housing increased, supply increased, we got more houses.

OMFG. And then the article did the impossible. It even went downhill from there.

phill4paul
02-04-2014, 01:17 PM
OMFG.

You understate.

ctiger2
02-04-2014, 01:17 PM
If $10/hr is good then $1,000/hr better. What's wrong with $1,000/hr? Don't you care about the poor? We need income equality. Those greedy capitalists!

jj-
02-04-2014, 01:23 PM
One of the most idiotic articles ever written.

Deborah K
02-04-2014, 01:56 PM
http://i39.tinypic.com/5mxrg7.jpg

T.hill
02-04-2014, 02:06 PM
Peter Schiff should really try to get a follow up interview with Jon Stewart.

Original_Intent
02-04-2014, 02:11 PM
As the prices of housing increased, supply increased, we got more houses.


That's right morons, and as the price of employees increases, the pool of available employees (aka "the unemployed") also increases.

FFS

KingNothing
02-04-2014, 02:12 PM
"Much to the chagrin of efficient market theorists, who believe economics is a pure science and live in an abstract world, markets are often neither rational nor efficient. "

What an amazing statement. So, because markets are not completely rational nor are they completely efficient, they are NOT rational and they are NOT efficient.

There is absolutely no better mechanism for pricing than markets. Prices may swing wildly and be prone to fits of irrationality, but that does not mean markets are less rational than the whims of whichever control-freak thinks he has the answer to society economic woes.

Pericles
02-04-2014, 02:20 PM
An increase in price increases supply and lowers demand. When demand is less than supply, somebody does not have his price met.

heavenlyboy34
02-04-2014, 02:22 PM
"Much to the chagrin of efficient market theorists, who believe economics is a pure science and live in an abstract world, markets are often neither rational nor efficient. "

What an amazing statement. So, because markets are not completely rational nor are they completely efficient, they are NOT rational and they are NOT efficient.

There is absolutely no better mechanism for pricing than markets. Prices may swing wildly and be prone to fits of irrationality, but that does not mean markets are less rational than the whims of whichever control-freak thinks he has the answer to society economic woes.

Bingo. Winnar. :cool:

Brian4Liberty
02-04-2014, 02:26 PM
Rand Paul stated that, "If you increase the price of something, you get less of it."

Of course they will spin and twist things. Typical media hit piece. God forbid they actually understand what he meant.

If you increase the price of something, you will be able to afford less of it, unless you can come up with the extra money to pay the extra cost. Pretty simple concept.

Could McDonalds buy cheaper beef, and make up the difference to still purchase the same amount of higher priced labor? Maybe. Then again, they are already using beef that was previously hardly fit for animal consumption. Their beef price is not going lower, unless they switch to Soylent Green.

Brian4Liberty
02-04-2014, 03:48 PM
430819298206941184

eleganz
02-04-2014, 03:56 PM
They love it when you post their links for your friends to see, no matter how ridiculous you may think the content is.

cajuncocoa
02-04-2014, 04:06 PM
LMAO....I always knew that Lefties were failures at microeconomics. Thank you, HuffPo for proving it.

Brian4Liberty
02-04-2014, 04:21 PM
They love it when you post their links for your friends to see, no matter how ridiculous you may think the content is.

Probably. Subbed my tweet instead.

ObiRandKenobi
02-04-2014, 06:05 PM
they write about rand for the clicks

Crashland
02-04-2014, 06:20 PM
The author is just playing word games to make readers conclude the opposite of what is true. Artificially raising the price of something gives you a surplus. The object being measured is workers. And what happens when you have a surplus of workers? Oh yeah, that's unemployment. As in, the supply of workers is greater than the demand. But this guy would have you believe that a surplus of workers means more people working.

whoisjohngalt
02-04-2014, 06:30 PM
It's horrid. The ridiculous examples equating general goods, water and coffee, to specific goods, bottled water and Starbucks coffee is where I couldn't take it anymore.

Ceteris paribus, it is an economic LAW that if you increase the price of a good, quantity of the good purchased will go down. It's supply and demand. Unless, of course, it's a perfectly price inelastic good. But I don't think they want to contend that labor is a Veblen or Giffin good?

I'm going to pretend to write an article on economics by trying to refute it's universally accepted foundation. Fuck Huffington Post, I'm glad I'm banned from commenting there.

angelatc
02-04-2014, 06:33 PM
Peter Schiff should really try to get a follow up interview with Jon Stewart.


He was on Facebook a day or so ago encouraging people to demand that TDS release the entire interview.

Rudeman
02-04-2014, 06:35 PM
If $10/hr is good then $1,000/hr better. What's wrong with $1,000/hr? Don't you care about the poor? We need income equality. Those greedy capitalists!

It's only fair that everyone becomes a millionaire. Or maybe it should be $1,000,000/hr then we can all become billionaires. In your face the 1%!

SilentBull
02-04-2014, 07:26 PM
Holy crap, this is probably one of the stupidest attacks ever. An ignorant fool that guy is.

Anti Federalist
02-04-2014, 07:36 PM
It's only fair that everyone becomes a millionaire. Or maybe it should be $1,000,000/hr then we can all become billionaires. In your face the 1%!

Pikers.

I don't want to work that many hours.

$1,000,000,000 per hour.

gwax23
02-04-2014, 09:44 PM
LMAO....I always knew that Lefties were failures at microeconomics. Thank you, HuffPo for proving it.

..and macro

As to Rand, he simply worded it badly.

anaconda
02-05-2014, 02:55 AM
In a perfectly competitive market you cannot raise or lower prices. You simply settle for the market price and produce as much as you can until hiring additional labor or capital becomes less profitable. And these workers that are subsidized by the government are not worth their wage PLUS the subsidy, but rather their wage NET of the subsidy. If they were worth what the writer is saying, there would be no need for the subsidy.

cjm
02-05-2014, 06:51 AM
As to Rand, he simply worded it badly.

Yes. If the quotation in the article is accurate, Rand's wording left the door open to some "interpretation."

Instead of talking about supply and demand (which I'm comfortable with, but loses some people), I have been saying, "raising the minimum wage is a friendly way of saying they want to outlaw all jobs that pay less than a certain amount." I'm not sure if this is getting through to folks any better. I've only recently tried this phrasing and I think it will take time to measure its effectiveness.

matt0611
02-05-2014, 07:57 AM
Even Paul Krugman's econ 101 textbook admits that minimum wage increases unemployment.

It's econ 101.

You increase the price of labor and you will get less. ALL ELSE BEING EQUAL (which the blithering idiots at Puff Post have failed to grasp)

Puff Po fails at econ 101, not Rand. But we already knew this.

FriedChicken
02-05-2014, 07:58 AM
Yes. If the quotation in the article is accurate, Rand's wording left the door open to some "interpretation."

Instead of talking about supply and demand (which I'm comfortable with, but loses some people), I have been saying, "raising the minimum wage is a friendly way of saying they want to outlaw all jobs that pay less than a certain amount." I'm not sure if this is getting through to folks any better. I've only recently tried this phrasing and I think it will take time to measure its effectiveness.

Thats an interesting way to put. I'm curious what reactions you'll get.

Brian4Liberty
02-18-2014, 10:34 PM
Time to give it back to him...

435994872365846529

Danan
02-18-2014, 10:55 PM
As the prices of housing increased, supply increased, we got more houses.

The difference between the shift of a supply function and the movement along a supply function is probably the first thing you learn in introductory micro.

Cabal
02-18-2014, 10:59 PM
Wait, this guy was being for serious? Surely this is meant to be a joke, right? Like, maybe he's trying to impress someone at the Onion to get a job?

The amount of absolute drivel spewed in that article is offensive and appalling.

dillo
02-21-2014, 02:38 AM
price has no effect on supply or demand, just quantity.

devil21
02-21-2014, 02:48 AM
Time for a Rand Paul Media Spin subforum yet????

anaconda
02-21-2014, 03:14 AM
The difference between the shift of a supply function and the movement along a supply function is probably the first thing you learn in introductory micro.

^This.

LibertyEagle
02-21-2014, 06:10 AM
Time for a Rand Paul Media Spin subforum yet????

No, please. That just encourages people to bring every negative article and obscure blog over here and post it. All it does is raise visibility of the hit pieces in Google and provides a nice, handy spot for lazy reporters to come visit to get all kinds of negative information about the candidates we claim to support.

anaconda
02-23-2014, 06:17 PM
The difference between the shift of a supply function and the movement along a supply function is probably the first thing you learn in introductory micro.

It is amazing how often one sees comments in blogs like "demand is greater than supply" and such.