ECONOMY/ENERGY/TRUMP PEOPLE/RICK PERRY: “Speaking at a coal-fired power plant in Maidsville, W.Va., on Thursday [7-6-17], 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.
Another possible interpretation of Perry’s odd remark is that he might have been repeating a theory that was once widely accepted among economists. On this theory, demand and supply will always be in balance across the economy as a whole. These days, however, many economists view this logic as deeply and dangerously mistaken.”
-Max Ehrenfreund, “Rick Perry offered a ‘little economics lesson.’ It didn’t go so well.,” The Washington Post online, July 6, 2017 03:58pm