Posted on by Californiacontrarian

Econ 101

I did actually take one economics class in college. Undoubtedly it was Econ 101 or its equivalent. Just because I took that class, it doesn’t make me an expert in economics. However, a lot of basic economics is common sense. Theories of supply and demand are likewise common sense, and one doesn’t need Econ 101 to understand or explain this basic economic principle.

Simplistically, when you limit the supply of something, the price of that thing will go up. Now obviously this basic principle doesn’t apply if the thing that is now limited is not something that has an underlying demand. For instance, if you limit the supply of bubblegum, the price of bubblegum will not necessarily rise, because there is not an overwhelming demand for bubblegum. However, if you limit the supply of something that is in demand, then the cost of that thing will rise. And furthermore, if one limits the supply of something that is in high demand, then the cost of that thing will disproportionately rise. Econ 101!

Let’s say for the sake of discussion, it’s been raining a lot and the forecast calls for a prolonged rainy stretch. Consequently, everyone wants an umbrella, and if there is a limited supply of umbrellas in your town, the price of an umbrella will go up. Econ 101! 

At some point some entrepreneur in your town will notice this supply-demand imbalance and will begin to import umbrellas from an adjacent town, and this new influx of supply will subsequently lower the cost of an umbrella. Econ 101. However, if there is no influx of umbrellas the cost of an umbrella will continue to rise as long as the need continues … as long as it keeps raining. (Granted this simplified example is before Amazon and ordering things online, but bear with me.) So when dealing with supply/demand balance/imbalance, supply can go up or down and likewise demand can also go up or down. 

Now why did I just go through this basic Econ 101 principle?? I went through this because our Bozo-in-chief obviously does not have a basic understanding of Econ 101. Europe needs energy, and as summer turns into fall, and as fall turns into winter, its demand for energy (oil and gas) will only increase. Because energy is not like bubblegum, the price of this energy will go up. And because Russia is the predominant supplier of umbrellas, it can control the price of the umbrellas that it sells, and because there is no other supplier of umbrellas, Russia can basically increase the price as it sees fit, no surprise, my friends, this is what is happening. 

From Townhall:

“Well, rather than crushing the Russian economy and kneecapping its ability to fight in Ukraine, Russia’s oil output has now rebounded to its pre-sanction level and Putin’s profits are soaring. “Russia has earned $20 billion in average monthly sales this year compared with a $14.6 billion monthly average in 2021, when economies were recovering from the pandemic crash,” The Wall Street Journal reported this week. ‘Shipments were rising again in August, data from ship-tracking firm Vortexa show.’

All that means that Biden, who was heralded by weak-kneed mainstream pundits and his fellow Democrats for uniting the world against Putin and inflicting punishing sanctions has made it so ‘Moscow is raking in more revenue than ever.’”

Well, as fans of Econ 101 will immediately realize, this was inevitable because (1) Europe needs energy and this demand is only going to increase, and (2) there is other supplier immediately on the horizon. The only reasonable supplier for the energy that Europe absolutely needs could have been, and should have been the U.S. The U.S. should have been that next town over that could have been supplying the umbrellas to keep pace with the demand. The U.S. should have been increasing its energy production. It could have increased its own energy production to meet what Europe is demanding.

But because J.B. obviously does not understand Econ 101, Russia is making a killing selling energy to Europe. This works for Russia because there is no alternate source of energy supply, as the U.S is not producing the oil and gas that it could. 

Furthermore, this is not going to change in the near future unless J.B. gets someone to tutor him in Econ 101, and even then it is quite presumptuous that J.B. will be able to understand the simple concept!

9/3/22

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