The Basics of Economics.

[Joe Steel]

To what end? Why would anyone innovate and commercialize an innovation if he couldn't sell it?

Of course demand is very important...

It's more than "very important." It's critical and indispensable to the creation of jobs. Even if everything you said were absolutely true beyond any shadow of doubt, no (or very few) jobs would be created without a demand for the product. The "real jobs" are in production for the market not development.

 

[Toro]

Another example to help understand why innovation creates wealth is to look at how innovation affects costs.

There is always demand for clothes. If someone creates a new process or machine that cuts the price of a shirt in half, the consumer can now either buy two shirts for the same money, or take the money she saved and buy something else, i.e. a skirt. Before the innovation, she would have one shirt. After the innovation, she would have one shirt and one skirt. It's the same shirt before and after the innovation. Demand for that shirt did not change. But because innovation lowered the cost of the shirt, she could now buy a skirt. The innovation allowed her to own more. It made her wealthier.

 

[Toro]

To what end? Why would anyone innovate and commercialize an innovation if he couldn't sell it?

Of course demand is very important...

It's more than "very important." It's critical and indispensable to the creation of jobs. Even if everything you said were absolutely true beyond any shadow of doubt, no (or very few) jobs would be created without a demand for the product. The "real jobs" are in production for the market not development.

Demand is infinite. People always demand more for less. It doesn't matter what it is. That is a constant throughout human history. But simply because demand exists does not mean that we get wealthier. If that were true, most of the wealth of the world would not have been produced over the past two centuries. It would have been produced much earlier because demand has always existed throughout time.

Most of accumulation of technical knowledge has occurred over the past 200 years. It is through this accumulation of technical knowledge which has allowed us to create vast and abundant amounts of wealth.

 

[Truthmatters]

demand is NOT infinate.


If it were there would Be no recessions

 

[Toro]

demand is NOT infinate.


If it were there would Be no recessions

There still would be recessions because some recessions are supply-induced. Our last two recessions have been because of imbalances in supply. That recessions are always a function of inadequate demand is simply wrong.

Demand is infinite. Incomes are not. There's a difference. Everyone wants, i.e. has demand, to be well-fed, have the best medical care, etc., but not everyone has the income to do so.

 

[Joe Steel]

To what end? Why would anyone innovate and commercialize an innovation if he couldn't sell it?

They wouldn't.

Demand is infinite. The demand for life-saving procedures was just as strong in 500 AD, 1000 AD and 1500 AD as it is today. But simply because demand was strong 500, 1000 and 1500 years ago does not mean life-saving products and procedures were produced then. It wasn't demand that created life-saving products. It was through innovation to meet a demand that has always existed.

...

Secondly, innovation in the modern economy relies heavily on public support. Much of the research which forms the basis of commercial activity is done at publicly-funded research facilities. For instance, without public funding we wouldn't have the internet and many modern medicines.

 

[Joe Steel]

demand is NOT infinate.


If it were there would Be no recessions

Good point.

Under some circumstances, consumers do decide to hold money rather than spend it. That creates a recession.

 

[Truthmatters]

when the poor have no money they dont spend.

when the middle class have no money they dont spend.

when the wealthy have no money they are not the wealthy any more.


Only the wealthy consume in a recession.

They love the economy in A trough.

Its means eveyone else is desperate and they get EVERYTHING on the cheap

 

[editec]

Do you understand how an economy works?

More or less, yes.

Give the best explanation of what you think it's working are.

What here?!

What do you understand about capitalism and how do you see it?

I know that capitalism as described by most as a system of quid pro quo doesn't remotely describe the system we've got.

I actually think capitalism might be a good idea and hope some day we try it.

Cause lord knows what we have now bears little relationship to the concept of capitalism.

What we have now is a kleptocracy flavored to favor the masters of money supply.

 

[Toro]

To what end? Why would anyone innovate and commercialize an innovation if he couldn't sell it?

They wouldn't.

Demand is infinite. The demand for life-saving procedures was just as strong in 500 AD, 1000 AD and 1500 AD as it is today. But simply because demand was strong 500, 1000 and 1500 years ago does not mean life-saving products and procedures were produced then. It wasn't demand that created life-saving products. It was through innovation to meet a demand that has always existed.

...

Secondly, innovation in the modern economy relies heavily on public support. Much of the research which forms the basis of commercial activity is done at publicly-funded research facilities. For instance, without public funding we wouldn't have the internet and many modern medicines.

I didn't say it did not. Government plays an important role in the economy.

Your post is framed in ideological parameters. I'm not talking about the role of government or the efficacy of macroeconomic policy over a cycle. I'm talking about the fundamental drivers of wealth creation. All wealth creation comes from lowering cost curves, i.e. producing more with less. How innovation and technological improvement happens is another discussion.

 

[Joe Steel]

Secondly, innovation in the modern economy relies heavily on public support. Much of the research which forms the basis of commercial activity is done at publicly-funded research facilities. For instance, without public funding we wouldn't have the internet and many modern medicines.

I didn't say it did not. Government plays an important role in the economy.

Your post is framed in ideological parameters. I'm not talking about the role of government or the efficacy of macroeconomic policy over a cycle. I'm talking about the fundamental drivers of wealth creation. All wealth creation comes from lowering cost curves, i.e. producing more with less. How innovation and technological improvement happens is another discussion.

You should be talking about the role of government because that's the issue at hand. An earlier poster defined "real jobs" as jobs created by the private sector. The only way to get "real jobs" from the private sector is to ensure demand is sufficient for production. That's the issue I'm addressing.

 

[EdwardBaiamonte]

The only way to get "real jobs" from the private sector is to ensure demand is sufficient for production. That's the issue I'm addressing.

too stupid!!!!

OMG!!!!demand is always sufficient !!! People are born demanding things like air, food, clothing, shelter, water as a necessity of survival. Giving them credit for breathing is a disgustingly low standard that only an deadly uber stupid liberal could imagine.

Life on the planet changed when Republicans invented or supplied a plow to till or bucket to carry water. Those rare geniuses supplied life on this planet and need to be encouraged in every conceivable way.

Consumer demand we can take for granted like the air we breath. Millions of people can look at a field and demand wheat for millions of years (and they did) but the Republican supply-sider who finally came along to make the field supply wheat literally saved milions and millions of lives from starvation and made millions and millions of more lives possible.


Similiarly, every human being had a limitless demand for computer power, but it was not until Gates and Jobs came along with the supply that the demand could be met!!!

Now even a liberal can understand what Republican supply-side economics is.

 

[Cabron]

The only way to get "real jobs" from the private sector is to ensure demand is sufficient for production. That's the issue I'm addressing.

too stupid!!!!

OMG!!!!demand is always sufficient !!! People are born demanding things like air, food, clothing, shelter, water as a necessity of survival. Giving them credit for breathing is a disgustingly low standard that only an deadly uber stupid liberal could imagine.

Life on the planet changed when Republicans invented or supplied a plow to till or bucket to carry water. Those rare geniuses supplied life on this planet and need to be encouraged in every conceivable way.

Consumer demand we can take for granted like the air we breath. Millions of people can look at a field and demand wheat for millions of years (and they did) but the Republican supply-sider who finally came along to make the field supply wheat literally saved milions and millions of lives from starvation and made millions and millions of more lives possible.


Similiarly, every human being had a limitless demand for computer power, but it was not until Gates and Jobs came along with the supply that the demand could be met!!!

Now even a liberal can understand what Republican supply-side economics is.

With all due respect, this is utter nonsense.
Supply and demand are the 2 sides of a coin...you can't say one is more important than the other.

 

[bripat9643]

I didn't say it did not. Government plays an important role in the economy.

Your post is framed in ideological parameters. I'm not talking about the role of government or the efficacy of macroeconomic policy over a cycle. I'm talking about the fundamental drivers of wealth creation. All wealth creation comes from lowering cost curves, i.e. producing more with less. How innovation and technological improvement happens is another discussion.

You should be talking about the role of government because that's the issue at hand. An earlier poster defined "real jobs" as jobs created by the private sector. The only way to get "real jobs" from the private sector is to ensure demand is sufficient for production. That's the issue I'm addressing.

So how did anyone have a job before government got into the business of "insuring demand?"

 

[bripat9643]

The source of all wealth creation is not demand. Demand is essentially infinite, and everywhere and always exist.

What creates wealth is innovation and the commercialization of innovation.

To what end? Why would anyone innovate and commercialize an innovation if he couldn't sell it?

They wouldn't.

Demand is infinite. The demand for life-saving procedures was just as strong in 500 AD, 1000 AD and 1500 AD as it is today. But simply because demand was strong 500, 1000 and 1500 years ago does not mean life-saving products and procedures were produced then. It wasn't demand that created life-saving products. It was through innovation to meet a demand that has always existed.

Joe espouses the economic theory that rain creates umbrellas. Unfortunately for this belief, it doesn't explain why there were no umbrellas before the 10,000 years of human history that passed before a man invented the umbrella.

 

[bripat9643]

demand is NOT infinate.


If it were there would Be no recessions

So recessions occur because people stop wanting things?

 

[bripat9643]

The only way to get "real jobs" from the private sector is to ensure demand is sufficient for production. That's the issue I'm addressing.

too stupid!!!!

OMG!!!!demand is always sufficient !!! People are born demanding things like air, food, clothing, shelter, water as a necessity of survival. Giving them credit for breathing is a disgustingly low standard that only an deadly uber stupid liberal could imagine.

Life on the planet changed when Republicans invented or supplied a plow to till or bucket to carry water. Those rare geniuses supplied life on this planet and need to be encouraged in every conceivable way.

Consumer demand we can take for granted like the air we breath. Millions of people can look at a field and demand wheat for millions of years (and they did) but the Republican supply-sider who finally came along to make the field supply wheat literally saved milions and millions of lives from starvation and made millions and millions of more lives possible.


Similiarly, every human being had a limitless demand for computer power, but it was not until Gates and Jobs came along with the supply that the demand could be met!!!

Now even a liberal can understand what Republican supply-side economics is.

With all due respect, this is utter nonsense.
Supply and demand are the 2 sides of a coin...you can't say one is more important than the other.

Sure you can because demand produces nothing. There are millions of African babies crying all day because they want to be fed, but work applied to the soil is what puts food on the table.

 

[Toronado3800]

Dunno Ed, but we sure could use 'em.....~S~

yes with 24 million unemployed we sure could. Here's how:

1) Make unions illegal ( 10 million new jobs) Democrats oppose

2) make minimum wage illegal ( 5 million new jobs) Democrats oppose

3) end business taxation; especially tax incentives to off-shore jobs ( 5 million new jobs) Democrats oppose

4) make inflation illegal ( 2 million new jobs) Democrats oppose


5) make Federal debt illegal( 2 million new jobs) Democrats oppose

6) send illegal workers home(8 million new jobs) Democrats oppose

7) Pass Balanced Budget Amendment to Constitution( 3 million new jobs) Democrats oppose

8) cut pay of government workers in half( 4 million new jobs) Democrats oppose

9) Make health insurance competition legal( 6 million new jobs) Democrats oppose

10) end needless business regulations ( 2 million new jobs) Democrats oppose

11) restrict Federal spending to 15% of GNP( 2 million new jobs) Democrats oppose

12) support unlimited free trade( 2 million new jobs) Democrats oppose

13) reduced unemployment compensation, welfare, food stamps, medicaid.( 2 million new jobs) Democrats oppose

14) privatize education, social security ( 4 million new jobs) Democrats oppose

15) end payroll taxes ( 1 million new jobs) Democrats oppose

Since Democrats always oppose wisdom and common sense the only serious option is to make them illegal as the Constitution intended

What the heck do you mean by "make inflation illegal"????

Oh, and that making the federal debt illegal crack is like pissing on Reagan and Bush and Bush's graves or front steps. Nice Reagan put down I have to use some time.

Man, who is liberal enough to somehow ban inflation. Ed who wants to impose his religous views on the good ppl of Oregon? Just keep claiming to be conservative so you can be their Al Gore and cost the Repubs votes.

 

[uscitizen]

Who needs jobs, everyone should just trade in the market.
We do not actually need to produce anything do we?

 

[Cabron]

too stupid!!!!

OMG!!!!demand is always sufficient !!! People are born demanding things like air, food, clothing, shelter, water as a necessity of survival. Giving them credit for breathing is a disgustingly low standard that only an deadly uber stupid liberal could imagine.

Life on the planet changed when Republicans invented or supplied a plow to till or bucket to carry water. Those rare geniuses supplied life on this planet and need to be encouraged in every conceivable way.

Consumer demand we can take for granted like the air we breath. Millions of people can look at a field and demand wheat for millions of years (and they did) but the Republican supply-sider who finally came along to make the field supply wheat literally saved milions and millions of lives from starvation and made millions and millions of more lives possible.


Similiarly, every human being had a limitless demand for computer power, but it was not until Gates and Jobs came along with the supply that the demand could be met!!!

Now even a liberal can understand what Republican supply-side economics is.

With all due respect, this is utter nonsense.
Supply and demand are the 2 sides of a coin...you can't say one is more important than the other.

Sure you can because demand produces nothing. There are millions of African babies crying all day because they want to be fed, but work applied to the soil is what puts food on the table.

But by the same token, there has been a bunch of products that someone supplied or tried to supply but there wasn't any demand. So you can't really have one with out the other.
Sometimes the military "demands" products or technology that doesn't even exist...That's demand driven.