supply

There is a sense these days, whether in politics or academia, that people should shape their own realities and each result is as valid or real as any other.

In John’s absence, Donny Kendal is joined by Research Fellow for Budget and Tax, Jesse Hathaway, in episode #104 of the In The Tank Podcast.

In today’s edition of the Heartland Daily Podcast, Heartland Science Director Jay Lehr joins host H. Sterling Burnett to talk about the abundant supply of oil and gas that exists due to fracking and in the future, Shale rock development and methane hydrates.

Eighty years go, on February 4, 1936, one of the most influential books of the last one hundred years was published, British economist, John Maynard Keynes’s The General Theory of Employment, Interest and Money. With it was born what has become known as Keynesian Economics.

A little more than a year ago, oil prices were above $100 a barrel. The national average for gasoline was in the $3.50 range. In late spring, oil was $60ish and the national average for gas was around $2.70. The price of a barrel of oil has plunged to $40 and below—yet, prices at the pump are just slightly less than they were when oil was almost double what it is today.

Everyone who owns a car, truck, tractor, quad bike, bobcat, forklift or other mobile machine is hoping that the fortune being wasted on green energy may produce just one real benefit – better batteries. We want batteries that are cheap, light weight, charge quickly with no losses, last forever and store a large quantity of energy. Nothing close is on the market yet.

Old fallacies never seem to die, they just fad away to reemerge once again later on. One such fallacy is that if there is significant unemployment and slow economic growth it must be due to not enough consumers’ spending in the economy, what Keynesian economists call a “failure of aggregate demand.”

You may not have noticed it when out buying things in the marketplace in the context of your personal budget, but according to the Wall Street Journal (April 24, 2015) the world is awash with too much stuff. We seemingly have too much of, well, almost everything: too many raw material commodities, too much capital, and too much labor. The world, claims the Journal, is suffering from global gluts.

The headline line in the Sunday St. Louis Post-Dispatch asked “Are St. Louis Area’s Home Prices too Low?” This is could not possibly have appeared describing any major metropolitan area of Australia, New Zealand, or the United Kingdom. Nor will newspapers in Vancouver, Toronto, Calgary, Portland, Seattle, Boston, New York or in any of the overpriced markets of California decry low prices any time soon.

What is far and away the most important global trade commodity? Food. People have to eat. Before the world’s peoples can afford to purchase from us an iPhone, or a Ford pickup truck – they have to buy (hopefully our) food.

Today, more than any time, arguably, since the Great Depression, the prospects for improved housing outcomes are dimming for both the American middle and working classes. Not only is ownership dropping to twenty-year lows, there is a growing gap between the amount of new housing being built and the growth of demand.

Ongoing effective economic experiments among the 50 states are sharpening, and definitive results will pour out in the real world, editorial and opinion fallacies to the contrary notwithstanding. That sharpening…