Kenneth C. Davis has made a great living with his “Don’t Know Much About” books. It began with Don’t Know Much About History. It became a mega-bestseller. He went on to write books on the presidents, the Bible, geography, the Civil War, the solar system, mythology, and other subjects.
Davis has not written on what people don’t know about economics. If he decides to write on the topic he can begin with this statement by President Obama on why he is opposed to building the Keystone XL pipeline:
“Understand what this project is: It is providing the ability of Canada to pump their oil, send it through our land, down to the Gulf, where it will be sold everywhere else. . . . That doesn’t have an impact on U.S. gas prices.”
One of the basic principles of economics is supply and demand. If there is more demand for a product than there is supply, the price goes up. Think gold and one-of-a kind works of art like those of Vincent van Gogh and Picasso.
If there is more supply of a product than there is demand, the price goes down. Think the comic book glut of special issue comic books of the 1980s and 1990s. They now sell for pennies on the dollars while a near mint copy of the first Superman comic — Action Comics No. 1 (1938) — sold in 2014 on eBay for $3,207,852.
There are estimated to be only 50 to 100 copies in existence out of a print run of 200,000 copies and only one issue graded 9 out of 10 in terms of condition.
It’s that simple. It only requires politicians and Ph.D.-level economists to confuse everybody. Even drug dealers know the basics of economic theory.
If more oil is made available to a global market, the price of oil will come down.
Continue Reading at Godfather Politics…
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