Touting coal, Perry confuses supply and demand
(CNN), energy secretary Rick Perry has confused the relationship between the fundamental forces of the economy while extolling the coal industry’s adoption of the Trump administration, according to economists.
“Here’s a little lesson in economics: the supply and demand for supplies gets put out there and demand will continue.” Standard & Poor’s Taylor Kuykendall said Thursday.
The former governor of Texas made the remark by talking to employees at a coal-fired power plant in Maidsville, West Virginia. A message left by CNN with Perry Friday’s office was not returned.
But economists have pushed Perry’s statement Friday.
“It’s an old statement called Say’s Law and what’s wrong.
It’s that simple, “said Doug Holtz-Eakin, president of the American Action Forum, a center-right think tank. The offer does not automatically create its own demand. ”
“There are two separate entities that have their own determinants and interact to provide prices,” he added.
The late French economist Jean-Baptiste Say argued that supply beyond demand was never carried out because demand always corresponds to supply. But Holtz-Eakin, former director of the Congressional Budget Office, said it was a basic misunderstanding of the economy.
“Maybe not everyone does the economy. And I know from the fact that everyone does not happen,” he said.
Adele Morris, director of policies for climate and energy economics at the Brookings Institution, said Perry’s words “really do not have any meaning.”
“What it seems to suggest is that if providers provided more, people would ask for more,” he said. “Well, suppliers do not control the application, they control the supply.”
There is no debate among economists about the law of supply and demand, said Morris, a former economist at the Joint Economic Committee of Congress.
“There is a debate about the disconnection of what the government says to coal workers and their communities and truths in the markets, in order to weave a story and tell people in the coal-dependent areas that have the Power to revive the coal industry, “he said.
President Donald Trump and his administration have regularly announced employment growth in coal, although experts say otherwise.
A study by Columbia University estimates that the coal industry lost about 60,000 jobs since the end of 2011 and hundreds of thousands of people since the 1920s because of a larger share of the world’s energy production from other sources Cleaner as solar gas and natural gas.
Democrat Ted Lieu hit Perry in his comments on Twitter.
“Dear Rick Perry: If you put a lot of 35mm film there, this will require you to continue NO This is not like capitalism stop lying to coal workers ..” Said the California lawmaker.