Most people know that Americans benefit from high taxes, powerful unions, limited consumer choice, and strong government control. But most people lack the training to fully understand why we derive benefits from these policies, and why government control over public anything results in unsurpassable quality. To remedy your "knowledge deficit" you can ask us any question you choose, and it will be explained by the legendary Professor Paul Krugman in a language that you can understand. From the evils of profiteering, corporatism, and economic exploitation to the rewards of regulation, social justice, and community/stakeholder involvement, Professor Krugman will use his agile mind to clarify the otherwise intimidating field of economics.

Economics Primer 1: Supply

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Supply is critical to understanding economics. And since so few people understand economics, it follows that almost no one understands supply. It is therefore very likely that you, Dear Reader, will also be unable to understand supply and demand. However, as you read my words, it will become very apparent that I, for one, am very well versed in the topic.

Supply refers to the willingness of people to offer a product or service at various price levels. In general, high prices will entice people to supply more of a product. Conversely, can you figure out what low prices will do? No, you are wrong, they will discourage people from supplying a product.

Let's look at an example. If the price of apples go up, then you're your grocer will be enticed to sell more apples. And if the price of apples go down, then your local grocer will be unable to sell more apples, and will instead be at the mercy of our heartless capitalist system and will probably forfeit his business, sell his daughter into prostitution, and die -- cold and unfed -- in the gutter.

How about another example. If Halliburton can make a lot of money producing weapons and war, then they will supply the Republicans with a war machine designed to murder your helpless children.

How about a different example. If Bush can make money on graft, he will become more corrupt. Of course, this is only an illustration, and I am not implying that Bush is a criminal (although is does rely on the support of criminals and racists).

Let's recap. High prices = High Supply and Low Prices = Low Supply. Now let's look at how the standard laws of economics are twisted by large corporations, greedy capitalists, and Republican operatives. For instance, large corporations can control supply, and therefore maintain high prices.

Of course, you have wondered how huge and obscene companies like Ikea and Wal-Mart have such high prices. This is because they routinely crush all competitors and maintain a low supply of goods. If you don't believe that, try competing with Wal-Mart and see what happens. Or, better yet, learn first-hand about Wal-Mart by sending your assistant to one, like I did.

Wal-Mart, you see, can do anything they like, because they have created an inelastic supply. Confused? Of course you are. Thankfully, at least I understand.

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You are a much more knowledgeable economist than knuckleheads like Walter Williams. I can follow his line of reasoning no problem, but you on the other hand often make no sense at all or can be marvelously obtuse and even factually creative. It follows that you are thinking on a higher plane of thought than I am and since often I don't understand you, you must be right! You make economics fun again. Thank-you so much.

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Mr. Otis:

You have plenty of company, as I think on a higher plane than everyone. And you are correct that, in the field of economics, if you don't understand your teacher, it is a sure sign of his competence. No one has trouble understanding simple people, but simple people are generally wrong. At the other end of the spectrum, you have my deliciously ungraspable formulae and self-generated theorems. If you can't "get it", you're not stupid -- I'm just brilliant.


Prof. Krugman

P.S. I have no idea who "Walter Williams" is, and from your description, it seems like we're all better off that way. Although no one comes close to matching my incisive and hyperstimulated mind, I would however recommend Bob Herbert as a substitute when I am unavailable.

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If we place more guns on the streets, does that mean that the price for guns will increase, which would discourage criminals from buying them and therefore make our streets safer? Could this be why gun bans don't work in DC? Since they are cutting down on the number of weapons on the streets, it appears that prices are going down and crime increases.

Oh Goodness... I think I've just reach my mental apex.

Thanx Dr. Krugman...

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Mr. Toohey:

I read your first question five times over and have concluded that it approaches something I would write, because even I am having trouble understanding it. Which of course means that you are developing an expertise in economic fluency. Others will respect you for this some day, my friend.


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I'm sorry, I left off the "will increase" part. (I have highlighted that part in RED)

Forgive me...

Comrade Danovich
I very confused of this supply idea. It seems like and idea embrassed by the thick headed Capitalist swines. Is it true that a socialist power meets the needs of everyone equal? Everyone just needs only one toothbrush, shirt, a pair of pants, one shoe, and a single piece of underwear. Wouldn't be very inefficient and wasteful to produce extra supplies?