Really enjoyed when Walter Williams and Thomas Sowell would fill in for Rush. Those two together were a hoot talking bout experiences and esp Walter lining out his wife.
He was a brilliant man. And to those who recall his wise words, he still is a brilliant man; on of the 3 giants in economics: Milton Friedman, Thomas Sowell, and Walter E. Williams.
I had a progressive teacher in middle school who taught what I later learned was Keynesian economics. It made perfect sense to me, that is, until I learned more about economics as an adult.
@@ExPwner By definition, a free market is one where both the seller and the buyer are on equal footing. Neither have power over the other. So, say in the case of a potential car buyer, the dealer and the customer are on equal footing. They can negotiate terms that satisfy both. The parties must come to an agreement that both benefit. The dealer has no power over the customer and the customer can always choose another dealer or to not buy a car at all. Now on to healthcare. Your child comes down with Leukemia. You are not on equal grounds with the medical system. They have you by the balls. The US has the highest healthcare costs by far. About 17 % of GDP compared to 11-12% for the rest of the developed world. That would even be questionable if the US had the best healthcare performance outcomes. But it’s not even close. Out of the top 11 top economies the US ranks 11th. The top 9 are all European except Australia and New Zealand. Canada was 10th. All 10 had some form of universal healthcare.
In a genuine competitive market. All this falls apart with massive industry consolidation, oligopoly and monopoly markets. Then all the supply/demand pricing theories all get tossed out.
Walter E Williams expressed it so well, demand often represents need. when people need resources above and beyond what is usually necessary the price Rise brings the resource to them, and people in other areas who end up having to pay the higher price because they also need the resource our only Subject to the fact that there is a greater demand a greater need for that resource not that somebody is trying to punish them. It is not a punishment, It is merely representative of the fact That resources are scarce And when the demand for them goes up everybody has to pony in if they want them. Dr Williams was a genius, we should all listen to his wisdom. rest in peace Sir.
I do not understand this statement, "Every business has record profits when inflation is out of control".? Is this proposing inflation has gotten out of control and many companies profited, because it spanned for more than enough time, to factor in a percentage???
@@rafaelgonzalez4175 The way profits are recorded is in pure numbers. They don't post profits in percentages. So when money is inflated, the numbers go up. They will always set records as long as they are profitable. Example: Say I'm a profitable business who is doing average business. Nothing changes with regards to the amount of business or percentage I'm charging on top of my costs. If money inflates, my numbers I report inflate. Before the inflation I might report $1.1 million dollars gross income. After the inflation I might report $1.7 million dollars gross income. In both scenarios I am still sticking to a low ~2% profit margin, but it looks like I'm making insane amounts of money to people who don't understand numbers.
@@rafaelgonzalez4175profit percentages haven’t materially changed. The absolute profit numbers are up because inflation has so significantly devalued the dollar.
Why do we pay for water even bottled water when the supply has never decreased and the demand has more than exponentially increased and the bottling company makes varying beverages from water to sell to the consumers? Also why is water the same cost, when the soda has a greater demand for more ingredients?...
@@mrparkerdan Supply and demand in a capitalist country has no economic inequality or equity or equality. In fact economics has nothing to do with capitalism. Capitalism has nothing to do with supply and demand. Demand is about it...
I think the reason the layman struggles so much with this concept is that as consumers we only see the economy from the perspective of consumers. We rightly understand that consumption plays a role in wellbeing, and we correctly observe that prices place consumption behind a paywall. The mistake is believing that that is the whole story. What people miss is that production is also behind a paywall- not because of greed, or because of some particular economic system, but because of the laws of physics themselves. Paying for goods and services means allocating resources towards the production and distribution of those goods and services, which is what makes supply possible. This is always important for the things we would like to consume, but becomes doubly so during a shortage or crisis. It is in your interest to ensure that your suppliers are turning a profit.
It is called consolidation, and secondary is a weird effect where higher costs increase profit without increasing margin. Industry consolidation leads to an effect where the same margin but higher volume per company, leads to more executive compensation, and more net income, for more shareholder return. So the workers are making the same amount, but the executive and majority shareholder are making a lot more. This causes income/wealth gap to grow. Also, if retailers are calculating prices based of margin, there is a weird phenomenon where increased cost at the same margin, then increases net profit. So it demotivated companies to reduce hard product cost, even collude with supplier friends to pay a higher price for goods they sell at margin. $1 cost per unit sold with 20% margin means $1.20 consumer price and $0.20 profit per unit. $1.50 cost per unit sold with 20% margin means $1.30 consumer price and $0.30 profit per unit. Margins haven't changed but net profit goes up. Consumers pay more and executives make more, workers get screwed.
@@5353Jumperyou just proved my point lol you said all that just to say "profit number bigger" which means nothing when profit margin %s stay the same. If profit margin %s remain the same there is no price gouging occurring those evil profit numbers go up due to inflation. That said sure companies could pay workers more. Cope
@@5353Jumper What a bunch of gibb/erish from you. For instance, you make the verifiably false claim that “net profits have gone up”. No, no they haven’t, certainly not as part of a long term trend once inflation is adjusted for, as your statement and incorrect analysis suggest they have; at least not from 2019 to now as the false allegation that “corporate greed” causes inflation become a political taking point.
@@5353Jumper To even lend one drop of feasibility to your overly simplified, largely non/sensical “analysis”, as a NECESSARY, but NOT sufficient condition, you need to show that workers pay as a portion of total revenue has SIGNIFICANTLY DECREASED, while CEO pay as a percentage of revenue has SIGNIFICANTLY INCREASED to the point that as kept the margins THE SAME as net revenue and net income (profit) increased. So, where is your DATA, your REAL EVIDENCE, or are you just spinning a narrative?
@davidmajor1508 well if we really want to get into it we would have to consider that nearly zero products are priced based on costs or margin at all. But if you want evidence all you need to do is look up all the media about companies posting/reporting record profits during these times of "high inflation". These profits then go to executive bonuses and short term shareholder returns. There are lots of graphs out there showing executive compensation vs worker compensation. Economic Policy Institute: The productivity-pay gap shows how the value of production has gone up by over 1.2% per year since 1980 but the worker compensation has only gone up only 0.3%. Meaning the value of production grows 4x faster than worker compensation.
Man, do I miss Walter Williams guest-hosting the Rush Limbaugh show. He was a fabulous explainer and presenter. RIP Mr. Williams, we wish you were still with us. Of course, I miss Rush, too!
Prices are signals, not punishment or unjust enrichment. People don't understand that our modern, plentiful world relies on prices; without them it would be a mess of inefficiency, waste, and unavailability. In a disaster situation, bottled water and plywood ARE worth more, and their price should reflect it.
ALWAYS LOVE LISTENING TO THIS MAN! I was saddened by his passing as another logical and intelligent mind and voice of the people disappeared! R.I.P. Sir!
Supply and demand is the root of fair pricing ... not bureaucrats with pencils forcing prices based on their political whims. Dr Walter Williams, like Dr Thomas Sowell are great Americans who ought to be listened to ... "carefully", instead of the media blather from politicians.
Right. There is no price gouging. There is only supply and demand. If there’s a hurricane and no one around has food or fresh water, you can become rich instantly by charging what the market will bear for those things. After all, what mother whose children are literally dying of thirst will not only give you all the money she has… but will also offer you her body in exchange for a quart of water? Heck, she might even give you the deed to her home….
It’s a straight up business model these days. Claim you have a shortage, drastically raise prices, gently bring them down a little over time, watch profits soar.
Or imagine that bottled water is scarce after a hurricane. If the store owner charges $5 a bottle instead of the usual price of $1, people will buy only what they need (rather then buying 20 bottles and emptying the shelf) and there will be water for those who come later. It is better to have water at $5 a bottle than no water at all. And then remember that the condition is only temporary. The scarcity disrupts the market until supplies are replenished - maybe several days later.
Totally different today than what he's talking about because every store in the United States of America are not price gouging it's because of inflation is so high we can't afford to buy anything
Wow he really put a spin on it, making price gauging during a hurricane not only acceptable but also necessary to the economy. There is a Hugh difference between prices fluctuating in a free market system because of natural supply and demand and people taking advantage of a natural disaster or war to profiteer. Supply side economics seems to make all increases in profit acceptable no matter who it
Democrats say that retailers are price gouging. And regulations and fuel prices have nothing to do with it. In fact we need more regulations to fix it.
The creation of 'scarcity" by lying when a commodity is not limited is widely practiced. For example, the amount of plywood that can be milled is not limited and never has been scarce. It was the creation of scarcity that created unsustainable prices. The Mills can add shifts and triple plywood creation and minimize the creation of false scarcity. We see the inflexibility of price at work in the USA, today : failure to buy when prices are artificially raised. The failure to buy manufactures 'recessions' as well as depressions. The times of correction of market prices i.e. recessions and depressions, where the consumer just refuses to buy result from the 'market' just giving up and ceasing economic activity (not purchasing items as we currently see in automobiles and housing). Automobiles approaching $100,000 has blown the market, and as in 2008, when a sufficient number of people can no longer afford either rent or to buy a home : the market correction will be a bottoming out of home prices and a mini-depression. In this market as an example, greed creates higher and higher prices and higher and higher lending to support those prices until most are underwater and the default and rush to sell your house before the value craters. For the most part, these cyclic corrections (recessions) are caused by lenders and sellers and not buyers, the default on debt and rent money is shifted to the people who do not cause this issue by those who do cause the problem. And so we can lie to the young and ignorant, but don't kid the older kidders, cause they have seen this all before.
The 'law' of supply and demand will work out in the end for most consumables. Look at EV prices/quality. Without artificial demand and price supports, the consumer will choose the product that best serves HIS/HER needs.
I would be curious how this scenario would apply to Price gouging. Bob’s plywood Sales decrease and the gross profit no longer covers The fix costs of the business. Manufacturers cost increase shipping cost increase and Energy/TRANSPORT prices increase which means bob’s plywood now is forced to increase prices by 30%. So to maintain profit margins on falling Sales, this isn’t Price gouging but the result of A tightening economy… the typical supply and demand theory is destroyed… This was the hangover from covid. Yet people blamed corporations of profit gouging.
I don’t think you are differentiating between capitalism and monopoly capitalism which is where the world is today. The Walmarts of the world can price gouge because they can centrally plan supply and demand by colluding with other big players. They can restrict supply, they have the market power to dominate their suppliers and with their sophisticated supply chain management can really drive down costs. Thus they can set pricing and maintain their desired profit margins. You are correct Bob’s Plywood can do none of this. He’s not price gouging, but trying to survive.
@@whousa642 I have read books and essays on the term. You might want to go over to Amazon books or other sites and lookup the term. It’s true that monopoly capitalism needs the state to protect it.
That last bit about fraud has gone right out the window. Every ad is a lie and it only gets worse because no-one gets sued for false advertisement anymore. There is no truth in advertising any longer
Pharmaceutical companies selling products that dont work or are even dangerous and all that entails getting them approved by the fda, either by fudging safety data or by promising sweetheart deals to board members. Financial institutions buying bad mortgages and packaging them into investment vehicles that when there is a downturn causes investors to lose money. Appliance manufacturers making subpar products or products with inbuilt expiry dates. All these companies that steal our personal data and use it against us. This is just a few i can think of.
What? He describes how the reason for the consumer’s decision was not based on acknowledgement of good of the community but rather due to efficient allocation of their own resources (money), then proceeds to claim it was a conscious and voluntary decision for the good of the community. He literally immediately contradicted himself. What did I miss???
People are eager to scream about Big Corporations … Like Big Oil … making “Billions” in “Profit”. So few understand that those companies are usually making a “NET Profit” of 5% or less annually. That is, for EVERY $1,000 they put at Risk, they are lucky to “make” $50 in a YEAR.
Oil is a high risk, high reward commodity. You can spend a fortune and discover none, but if you do it’s a lot of revenue. It draws a lot of the ‘anti-profit’ simpletons for this reason. They cannot wrap their head around all the dollars lost finding nothing. They use the revenue of the oil, minus the cost to the oil company company during the extraction process, refer to that as ‘profit’, and then conclude something sinister has occurred
There's no such thing as price gouging as long as you ignore the last 250 years of history. As long as you ignore that fact that companies are convicted of collusion all the time. As long as you ignore the fact that rich people are dominated by greed and will do literally anything to get more money. The free market works under it's assumptions, which are many. In this case the assumption is that no buyer or seller has price setting power. That's rarely true. Capitalism is a winner-take-all game and it doesn't take many years for some some to get very rich and many to get very poor. That's enough to break the assumptions of the free market. That's why pretty much ever nation on earth regulates it's markets. People don't know that laissez-faire capitalism in France turned into a horror movie in a couple of generations. Some got morbidly rich and most were left with nothing. Rather that sit and wait to die the peasants rose up and chopped the heads off of most of the rich. The social welfare net we have today is/was an attempt by the rich to avoid the head-chopping phase again. It's mostly worked. Today the rich believe they can avoid the head-chopping phase by mind-controlling the peasants with fascist propaganda. Give them a mighty ruler to praise and some boggy men to fight and watch them spin. Only time will tell how well that will work.
Wonderful speech, but doesn't claim price gouging is a myth. Even finishes saying, while talking about being fair, "engages in open and free competition without deception and fraud." I wonder how he'd feel about allegations of collusion to raise rent prices using third party companies to artificially raise it breaking the rules of a fair market.
His speech doesn't demonstrate price gouging is a myth but confirms that price gouging exist, is common, and a direct result of supply and demand, which increases as a result of disaster conditions.
Every industry needs to be treaded separately. Anyone can cherry pick one industry example, but there is no one economic theory that works effectively for all industries. Some industries work great as open markets, with lots of competition, varieties, and capital investment, help drive productivity and development to answer demand. Some industries are natural monopolies where it is only possible for one organization to answer demand in a region. There is no open market, there is no competition. In these industries an unregulated profit motive causes disaster and suffering. The best fit is a central government organization. Some industries have no profit motive, or where profit motive is socially damaging. The best fit is NGO or Social Collective organizations. For profit electricity grids are as stupid as government run bakeries. Neither will be good for citizen prosperity. We need to let go of the cold war propagandist idea that a country needs to pick one or the other. A mixed economy managed by a citizen representative government is the obvious best choice if we could all just forget the BS terms everyone uses, but no one understands.
Yes, and no matter what the theorists argue, mixed economy is a fact for that very reason. Yes, there is a pendulum like movement within what is included in that mix, but mixed it is!
@Sidtube10 they love the "no true scotsman" argument to reinforce the loyalty to the theories, but it really is true. There never has been a pure Capitalist, Socialist or Communist nation ever. They are all mixed. All the national loyalty to one term or the other was used by the wealth elite in all nations on all sides to create inefficiencies in the management of industries. These points of inefficiency cause pockets of corruption and funnels of wealth away from citizens toward the wealth elite.
I choose to pay the electric company for the convenience. You have the freedom to buy solar, wind, hydro, etc. or even invent a new source of energy production. Just because it’s easy to hook up to the grid doesn’t mean it’s the only way. Monopolies only exist when government makes competition illegal
@Woodshedphilosophy an electricity GRID is an example of a natural monopoly where no competition is possible. It is extremely impractical to run multiple electricity lines to your house. Multiple gas lines. The only reason you have more than one network connection to your house is that it used to be one for telephone and one for TV. There are some industries where it is just exponentially more efficient to have fewer companies, like staple grocery distribution. There is just a minimum size company for efficiency in anything but micro niche capacity, so there in only a small handful of companies in the industry for the entire nation and it is impossible for any new competitors to get in. It is a natural oligopoly, same as fuel distribution. You also notice there is one political side fighting for your rights to install solar/wind and break free from the electric grid monopoly. Though most of us will still be connected to the grid in one way or another. There is another party fighting to keep us all reliant on a petroleum fueled electricity grid. I much prefer the electricity made closer to the consumer, owned and run by the consumer or their local community. To give competition to the monopoly grid.
I have to disagree with this guy. if we were at the same level of income and economic opportunity, then price gouging would make sense per examples provided by the speaker or the proponent of price gouging. But we all are not at the same economic level. The price gouging hurts the poor and economically disadvantaged. For the hotel example the family doubles up, and frees a room for someone else. With prices doubled, a family less disadvantaged economically, has to find public accommodation. Because , it was hard to afford the normal price of a room, now that it doubleed in prices, they can sleep in street or look for public shelters.
When crude oil prices dropped from over $100 / barrel in 2012, to between $38 and $60 / barrel from 2016 - 2020, what caused that? Did the oil companies suddenly decide to not to gouge?
@@carnakthemagnificent336 Here's why you dope. In 2012 increased U.S. oil production reached over 6 million barrels per day, the highest level since 1998. This contributed to building U.S. crude oil inventories, putting downward pressure on oil prices. Global Economic Concerns: There were concerns about lower oil demand due to a slowdown in the global economy. Supply and Demand Dynamics: The balance between supply and demand played a crucial role. Increased supply, particularly from the U.S., coupled with concerns about demand, led to a decrease in prices.
What was inaccurate? When people work harder to deliver higher priced products to people in great need, the people delivering the products are acting in their own interest.
It's not that I don't agree, I'm a big fan of the concept of the free market and allowing a free society to heal itself naturally rather than by outside interference, but we are so far from having a free-market at this point that the concept is hardly recognizable anymore.
@@GlasbanGorm in a free market, cartels are unstable and don’t last, unless kept in place by the gov. Case in point: the Fed (gov) keeps the banking cartel in place. Same with monopolies.
Explain how moving product 1000 miles increases its price by 60% which has little relationship to transport costs as the product has travelled several thousand miles to get to the first port of call and the same mode of transport is used throughout to get it to the second port of call?
You didn’t listen to a thing did you? It’s not just the transport costs. Using his example. The demand for plywood has doubled. Therefore, the price goes up until the market can adjust to a point where production of plywood matches the demand. The price will go down when the demand goes down. It’s not rocket science. The price will always remain high until the production of whatever product is rises to match demand, whereby the price will stabilise or go down. Read Thomas souls, book basic economics. If you don’t educate yourself, you will not understand the dynamics of the market.
Haha ... really ? So ... the available room in the hotel it will be taken by another ...family ... who has the same ability to spend ? or it will remain empty ?
Another family who actually NEED the room will spend the money for the available room of hotel... Demand goes up, prices(of rooms) will rise if supply(rooms available) is limited. Until, there is actually more rooms supplied or available to meet that demand for prices to lower.
@@dsgio7254 B/c, in the example that Dr. Williams explained in the video, the "previous family" wanted to rent TWO rooms but the cost of renting in the hotel doubled and ended up renting ONE. Leaving the extra room available to rent for the second family who didn't have a room.
If there is a single law on the books which compels corporations to be socially responsible, someone please let me know. They are legally required to maximize profits for shareholders, so whenever profit and social responsibility are in conflict, there is zero doubt which one the corporation will sacrifice.
I learned about Walter Williams through Rush Limbaugh. I learned about Thomas Sowell through Walter Williams. Thank you Rush!
I agreed with much of what Rush Limbaugh said. I agreed with EVERYTHING Dr. Williams said.
@@wolfpat Yes, same here, and Thomas Sowell was in there as well. All had great minds that were an education to others every time they spoke.
I learn about him through G. Gordon Liddy's show that was on before Rush, in fact I was introduced to Thomas Sowel on Liddy's show also.
Really enjoyed when Walter Williams and Thomas Sowell would fill in for Rush.
Those two together were a hoot talking bout experiences and esp Walter lining out his wife.
Godspeed Mr. Williams. You left us too soon.
Oh! We need him now.
@@DennisSullivan-q2rwe have him here
RIP kind sir. Your words are still heard loud and clear.
🤢🤮
Why couldn't Walter Williams or Tom Sowell have been our first Black President?
Because they were smart.
they didn't suck up to Oprah
your not kidding ,i wish too
Too smart to run.
MYSTERY BABYLON
Every follower of Robert Reich’s channel needs to watch this video - including Mr Reich himself.
I believe Robert Reich knows what he says is nonsense - He says it because he has an other, bigger agenda.
The stump hates God because he is a stump, therefore his views.
I wanted to end it when my ENGLISH teacher assigned us to read robert reich
I am so sorry that he's gone RIP Dr. Williams.
He was a smart man and very much appreciate learning from him.
Miss this man!
Could listen to Dr. Williams and Dr. Sowell all day long, but I have a social responsibility to increase my profits.
@@90rightangle2 Indeed so, and if we forget this part of the social equation, our wives and children will
be very happy to remind us of our duties. 😉
"Because if I don't tell you these things you're going to live the rest of your life not knowing them." Haha, what a great line!
He was a brilliant man. And to those who recall his wise words, he still is a brilliant man; on of the 3 giants in economics: Milton Friedman, Thomas Sowell, and Walter E. Williams.
👍
I have been following your page for the last 12 years (Ron Paul 2012). Good to see you're still going!
Beautiful. I have always loved reading and hearing Dr. Williams.
I had a progressive teacher in middle school who taught what I later learned was Keynesian economics. It made perfect sense to me, that is, until I learned more about economics as an adult.
What did you learn as an adult?
@@paulfrye2962I'd assume Austrian economics
@@mattyingling9020 you can assume which ever economics you wish. Our current situation is not an economic process. It's a greed situation.
@@paulfrye2962 inflation caused by government greed.
@@paulfrye2962 yes government greed
In other words, free markets maximize social good and, by implication, intervention reduces social good.
Ah yes. But some markets aren’t totally free and they need controls. Healthcare is an obvious one. Serious healthcare is far from a free market.
NO all free markets maximize the social good, even health care
@@barryhaley7430nope. Healthcare is messed up because of controls on it. A free market is better.
@@ExPwner By definition, a free market is one where both the seller and the buyer are on equal footing. Neither have power over the other. So, say in the case of a potential car buyer, the dealer and the customer are on equal footing. They can negotiate terms that satisfy both. The parties must come to an agreement that both benefit.
The dealer has no power over the customer and the customer can always choose another dealer or to not buy a car at all.
Now on to healthcare. Your child comes down with Leukemia. You are not on equal grounds with the medical system. They have you by the balls.
The US has the highest healthcare costs by far. About 17 % of GDP compared to 11-12% for the rest of the developed world. That would even be questionable if the US had the best healthcare performance outcomes. But it’s not even close. Out of the top 11 top economies the US ranks 11th. The top 9 are all European except Australia and New Zealand. Canada was 10th.
All 10 had some form of universal healthcare.
In a genuine competitive market.
All this falls apart with massive industry consolidation, oligopoly and monopoly markets.
Then all the supply/demand pricing theories all get tossed out.
No Truer Words Spoken Mr. Walter E Williams!
Walter E Williams expressed it so well, demand often represents need. when people need resources above and beyond what is usually necessary the price Rise brings the resource to them, and people in other areas who end up having to pay the higher price because they also need the resource our only Subject to the fact that there is a greater demand a greater need for that resource not that somebody is trying to punish them. It is not a punishment, It is merely representative of the fact That resources are scarce And when the demand for them goes up everybody has to pony in if they want them. Dr Williams was a genius, we should all listen to his wisdom. rest in peace Sir.
What's the profit percentage, Kamala? Every business has record profits when the inflation is out of control. It's the percentage that matters.
You expect an answer when she hasnt even announced a real policy? 😆
That sir, is one fact that liberals always seem to ignore. They choose to quote the bottom line number because it fits their narrative.
I do not understand this statement, "Every business has record profits when inflation is out of control".? Is this proposing inflation has gotten out of control and many companies profited, because it spanned for more than enough time, to factor in a percentage???
@@rafaelgonzalez4175 The way profits are recorded is in pure numbers. They don't post profits in percentages. So when money is inflated, the numbers go up. They will always set records as long as they are profitable.
Example: Say I'm a profitable business who is doing average business. Nothing changes with regards to the amount of business or percentage I'm charging on top of my costs. If money inflates, my numbers I report inflate.
Before the inflation I might report $1.1 million dollars gross income. After the inflation I might report $1.7 million dollars gross income. In both scenarios I am still sticking to a low ~2% profit margin, but it looks like I'm making insane amounts of money to people who don't understand numbers.
@@rafaelgonzalez4175profit percentages haven’t materially changed. The absolute profit numbers are up because inflation has so significantly devalued the dollar.
Price is determined by the law of supply and demand. Why reinvent the wheel. It works just fine.
Not to people on the shit end of the stick of economic inequality ... nor those pandering to these people for votes ☹️
The 'law of supply and demand' was the result of a koolaid party.
@@mrparkerdanWork 18 hours a day with more intensity
Why do we pay for water even bottled water when the supply has never decreased and the demand has more than exponentially increased and the bottling company makes varying beverages from water to sell to the consumers? Also why is water the same cost, when the soda has a greater demand for more ingredients?...
@@mrparkerdan Supply and demand in a capitalist country has no economic inequality or equity or equality. In fact economics has nothing to do with capitalism. Capitalism has nothing to do with supply and demand. Demand is about it...
I miss him ..B1$
I think the reason the layman struggles so much with this concept is that as consumers we only see the economy from the perspective of consumers. We rightly understand that consumption plays a role in wellbeing, and we correctly observe that prices place consumption behind a paywall. The mistake is believing that that is the whole story. What people miss is that production is also behind a paywall- not because of greed, or because of some particular economic system, but because of the laws of physics themselves. Paying for goods and services means allocating resources towards the production and distribution of those goods and services, which is what makes supply possible. This is always important for the things we would like to consume, but becomes doubly so during a shortage or crisis. It is in your interest to ensure that your suppliers are turning a profit.
Loved Dr. Williams. Sure miss him today.
I love the look on the faces of people who think "corporation greed causes inflation" when you show them profit margin %s haven't gone up lmao
It is called consolidation, and secondary is a weird effect where higher costs increase profit without increasing margin.
Industry consolidation leads to an effect where the same margin but higher volume per company, leads to more executive compensation, and more net income, for more shareholder return. So the workers are making the same amount, but the executive and majority shareholder are making a lot more. This causes income/wealth gap to grow.
Also, if retailers are calculating prices based of margin, there is a weird phenomenon where increased cost at the same margin, then increases net profit. So it demotivated companies to reduce hard product cost, even collude with supplier friends to pay a higher price for goods they sell at margin.
$1 cost per unit sold with 20% margin means $1.20 consumer price and $0.20 profit per unit.
$1.50 cost per unit sold with 20% margin means $1.30 consumer price and $0.30 profit per unit.
Margins haven't changed but net profit goes up. Consumers pay more and executives make more, workers get screwed.
@@5353Jumperyou just proved my point lol you said all that just to say "profit number bigger" which means nothing when profit margin %s stay the same. If profit margin %s remain the same there is no price gouging occurring those evil profit numbers go up due to inflation. That said sure companies could pay workers more. Cope
@@5353Jumper
What a bunch of gibb/erish from you.
For instance, you make the verifiably false claim that “net profits have gone up”. No, no they haven’t, certainly not as part of a long term trend once inflation is adjusted for, as your statement and incorrect analysis suggest they have; at least not from 2019 to now as the false allegation that “corporate greed” causes inflation become a political taking point.
@@5353Jumper
To even lend one drop of feasibility to your overly simplified, largely non/sensical “analysis”, as a NECESSARY, but NOT sufficient condition, you need to show that workers pay as a portion of total revenue has SIGNIFICANTLY DECREASED, while CEO pay as a percentage of revenue has SIGNIFICANTLY INCREASED to the point that as kept the margins THE SAME as net revenue and net income (profit) increased.
So, where is your DATA, your REAL EVIDENCE, or are you just spinning a narrative?
@davidmajor1508 well if we really want to get into it we would have to consider that nearly zero products are priced based on costs or margin at all.
But if you want evidence all you need to do is look up all the media about companies posting/reporting record profits during these times of "high inflation". These profits then go to executive bonuses and short term shareholder returns.
There are lots of graphs out there showing executive compensation vs worker compensation.
Economic Policy Institute: The productivity-pay gap shows how the value of production has gone up by over 1.2% per year since 1980 but the worker compensation has only gone up only 0.3%. Meaning the value of production grows 4x faster than worker compensation.
Mr Williams is another brilliant mind. I wish he was here to shine light on, or even help correct, some of the nonsense in 2024.
Fascinating. This is a perspective I had never considered. And it makes perfect sense.
Brilliant man, Mr Williams. RIP
Wenn das nur alle Sozialdemokraten in Deutschland verstehen würden...
Walter Williams was a National Treasure!!!!!
Walter WiIliams was a great defender of Liberty. We are all worse off for his passing.
Man, do I miss Walter Williams guest-hosting the Rush Limbaugh show. He was a fabulous explainer and presenter. RIP Mr. Williams, we wish you were still with us. Of course, I miss Rush, too!
Prices are signals, not punishment or unjust enrichment. People don't understand that our modern, plentiful world relies on prices; without them it would be a mess of inefficiency, waste, and unavailability. In a disaster situation, bottled water and plywood ARE worth more, and their price should reflect it.
ALWAYS LOVE LISTENING TO THIS MAN! I was saddened by his passing as another logical and intelligent mind and voice of the people disappeared! R.I.P. Sir!
Supply and demand is the root of fair pricing ... not bureaucrats with pencils forcing prices based on their political whims.
Dr Walter Williams, like Dr Thomas Sowell are great Americans who ought to be listened to ... "carefully", instead of the media blather from politicians.
Right. There is no price gouging. There is only supply and demand. If there’s a hurricane and no one around has food or fresh water, you can become rich instantly by charging what the market will bear for those things. After all, what mother whose children are literally dying of thirst will not only give you all the money she has… but will also offer you her body in exchange for a quart of water? Heck, she might even give you the deed to her home….
It’s a straight up business model these days. Claim you have a shortage, drastically raise prices, gently bring them down a little over time, watch profits soar.
Thank you sir for your shared knowledge
Perfect lecture.
Or imagine that bottled water is scarce after a hurricane. If the store owner charges $5 a bottle instead of the usual price of $1, people will buy only what they need (rather then buying 20 bottles and emptying the shelf) and there will be water for those who come later. It is better to have water at $5 a bottle than no water at all. And then remember that the condition is only temporary. The scarcity disrupts the market until supplies are replenished - maybe several days later.
rationing.
What was the date of this talk?
Totally different today than what he's talking about because every store in the United States of America are not price gouging it's because of inflation is so high we can't afford to buy anything
I used to listen to G. Gordon Liddy way back before Rush, he would have Walter on the show all the time, that's how I was introduced to this .
Wow he really put a spin on it, making price gauging during a hurricane not only acceptable but also necessary to the economy. There is a Hugh difference between prices fluctuating in a free market system because of natural supply and demand and people taking advantage of a natural disaster or war to profiteer. Supply side economics seems to make all increases in profit acceptable no matter who it
Uncle Walt was wise beyond these times
Good timing thank you
Democrats say that retailers are price gouging. And regulations and fuel prices have nothing to do with it. In fact we need more regulations to fix it.
The creation of 'scarcity" by lying when a commodity is not limited is widely practiced. For example, the amount of plywood that can be milled is not limited and never has been scarce. It was the creation of scarcity that created unsustainable prices. The Mills can add shifts and triple plywood creation and minimize the creation of false scarcity. We see the inflexibility of price at work in the USA, today : failure to buy when prices are artificially raised. The failure to buy manufactures 'recessions' as well as depressions. The times of correction of market prices i.e. recessions and depressions, where the consumer just refuses to buy result from the 'market' just giving up and ceasing economic activity (not purchasing items as we currently see in automobiles and housing). Automobiles approaching $100,000 has blown the market, and as in 2008, when a sufficient number of people can no longer afford either rent or to buy a home : the market correction will be a bottoming out of home prices and a mini-depression. In this market as an example, greed creates higher and higher prices and higher and higher lending to support those prices until most are underwater and the default and rush to sell your house before the value craters. For the most part, these cyclic corrections (recessions) are caused by lenders and sellers and not buyers, the default on debt and rent money is shifted to the people who do not cause this issue by those who do cause the problem. And so we can lie to the young and ignorant, but don't kid the older kidders, cause they have seen this all before.
The 'law' of supply and demand will work out in the end for most consumables. Look at EV prices/quality. Without artificial demand and price supports, the consumer will choose the product that best serves HIS/HER needs.
Thomas Sowell, Walter Williams, Milton Friedman, all GOATS
Add Friedrich Hayek and Ludwig von Mises to the all-star team.
I always enjoyed listening to Dr. Williams when he would stand in for Rush Limbaugh.
Building a structure for a "dog" is far more important in the hierarchy of priorities.
Still can't believe he is gone! An incredible patriot and thinker for America.
Rationing is the word he is looking for. The price increase does the rationing.
thats all fine as long as we are talking about FREE MARKETS ,does that include walmart,amazon,apple,boeing,conagra,phyzer,ford,and ,hersey, tyson?
Do you mean to tell me that people act morally because of higher prices!?
What will they find out next? I am interested to know if water is wet.
One could claim anti gouging laws are one of the rules, hence that is entirely consistent with Milton Friedman's idea of social responsibility.
Thanks for sharing
👏👏👏👏👏👏👏👏
Although these days people value the dog more than people......as they did when ancient Rome fell.
I would be curious how this scenario would apply to Price gouging.
Bob’s plywood Sales decrease and the gross profit no longer covers
The fix costs of the business.
Manufacturers cost increase shipping cost increase and Energy/TRANSPORT
prices increase which means bob’s plywood now is forced to increase prices by 30%.
So to maintain profit margins on falling Sales, this isn’t Price gouging but the result of
A tightening economy… the typical supply and demand theory is destroyed…
This was the hangover from covid. Yet people blamed corporations of profit gouging.
you are mixing government action with free market
I don’t think you are differentiating between capitalism and monopoly capitalism which is where the world is today. The Walmarts of the world can price gouge because they can centrally plan supply and demand by colluding with other big players. They can restrict supply, they have the market power to dominate their suppliers and with their sophisticated supply chain management can really drive down costs. Thus they can set pricing and maintain their desired profit margins. You are correct Bob’s Plywood can do none of this. He’s not price gouging, but trying to survive.
@@sunnyandbreezy there is no such thing as monopoly capitalism. Look up what monopoly is. Monopoly always needs government.
@@whousa642 I have read books and essays on the term. You might want to go over to Amazon books or other sites and lookup the term. It’s true that monopoly capitalism needs the state to protect it.
It's business, hotels rates change on weekends or when big events are forecast, airshows,superbowls,eclipse etc.
thought it was price guaging 😂. RIP Dr. Williams, you are missed.
That last bit about fraud has gone right out the window.
Every ad is a lie and it only gets worse because no-one gets sued for false advertisement anymore. There is no truth in advertising any longer
Cognitive dissonance
Do consumers suffer horrid public disaprobation when the business cuts prices or must reduce them? Didn't think so.
The last part is the most important. However nowadays there is great deception and fraud from major corpos, causing suffering around the world.
Can you give examples?
Pharmaceutical companies selling products that dont work or are even dangerous and all that entails getting them approved by the fda, either by fudging safety data or by promising sweetheart deals to board members. Financial institutions buying bad mortgages and packaging them into investment vehicles that when there is a downturn causes investors to lose money. Appliance manufacturers making subpar products or products with inbuilt expiry dates. All these companies that steal our personal data and use it against us. This is just a few i can think of.
Bad parents. Can't have good price.
Somebody show this to Kamala Harris
What? He describes how the reason for the consumer’s decision was not based on acknowledgement of good of the community but rather due to efficient allocation of their own resources (money), then proceeds to claim it was a conscious and voluntary decision for the good of the community. He literally immediately contradicted himself. What did I miss???
People are eager to scream about Big Corporations … Like Big Oil … making “Billions” in “Profit”.
So few understand that those companies are usually making a “NET Profit” of 5% or less annually.
That is, for EVERY $1,000 they put at Risk, they are lucky to “make” $50 in a YEAR.
Oil is a high risk, high reward commodity. You can spend a fortune and discover none, but if you do it’s a lot of revenue. It draws a lot of the ‘anti-profit’ simpletons for this reason. They cannot wrap their head around all the dollars lost finding nothing. They use the revenue of the oil, minus the cost to the oil company company during the extraction process, refer to that as ‘profit’, and then conclude something sinister has occurred
Aaaaand there you go.
Kamala should go after Apple for price gouging
The myth of theft?
The myth of lies?
The myth of evil?
There's no such thing as price gouging as long as you ignore the last 250 years of history. As long as you ignore that fact that companies are convicted of collusion all the time. As long as you ignore the fact that rich people are dominated by greed and will do literally anything to get more money.
The free market works under it's assumptions, which are many. In this case the assumption is that no buyer or seller has price setting power. That's rarely true. Capitalism is a winner-take-all game and it doesn't take many years for some some to get very rich and many to get very poor. That's enough to break the assumptions of the free market. That's why pretty much ever nation on earth regulates it's markets.
People don't know that laissez-faire capitalism in France turned into a horror movie in a couple of generations. Some got morbidly rich and most were left with nothing. Rather that sit and wait to die the peasants rose up and chopped the heads off of most of the rich. The social welfare net we have today is/was an attempt by the rich to avoid the head-chopping phase again. It's mostly worked.
Today the rich believe they can avoid the head-chopping phase by mind-controlling the peasants with fascist propaganda. Give them a mighty ruler to praise and some boggy men to fight and watch them spin. Only time will tell how well that will work.
The religion/myth that the "free market" actually exists and it is the solution to all that ails humanity has no basis in reality.
Wonderful speech, but doesn't claim price gouging is a myth. Even finishes saying, while talking about being fair, "engages in open and free competition without deception and fraud." I wonder how he'd feel about allegations of collusion to raise rent prices using third party companies to artificially raise it breaking the rules of a fair market.
His speech doesn't demonstrate price gouging is a myth but confirms that price gouging exist, is common, and a direct result of supply and demand, which increases as a result of disaster conditions.
❤❤❤
I Agree!!!
Gouging stops hoarding.
Like the Myth of Capitalists??
BLACK by popular demand!!!
Kroger stock price 2020, Kroger stock price 2024.
So devil’s advocate would say why not keep prices to high all the time..
and that would not work
Where is the explanation of the Myth of Price Gouging?
Doesn't even use the term.
Why don't we have laws against socialism?
Interesting thesis but this hardly helps those who need plywood. It is still expensive for them. Therein lies the rub.
nonsense
@@whousa642 Oh yeah they decided to make it cheap for those who need it sure.
@@johnnotrealname8168 nonsense
@@whousa642 Exactly. They would not which is the problem.
@@johnnotrealname8168 are you a child
Every industry needs to be treaded separately. Anyone can cherry pick one industry example, but there is no one economic theory that works effectively for all industries.
Some industries work great as open markets, with lots of competition, varieties, and capital investment, help drive productivity and development to answer demand.
Some industries are natural monopolies where it is only possible for one organization to answer demand in a region. There is no open market, there is no competition. In these industries an unregulated profit motive causes disaster and suffering. The best fit is a central government organization.
Some industries have no profit motive, or where profit motive is socially damaging. The best fit is NGO or Social Collective organizations.
For profit electricity grids are as stupid as government run bakeries. Neither will be good for citizen prosperity.
We need to let go of the cold war propagandist idea that a country needs to pick one or the other. A mixed economy managed by a citizen representative government is the obvious best choice if we could all just forget the BS terms everyone uses, but no one understands.
Yes, and no matter what the theorists argue, mixed economy is a fact for that very reason. Yes, there is a pendulum like movement within what is included in that mix, but mixed it is!
@Sidtube10 they love the "no true scotsman" argument to reinforce the loyalty to the theories, but it really is true. There never has been a pure Capitalist, Socialist or Communist nation ever. They are all mixed.
All the national loyalty to one term or the other was used by the wealth elite in all nations on all sides to create inefficiencies in the management of industries. These points of inefficiency cause pockets of corruption and funnels of wealth away from citizens toward the wealth elite.
I choose to pay the electric company for the convenience. You have the freedom to buy solar, wind, hydro, etc. or even invent a new source of energy production. Just because it’s easy to hook up to the grid doesn’t mean it’s the only way. Monopolies only exist when government makes competition illegal
@@Sidtube10name something the government does well. Then tell me what industries the government should run
@Woodshedphilosophy an electricity GRID is an example of a natural monopoly where no competition is possible. It is extremely impractical to run multiple electricity lines to your house. Multiple gas lines. The only reason you have more than one network connection to your house is that it used to be one for telephone and one for TV.
There are some industries where it is just exponentially more efficient to have fewer companies, like staple grocery distribution. There is just a minimum size company for efficiency in anything but micro niche capacity, so there in only a small handful of companies in the industry for the entire nation and it is impossible for any new competitors to get in. It is a natural oligopoly, same as fuel distribution.
You also notice there is one political side fighting for your rights to install solar/wind and break free from the electric grid monopoly. Though most of us will still be connected to the grid in one way or another. There is another party fighting to keep us all reliant on a petroleum fueled electricity grid.
I much prefer the electricity made closer to the consumer, owned and run by the consumer or their local community. To give competition to the monopoly grid.
Him or Thomas Sowell should've been the first black president
I'm not sure what the hell this guy is saying, support the price gouging it's good for society? That's what I'm getting out of this shit
I have to disagree with this guy. if we were at the same level of income and economic opportunity, then price gouging would make sense per examples provided by the speaker or the proponent of price gouging. But we all are not at the same economic level. The price gouging hurts the poor and economically disadvantaged. For the hotel example the family doubles up, and frees a room for someone else. With prices doubled, a family less disadvantaged economically, has to find public accommodation. Because , it was hard to afford the normal price of a room, now that it doubleed in prices, they can sleep in street or look for public shelters.
Yeah right, the major oil corporations never gouge.
When crude oil prices dropped from over $100 / barrel in 2012, to between $38 and $60 / barrel from 2016 - 2020, what caused that? Did the oil companies suddenly decide to not to gouge?
@@carnakthemagnificent336 Here's why you dope. In 2012 increased U.S. oil production reached over 6 million barrels per day, the highest level since 1998. This contributed to building U.S. crude oil inventories, putting downward pressure on oil prices. Global Economic Concerns: There were concerns about lower oil demand due to a slowdown in the global economy. Supply and Demand Dynamics: The balance between supply and demand played a crucial role. Increased supply, particularly from the U.S., coupled with concerns about demand, led to a decrease in prices.
The second he said social interest I lost interest.
Bull shit! It's unethical and illegal.
Only a low-life POS would rip someone off in their time of need.
This is not an accurate analysis of human motives. People always act in their own self-interest regardless of the situation.
What was inaccurate? When people work harder to deliver higher priced products to people in great need, the people delivering the products are acting in their own interest.
It's not that I don't agree, I'm a big fan of the concept of the free market and allowing a free society to heal itself naturally rather than by outside interference, but we are so far from having a free-market at this point that the concept is hardly recognizable anymore.
Yes but she’s just gauging, doh!
Cartels exist. Monopolies exist. This is reality not abstract thought.
They do but monopolies usually exist because of government!
@@GlasbanGorm in a free market, cartels are unstable and don’t last, unless kept in place by the gov. Case in point: the Fed (gov) keeps the banking cartel in place. Same with monopolies.
Cartels and monopolies don't suddenly appear during a disaster. Your statement is intentionally dishonest.
@@jumboshrimps4498what if the disaster was artificial and intentional?
@@mrparkerdan So you'll be okay with price increase as long as it's natural disaster?
Explain how moving product 1000 miles increases its price by 60% which has little relationship to transport costs as the product has travelled several thousand miles to get to the first port of call and the same mode of transport is used throughout to get it to the second port of call?
You didn’t listen to a thing did you? It’s not just the transport costs. Using his example. The demand for plywood has doubled. Therefore, the price goes up until the market can adjust to a point where production of plywood matches the demand. The price will go down when the demand goes down. It’s not rocket science. The price will always remain high until the production of whatever product is rises to match demand, whereby the price will stabilise or go down. Read Thomas souls, book basic economics. If you don’t educate yourself, you will not understand the dynamics of the market.
@@rogerthornhill1491 So monopolies didnt play a role in the current situation ? you think ?
@@rogerthornhill1491 - Nice try, Roger. Or, should I say George Kaplan? 🤔
@@rogerthornhill1491 The contention that demand is the only driver of pricing is fatuous.
Haha ... really ? So ... the available room in the hotel it will be taken by another ...family ... who has the same ability to spend ? or it will remain empty ?
Another family who actually NEED the room will spend the money for the available room of hotel... Demand goes up, prices(of rooms) will rise if supply(rooms available) is limited. Until, there is actually more rooms supplied or available to meet that demand for prices to lower.
@@ggefryg Why the previous family did not "really" "need" the room ?
@@dsgio7254 B/c, in the example that Dr. Williams explained in the video, the "previous family" wanted to rent TWO rooms but the cost of renting in the hotel doubled and ended up renting ONE. Leaving the extra room available to rent for the second family who didn't have a room.
@@ggefryg Yes - why you said that they did not need the room really ? Any reason ?
I find this man to be brilliant, but not this time. Easy words when living high on the hill. Sheer nonsense in the moment.
If there is a single law on the books which compels corporations to be socially responsible, someone please let me know. They are legally required to maximize profits for shareholders, so whenever profit and social responsibility are in conflict, there is zero doubt which one the corporation will sacrifice.
And, of course the paid commentators.