It’s Not About the Economy — It’s About People
Well now, I must say that I am truly impressed that so many people seem to know about that little known thing called “supply and demand.” Why, since I began this discussion about out of control rent prices in the area, I’ve had several people “rebut” my point by showing that, they too, have heard of supply and demand. These folks seem to think that we don’t understand the law of supply and demand. Well, fine. If that’s what you want to talk about, let’s have at it.
Now, I think supply and demand is a fine thing and it encourages all kinds of good things like competition and fair pricing and so on and so forth. Let’s pick a topic other than rent and housing to discuss. I’ll give you a good example of supply and demand: Theater popcorn.
Now, when you go see a movie, you have to have popcorn to add to your viewing enjoyment. We all know that theater popcorn is expensive. The profit margin on a box of popcorn is unreal. The thing is; people are willing to shell out for that luxury. Notice I said “luxury.” There are all sorts of products out there and supply and demand does work in those situations, but let’s talk about supply and demand when it comes to things we need for basic life.
Let’s pretend for a moment. Just for the sake of argument, let’s say that you own a small neighborhood grocery. Now, people in the neighborhood trade with you and, while you may not be bosom buddies with everyone in the neighborhood, you depend on those people and they, to a point, depend on you.
Well, let’s stir the pot here and say that, one day, a disaster strikes the very neighborhood where your store is located. Suddenly, everyone in the neighborhood needs food and water. Meanwhile, here’s you in your store that has a great supply of food and water. You’ve got the supply and, boy, is there ever a demand. Do you jack your prices up to the point where very few people can now afford food and water? Do you then turn to those people who are going without food and water and say, “Hey, this is nothing personal. It’s just supply and demand.” If you’re the kind of person who can look your fellow man in the eye and say such a thing, you may have a lot of money, but you are morally destitute.
I’ve been checking the classified ads lately and I see that, not only are there three or four columns of houses available, but some of them have been listed for quite some time. Sound like a housing shortage to you? Well, I’ll tell you what I think is driving these prices; I think it’s all anticipatory shortage. For months now, we’ve been hearing about how all these people are coming here and there isn’t enough housing. Well, everybody with rental property is all excited. Oh, boy! There’s going to be a housing shortage. I’m jacking up the price of my property right now.
One person pointed out, quite rightly I may add, that if the market won’t bear these prices, the price will come down. About how long does that take would you say? I’m sure that people who are caught up in this artificial housing shortage would like to know when they can find a place to live.
A few people have accused me of wanting some kind of government legislation about all this. In other words, they are trying to label me politically. There is nothing political about this, but let me set you straight right here and now. If the government gets involved with this, we are all in a lot of trouble. the situation is bad enough without the government getting involved.