The Soviet-ness of Supply Side Economics

I was sitting in a macro-economics class in college when Reagan announced a dramatic change in decades of Keynesian economic policy.  He was shifting the United States economic policy from demand-side economics to supply-side economics.  Keynesian economics had been used since the great depression, and is generally referred to "demand-side" economics.  It essentially states that the demand for a product will drive the supply.  Prior to that, aggregate supply-side economics had been employed.  I remember on that day that my economics professor had simply stated that supply-side economics was a robber baron's wet dream, in essence, and wouldn't serve the general populace well.  The problem with supply-side economics is that it estimates demand, irrespective of what actual demand -- or critical need -- may be.

Which brings us to today, the complete lack of the basics one needs to successfully navigate a pandemic, and a sudden realization:  Supply-side economics is Soviet.

I'll say that again: Supply-side economics, re-introduced by Reagan and the "conservatives" [sic] in the 1980's actually mirrors the model used in Soviet Russia.

That's right: The flag wavin', flag wearin', flag huggin' "patriots" have modeled economic policies on the Soviet Union.

It is for this reason that you can't find: toilet paper, paper towels, hand sanitizer, N95 masks, rubbing alcohol and a variety of other basic necessities.  The PROBLEM is this: companies produced only enough for a few days, rather than keeping a supply on hand.  That is, rather than letting demand drive the market, they've let supply drive the market.  The problem with this is that it makes a flawed assumption: that supply chains, environments and workflows will change only slightly, never dramatically.

This is, of course, foolish.

It's foolish because the universe -- and our world in it -- is anything but static.  It is anything but changeless.

It is, however, predictable.  All you need to know is a bit of history, and maybe a smattering of physics.

Armed with these tools you could easily see how a civilization that based it's existence on a 3-day supply of critical goods would completely and utterly fail should the proverbial rug be pulled from underneath it.  And with COVID-19, that is precisely what has happened.  The situation is made worse by an administration interested only in enriching it's most loyal, and really not at all interested in trying to govern effectively, but I digress.  This is about how our alleged "free" market has devolved into a swamp of scalawags and ne'er-do-wells.  This is the reason the quality of products has decreased (while the price has increased).

Supply-side economics dictates that consumers will buy what is available to them.  Period. Demand-side, on the other-hand, dictates that companies will produce as much as is required to meet the demand.  The reason companies don't like this is that it isn't as cost effective.  That is, the stock holders don't see as large a dividend as they might otherwise see.  The upside, of course, is that there is an actual  supply to match the demand.

Short of that, you get what we have here in America today:  Shelves that resemble those in Soviet Russia.

Are we tired of all that winning yet?