Supply and Demand Still Exists: Found on Vacation in the Virgin Islands

Contrary to public opinion, the Law of Supply and Demand (SnD) is still alive and well and vacationing in the Virgin Islands. Some say she’s been down there for twelve months while others put it at only a few weeks.

Noticeably absent is SnD’s longtime partner, Markets.

Though the exact timeline for SnD’s departure from Markets is unclear, sources say that trouble has been brewing for some time.

“Okay,” said one insider, requesting that his identity be kept secret, “let’s just look at the effect it’s having on the children. They’re always the ones to act out, dear things. They bear the brunt.” The insider paused to wipe at his eyes, then blew his nose and cleaned his glasses. “They bear the brunt.”

“Would one child in particular be a good illustration of this?” I wondered.

“Oil,” he said without hesitation. “Oil is really acting out at this time. Oh, I know, she’s always been an unruly child, but as long as SnD was in the home, she at least knew she had guidelines. That’s all changed now that Markets had taken up with that skank, Scarcity.”

“Scarcity?”

“Yes, Scarcity. Markets think that there won’t be enough Oil, that it’s somehow become under-supplied overnight, and so Markets seeks to keep her under his thumb, and not just for right now, but far into the future, when Markets believes that Oil will be so much harder to find.”

I chewed on my bottom lip, considering. “Isn’t that just good parenting?”

“A child needs her mother. What are you, some kind of Nazi?” He glared at me. “No,” he continued, “it’s not good parenting to shack up with an entirely different model. It’s still the same Supply and Demand this year that it was last year, but Markets is reading the papers, listening to the paparazzi, and now his attitude has changed. He thinks Scarcity is the way to go, so Supply and Demand packed up her stuff and went to the beach. I don’t blame her.”

“Is this all Oil’s fault?” I said.

“It’s complicated. Are you some sort of a Philistine? I don’t know that you can even blame the entire thing on Markets, though he certainly behaved abominably.” He threw up his hands and rolled his eyes.

“Well look at Copper, for instance,” he said, shaking out a pack of cigarillos and hanging one from the corner of his mouth. “Copper’s been saying he was going to grow for years now, and Markets would hold steady, not put big restrictions out there or buy up Copper’s futures ahead of time, confident that his son would come through with the extra production, and there would be plenty for all.”

“I suppose it didn’t happen?” I said.

“No it didn’t happen. And Markets got burned, in some cases pretty badly. He claimed Supply and Demand had betrayed him. He took out a page in the Journal and claimed that Supply and Demand just wasn’t working for Markets anymore.”

“And so Scarcity was the new model?”

“That’s the way he saw it,” said the insider as he lit up and took a drag. He blew smoke in my direction.

“So why even deal with models?” I said. “Who cares about models? We just want things to be right and cost what they should.” I stopped at this point, embarrassed by my outburst.

“Oh for heaven’s sake!” he said, throwing down his cigarillo and grinding it beneath the heel of his patent leather boot. “Where do they get you people?”

Calling Geraldo

Where is Geraldo Rivera when you need him?

Here's an msn article by John W. Schoen, senior business producer. In it he mentions that "since some traders have no intention of ever using the oil, prices can also move on just the potential for future changes in supply or demand." Then he goes on to say, "Right now, oil producers — both countries and companies — are among the biggest winners."

I fell out of my chair. Bob, my cubicle neighbor, began to laugh.

"You just read that article on oil prices," he said.

"It's the traders!" I squeaked. "They're traitors!"

"What about the oil companies?" said Bob. "They're raking in the dough, too."

I sat there in the floor, contemplating my navel. It was my x-ray vision that allowed me to see it through my shirt and tie. You know, I like a shirt with a little bit of rayon in it. It hangs better - the extra heft is comforting as well. Oh, sorry.

"Why isn't Geraldo on this?" I said.

"Hey, you're right!" said Bob, snapping his fingers. "It's so obvious that..."

"The oil companies..." I said.

"Have an incentive program," said Bob.

"To futures traders..."

"To artificially run up prices..."

We just looked at each other, frowns creasing our sweaty little foreheads, marvelling over this diabolical bit of brilliance. Obviously, consumption is about as high as it can be... Oh, quibble all you want, but fluctuations at this point are going to be marginal.

But if you can double your pricing in two years without increasing cost very much... Of course, consumers would crucify you - crucify you unless you can blame it on something high and mighty, something the public holds in awe, something pure and yet wholly obscure, something that defies logic and reason, a veritable holy grail... Market Forces!

Market Forces are widely believed to be infallible, infallibility historically being the Pope's province, located somewhere in a broom closet in the Vatican. Market Forces are therefore the perfect foil; in a Market Forces vortex, accountability levels go to zero!

I relayed all this to Bob in a breathless rant. He handed me an unopened water bottle.

"I'll email Geraldo," he said. "This is big."

This is big.