McDonald’s was not able to sell 10 million pounds of chicken wings from its recent Mighty Wings promotion. So how does the marketplace deal with a surplus of goods?
BusinessWeek tells us, and they actually understand how the process works:
What will the chain do with all that surplus? “We’re bringing back Mighty Wings—stay tuned,” McDonald’s spokeswoman Lisa McComb wrote in an e-mail. Selling off the remainder shouldn’t be a problem, especially since it seems the fast-food giant is planning to bring the wings back at a lower price. (my emphasis)
Translation? The market clears! McDonald’s will lower the price of the wings until they’re all sold.
BusinessWeek is right. It “shouldn’t be a problem”. I’ll be more precise: It won’t be a problem.
Sadly, this example only displays a selective understanding by BusinessWeek of the laws of supply and demand. In the mainstream media, there are times when you’re supposed to ignore supply & demand if it means increasing governmental powers.
Let’s take unemployment. How does the marketplace deal with a surplus of people looking for work? Aren’t the same economic laws at work? Don’t supply & demand still exist? Won’t the market still clear at a certain price?
When it comes to unemployment, BusinessWeek has selective amnesia. Here’s an entire piece on how government should not only have a “minimum wage” but also raise it!
Doesn’t a minimum wage merely outlaw all jobs that could be performed under the government mandated minimum? The government (and obviously its media) pose as people who are trying to help. But outlawing jobs only hurts teenagers, the low-skilled, and the poorest and most vulnerable people in society. In fact, they can do as much damage as they please. What if the minimum wage were raised to $50/hr. I know I’d be out of a job, as well as just about everyone that I know….Would you get the axe as well?
BusinessWeek doesn’t want the market to clear. Instead they support legislating people into unemployment! No job for you….by law!!
Economic laws cannot not be fooled, tricked, or broken. You can’t follow them only when it’s convenient to do so. If BusinessWeek really wanted to help solve the unemployment problem, the headline should read “Abolish The Minimum Wage!”
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