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There are numerous ways to teach your children about economics. One way is to average grades. If one child has a B average and another has a C average and one has an A, then give everyone a B. The C-average child will be happy, but the A-average child will not. Next time around, the A-average child might not work as hard and get a B, while the C-average student might do less work, because he will get the B.

It won’t take long before all grade production falls off.

How about this one? Everyone is aware of a toilet paper shortage. How did it happen? Also, why are dairy farmers dumping milk when it’s still in demand? Why is it taking longer for garbage to be picked up at residences? Why have gun sales spiked?

There is a simple economic reason for these anomalies. Conditions changed, therefore people’s economic choices changed. This is something that socialism and communism cannot adapt to. Planned economies cannot adjust and don’t have the means to adjust.

Did you know there’s been a run on web cams? Do you want to guess why?

Billions, possibly trillions, of economic decisions are made every day in the United States. Because of the way people normally make those decisions, companies produce and supply certain goods to the marketplace. Some of these products are delivered daily, some weekly, etc. Businesses plan their workers and inventory based on what is normal and predictable.

COVID-19 was unpredictable. That’s why there were shortages of certain goods and services and an overabundance of others. Suppliers had to adjust quickly. Again, this could never happen under Socialism and Communism.

It happened with toilet paper. Why a run on toilet paper? TP manufacturers have different markets with different types of TP. The TP that we buy for our homes is different from what you will find at, for example, airports and high-rise buildings. The manufacturing, packaging, and shipping are also different.

How many of you remember the TP shortage of 1973, the same year there was an oil shortage and long lines to get gasoline? First, it started that there was a paper shortage, and TP is paper. A few stories in the news elevated the story.

Second, Johnny Carson joked about it. “You know, we’ve got all sorts of shortages these days,” he told 20 million viewers. “But have you heard the latest? I’m not kidding. I saw it in the papers. There’s a shortage of toilet paper!”

Absolute madness ensued. Millions of Americans swarmed grocery outlets and hoarded all the toilet paper they could get their hands on. “I heard it on the news, so I brought 15 extra rolls,” one customer told The New York Times. “For my baby shower,” said another, “I told my party guests to bring toilet paper.” In the chaos, company officers and industry leaders told the public to remain calm; store owners ordered astronomical quantities of toilet paper, and set limits of two rolls per customer. Nobody seemed to play by the rules. (PriceEconomics)

While Carson read a real story about the shortage, “people didn’t realize the story had been about commercial toilet paper and there was a surge of panic buying of consumer-grade toilet paper. This resulted in the stores selling out of the toilet paper they had on the shelves.” (Snopes)

Sounds like today, but there was no TP-shortage rumor. The shortage was because parents and their children were at home 24-7. They needed more TP. Normally, for eight or more hours every day, parents and their children were normally at work and school. They used the school and work bathrooms. This meant that there was less need for TP at schools and businesses that received their TP on pallets and most likely in a different form.

Manufacturers had to rethink production and delivery for home use because the supply and demand chain had changed.

It’s that simple.

Something similar happened with milk production. Dairy cows can’t turn off the spigot. Once again, market demand determined supply and demand. With nearly everyone at home, schools and businesses stopped ordering milk. Milk that’s sold commercially comes in small one-off containers. Milk packaging for homes is different. Retooling to meet a different demand takes time. What could the dairy farmers do with the extra milk? All they could do was dump it since their normal delivery channels had changed. As you know, there is an expiration date for milk.

We received a notice from the company that picks up our garbage early every Wednesday morning informing us that they would be late because there’s more garbage to pick up. Same issue.

Gun sales spiked because of fears that there would be food shortages, break-ins at empty buildings, and home invasions.

Be thankful you live in a country where the free market is mostly free from government control. Also be thankful for the profit motive. Government officials mostly care about being reelected. They can help with that by giving away free money that they produce digitally. It’s a neat trick that you and I can’t do unless we want to face some serious jail time.

Companies that rely on repeat customers will do most anything to produce and distribute their product. It’s the profits that keep them in business. They can’t print money. Service is their way for repeat business. There’s always another supplier one when fails to produce.

The next time you get angry at all the trucks on the highways, keep in mind that they run 24-7 to keep the grocery store shelves stocked.

Read the original story here.

Visit The American Vision here.

Author: Gary DeMar

Gary—who served as President of American Vision for thirty-five years—is a graduate of Western Michigan University (1973) and earned his M.Div. at Reformed Theological Seminary in 1979. Author of countless essays, news articles, and more than 27 book titles, he has been featured by nearly every major news media outlet. Gary also has hosted The Gary DeMar Show, History Unwrapped, and the Gary DeMar’s Vantage Point Webshow and is a regular contributor to AmericanVision.org. Gary has lived in the Atlanta area since 1979 with his wife, Carol. They have two married sons and are enjoying being grandparents. Gary and Carol are members of Midway Presbyterian Church (PCA).

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