Alan Ferdman | Issues for the Next President?

Letters to the Editor
Letters to the Editor
Share
Tweet
Email

I think of Jim de Bree as a friend, yet when I read his commentary of Oct. 10 in The Signal, he sounded like an old man sitting on a bench in front of the general store complaining about all the young folks.

Jim tried to sound collegiate by using terms like “demand pull and cost push.” What he was doing was simply defining “the theory of supply and demand” in a more complex way. Simply put, if demand for a product exceeds the amount of supply available, consumers will compete by paying more to get it and the price goes up. Conversely, if the supply of a product available exceeds customer demand, those selling will compete by lowering prices and the price goes down. That concept has not changed for a very long time.

Jim went further in his explanation by talking about higher wages causing services, costs and prices to rise, thereby causing employees to desire higher future wages, and the process starts all over again. The only time that is untrue is when productivity gained by a process or product change offsets increased costs. An industry where it has worked well is the electronics industry. I think everybody will acknowledge the last time they purchased a television and realize the price of electronics overall has gone down and the reliability of those products has gone way up.

While dockworkers believe they can offset or eliminate automation, they’re in a dream world. You can easily understand the concept every day by watching westerns on television. In each show the cast routinely deals with horse travel, unpaved roads, waiting for their item to come in at the general store, and freight being delivered on horse-drawn wagons.

Why do you think that is no longer true? Did the freight haulers refuse to give up their horse-drawn wagons? No, they did not, because there came a time when freight haulers realized using trucks was far more productive and they could make more money by using them.

I believe the most important thing to realize is, as automation increases productivity, it also creates new jobs with new skills, which are typically higher-paying than the jobs they replace. That has been the way of business since time began and is going to continue no matter what unions or Jim de Bree complain about. The issues for the next president in this area is no different from what faced presidents in the past. How will their administration help maintain our country as the most productive in the world and give our children a better lifestyle than we experienced? That is the question that should be asked.

Alan Ferdman

Canyon Country

Related To This Story

Latest NEWS