i wanna make this
program for sure well i think that don't
die a class on economics i think the
most important thing that we can do here
at tom harvard university the most
important thing that we can do
is
if we want to prevent a crash irv
learning it's through the coming crash
is understand
economics
it's really a circle
right in size it is uh... when you say
okay how do we define economy while
there's really not a starting point but
but there is the most important point so
let's start there
demand
demand is created by basically three
things
basic human needs people need to eat
they need to sleep they need a whole
number of over their head he needs
desires people want things
these are all things he did so that
makes perfect sense as demand
and paychecks they have to have a way to
fulfill that demand
and in terms of an economy paycheck serb
bmp are doing most important parts
is not a paycheck that income he can't
it needs desires map
so he got a paycheck and you go out you
spend with that
uh... weller ninety percent of americans
spanned
the vast majority well over ninety five
percent of all the money that they make
every single week
spent at the store they spent it at the
movies they spend it for rent they spend
it denotes groceries or whatever that
these so you go to store to buy
something
now the store has to pay the clerk who
helps you out
and the stock boy who stocks the shelves
or girl or whatever and the did the the
uh... uh... uh...
the people who run the the the
missions that the check of machines in
the obvious a billion times ago
all those jobs are created because you
bought something at that store
the stressed by from their wholesalers
they have to buy from their
manufacturers
manufacturers have to get the raw
materials to make their stuff if it's
like paper products they have to go to a
logger
if it's you know mmm
card or is that the original source was
a mind someplace i mean this is
all along the way it started out as
during the ground and has ended up as a
car as as an automobile
great isn't it up as the top of a jar of
of pasta
burrowed tomato sauce for pasta
right and every step along the way for
that thing that you bought in that
supermarket jobs were created to get it
there so you could buy it
and every one of those jobs put money
workers' pockets sonali you the job
creator as the consumer
because you're starting the cycle
by buying something
you're contributing to the money that
goes into the pockets of all these
workers all along the way
and each one of them is going to take
their their paycheck in go to a store
and buy something and bus demand spreads
through the economy
and it all starts with you having a
paycheck
demand is the most important
in this cycle of an economy now uh...
obviously got the man on the once i get
supply on the other
you you have about paycheck and you had
a decaying avenue your desire you go to
the story said i want something
well they've got a habit at that supply
but demand is more important than supply
because
without
demand to those three pieces of demand
a paycheck a needed a desire
without all three of those
released two of three of those the
paycheck and either the new york you
desire
there's no economic activity you can
supply all day long incomplete full
stores
you have people have no money
they can't
generate demand in an economy
now it is true that suppliers can
stimulate demand in calling you kinda
phoning them over the new computer for
example is the stuff that's always
thrown out by you know supply siders are
you know
idea
but the best really proves the point
because if you got a paycheck
people gamble on
desires all day long but they don't have
genuine what's referred to in economics
as demand
custom and it requires the ability to
pay for something
i mean arguably behind you could see
people will
specially when is it still things
that's really not in economic terms
that's not too bad
and this is why the whole idea
supply-side economics is stupid
the real job creators they're the people
who buy things
so what happens when the job creators
the consumers the people you know the
date that the people who buy things in
the us
creatas virtuous cycle
what happens when they can't buy things
kazi they lose their wages are they lose
their entire job
demand collapses
there's no more things to buy mister you
know there's no more buying from the
store
the stories that you're not bein from
the store
the stores are buying from a wholesaler
but also as i buy buy-in from the
manufacturer the manufactures are buying
from the minor or the logger
and at least avalon away all those
people employees
all of their employees are getting laid
off and all of those people now are no
longer able to go to the store and buy
things so demand right down the line
starts to collapse in the economy
spirals into a depression
and this was always the way it was the
united states
from the phony republican tila
nineteen-thirties which is why we never
went more than fifteen years that a
stock market crash in seventeen eighty
seven in nineteen thirty five
but that f_d_r_ the recommendation john
maynard keynes put in a place
stabilizers to prevent these spirals
that are inherent in capitalism
since nineteen thirty five when people
are unemployed they cancel by things
and the reasoning is so by things is cuz
they have unemployment churns insurance
food stamp stuff like that
ever state they still have the ability
of body
additionally government spending
increases demand
when capitalism fails
by hiring people to do things like fix
roads and bridges these people out ajax
so they can resume their role is job
creators spending at the store
and when government spending is high
enough
that downward spiral gets broken in the
economy the economy recovers and the
mother
economy recovers
that people who work in government
paychecks are now they money into the
government actions
and the deficits goal doesn't seem to
cusco
is dr
econ one oh one
pass it along
this is the common argument
and thing that is so astounding to me
is how q conservatives
so obviously nun who watch fox news
dept
