Economic Manipulation

Submitted By cfin93
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What is economic manipulation and is it always a bad thing? When I think of economic manipulation and false shortages, I think of the many times when our governments have wasted, thrown out, or just gotten rid of things just to create higher sale prices and raise profits. After doing much research, I’ve come to the conclusion that economic manipulation is something that needs to be looked into and taught about in public. So first, let’s give you all some brief background history on what exactly is economic manipulation.
Economic Manipulation is when our government manipulates its public (you) into believing that there is a scarcity in a certain supply in order to increase sale profits. A November 9, 2011 article on community.cengage.com, states that a false product shortage is a form of artificial scarcity induced by a supplier, often with the intent to elevate consumer demand above levels that may otherwise be achieved in the absence of such scarcity. These two come into relation when our government uses “shortages” as a way to manipulate the economy. Let’s use oil for example. I’m sure the lack of oil or gas is something that everyone in this room has experienced in some way. It seems like every day gas prices fluctuate. One minute they are up and the next minute they are down. If oil is so incredibly scarce, why use it for unnecessary things? Why waste it on tools for war when there are so many new technologies that make it possible to fight without the use of oil.
Also, although I am a fan of president Obama, I want you all to think on his promises of lowering gas prices. How can gas prices be lowered if there is a lack of oil? Let’s take it back to highschool and think about the bread and butter of economics; supply and demand. Micheal Horn’s 2013 textbook, The Freeman: Disrupting the Classroom, states (in layman terms) that when supply is low but demand is high, the price is increased. If supply is low and demand is high, how could it be possible to lower prices unless supply is actually not really low?
Are you thinking now?
Referring back to the oil example, could there really be an oil shortage when Robin M. Mills’ 2008 book, The Oil Crisis, explains that there is unconventional oil that can be and has been produced fast enough to replace the decline in conventional oil.

There have been many times when companies have the public to believe that there is a lack in a certain supply just so that the prices could increase and so could the funds in their pockets. Gas isn’t the only supply shortage that is involved. A recent study published in The New Orleans Time, by John McQuaid states that in the 1950s, tons of coffee and whole milk were dumped into the Gulf of Mexico in order to drive prices up in stores and create higher sales and profits.
So now that we have a pretty could idea on what economic manipulation is and some of the ways the government applies it, let’s try to understand how it can affect us negatively and positively. As previously stated before, when supply is low but demand is high, prices increase. When we are told that there is a lack in supply in a certain material, we automatically understand that there may be a price increase. Therefore we know that more money will be spent on that material. Let’s refer back to my oil reference.
Let’s say we are all average people working at average jobs making an average hourly pay of 9.25. The prices of oil go up. The amount of money in your pocket doesn’t. The amount your job pays you doesn’t. Your school tuition is definitely not decreasing. So now although our government and their companies are making more money, yet we are struggling to get money so that we can get 30 dollars to get half a tank of gas. So one affect is you’re broke now. Another is now the price of gas is increasing and you are
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