Showing posts with label Supply and Demand. Show all posts
Showing posts with label Supply and Demand. Show all posts

Tuesday, June 17, 2014

Value of Obama's Words 2008 to 2014: A Supply and Demand Analysis

Supply and demand analysis is the economist's tool for explaining changes in value over time. Below is a S&D chart helping us understand what happened to the value of the words uttered by President Obama. 

In 2008 the President's words had high value as shown at the intersection of the Supply of O-words in 2008 with the Demand for O-words in 2008. 


The chart shows that the demand for O-words remains unchanged in 2014 but the change on the diagram is the large increase in his spoken words in his many speeches -- as shown by a rightward shift in the O-Supply Curve in 2014.

The result is a glut of words and therefore a drop in the value of his words. If my quantitative estimates are correct, the O-Supply Curve shifted enough to drive down the value of his words into negative territory.

A negative word value means that the President would have to pay people to listen to him. This puts him in the same league with Mel Gibson and your mother-in-law. I think that people of both parties agree with this analysis.