May 30, 2007
Thank You John Stossel
In RCP, John Stossel explains Adam Smith better than Mr. Smith and even better than PJ O'Rourke's book explaining Adam Smith. He relates trade to the purchase of coffee.
How many times have you paid $1 for a cup of coffee and after the clerk said, "thank you," you responded, "thank you"? There's a wealth of economics wisdom in the weird double thank-you moment. Why does it happen? Because you want the coffee more than the buck, and the store wants the buck more than the coffee. Both of you win.
In related news, a new drive-trough Starbucks has now opened about a mile from my house. Short jk futures, dude's gonna be broke.
Hat-tip: Greg Mankiw
But what about "coffee gouging?" Does Stossel explain why the government refuses to curb the "obscene coffee profits" that result from $4 venti lattes?
Posted by: johngalt at May 30, 2007 7:40 PMClearly, Stossel is in the tank for big coffee.
Posted by: jk at May 31, 2007 10:30 AM"Coffee Gouging"?
You've missed the basics of the free markets. FIRST you get the people hooked into that special feeling. THEN you jack up the price by increasing the "value".
That venti really means $3 vs joe which means $0.50.
Posted by: Terri at May 31, 2007 10:47 AM | What do you think? [3]