Crazy Marbles

Normal econ 101 supply/demand says that if prices are higher than what people want to pay, the sellers will naturally lower their prices.
And if prices are too low, sellers will naturally raise prices to pick up the slack.
But...
The thing is, price itself is often the main determinant in what people are willing to pay in some markets (like housing right now). There are several reasons why that's true, but the important thing is, sometimes a rising market makes people believe they should pay more, because they will get a good return (as the market continues to rise). Similarly, if the market is dropping, they will jump ship at a lower price than they might otherwise.
This is the normal idea in economics of how "expectations" alter the price. But usually the theory is applied to argue that the equilibrium price is shifted (upwards by expectation of good things coming). In fact, expectations don't merely shift what people are willing to pay, altering the intersection of the supply & demand curves a little, settling on a slightly different sales price.
Expectations totally destroy the normal "invisible hand" forces that would make buyers and sellers arrive at something like a static price.
Buyers will believe, as the market rises, they should pay even more. Sometimes more than the asking price (as happens in the housing market regularly). Similarly, dropping prices are a signal to sell rapidly. Time is the key. Buyers and sellers are focused on return over time. If they believe in 5% monthly appreciation, they will want to close the deal as rapidly as possible, and will happily pay a 5% premium to do it.
The opposite of equilibrium: In an Adam Smith/David Ricardo happy balanced market, a price is like a marble in a bowl (you can imagine the right side of the bowl represents low prices and the right side, high). No matter where the marble goes, right, left, anywhere except the one price at the bottom, it will be forced back to the bottom. The invisible hand. But expectations turn the bowl upside down.
Now the marble sits on top (if it can ever get there at all). If it starts to slip up or down, the speed will feed on itself. All of the forces are away from equilibrium and stability - which may never occur. If prices level off for a while, it's because people are waiting for signals, or the market is tired (volatility itself can be a damper on some markets, if the participants are risk averse for the scale of investment required - like a house).
The logical mode of pricing in such a (rising) market is to avoid setting a price at all, and simply solicit multiple offers.
If you believe the market is falling, it makes sense to set a price, just below what you think the market price of that moment might be.
Sell quickly. And that's what happens. Isn't it? So who says the economy as a whole isn't at least tugged by these forces of disequilibria, and all those pretty supply/demand/money supply models are fairy tails, told by Greenspan, full of supply and demand, signifying nothing.
economics equilibrium balance bubble ricardo

Bush Ramble

Any economist would say that it makes sense to regulate where a company makes a profit at the expense of the community because it can. For example, if there was no regulation against dumping toxic waste into the ground water and "everybody else is doing it," most companies would do it (happens in India. It happens here when companies think no one is watching).

There are lots of cases like that where the cost is real, but the company that is profiting isn't the one paying. Regulation can simply allocate the cost properly to make the market more efficient. Even conservative economists agree with that. Markets are not necessarily naturally efficient. Graft is another example. It's regulated because the company benefiting by paying the bribe isn't paying the real price (the community pays it).

So if a president deregulates the drug companies so they can profit by testing drugs on the general population rather than paying for appropriate testing, is that worth it? The whole idea is to keep one person from shitting in another person's backyard.
That seems reasonable to me. Some people favor deregulation of Nuclear Power? That's forward thinking.

Protective tariffs, inefficient state-granted monopolies (like cable tv), high taxes on people too poor to afford adequate housing or health care... all things that could use a little government trimming. Deregulate there! And, of course, all employees of the DMV should be summarily executed.

Personally I think Clinton did a better job than Bush. The country was certainly in better shape, though Clinton doesn't get all the credit or Bush the blame for all of that. But I do think a lot of this military activity is hurting more than helping. And I really don't think we're better protected since 911. I wish we were. Obviously anything we have approximating a diplomatic relationship with even our allies is in shreds. We're in the middle of a weak, vacillating recovery that seems to be weighted towards the wealthier segments, with continuing higher than typical unemployment and probably significant inflation. Numbers below poverty levels are actually increasing.
It just doesn't seem good. Bush didn't cause 911 and he didn't cause Katerina either. Even if he signed Kyoto, global warming may be irreversible. He didn't even cause (all of) the mess in the middle east.

So it's not all his fault. But that doesn't mean things are good! FDR (some think) was great, but nobody would say things were good during his presidency. What with a great depression & wwII. So things aren't good.
I happen to think some of it is Bush's fault (unbalanced budget from tax cuts even before Iraq. Then there's Iraq. Then more tax cuts.)
He certainly doesn't seem to think he did anything wrong. Except from a PR point of view.

He seems to believe his low popularity now is a PR goof because of Katerina.
He really seems to believe Iraq is going well and according to plan. I'm sure that's what Dick tells him - and he doesn't read the papers.
Certainly not the NYT or Washington Post. Maybe some Hoover news letter.
I wish he did.
A lot of people feel like if only he knew what was going on, he would fix it. That he's a good man who simply isn't seeing what's going on.
I remember that clip where he was asking his adviser --"we already gave cuts to the wealthy. Shouldn't we give to the middle?"
Answer "stay on message Mr. President." I don't think he cares.
I wish he did.
bush regulation heartless bastard