Supply and demand is the law?

CASSE (Center for the Advancement of the Steady State Economy) carries this piece:

Demand a Supply of Common Sense; Just Don’t Price It
by Brian Czech

Ah, the confusion of economics students when they encounter the subject of supply and demand in introductory “micro.” They learn that prices are determined by supply and demand. Then they’re taught that the quantities supplied and demanded are determined by… prices!

There happens to be no lurking inconsistency here, no magic trick to dazzle us; not even a ridiculous fallacy to accuse the professor of. It’s just a matter of semantics; supply is not the same as “quantity supplied” and demand is not the same as “quantity demanded.”

So Americans know quite well how Big Money can pollute the truth. Can we expect the mother of all money-making theories, unlimited growth theory – along with its crazy correlates – to come to us on wings of truth? Sure, sure, higher prices stemming from lowered supplies actually “increase” supplies because they provide an incentive to “supply” even more. And more smoke makes the air “cleaner” by providing an incentive for smokers to increase the “supply” of clean air. More traffic increases the “supply” of open road. More noise actually leads to a greater “supply” of quietness. Less of a good thing leads to more of it! More of a bad thing leads to less of it! Or, if you prefer, less of a good thing leads to less of a bad thing, and more of a bad thing leads to more of a good thing!

So if the growthmen want to claim that oil supplies, for example, are actually increasing, not decreasing, as evidenced by a downturn in price, let them play with the word “supply” like the Seven Dwarves play with “addictive!” Let them use “supply” to mean more, less, an OK mess, anybody’s guess … whatever. But may the rest of us not sound, as one old hand used to say, “Dummer’n a doggone boot!” Supply is how much there is, after all, and as you use it, less remains.

and lifted from comments is the Sandwichman:

Amen. And let’s not forget unemployment. According to the growth orthodoxy, unemployment creates jobs. How does this happen? Easy! Unemployed workers are willing to work for less money, which drives down the cost of labor. The lower cost of labor creates an incentive for investors to hire people to produce more goods and services (at a lower price). All the newly employed unemployed people can then go out and buy the cheaper goods and services with their lower wages. That is unless there is unemployment insurance to keep people from supplying their labor at a lower cost. And if you don’t swallow that crock of bull, you’re committing the “fallacy” of assuming there is “only a fixed amount of work to be done.”

So remember, folks, unemployment creates jobs… and more smoke makes the air cleaner.