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Originally Posted by guerilla
The market is self-correcting. As long as there are not barriers to entry, monopolies cannot maintain their market share WITHOUT (this is the caveat) providing better prices and services/goods than any competitor. Which is a win for the consumer.
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Well in the industries I think should have regualtion there are significant barriers to entry. One is cost of providing the goods and service. One is lack of inititaive by local people and businesses to provide an alternative. One is lack of capital. Loans are getting harder to get. Less businesses will be created. Should people get overcharged by the few companies that survive in each industry? You will be screaming for regulation if there ends up being 2 or 3 big banks in the US after this mess.
Quote:
Originally Posted by guerilla
Google falls into this paradigm. Yahoo and MSN are so incompetent, and their search so useless, that Google dominates the landscape. Both Yahoo (time) and MSN (OS) have had big traditional advantages over Google. And yet they lost out.
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Someday, someone will challenge Google seriously, by taking on the search engine portion. Unless Google continues to have the best search engine, in which case again, the consumer wins with Google being available and pervasive.[/quote]
Well Yahoo was overconfident by their early success and Microsoft has always been MS. Not really serious about anything until it takes off.
I dont expect a real competitor to Google anytime soon. For someone to have the human capital to design a real search engine and the resources to allow them to mimic the 50 different apps Google has would be very unlikely. Not to mention the hundreds of data centers all over the world. Also they cant get contextual ad customers without a large industry share. Google can / and is charging and acting basically how they want. If people stop using Google adwords usually they stop advertising. $10 clicks when there is no other bidder? That is not a free market.
Quote:
Originally Posted by guerilla
As far as Enron, you're making my point. No regulation and deregulation are not the same thing.
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Not sure how. Please explain. A company could fight for less regualtion from a point of little regulation or lots of regualtion.
Quote:
Originally Posted by guerilla
So you're saying that in an industry where there is no competition, we are going to regulate it into a monopoly?
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It already is a monopoly. But in some industries with high barriers to entry, and price inelasticity to demand, I think govts should prevent gouging.
Quote:
Originally Posted by guerilla
Maybe there is no competition because the cost is below the price to develop an alternative? In which case, the market price (however high it may be perceived) is not higher than it should be.
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Really? Always? I can think of dozens of cases where that is not true. Your idea is in a perfect world. The world is far from perfect. There are high costs, lack of initiative, barriers to entry, capital problems, human resource shortages, corruption, and bribes.
Quote:
Originally Posted by guerilla
Maybe no one can compete with your electric company, because there is not enough profit in it to compete! Duplicating infrastructure may not be profitable because only a portion of the existing market will be served with 100% of the capital costs. These are just economic realities, not monopolistic agendas.
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So whats your point? That the local electricity company should be protected by the economic realities and charge whatver they can get away with? Or until someone else spends millions, maybe billions and 5 to 10 years to build a competing system?
Quote:
Originally Posted by guerilla
Can you imagine having multiple phone companies? Multiple cable companies? Oh wait, Cell Phones and Satellite TV.
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Yes and all of those are good for the market as a whole and low power and wireless. Until electricity can be transmitted wirelessly and the equipment is not huge and expensive I dont see people having choices for electricty worldwide. I dont even know of one community where people can decide what electricity provider they can have. Let alone all communities in the USA or the world.
Quote:
Originally Posted by guerilla
The market will provide if there is demand. Just because it is a hassle to duplicate infrastructure today, doesn't mean that the free market won't create new infrastructure or find a new technique around it.
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The market does not always provide. Our grandparents lived in a world of one electricity company, one phone company, a few car makers, and limited food and entertainment. Should those companies be able to do whatever they want? Charge what they want, and make unsafe products?
Quote:
Originally Posted by guerilla
But in order to have the profit incentive to do so, the market has to have zero artificial barriers to entry. If it's too costly to get in, then it becomes even harder to develop alternatives.
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Are you speaking for all CEOs and all companies? Where do you get all this insight? There are always barriers of some sort. They just get added into the big picture. Profit and Loss, Costs and Benefits.
Quote:
Originally Posted by guerilla
It's like the so-called energy crisis. You can't drill anywhere. You can't build nuclear. There are probably a million other things you can't do. So the costs are enormous to practice any R&D and establish a new company.
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Yes a lot of what you see in the news is made up shit. The energy crisis, the banking crisis, the Enron crisis. The govt is pushing these and will try to make the results come out in their (or their friends) benefit. Its classic Hegelian dialect.
But you can drill in many places in the USA and abroad. If the oil companies really wanted to they would lobby for that. They are making record profits year after year. They found what works for them.
You can build nuclear. No one wants to for public relations and cost reasons. Nuclear is more expensive than the alternatives. That might change. In my hometown there are two electrcity companies as I discussed. The one with nuclear is more expensive because of inefficiencies and mismangement. Because of the nuclear plant.
Quote:
Originally Posted by guerilla
So the government's solution is, spend more money. Instead, they should just cut regulatory red tape. Let people drill. Let people build nuclear. Let the market work.
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Regulation and the banking crisis are two different things. You cant jsut cut red tape and ignore the other problems. The market is slow, and slow change is painful. Ask Japan, they tried to slowly right their problems and still have deflation 20 years later.
I think the banking crisis was created by not enough regualtion and not enforcing the regualtions we had. Plus they wanted it to some extant. They made tons of profits for years and the more fucked their company is now the more likely the government will bail them out.
Quote:
Originally Posted by guerilla
You see this all day, every day. Right now, the banks are in trouble. The system is starved for genuine, real capital.
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I think they had too much capital, with lowering fractional reserve amounts and loose lending practices. And the government is giving them tons of capital, is that good? The banks currently deciding to not lend each other money is the markets way of dealing with this. How fun would that be for a few years? Goodbye economic growth.
Quote:
Originally Posted by guerilla
So the government will impose more regulations, force capital to flee to other markets and out of the currency. They will run up more debt, causing inflation, which will make it even harder for people to keep the homes they haven't bought yet.
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Yes they will but this govt is regualtion crazy. Probably why this happened in the first place. They let it. They let it snowball a bit. And now are trying to get it under control. Record profits for companies and Americans get to work two jobs to keep their house.
Just becuase this admin is fucking loony does not mean I ignore economic principles and think that a truly free in all markets economy would work with this level of special interests and corruption.
Quote:
Originally Posted by guerilla
When really, they should cut red tape, raise interest rates and cut spending/taxes simultaneously. That would allow the market to respond to the crisis, higher interest rates would be an incentive for people to save (savings are capital) and by cutting taxes would have the same effect. People would be more inclined to work, save and invest. The spending cuts have to come, because more debt is inflationary, so you can't cut taxes unless you cut spending, otherwise you're spinning your wheels.
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Personally economically I think a slow hand on things is typically better. I have no idea what the markets reaction would be to those things. Probably disbelief of less regulation when that is what started this. Higher interest rates would probably mean less people and companies would want loans but banks would be more likely to want to issue them. Resulting in lower loaning standards. And this govt is in love with spending. They could not stop if they tried. I think they should try, but that would involve no long term bases in the Middle East which we seem to really want.
Quote:
Originally Posted by guerilla
Watch what the government does over the next year or two. They will do everything assbackwards, and then blame the market, price gougers, greedy capitalists etc. All while they continue to spend spend spend, and help out their buddies on Wall Street.
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Yep this admin and probably the next is stupid as shit. From the Treasury department, to the Executive Branch, to the gutless sheeple Congress.