Restricting Trade

[cm husker]

what point are you trying to hem me in on? I've already said there are political realities related to state ownership of things like the military. That's different from the question of what is most efficient and least corruptable. When the government is the sole consumer, such as with the military and prisons, there are much different reasons for it to maintain ownership than when we are talking about industries that provide goods and services to the public.

 

Let's refocus on how this came up. You essentially said: I'm for free markets but I want them regulated in a way that achieves good results (e.g., trade is restricted to countries that maintain labor and environmental standards; OSHA gets reformed to world "correctly;" banks are regulated so they take the "right" risks). How is that different than what we have today? How do we get the "right rules" put in place if we've been putting the wrong ones in place for 40+ years?

 

I also just want to note that private ownership doesn't mean that the public can't use and benefit from something. It just means that the actual users and benefiters pay their own way instead of getting a subsidy from everyone else. A perfect example would be roads or national parks.

[BigRedBuster]

You have said several times that you are against a mixture of capitalism and socialism or even regulation. Meanwhile, you have agreed that some industries are best owned by the public through government.

You also have said that you are all for free markets and against regulation on those markets but at the same time you claim to not be fore unfettered capitalism.

 

You are all over the board on this subject.

 

Also, after rereading some posts above, you lump the FAA into what seems a comment bout government overregulation of industry. So...are you saying we should have air travel that is not regulated by the government to be safe?

[cm husker]

I've actually said just the opposite about regulation. And it's pretty consistent: if the industry provides goods and services to individuals, then we should look at every angle of privatization that we can because that promotes competitiveness. The regulatory arm should be used to increase consumer knowledge, not to protect consumers from themselves. That's why I'm for things like requiring a consistent disclosure method for personal loans (and discouraging companies from hiding terms in small print). But I'm not for the government subsidizing those loans or dictating what lending conditions are required.

 

But, for the record, the FAA is one of the prime examples of an agency that has been captured by its participants and effectively gives the major players a monopoly by artificially restricting the number of gates that can be built at airports. Look into the fight over adding an airport in Atlanta as a prime example of industry players leveraging regulatory contacts to stand in the way of competition.

[cm husker]

Here's a great story that highlights when an agency starts improperly advocating for its industry under the guise of safety:

 

http://www.usatoday.com/story/news/politics/2014/06/26/faa-developers-tall-buildings/11441517/

[BigRedBuster]

So...you are for regulation, just regulation you agree with.

[cm husker]

So...you are for regulation, just regulation you agree with.

Yes. Jeez. Didn't know it would take you this long to get it, even though I've consistently stated I'm not an anarchist.

 

Glad the light is on. Now maybe you can answer what principles you'd put in place OSHA for example. Because I've already outlined mine many times over.

[BigRedBuster]

The issue is confusing to discuss with you because you many times use comments like:

 

I'm simply for open, unfettered markets,

 

That means you are against regulations in industry.

 

Any time you put any type of regulation (even if you agree with it) it changes the markets. But, at the same time, then you claim you are for open and unfettered markets.

 

You claim you are for this because it allows for more competition.

 

However, completely unfettered markets also would allow issues like monopolies and predatory pricing which greatly restricts competition in the market place and new competitors from coming into the market.

[BigRedBuster]

 

So...you are for regulation, just regulation you agree with.

Yes. Jeez. Didn't know it would take you this long to get it, even though I've consistently stated I'm not an anarchist.

 

Glad the light is on. Now maybe you can answer what principles you'd put in place OSHA for example. Because I've already outlined mine many times over.

 

I have said that I would change the incentives of the people doing the inspections. I am not an expert on the intricacies of how the entire system works so I am not able to give a detailed plan and neither can you.

 

Just because I see a problem, doesn't mean I have a solution. I believe there is a solution. I'm just not qualified to lay out the precise plan.

There does need to be a complete overhaul of the fining system within the regulations.

[cm husker]

Please explain how monopolies and predatory pricing are enabled by completion.

 

Spoiler alert: there are almost zero free market monopolies. Almost all monopolies, historically, were enabled by regulations restricting competition. That's pure and indisputable fact. I would bet you can't name one monopoly in history that was established absent government support. Heck, the word even comes from the period when kings would grant monopolies in exchange for a piece of the profits.

 

As to preditory pricing, it doesn't work. It's trotted out in economic theory, especially by populists who like to rail against things like "currency manipulation," but in practice (a) competitors rarely engage in it because, to cut prices enough to drive out completion (I.e., operating at a loss for a period of time), they will never be able to raise price high enough compared to the applicable market price to recoup their losses, and (b) it's a boon to consumers if a competitor stupidly provides a good or service at a below market/at a loss price (see again, how we benefit from Chinese "currency manipulation" as consumers).

 

This is basic economics that is so consistent misunderstood or ignored for political reasons that it underscores exactly why we need to reduce regulatory influence as much as possible.

 

Antitrust law is generally a colossal waste of taxpayer resources. Even state sponsored cartels can't stand up to market forces. Just look at OPEC's struggled to keep its members in line.

 

 

By the way, why won't you offer any guiding principles on how to fix OSHA?

[BigRedBuster]

I've actually said just the opposite about regulation. And it's pretty consistent: if the industry provides goods and services to individuals, then we should look at every angle of privatization that we can because that promotes competitiveness. The regulatory arm should be used to increase consumer knowledge, not to protect consumers from themselves. That's why I'm for things like requiring a consistent disclosure method for personal loans (and discouraging companies from hiding terms in small print). But I'm not for the government subsidizing those loans or dictating what lending conditions are required.

 

But, for the record, the FAA is one of the prime examples of an agency that has been captured by its participants and effectively gives the major players a monopoly by artificially restricting the number of gates that can be built at airports. Look into the fight over adding an airport in Atlanta as a prime example of industry players leveraging regulatory contacts to stand in the way of competition.

I've not read about the gate issue.

 

But, are you for getting rid of the FAA as far as regulations that keep our air traffic system safe?

[cm husker]

 

 

 

So...you are for regulation, just regulation you agree with.

Yes. Jeez. Didn't know it would take you this long to get it, even though I've consistently stated I'm not an anarchist.

 

Glad the light is on. Now maybe you can answer what principles you'd put in place OSHA for example. Because I've already outlined mine many times over.

I have said that I would change the incentives of the people doing the inspections. I am not an expert on the intricacies of how the entire system works so I am not able to give a detailed plan and neither can you.

 

Just because I see a problem, doesn't mean I have a solution. I believe there is a solution. I'm just not qualified to lay out the precise plan.

There does need to be a complete overhaul of the fining system within the regulations.

Fair enough.

 

I just don't see how those incentives change if the agencies continue to maintain the power they have.

[BigRedBuster]

 

 

Please explain how monopolies and predatory pricing are enabled by completion.

 

Spoiler alert: there are almost zero free market monopolies. Almost all monopolies, historically, were enabled by regulations restricting competition. That's pure and indisputable fact. I would bet you can't name one monopoly in history that was established absent government support. Heck, the word even comes from the period when kings would grant monopolies in exchange for a piece of the profits.

 

As to preditory pricing, it doesn't work. It's trotted out in economic theory, especially by populists who like to rail against things like "currency manipulation," but in practice (a) competitors rarely engage in it because, to cut prices enough to drive out completion (I.e., operating at a loss for a period of time), they will never be able to raise price high enough compared to the applicable market price to recoup their losses, and (b) it's a boon to consumers if a competitor stupidly provides a good or service at a below market/at a loss price (see again, how we benefit from Chinese "currency manipulation" as consumers).

 

This is basic economics that is so consistent misunderstood or ignored for political reasons that it underscores exactly why we need to reduce regulatory influence as much as possible.

 

Antitrust law is generally a colossal waste of taxpayer resources. Even state sponsored cartels can't stand up to market forces. Just look at OPEC's struggled to keep its members in line.

 

 

By the way, why won't you offer any guiding principles on how to fix OSHA?

sooooo....we are back to you being all for completely open and unfettered markets without governmental regulations that will cause problems.

 

You talk in circles. That is why it is virtually impossible to discuss things with you.

 

I have specifically addressed your OSHA question now at least twice. If you choose to ignore those posts, then so be it.

If you're bound and determined to talk in circles on this, then I'm done with the conversation.

 

 

And...yes....I personally know of predatory pricing that has worked. My raw material suppliers use it. When we got into our industry, our main raw material was supplied by over 30 companies. Now, we are down to 3. This was done through predatory pricing where they learn a company is suffering, the entire industry lowers the price to the point it drives that company to fold or sell. Then the price raises back up till another one suffers then bam...it drops and drives them out.

 

It's now to the point where it is very close to a monopoly. They work very hard to restrict access to competition. This industry was slammed with law suits over this action back in the 70s only to see it start doing it again. Now, it's to the point where the customers have no power to stop it because the suppliers will just refuse to sell to any company that brings up the issue....basically driving them out of business.

 

 

If you think it doesn't happen and doesn't work, you are extremely naive.

 

 

So.....again....if you choose to ignore my comments and talk in circles....I'm fine with just ending the conversation and moving on.

 

 

Also.....pretty much any time in an argument someone says...."That's pure and indisputable fact." pretty much flies up a red flag that in fact....it is disputable.

[cm husker]

 

 

I've actually said just the opposite about regulation. And it's pretty consistent: if the industry provides goods and services to individuals, then we should look at every angle of privatization that we can because that promotes competitiveness. The regulatory arm should be used to increase consumer knowledge, not to protect consumers from themselves. That's why I'm for things like requiring a consistent disclosure method for personal loans (and discouraging companies from hiding terms in small print). But I'm not for the government subsidizing those loans or dictating what lending conditions are required.

 

But, for the record, the FAA is one of the prime examples of an agency that has been captured by its participants and effectively gives the major players a monopoly by artificially restricting the number of gates that can be built at airports. Look into the fight over adding an airport in Atlanta as a prime example of industry players leveraging regulatory contacts to stand in the way of competition.

I've not read about the gate issue.

 

But, are you for getting rid of the FAA as far as regulations that keep our air traffic system safe?

I'm for keeping an agency in place who can set rules within the industry like speed limits. I think it's a problem when they restrict expansion under the guise of safety but in reality it's to help airlines "maintain profitability." That behavior is evident in the quotes from the article I posted and it's evident when they refuse to allow a new airport to be built around a city because of "too much air congestion" when that's not really a significant risk.

 

We could get around a lot of government imposed regulation by simply asking participants to assume risks of operation. By making them assume those consequences, they will inherently behave in a less risky way.

 

The question in my mind is always, how much damage are we preventing through regulation that would otherwise occur but for regulation. Similar to the OSHA trends, it's not clear to me that the FAA is driving meaningful marginal improvements in air safety over what would occur absent their presence simple as a result of competitors wanting to operate safely and efficiently.

[cm husker]

 

 

Please explain how monopolies and predatory pricing are enabled by completion.

 

Spoiler alert: there are almost zero free market monopolies. Almost all monopolies, historically, were enabled by regulations restricting competition. That's pure and indisputable fact. I would bet you can't name one monopoly in history that was established absent government support. Heck, the word even comes from the period when kings would grant monopolies in exchange for a piece of the profits.

 

As to preditory pricing, it doesn't work. It's trotted out in economic theory, especially by populists who like to rail against things like "currency manipulation," but in practice (a) competitors rarely engage in it because, to cut prices enough to drive out completion (I.e., operating at a loss for a period of time), they will never be able to raise price high enough compared to the applicable market price to recoup their losses, and (b) it's a boon to consumers if a competitor stupidly provides a good or service at a below market/at a loss price (see again, how we benefit from Chinese "currency manipulation" as consumers).

 

This is basic economics that is so consistent misunderstood or ignored for political reasons that it underscores exactly why we need to reduce regulatory influence as much as possible.

 

Antitrust law is generally a colossal waste of taxpayer resources. Even state sponsored cartels can't stand up to market forces. Just look at OPEC's struggled to keep its members in line.

 

 

By the way, why won't you offer any guiding principles on how to fix OSHA?

sooooo....we are back to you being all for completely open and unfettered markets without governmental regulations that will cause problems.

 

You talk in circles. That is why it is virtually impossible to discuss things with you.

 

I have specifically addressed your OSHA question now at least twice. If you choose to ignore those posts, then so be it.

If you're bound and determined to talk in circles on this, then I'm done with the conversation.

 

 

And...yes....I personally know of predatory pricing that has worked. My raw material suppliers use it. When we got into our industry, our main raw material was supplied by over 30 companies. Now, we are down to 3. This was done through predatory pricing where they learn a company is suffering, the entire industry lowers the price to the point it drives that company to fold or sell. Then the price raises back up till another one suffers then bam...it drops and drives them out.

 

It's now to the point where it is very close to a monopoly. They work very hard to restrict access to competition. This industry was slammed with law suits over this action back in the 70s only to see it start doing it again. Now, it's to the point where the customers have no power to stop it because the suppliers will just refuse to sell to any company that brings up the issue....basically driving them out of business.

 

 

If you think it doesn't happen and doesn't work, you are extremely naive.

 

 

So.....again....if you choose to ignore my comments and talk in circles....I'm fine with just ending the conversation and moving on.

 

 

Also.....pretty much any time in an argument someone says...."That's pure and indisputable fact." pretty much flies up a red flag that in fact....it is disputable.

So... you received your raw materials more cheaply than you should have for periods of time, and this is bad why? Poorly run companies that were suffering under the weight of competition were driven out of business, and this is bad why? What is keeping competitors from re entering the market now? If it's simply that the current 3 competitors are offering raw materials at a price that's too competitive to make investment worthwile, that's not a bad thing. If government restrictions, usually sponsored by the 3 dominant competitors, are barriers to entry, then you see the problem as plainly as I do.

 

In any event, how does one prove and prevent preditory pricing in your mind? Does a regulator fix a minimum price? Do you see the problem here?

 

Antitrust law is intended to protect consumers (in this case you), not competitors.

 

How were you damaged by preditory pricing?

 

p.s. Having dominant market share doesn't mean you have a monopoly. Just ask apple in the smart phone context.

[cm husker]

It's also worth noting that despite claims of my naïveté, the federal government has never successfully prosecuted a preditory picking charge.