Dumb Political Correctness

Discussion in 'West Mall' started by Mr. Deez, Feb 8, 2012.

  1. Seattle Husker

    Seattle Husker 10,000+ Posts

    If that's the bar we set for our leaders then our great Democracy project is already doomed. I hope this statement is only to justify your support for Trump and not truly what you think of the POTUS office.

    You're all missing one key point in his mocking the journalist in comparing it to Cruz. He didn't use the crooked arm/hand when he mocked Cruz but certainly did with the journalist. I can't believe we are having this conversation though that it's acceptable to publicly mock/humiliate others. What ever happened to winning the war of ideas?
     
  2. texas_ex2000

    texas_ex2000 2,500+ Posts

    Whatever dude. Read your history.

    That's ridiculous.
     
    Last edited: Jan 12, 2017
  3. Seattle Husker

    Seattle Husker 10,000+ Posts

    Because we've discovered some politicians have low moral character after they were in place we should simply accept that behavior? From my experience, more often than not those individuals are pushed out of office after their misdeeds become public.
     
  4. Htown77

    Htown77 5,000+ Posts

    How does breaking up monopolies hurt competition?

    Monopolies do not allow new entries into the market, they stifle competition, raise prices, cease innovating and on the overall lower the quality of life.

    The lack of anti-trust enforcement since the 1980s is a huge problem, if not the biggest non pollution/energy problem this country faces today economically.

    Example: Apple has an illegal tying arrangement with phone companies. If you buy an iphone, you have to buy a phone plan. Apple will not sell you a phone without another company's phone plan. This is currently illegal (despite the lack of enforcement) and for good reason. It lowers the quality of life/freedom of the consumer and stifles competition for any phone company that does not have a deal with apple.

    Honestly, a monopoly is just a private government that has many of the same economic inefficiencies as socializing something has. The Sherman act is designed to promote competition by encouraging price competition (making a better, cheaper product) and discouraging companies trying to exclude competition.

    Now there are occasionally industries or services where monopolies are necessary, but those are exceptions, not the rule. (Simple example: the government should have a monopoly on the police/armed forces).
     
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    Last edited: Jan 12, 2017
  5. iatrogenic

    iatrogenic 2,500+ Posts

    In theory, your argument makes sense. Unfortunately, those laws just end up favoring incumbents for the most part. It is the administration of the laws that screw up the idea behind the law.

    I can list a few examples if you like. The examples actually show that prices are kept higher by these type of laws.

    Your example above concerning Apple is far from a monopoly. There are many phone manufacturers. In fact, the road to riches is strewn with bankrupt companies that were thought to have a monopoly at one time, but were destroyed by competition.
     
  6. Htown77

    Htown77 5,000+ Posts

    Please do. Most of the time, anti-trust laws favor the start up bringing the complaint over the big, established company. Right now the laws are not being enforced very well and have not been enforced very well for 30 years (you can basically get away with restraints of trade right now).

    Restraints of trade create monopolies and stifle competition. There is a very complicated formula for looking at this. Basically, under current laws if they were being enforced, you can restrain trade as long as you have a low market share and the effects of your restraint are not enough to influence the market. Apple and those phone companies (AT&T, etc) have a great percentage of the market share and their restraints certiainly create barriers for entry and allow them control over the market. If there are significant barriers to entry being controlled a few large companies, there can be no perfect competition, there is no free market and everything is kaput.
     
    Last edited: Jan 12, 2017
  7. Joe Fan

    Joe Fan 10,000+ Posts

  8. iatrogenic

    iatrogenic 2,500+ Posts

    Sherman Antitrust Act 1890--forbids anyone to monopolize or attempt to monopolize or engage in restraint of trade
    Clayton Act 1914 and Federal Trade Commission Act both 1914)-forbids acts incidental to monopolization such as restraint of trade and various unfair business practices
    Robinson Patman Act 1936 and Celler Amendment 1950-more regulation against price discrimination, obstacles to firms wanting to merge

    The problem with these laws is exhibited in your post. You state that "there is a very complicated formula for looking at this". The reason the formula is so complicated is because there is a wide variance in definitions, and the formulae allow discretion by the administrators. What may be a significant barrier of entry to you is probably going to be different for someone else. The guidelines used are also subjective, ridiculous ways to estimate competition post-mergers. Just reading the "Upward Pricing Pressure" guidelines and HHI is a waste of valuable time.

    What someone may define as a particular product may lump together a number of products that have divergent characteristics. Mobile phones are a good example of the "definition" problem. For example, you state Apple and "those phone companies" have control over the market. This is not correct. Samsung, HTC, Google, Motorola, Sony and LG sell phones, and there are many carriers (Verizon, Boost, Cricket, Net10, H2O, T-Mobile, Cricket etc.).

    Another issue is substitutability of products. If you were to buy every typewriter company in the world, you would have a monopoly by most common definitions. Theoretically, you would raise your typewriter prices above the level that you could in the face of competition. However, no one is going to buy the typewriters at an unusually high price because substitutes are available in the form of computers and printers. Also, just owning all of the companies does not prevent someone else from starting a typewriter company. Life Magazine was a dominant firm at one time. In my freshman year at Texas, we used punch cards that ran through "computers" to perform basic calculations. By the time I graduated, there were desktop personal computers available. There may have been a monopoly on punch cards at one time, but three years later that was irrelevant.

    The next problem is illustrated in your post also. You have gone from defining "monopoly" (where one company produces all output) to calling a monopoly "a few large companies". The "few large companies" are known as "competitors". The definition of a true monopoly is the ability to prevent competitors from doing the same thing. Those companies rarely exist without government interference.

    If two companies control 75% of the market, but there are 40 competitors that have the remaining 25%, the two large companies haven't prevented others from competing.

    What is lost is the ability to examine companies based on efficiency, innovation, product quality, marketing, etc. inherent within various firms. How about management ability? Where does that come into play? Why should management teams be held equal when examining markets?

    The Robinson Patman act was said to prevent price discrimination that reduced competition. Its evolution was due to large retail chains buying huge quantities and selling at prices that were lower than local merchants. The same complaint is often lodged against Walmart today. Antitrust cases were brought against Great Northern Railroad and Standard Oil Company, which were companies that charged lower prices than their competitors. See Anheuser Busch v FTC where action was brought because the beer company was selling beer at a lower price in St. Louis. In FTC v Morton Salt, Morton was prosecuted for selling salt to those purchasers buying in boxcar loads at a price lower than to those buying in small quantities. In the opinion, the following is stated: The legislative history of the Robinson-Patman Act makes it abundantly clear that Congress considered it to be an evil that a large buyer could secure a competitive advantage over a small buyer solely because of the large buyer's quantity purchasing ability. There are many, many examples of the government prosecuting firms for selling products at a price lower than the competition.
     
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  9. Htown77

    Htown77 5,000+ Posts

    Yes, if a company is underselling to run everyone our of business, then takes control of the market and sets the price, that is BS. Look at Stripes gas stations in corpus. They undersold until they ran everyone out of business/took contol of most of the market (leaving a few other gas stations to not have 100% and be obvious). Then, once they had most of the market share, they jacked up the prices on their concessions. The few small firms followed their lead. The prices of concessions at a Stripes are ridiculously higher than the market. I'll add this is not even just an observation, their management openly brags that their business model was having enough capital to take the hit of below market prices until they could take enough market share to control prices and overcharge. Low prices are not better if they are just temporary to take the market and indefinitely charge higher prices.

    Also, an oligopoly may as well be a monopoly. A good example is cable companies and dividing up the market and getting exclusive deals for certain apartments/neighborhoods. Even stripes just having most of the market (enough to control price) and leaving a few token firms

    Your biggest assumption is there will always be innovation to thwart a monopoly/oligopoly. That is simply not always the case. One example: diamonds. You also seem to ignore the power of monopolies/oligoplies to thwart competition and the fact that enforcment of anti-trust laws has spurred innovation/competition over the past 100 years.

    I have never made the argument that every action by the government was perfect or correct. There have certainly been failures. No law will ever be enforced perfectly. That is not a reason to not have good laws. Some drunk drivers will be caught, others will be ignored. Some jaywalkers will be caught, others will be ignored. However, in general, anti-trust legislation is better than no anti-trust legislation. Some mergers need to be blocked and some actions defined in the Clayton Act that only serve to hurt competition should be policed.

    We tried a no sherman/clayton system before. The late 1800s were full of extreme corruption and it did not work. We seem to be returning to that.
     
    Last edited: Jan 15, 2017
  10. Clean

    Clean 5,000+ Posts

    Yellow is just code for white!! WTF?

    Is Ashley trying to out-Streep the competition?
     
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  11. ProdigalHorn

    ProdigalHorn 10,000+ Posts

    She gets that emojis weren't created by white people, right?
     
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  12. iatrogenic

    iatrogenic 2,500+ Posts

    No, they bought a firm called Susser that owned 640 stores.

    Not according to their financial statement. They are no higher than other large retail chains. By the way, you can buy 2 Laredo tacos for $3 at your local Stripes. Yummy.

    I won't call bull---- yet,but I would like to see verification of this.

    Then buy U-vese, Dish or DirecTv

    Diamonds are a commodity, not a company. There are thousands of jewelry retailers.

    Give some examples.
     
  13. Htown77

    Htown77 5,000+ Posts

    Those that employed those strategies at Stripes to make it into what it is have been publically open about their business strategies. That was just a example of which I have direct knowledge.

    But I am not limited to one modern example of lowering the price, taking the hit then raising the price later. If you want examples you can look into, I have a whole anti-trust law textbook full of them if you would like me to list them. I'll even throw in case citations.

    De Beers controlled the world diamond supply/price for decades until new diamonds were recently discovered. One cannot generally depend on new supplies of resources being discovered... unless I guess we go into space and find some? Either way, enduring 100 years of a monopoly is not prudent.

    Will list examples in a later post.

    Not everyone has those options. Some people are locked into one cable company based on where they live (rural or apartment with owner setting exclusive deal).
     
    Last edited: Jan 15, 2017
  14. iatrogenic

    iatrogenic 2,500+ Posts

    I can't find any facts supporting this claim.
    Sure. Let's examine some of them.

    Then the people have made a choice to rent from the owner under the owner's conditions, which include limited options. They can move, build their own place, drive a greater or shorter distance from another rental location, use an antennae, etc.

    It is good that competition solved the diamond problem without government interference. Other options would be to buy substitutes like CZ, rubys, emeralds, get a tattoo instead of a ring, etc. You don't have to follow cultural norms if you don't want to. 100 years is a long time to you and me, but a very short time in the grand scheme.
     
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  15. Seattle Husker

    Seattle Husker 10,000+ Posts

    Specific to the cable companies, they've used their regional monopolies to limit any access to the copper wires going into our homes. Their cable monopoly is now turning into an internet monopoly. As much as the wireless carriers are trying to catch the speed of delivering a signal over that copper wire, we are still decades away, truthfully.

    Look no further than Comcast's stratification of their internet service (and significant price increases) as their customers begin to abandon their cable service. I personally walked into Comcast in September to eliminate all but Internet service reducing my Comcast bill from $240 to $80. I replaced the cable with Sling, Hulu and antennas. In October they announced data caps and now I have to pay $50 more/month to get the same bandwidth I had before. Neither DSL or Wireless providers can match the speed and volume of a copper wire.
     
    Last edited: Jan 13, 2017
  16. Htown77

    Htown77 5,000+ Posts

    I could talk about how I got footlong sandwich at Subway for lunch the other day for $6.50 with a coupon and you will not be able to find any facts to support this claim. Would you further argue that subway does not sell footlongs for $6.50 with a coupon?

    I guess what I would like to know is, do you genuinely not believie that undercutting the market, buying up the competition, then price gouging exists? If you do not believe such a thing exists, I will provide examples. If you know it exists, and just are okay with it, I am not going to waste my time. That is the point we are arguing on that issue.
     
  17. Htown77

    Htown77 5,000+ Posts

    How would competition have solved the diamond problem if no new diamonds were ever discovered? Do you just believe some new alternative will always be discovered/invented?

    What if instead of diamonds, it was a necessary medicine?

    If competition and market efficiency is prevented beyond the lifetime of any consumer, then that is way way too long.
     
  18. iatrogenic

    iatrogenic 2,500+ Posts

    Substitutes will always exist.

    Patents run out. Reverse engineering occurs often.

    I'm not saying that it is not possible for a company to have a monopoly without government assistance, but it would be very rare and would not last very long.

    My point is that antitrust laws typically end up protecting incumbent competitors, not competition.
     
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  19. iatrogenic

    iatrogenic 2,500+ Posts

    I know it has been tried, but I don't know if it has been successful for any length of time. I would appreciate a couple examples.
     
  20. nashhorn

    nashhorn 5,000+ Posts

    You hit one of my hot buttons SH. That monopoly in 'good' internet service cable has drives me crazy.
    And before you guys come at me with "there are alternatives", I know, I know, but like SH states, none of them can do as well as the copper wire. So you want their service you pay their price.
     
  21. Htown77

    Htown77 5,000+ Posts

    Okay, we have actually reached the center of all of this and honestly, I do not think there is much further to debate once we get down to the why of the disagreement. I appreciate your post because you've saved me a lot of work as you have given me what your response will be to anything I post.

    Your position is: Substitutes always exist eventually. It does not matter if it takes 100 years. The government should stay out altogether because at some point that monopoly will cease existing, even if that point in time is the eventual collapse of the United States of America and its replacement by a different government no matter how near or far that may be.

    I could find someone gouging prices for decades and you would say "that's not long in the grand scheme of things."

    I say "why wait and hope there is more competition in our lifetimes? Why not just police anti-competitive practices now?"

    You say "breaking up big companies just helps the incumbents" (Did breaking up Standard Oil help Standard Oil?)

    You say "monopolies cannot exist long without government assistence" even though De Beers lasted decades and would still be here today if the supply of diamonds had been more finite. (Techincally, no business, large or small, can survive without government assistence. Governments grant and protect property rights including deeds to land, patents and copyrights. So you have no matter what, you made a true statement with that one I suppose.)

    I think that pretty much sums up our disagreement and positions.
     
    Last edited: Jan 15, 2017
  22. iatrogenic

    iatrogenic 2,500+ Posts

    That's cool. I know finding facts to bolster your position is difficult.
     
  23. Htown77

    Htown77 5,000+ Posts

    I found some and you responded with "100 years is a long time to you and me, but a very short time in the grand scheme." I can give you cases, but I am afraid none deal with 100 or 1,000 year or whatever length of time that would satisfy you. You've ignored facts listed and your response is "eventually all monopolies will go away and there are ALWAYS substitutes." There's no point in listing facts.
     
  24. Crockett

    Crockett 5,000+ Posts

    Substitutes always exist?




    Ever dealt with Ticketmaster? Time Warner Cable? Parked in Arlington on Cowboys Game Day?
     
    Last edited: Jan 13, 2017
  25. Htown77

    Htown77 5,000+ Posts

    Just move to Jacksonville and become a Jaguars fan ;)
     
  26. Statalyzer

    Statalyzer 10,000+ Posts

    Substitutes do exist to ticketmaster up to a point, but not enough people chose to take advantage of them.

    The problem is that regulations allowing them to do are basically written by the lobbyists for those companies. Government has its fingerprints all over many of these oligarchies. People correctly mention government is bought and sold by the bigger companies and their lobbyists, then ask for said government to save them. The result, more regulations, in the name of helping the people and hurting the big bad companies - regulations the oligarchy can afford but smaller competitors cannot.
     
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  27. Htown77

    Htown77 5,000+ Posts

    The way anti-trust law is set up without going into the long details is the regulations generally are only to apply to companies with big national or regional market share. It's not like general regulations in other industries. The whole point is to help the little guy by making sure the big guy is competitive and not anti-competitive. The record is mixed with too much government intervention in the 60s and 70s and probably not enough since the 80s. I would argue there has been little enforcement to the detriment of the small competitor and the advantage of the larger, anti-competitive companies since the 80s.

    In most industries, I strongly support deregulation. Deregulation of the trucking industry in the 70s/80s worked wonders for the economy. Anti-trust, however, is the defense against the aggregation of market power by a few small hands who can get lobbyists to pass whatever laws they wish. Anti-trust is the best defense against the power of lobbyists. It is harder for 10 businesses with 10% to coordinate lobby efforts than 1 business is with 95%.
     
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  28. Mr. Deez

    Mr. Deez Beer Prophet

    Well said Htown.
     
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  29. Sangre Naranjada

    Sangre Naranjada 10,000+ Posts

    [​IMG]
     
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  30. Monahorns

    Monahorns 5,000+ Posts

    Iatrogenic, I can't remember exactly Marx's belief. But believed there was structure of society which was based on something like labor or farming. Then everything else was a super-structure. It was his way of glorifying the people he wanted to glorify and demonize everyone else. But it there was nothing explanatory or essential about it. It was arbitrary for the purpose of building his narrative. Socialists/communists do that a lot.
     

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