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Forums - General - Unemployment at a 26 year high (9.7%)

Didn't Obama also say that recession will be over by the end of this year? I might be mistaken.
Many predict the stocks will crash soon, and the Feds are buying our own bonds. Crazy times.
Unemployment will rise.
I need 10k a year - part time job NOW.

Health Care will further cripple the economy.



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ManusJustus said:
mrstickball said:
Manus -

On one end, you argue about the abuse of market power should companies exert a monopoly or monosopy. Why is this any different if the government exerts the monopoly?

The difference is accountability.  If a private company has a monopoly, the company can charge whatever price they want and deliver whatever quality of good they want, and the consumer has no choice but to purchase the good.  If the government has a monopoly, they need to balance price and quality with consumer expectations (similar to what a private business would do in a competitive market), and if politicians fail to do so then will have to answer to the public.  Note that this phenomenon is not unique to democracies, even a dictarotship/monarchy like Saudi Arabia wants to keep the price of government provided goods (oil) down to keep the populous happy.

Yet in America it doesn't work when government took over public education (costs are rising, quality of care is declining) or pensions (public are atrocious compared to state or private).

I don't understand the idea of accountability. Monopolies are bad regardless of what you want to argue for accountability. The government has been accountable for DECADES and yet nothing has improved. How exactly are they accountable? The fact is there's no competitive market when there's a monopoly - government or otherwise. I don't think you can honestly look at the US example of federally-run programs and think for a moment that their monopolies are something wonderful. This is why I advocate competition in these fields the government has so woefully failed at.



Back from the dead, I'm afraid.

mrstickball said:
ManusJustus said:
mrstickball said:
Manus -

On one end, you argue about the abuse of market power should companies exert a monopoly or monosopy. Why is this any different if the government exerts the monopoly?

The difference is accountability.  If a private company has a monopoly, the company can charge whatever price they want and deliver whatever quality of good they want, and the consumer has no choice but to purchase the good.  If the government has a monopoly, they need to balance price and quality with consumer expectations (similar to what a private business would do in a competitive market), and if politicians fail to do so then will have to answer to the public.  Note that this phenomenon is not unique to democracies, even a dictarotship/monarchy like Saudi Arabia wants to keep the price of government provided goods (oil) down to keep the populous happy.

Yet in America it doesn't work when government took over public education (costs are rising, quality of care is declining) or pensions (public are atrocious compared to state or private).

I don't understand the idea of accountability. Monopolies are bad regardless of what you want to argue for accountability. The government has been accountable for DECADES and yet nothing has improved. How exactly are they accountable? The fact is there's no competitive market when there's a monopoly - government or otherwise. I don't think you can honestly look at the US example of federally-run programs and think for a moment that their monopolies are something wonderful. This is why I advocate competition in these fields the government has so woefully failed at.

There are cultural and methodological differences, so not everything a country does will be as efficient as it could or should be.  Just because the United States government has failed doesnt mean any government would fail, which is apparent when we look at examples where other governments, such as the United Kingdom or Australia, have succeeded in those same areas.

Think about monopolies this way, lets consider a water company with a monopoly (or to be more specific a regional monopoly).  Would you rather have a greedy businessman be in control of the water company, or would you rather a mayor who is running for re-election in a year be in control of the water company?  Its no suprise that since the businessman is not accountable to the consumer at all, he will make price and quality decisions to maximize his profit.  However, the mayor needs the price and quality of water to be at a level where it will not negatively influence his bid for re-election. 

In both instances it is personal greed that is the driving mechanism, the businessman wanting to make as much money as he can and the mayor wanting power through being re-elected, but the greed of the mayor works in favor of the consumer whereas the greed of the businessman does not.



Could you define how the greed of the businessman is a greater evil than that of the mayor?

Let me go a step further on justifing the businessman over the mayor. First off, I admit that all greed is evil.

However, my problem is this: Who is more likely to understand the intricacies of water management? The businessman who has most likely employed people as experts in the field, most likely has dedicated his own life to the business of water manage, or the mayor who may or may not understand anything concerning the field, other than knowing that it's a local hotbutton issue?

After all, a mayor is a leader that must rule over many, many fields and may not have the expertise in the fields required. But the businessman absolutely should, afterall, running a business successfully requires knowledge of the field.

I feel this is why we have so many issues with reform in the system. Politicians come from very diverse backgrounds and careers, and usually are campaigning to change something they may, or may not, have any idea how to fix at all. They may get experts to tell them, but they truly have no idea about the field themselves. Furthermore, the experts they hire may be favorable to his viewpoint, rather than that of a market-neutral perspective.

Business control monopolies because they are good at what they do. Wal-Mart is not becoming a retail monopoly because it was legislated. They are doing it because Sam Walton was a friggin' retail genius that knew how to wheel and deal to give us 'always low prices'. Microsoft has become a monopoly because Gates broke the PC mold of offeringing a verticle solution for operating systems via proprietary means, and afforded customers and retailers a more robust solution.

However, a politician rarely crafts a bill because they are experts in the field, nor gain power through the understanding of the problem, but the promise that they understand the problem. This has given us such American wonders as the public education system, Social Security, and Medicare.

You are indeed correct that other countries may be able to do it more efficiently. But that does not mean that if we adapt to their system we become as efficient. We are different people. What about our public education system is so radically different that we spend twice as much on a government system and get less quality? Mind you, federal education has been around for decades.



Back from the dead, I'm afraid.

Assuming greed is evil, as you stated, one evil is not greater than the other, but one greed can do more good than the other.  Greed in a competive business world can be a good thing, and greed in a democratic political system can be a good thing.  Note I use 'can' and not is.

You assumed that that people who own businesses are good at them, and that politicans have no idea how to run a business.  This is not true.  For instance, what if the water company owner had no idea how to run a business and merely inherited it from someone else?  He would not be qualified to run the business.  He could hire other people else to run the business, but he still wants to make a lot of money for himself, cutting into efficiency.

Not all monopolies are that way because of a business 'being too good at what it does.'  Many monopolies are regional monopolies (like the water company) and it is not viable for competition to occur.  Take the water company for example, you have one pipe running to your house and one system running through your city.  Could you imagine what a nighmare it would be, or how inefficient it would be, to have 2 or 3 water companies with their own pipes going all over a city?



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I find your water pipe scenario hilarious.

What about telephone service?
What about power service?

Where I live, we have 3-4 power companies that offer service, yet only 1 power line. You are able to choose your provider, and they attempt to offer better rates and service. The lines are shared, but the service is not. Depending on what they offer (green energy, cheaper rates, better services, more products, ect), you are free to select them. If you do not like your service, a new company can come in and route the box for you.

Likewise, look at phone companies and also internet companies. Both require the usage of data trunks (similar to a water line), and sometimes share connections to offset costs to ensure customers get what's needed.

Also, where I live for water production, some cities have stopped offering the service because businesses are doing a BETTER and CHEAPER job of managing services. EMS service too.

Yes, a bad businessman can become head of a company that doesn't know what he's doing. If that happens there are multiple options:

1) Vote out the CEO or head of the company
2) Let him run it into the ground, destroying the company

We've seen this happen time and time again with many, many companies from any and all business practices. The difference is that in the private world is that there is actual competition for the products and services, in the government-monopolized world, there is not. If there is a better unique system, it's rarely implemented in the government system (why don't we have differed investments for SS to get a better rate? Politicians. Why don't we have more school choice? Politicians) yet the situation in the private field is far more liquid.

I worked for a private EMS company for a year. I know what privately-backed services do when they intrude on the government's game. They are usually cheaper because the labor supply is based on free-market economics and not government-mandated requirements (a medic for the publically-funded city is about twice as expensive as the privately-backed county), and tenure usually isn't a problem, which usually is the case in the public realm.



Back from the dead, I'm afraid.

I find your entire argument hilarious.

So how are different water companies going to get their water to consumers through the same pipe system?  Magic?  Seems to be your answer for other things.  Other such public goods and natural monopolies include roads and security, but I guess they could build several roads on top of each other and so you can only pay one company when you drive on them, and I guess Army Inc. could let Mexico invade your neighbors house if he didnt pay his national security bill on time.

Your water company businessman analogy is also laughable.  I dont know how anyone could convince themselves that an owner wanting to make as much profit as possible, with no restrictions on price or quality, would be an equal situation to a politician in charge of the plant who was running for re-election in a few years.  Both the city government and the investor who own the water plant are going to hire someone else to run the company for them, again the difference here is that the mayor wants to make his electorate happy so he can get re-elected and the investor/owner wants to make as much money as possible.

See the difference?  Consumers can force a politician out of office, but they cant force the business owner of a monopoly out of business.

Its obvious that you have a fundamental misunderstanding of economics.  I would advise reading the economics website I linked to or taking an introductory economics course.



ManusJustus said:

I find your entire argument hilarious.

So how are different water companies going to get their water to consumers through the same pipe system?  Magic?  Seems to be your answer for other things.  Other such public goods and natural monopolies include roads and security, but I guess they could build several roads on top of each other and so you can only pay one company when you drive on them, and I guess Army Inc. could let Mexico invade your neighbors house if he didnt pay his national security bill on time.

Your water company businessman analogy is also laughable.  I dont know how anyone could convince themselves that an owner wanting to make as much profit as possible, with no restrictions on price or quality, would be an equal situation to a politician in charge of the plant who was running for re-election in a few years.  Both the city government and the investor who own the water plant are going to hire someone else to run the company for them, again the difference here is that the mayor wants to make his electorate happy so he can get re-elected and the investor/owner wants to make as much money as possible.

See the difference?  Consumers can force a politician out of office, but they cant force the business owner of a monopoly out of business.

Its obvious that you have a fundamental misunderstanding of economics.  I would advise reading the economics website I linked to or taking an introductory economics course.

They actually already do share water pipes in a lot of areas Manus.

One thing water companies are always lobbying agaisnt is laws that free up the pipe system to be used by everybody.

For an example of such laws passing foward

http://www.news.com.au/adelaidenow/story/0,22606,25662013-5006301,00.html

How does it work you provide water to the main pipeline for your customers... others do as well... as does the main water supplier.

 

Any "under" you go... as in you provie less water then those who you take it up on... you pay the main supplier their stardard rate.

Any "over" you go, you get a credit for next month equal to the main comapnies price of water.  (If they chard 2 dollars a gallon and you charge 1, and your 2 gallons over.  You get a 1 gallon credit.)

\



ManusJustus said:

I find your entire argument hilarious.

So how are different water companies going to get their water to consumers through the same pipe system?  Magic?  Seems to be your answer for other things.  Other such public goods and natural monopolies include roads and security, but I guess they could build several roads on top of each other and so you can only pay one company when you drive on them, and I guess Army Inc. could let Mexico invade your neighbors house if he didnt pay his national security bill on time.

How do electric compnies get power through the same lines? Magic? Yet they do exactly that in America. I told you that they do exactly that in my area. Water can be the same way.

Your water company businessman analogy is also laughable.  I dont know how anyone could convince themselves that an owner wanting to make as much profit as possible, with no restrictions on price or quality, would be an equal situation to a politician in charge of the plant who was running for re-election in a few years.  Both the city government and the investor who own the water plant are going to hire someone else to run the company for them, again the difference here is that the mayor wants to make his electorate happy so he can get re-elected and the investor/owner wants to make as much money as possible.

Lets back up here for a minute:

The businessman still needs to do a good job, or face external pressure from other businesses that can either provide the same service, or better the service. Again, in my county, it's happening with city water vs. public water. The evil private water company is keeping their consumers happier and has a better profit than the city is, so they are preping to transfer control over to the private company.

And if the investor does not make the consumers happy, they can easily switch, forcing said owner out of business. I've stated that already. Go read the business wires. CEOs get fired all the time.

See the difference?  Consumers can force a politician out of office, but they cant force the business owner of a monopoly out of business.

Yet in praxis, very little has changed in the US when politicians are removed from power promising reforms to government-run monopolies. Also, your under the assumption that a government monopoly is as efficient as a private monopoly. I'd give the historical precedent of various monoplies to state your wrong. Govt. monopolization of postal, pension and education services has been detrimental, and I've used them again and again as an example of why government monopolies are bad, yet you rehash the same old rhetoric that 'well they can be voted out' yet parties have changed hands many times, and we still have a broken system. So I must ask again: How are the currently run government monopolies better than a private monopoly? History is not on your side in America, I believe.

Its obvious that you have a fundamental misunderstanding of economics.  I would advise reading the economics website I linked to or taking an introductory economics course.

Given your examples have been wrong, I suggest you do the same.

 



Back from the dead, I'm afraid.

I should also state that if your THAT worried about privatized monopolies on services like water, the government could always ensure that competition existed. Even in that scenario, it'd be better than the government monopolies on specific services.

Furthermore, what government agencies do you believe to be so critical that they could never ever become privatized? Your arguing water, but argument your providing leads me to believe that if the government provides better praxis due to voting, then the government should run every area of business as it would have the most fair competition.



Back from the dead, I'm afraid.