People of the same trade seldom meet together, but the conversation ends in a conspiracy against the public, or in some diversion to raise prices.
---Adam Smith, The Wealth of Nations.
A recent post by Nikto entitled "The Tax Cut Experiment" provoked an interesting discussion in comments and it made me think of the quote above. Clearly, Smith was well aware of corporate force even that long ago. The comments in that post also sparked a memory of the phone call between Robert Crandall, president of American Airlines, and Howard Putnam, president of Braniff Airways, in 1982.
Crandall: I think it's as dumb as hell...to sit here and pound the #$%#$ out of each other and neither one is making a $%#$ dime.
Putnam: Do you have a suggestion for me?
Crandall: Yes, I have a suggestion for you. Raise your #$%#$ fares 20 percent. I'll raise mine the next morning.
Putnam: Robert, we...
Crandall: You'll make more money and I will, too.
Putnam: We can't talk about pricing!
Crandall: Oh, ##$%$, Howard! We can talk about anything #$%$ thing we want to talk about.
If Crandall were around today, he'd be running a Tea Party organization.
The simple fact is, folks, that the government can sometimes improve markets. Never is this more true than with the airlines. Time and again we see that if left to their own devices they will collude against the public and produce a market that is not efficient...in other words, less consumer surplus.
In so many ways, this accurately describes the problem we have right now. We have a decided lack of aggregate demand with consumers (two thirds of our economy) not spending money. The main reason for this is prices from food to gas to health care are completely ridiculous.
With government effectively ball less (vasectomy courtesy of the Tea Party), it's only going to get worse.
68 comments:
Guys like Crandall are still running the airlines. Through the magic of the Internet airlines can collude instantly on prices.
They have established protocols for signaling fare increases. Even though they've been sued countless times over the last 20 years for doing this, they're still at it.
The same thing happens with gas prices, only on a much more targeted price variations. All the stations in one part of the city regularly charge 10-20 cents more than all the stations in another part of the city -- even though stations in the same neighborhood are owned by competitors. And most station's prices these days are controlled by a central computer system, not the individual operators.
This allows the companies to vary prices by time of day, to allow for maximum gouging -- err, excuse me -- rather, "market efficiency."
Many industries no longer have any viable competitors anymore. The big companies carve out mutually agreeable sectors and pretty much ignore each other. When competitive upstarts come along they are bought off and their product lines trashed.
Like, say, T-mobile...
Clearly, Smith was well aware of corporate force even that long ago.
Collusion is force?
Words do have meanings ya know.
Smith also warned of the danger of govt giving favor to certain businesses. Funny how you never quote that part.
>A recent post by Nikto entitled "The Tax Cut Experiment" provoked an interesting discussion in comments and it made me think of the quote above.
If by interesting you mean "Nikto shows that he has trouble figuring out how a known-to-be-temporary-tax-cut might differ from an actual tax cut", I agree. You guys have never been big on trying to understand incentives though, so its ok. But yes, in general, if given the opportunity, corporations will attempt to maximize profits through whatever means they think they can get away with. Is that somehow surprising?
>If Crandall were around today, he'd be running a Tea Party organization.
Pretty gratuitious swipe, even from a partisan hack like you Mark.
>Time and again we see that if left to their own devices they will collude against the public and produce a market that is not efficient...
Leaving aside the fact that you use the word "efficient" like it has some kind of useful meaning there, rather than typical Markish "sounds nice but has a mush meaning", you know whats worse than when corporations collude with each other? When they collude with the government. Which collusion do think I find more worrisome?
>The main reason for this is prices from food to gas to health care are completely ridiculous.
Oh this is rich. The stereotypical professor, who knows absolutely nothing about producing oil or food tries to tell oil and food producers that their prices aren't right. What are the right prices then Mark? Have you examined the supply chains for those products that you think are too expensive and identified the places where savings can be found?
You should look up ivory tower thinking Mark. It's a big problem for you.
By the way, what is the source for the phone conversation you relate? Just curious.
With government effectively ball less (vasectomy courtesy of the Tea Party)
Just as firm a grasp of medical knowledge as everything else.
Words, how do they work?
My source was Greg Mankiw's Principles of Microeconomics, Third Edition, p.364.
you use the word "efficient" like it has some kind of useful meaning there, rather than typical Markish "sounds nice but has a mush meaning"
And you folks chide me for not understanding basic economics...tsk tsk...:)
Speaking of which...the basic rules for oligopolies apply for the oil cartels. Sure, there is great demand around the world but given that there are so few producers of this essential energy, they can charge whatever price they want really. The market is not efficient because there is very little consumer surplus. With the government not being able to control the price (and they shouldn't), the only other alternative is other forms of energy. But that would mean admitting that liberals were right about something and we can't have that either. More importantly, it would mean taking power away from very powerful people. That also will not happen because they are the blessed and holy job creators.
I'm curious, Hap, about what sort of economy you think we are going to have with more and more money concentrated in the hands of fewer people. You've made it clear that the government is to do nothing about this. The free market is not going to take care of it so who will then? Who? If two thirds of our economy is consumer spending, and those consumers don't have enough money, how does this all play out? What is to be done about the decided lack of aggregate demand? Anyone can answer, of course.
I don't see how you can come to any other answer than the middle class being the engine that drives our economy. And if the "free" market isn't protecting them, then who does, if not the government?
And yet Mark and Nikto continue to ignore the airlines that didn't raise prices in order to try to gain market share instead of profit margin. But I guess that doesn't fit the anti-free market narrative. Or maybe it's only that Daily Kos or Talking Points Memo didn't see fit to mention them (for some strange unknowable reason), and both Mark and Nikto were too lazy to check for themselves. Hmm, are Mark and Nikto lazy, or are they dishonest? Why, yes! Yes, they are!
>they can charge whatever price they want really.
Wow. Any price they want huh? Like.. $500 a barrel of oil? Why haven't they done that, I wonder? Sure seems like a wise move if they can charge any price they want.
>The market is not efficient because there is very little consumer surplus.
Mark, could you explain, in your own words, why the amount of consumer surplus tells us whether a market is "efficient" or "inefficient"? I think you're either bullshitting or coming at it from a very technocratic, "the economy is just a bunch of levers that can be pulled at the government's whim" level of nonsense. (And in general, you really ought to make a habit of explaining what you mean when you use such terms rather than tossing them out in an attempt to sound smart. It doesn't fool anyone, as you should well know by now.)
>I'm curious, Hap, about what sort of economy you think we are going to have with more and more money concentrated in the hands of fewer people.
Round we go again. You forget, o elevated sense of self one, that you have yet to demonstrate why that is a problem, which you were reminded of the last time you brought it up, and you proceeded to (again) refuse to explain. And I will once again ask - is the economy a zero sum game, where someone who gets richer necessarily makes someone else poorer? If it is, learn some economics. If it isn't, then why should you care if someone else has managed to get rich, except in the sort of case where they literally stole it, or managed to extract it from taxpayers with the complicity of the government?
>If two thirds of our economy is consumer spending, and those consumers don't have enough money, how does this all play out?
Let's turn the question around. If consumers don't have enough money, why do you think that knocking down those that earn the most is going to help those consumers get more money?
>And if the "free" market isn't protecting them, then who does, if not the government?
Dear god, would you stop throwing random nonsense words into sentences without explaining your premises. When has the free market "protected" anyone? Why does the middle class need to be "protected", and from whom? Why do you think the government would be better at "protecting" the middle class than the middle class would be at "protecting" themselves?
Man. King of throw random shit out, thy name is Mark.
could you explain, in your own words, why the amount of consumer surplus tells us whether a market is "efficient" or "inefficient"?
Could you? I don't think so. Hap, it's really OK if you don't fully understand what I am talking about. It doesn't mean that you "lose" and I "win" if I have deeper knowledge about something and you don't. Attacking me personally in the hopes of a "gotcha" and/or masking your ignorance is pretty sad. I'm certainly not an advanced economics expert but I do know the basics and it appears to me that either you don't or your ideology is frustrating you again and preventing you from being able to have a critical discussion about this stuff.
Maximizing surplus (both consumer and producer) means having the most efficient market possible. Consumer and producer surplus are fundamental indicators of whether or not the allocation of resources in a market is efficient. Taxes, for example, erode surplus in the same way that monopolistic firms do-deadweight loss. The goal is to allow the market its natural equilibrium. There are obviously many factors that can interfere with this and the one Nikto and I were talking about has to do with what happens when a firm is a price maker and sets a price that maximizes profit but erodes consumer surplus. This is the case with the oil cartels.
They can charge whatever price they want to maximize profit. Obviously, they won't charge 500 dollar a barrel as there would be less demand so they don't really want that. But they will charge at a price that is above marginal cost. Remember, in a competitive market, price=marginal cost.
Regarding your zero sum game point, again, I would ask you if you are talking about real wealth or the inflated wealth we see in our economy. If you are talking about real wealth, then yes, it is a zero sum game. I have explained to you time and again that if more wealth is concentrated in the top percentiles, our economy suffers because the middle class is the engine that drives this economy. The proof of this can be seen in the simple fact that consumer spending represents two thirds of our economy. If there are less consumers spending, our economy suffers which is the situation we have now. Given these facts, this statement,
where someone who gets richer necessarily makes someone else poorer? If it is, learn some economics.
makes no sense. Unless, of course, you are being pissy about the fact that trickle down has been proven to be a colossal failure over time.
Regarding protection, the government protects property rights which is clearly an outcome that makes markets operate efficiently.
>Could you?
No, because I don't think it has much applicability to the real world. Why do you think I asked you? Nor am I an economics expert - but since you don't provide sources and simply toss off notions without explaining why they might be relevant, your history leads one to suspect "appeal to big words" on your part. Sorry, but you've earned it.
Two problems:
First, do you have a reference to the idea that producer or consumer surplus has anything to do with "efficiency"? Most ideas of market efficiency (that I know of) have to do with the availability of information in the market. Not the amount of surplus. Intuitively, the line you draw between surplus and efficiency doesn't necessarily seem to make sense, because price changes would change the surplus for one or the other group, which would then presumably lead someone like you to think that the market is no longer efficient. Since price changes happen all the time, that seems silly, so I would hope you mean something else.
Second, you're taking a pretty abstract concept, that of surplus, and trying to claim conclusions from it in the real world. That's a lot like claiming conclusions from the Laffer curve. Yes, we know the Laffer curve exists, because the two extremes make the case for it obvious. But its either not possible or extremely difficult to know where we are at inside the Laffer curve. Same problem here - I suspect you're claiming knowledge (I know what the surplus is in the oil market (what is it?), and its not maximized (how do you know that?), so the market isn't efficient) that you don't have. Feel free to correct me.
>Remember, in a competitive market, price=marginal cost.
You mean in a perfectly competitive market, which, as you are no doubt aware, largely doesn't exist except as an abstract concept. Therefore:
>They can charge whatever price they want to maximize profit.
Is true to the same extent as just about every other market in the world, where producers have some leeway to set their prices in order to try to maximize profit. Competition with other producers necessarily limits that leeway though. Now, you are presumably claiming that the oil market, for example, is dominated by an oligopoly, and thus competition is limited or is able to collude to a greater extent that possible in other markets. Yet you have offered no evidence for this other than your assertions. I like to dabble in the oil markets, so I happen to know that there are hundreds of oil exploration and production companies out there, most of which are far smaller than the biggies like Exxon or Shell. All of these little companies are trying to become the next Exxon or Shell, and the higher prices of oil only motivates them more. Speaking of which, Exxon and Shell make no small effort to find oil themselves, which helps reduce reliance on middle east oil. All this is driven by the price of oil, which is the essence of capitalism - high prices attract competition to a market, hoping to make money. So again - what do you think is broken about the oil market? What makes you think you can "fix" it?
>I would ask you if you are talking about real wealth or the inflated wealth
There you go, making shit up again. What is "real" wealth? How do you tell the difference between "real" wealth and "inflated" wealth? Is that an actual term of economics, or just a Mark made up term? Since I don't know what you mean by that, it's pretty hard to answer your question.
>I have explained to you time and again that if more wealth is concentrated in the top percentiles, our economy suffers because the middle class is the engine that drives this economy.
I like the way you claim stuff morphs into "explaining" when you retell it. It's like you want believe your assertions magically turn into fact with the passage of time. You have claimed such, you have done nothing to address the rather obvious holes that have been poked in your claims.
>If there are less consumers spending, our economy suffers which is the situation we have now.
Sure - but you're implying that the reason that consumers have less money is because there are wealthy people out there. Which implies that those wealthy poeple are taking their wealth straight out of consumer's pockets. You haven't come anywhere close to explaining why that line of reasoning makes sense.
what sort of economy you think we are going to have with more and more money concentrated in the hands of fewer people
How exactly are you harmed by Soros, Buffet, Jobs or Gates becoming obscenely wealthy? Answer that or kindly STFU about how bad the concentration of wealth is.
do you have a reference to the idea that producer or consumer surplus has anything to do with "efficiency"?
Any introduction to microeconomics text will suffice. The one I have is Mankiw's Principles of Microeconomics, 3rd Edition. Efficiency is defined therein as "the property of resource allocation of maximizing total surplus received by all members of society."
because price changes would change the surplus for one or the other group, which would then presumably lead someone like you to think that the market is no longer efficient.
Well, it is true that sometimes there is more consumer surplus than producer surplus and vice versa. A market is always efficient if the total surplus is maximized which means the established market equilibrium (price and quantity) even though it may be that one group has more surplus than the other.
When you get to monopolies and oligopolies, you see inefficiency. They charge a price that is above marginal cost which leads directly to less consumers buying the product even though they value it. That is inefficiency defined and is an accurate way of describing the problem we have with several markets in our economy. So, I disagree with you regarding it being an abstract concept. The health care market is a great example but I've talked about that before.
Competition with other producers necessarily limits that leeway though.
That's right. So where is the competition for oil? Or air travel? There doesn't seem to be much. These are not competitive markets and so they can dictate the terms and be price makers.
So again - what do you think is broken about the oil market? What makes you think you can "fix" it?
I think the people that produce oil in this world collude on pricing. It's pretty obvious. Fixing it would involve allowing alternative forms of energy into the market and actually making it competitive. With the power that big oil has in the world, this seems unlikely.
There you go, making shit up again.
I've discovered that when you say this it really means you just don't like what I said. So, do us both a favor and not waste any more time. Simply say, "I don't like that." It's the same thing as me not liking the Dave Matthews Band.
Real wealth would be a savings account with 10K in it. Inflated wealth would the price of my home 8 years ago as opposed to today. In other words, the perception of what something may be worth someday. Now, you could argue that my money in my savings account isn't real either but that could whir off into a seriously abstract discussion.
but you're implying that the reason that consumers have less money is because there are wealthy people out there.
Hell no I am not. There are always going to be wealthy people in our society. That's the nature of how our system works. My complaint is that those wealthy people want more and more at the expense of the very economy that has made them as wealthy as they are. You can't have any serious growth with such a decided lack of consumer confidence.
Did you ever read the Citigroup Plutonomy document? It's no longer available online but it essentially explained where we are currently.
You haven't come anywhere close to explaining why that line of reasoning makes sense.
That's not my fault. That's your belief system getting in the way. You operate under the idea that the more money that is sent upwards the better it is for the economy. The results speak for themselves.
Fixing it would involve allowing alternative forms of energy into the market and actually making it competitive
There is a big difference between letting something into the market and 'making' it competitive.
Either it is competitive or it is not.
I'm certainly not an advanced economics expert but I do know the basics
Actually no, you don't know the basics. You occasionally quote an economist, but your understanding really doesn't extend beyond a soundbite. You could do something about that you know.
Efficiency is defined therein as "the property of resource allocation of maximizing total surplus received by all members of society."
That isn't a very good definition, particularly for a micro-econ text. I'd suggest Paul Samuelson instead.
A market is always efficient if the total surplus is maximized which means the established market equilibrium (price and quantity) even though it may be that one group has more surplus than the other.
Sounds like you are attempting to describe Pareto optimality - a concept they teach in Econ 101 and then spend the rest of all economics disowning.
The health care market is a great example but I've talked about that before.
Actually no, you haven't. You wave your hands (and lips) about how it isn't efficient, but you never say what specifically is so. I've pointed at least twice to the cost curve (by age) over population - and you have avoided addressing that altogether. So don't lie - even to yourself.
Or air travel?
You keep saying that, but more people travel more cheaply today than 40+ years ago - under the regulations you would seem to yearn to return. Yes, inefficient air operations have been squeezed - brutally - but consumers have benefited. There just isn't even an argument about that. I mean you aren't actually arguing that competition is bad because some corporations have been hurt by it are you?
Did you ever read the Citigroup Plutonomy document?
Yes, and it was about as meaningful as The Protocols of the Elders of Zion.
That's not my fault. That's your belief system getting in the way.
No M it is you insisting on your beliefs without presenting real arguments. It is all about your belief system.
>The one I have is Mankiw's Principles of Microeconomics, 3rd Edition. Efficiency is defined therein as "the property of resource allocation of maximizing total surplus received by all members of society."
Do you have an actual link to such online? I'm not trying to be pedantic, actually, I just can't find anything that remotely ties together the ideas of efficiency and surplus. The notion of market efficiency is always about the relative amount of information available to the various players in the market.
>They charge a price that is above marginal cost which leads directly to less consumers buying the product even though they value it.
No, you're already off into the weeds. The only market which charges a price that is equal to the marginal cost is a perfectly competitive market, which does not exist in the real world. In the real world, every producer charges a price that is above marginal cost, assuming they can actually sell their product. Therefore, I can only surmise that your complaint is that in certain markets, you believe that the price charged is much higher than the marginal cost than is reasonable, in your opinion. Is that your complaint? Beyond your own unshakable belief, do you have any evidence for this larger-than-would-otherwise-occur price markup?
>That's right. So where is the competition for oil?
Er, in the very numerous producers of oil? The numerous refiners? The numerous producers of drilling and exploration equipment? Where *isn't* the competition for oil, and what do you have beyond assertion that there isn't any competition for oil?
>It's pretty obvious.
No, it's not. Only in your wish think world.
>Fixing it would involve allowing alternative forms of energy into the market and actually making it competitive.
What a mess. First, "allowing." Who isn't "allowing" alternative forms of energy into the market? Who can even decide that, with the possible exception of the government? How do you "make" alternative forms of energy competitive? Being competitive isn't exactly some kind of switch you can just pull at a whim. In order to compete with oil, an alternative would have to: (just off the top of my head) have a roughly comparable or better cost/energy output. Have similar or better distribution mechanics. Not require certain environmental conditions to be true in order to work. Be able to function on a small scale, like a car. Not require massive government subsidies in order to be viable. (Otherwise known as not being competitive except that government wants to make it seem like it is.) Do you know of an alternative energy that comes even close to the flexibility that oil provides? I don't. There are certain cases where oil can be reasonably replaced with something else, such as for power plants, but the internal combustion engine, for example, is pretty far from being powered by banana skins, despite all your wishing. Yes Mark, it would be nice if there was some other source of energy out there that could simply whisk oil away as the worlds primary source of energy, but it's just not that easy or simple.
>With the power that big oil has in the world, this seems unlikely.
Oh ok. So you're going with the conspiracy angle, I take it? Very .. scholarly of you, Mark.
>I've discovered that when you say this it really means you just don't like what I said.
Nope, I'll tell you exactly what it means. It means you said something that is so ambiguous as to be meaningless. It's a common way for you to muddy the waters of any discussion, by tossing out something that requires hundreds of words of clarification to even understand what you are trying to say. I'm sure in your mind, you are making some kind of brilliant point. To the rest of us, it's like walking into a party and taking a dump in the middle of the room. Everyone looks around at each other and asks, "wtf was that?" In this case, you lived up to it:
>Real wealth would be a savings account with 10K in it. Inflated wealth would the price of my home 8 years ago as opposed to today.
Uh huh. And 8 years ago, how would you tell the difference between "inflated" wealth and "real" wealth? Answer: you couldn't. It is entirely possible that today, right now, your house in valued at a price that isn't sustainable. How would you be able to tell? But it may also be true that those dollars in your savings account represent inflated wealth, courtesy of a government that is eager to inflate it's currency. How would you be able to tell? You can't. I'm aware of no such classification of wealth in anything resembling economic thinking, so please, clarify your output and tell me why you think this notion of "real" vs "inflated" wealth is meaningful. Leaving aside the notion of inflated vs real wealth, you seemed to state that where wealth is concerned, one persons gain is another persons loss. This is a fallacy. There are gazillions of resources out there that will tell you why, here is one non academic one if you want to educate yourself:
http://everydayecon.wordpress.com/2006/10/11/economics-is-not-a-zero-sum-game/
>wealthy people want more and more at the expense of the very economy
And again, we are back at square one. "At the expense" of. You keep simply presuming that this is the case. How does a wealthy person harm the economy by producing wealth? Assertion does not make an argument Mark, and that's all you have ever done here - simply assert that its true.
>Did you ever read the Citigroup Plutonomy document?
Yes. I found it to be a rather unconvincing claim about how the world works. You do realize that it was authored by a corporation though, right? booga booga!!
>You operate under the idea that the more money that is sent upwards the better it is for the economy.
Sigh, another ambigous claim. What does it mean to "send money upwards"? I certainly don't write checks to people that are richer than me just for the heck of it, do you? If I believe anything, it is that encouraging conditions that lead to wealth creation is a good thing for all members of the economy. Some people will likely be better at creating and/or accumulating wealth than others, perhaps even massively so. This is not a bad thing unless that wealth creation is done on the basis of some sort of force. If it is done by convincing other people to voluntarily part with their money, then everyone will be better off. (You might want to look up how wealth is created if you are confused on that one.)
And they both still ignore the airlines that didn't raise prices, following another competitive strategy.
Run away, brave Sir Mark! Run away!
I just can't find anything that remotely ties together the ideas of efficiency and surplus.
Well, juris' definition of efficiency above is another example. Mankiw has his materials available online at:
http://mankiw.swlearning.com/mankiw3e/powerpoint_econ.html
Chapter 7 is the section on surplus and efficiency. Slide 32 has the definition that I quoted above. I would also point you to Chapter 15, Slide 29, for a graphic representation of what I have been discussing. Recall that oligopolists would serve themselves best if they charged the same price that a monopolist would charge if they market were a monopoly.
Much of what I am saying here ties together. It's up to you to face the reality of what is going on. I can't force you, obviously. If you accept the fact that two thirds of our economy is supported by consumer spending, then less consumer spending is bad. There are less consumers spending because they have less money. More of the pie belongs to less people. These are also indisputable facts. My contention is that firms in the markets which have inelastic demand (health care, gas, airlines) set prices which result in inefficiency...a price above marginal cost...a price which some of the very much needed consumers can't afford to pay even though they value the good.
I think the problem here is another of ideological perception. You have assumed that I am a Marxist because I am a Democrat so therefore I am against wealth creation and my goal is state run even distribution of wealth. Not at all. My goal is ending corporate welfare...the corporate queens of which Nikto spoke today...ending the stranglehold that some firms have on our country. I'm not talking about the voluntary purchase of DVDs or video games here, Hap, I'm talking about the basic necessities of life.
This is why the government exists...to intervene when markets do not allocate resources efficiently and do so at the expense of society as a whole. People need health care, Hap. How you don't see the force in this is simply unfathomable.
There just isn't even an argument about that.
Nikto and I showed it to you. You didn't like it. What more is there to say? I can tell you over and over again that the sky is blue but if you have rose colored glasses on, you see a different color and always will. Besides, I think we both know at this point, juris, you are just doing this to be contrary. If I was right about something, you would never admit it.
Larry, do you have anything substantive to offer this conversation? I'd like to hear your thoughts on market efficiency.
Haplo9, Juris, and Larry,
2. Character Assassination/Ad Hominem. Fox does not like to waste time debating the idea. Instead, they prefer a quicker route to dispensing with their opponents: go after the person's credibility, motives, intelligence, character, or, if necessary, sanity. No category of character assassination is off the table and no offense is beneath them. Fox and like-minded media figures also use ad hominem attacks not just against individuals, but entire categories of people in an effort to discredit the ideas of every person who is seen to fall into that category, e.g. "liberals," "hippies," "progressives" etc. This form of argument - if it can be called that - leaves no room for genuine debate over ideas, so by definition, it is undemocratic. Not to mention just plain crass.
which does not exist in the real world. In the real world
Forgot about this. Yes, they do. A farmer's market is an example of perfect competition. Actually, street vendors around the world who sell food are an example and they are very prevalent. There are a large number of buyers and sellers. There are no entry or exit barriers. Buyers can switch easily to one seller or another. The products are homogeneous. I was nearly dragged to a farmer's market this weekend by a visiting friend which made me think about this. I find them to be boring as all shit.
Another example is free software, right?
Hey Santa, didn't see your comment as I was composing. It's nice that you pointed that out but their personal attacks have about as much weight with me as "You are picking on me because I am black"-a common statement I hear at school.
Wow, and you clowns calling practically every non-Prog fascists, racists, and other crap isn't personal or ad hominem attacks? Give me a fucking break. Losers.
And Mark still ignores the airlines that didn't raise prices. No doubt their following a different competitive strategy is an example of just how collusive those sneaky bastards really are.
Thanks for the link.
>It's up to you to face the reality of what is going on.
Ah yes, Mark has already figured out how the world works, its just up to the benighted rest of us to see his brilliance. Pardon me if I find you rather unconvincing. :)
>then less consumer spending is bad.
Why yes, I do accept that less consumer spending is bad.
>More of the pie belongs to less people.
No, this does not follow, as you've been instructed repeatedly. Economics is not a zero sum game. Using the government to try to reduce the size of the pie that wealthy people take won't put more money in middle class people's pockets, except with some kind of draconian confiscation scheme. It will just reduce the total size of the pie, and make everyone worse off.
>markets which have inelastic demand
Well, at least you aren't claiming those markets are perfectly inelastic anymore. I'll call that progress Mark, good job.
>set prices which result in inefficiency...a price above marginal cost...
Ok, well, as you seem so convinced that this situation is occurring, what should those prices be? Tell us. The current spot price of a barrel of oil is about $85. The average price of a gallon of gas is around $4.24. What should they be instead, and more importantly, what evidence can you bring to bear that makes a case that those price points are where they are because of arbitrary and profiteering-like cost increases by producers? If you don't have any information here, that's fine. It's probably a large undertaking, and I doubt you've undertaken it. How about this then - what measures would you say the goverment should take to reduce inefficiency in these markets?
>You have assumed that I am a Marxist because I am a Democrat
That would be something of an insult to Marxists. I have to believe/hope that an actual Marxist could at least be coherent with their claims. All you've been saying is this: "A book told me that markets can be inefficient. And I think some stuff costs too much. Therefore, those markets are inefficient, and I think the government can fix it. Somehow."
>My goal is ending corporate welfare...
If you mean corporate subsidies, I agree with you. If you mean the collusion between government and corporations, I also agree with you. But I would submit that increasing the power of government will reduce neither of these things, regardless of your intent. I would also submit that neither political party is interested in reducing those things.
>ending the stranglehold that some firms have on our country.
Uh huh. Are you simply saying that "prices higher than Mark likes" = stranglehold? Or do you have something more.. sinister in mind?
>This is why the government exists...to intervene when markets do not allocate resources efficiently
Let me finish your sentence. "and most likely make markets even less efficient than when they started." We've not even talked about means, which is - what do you think the government should do in these cases of alleged market inefficiency, and why do you think the government is good at fixing such things?
>People need health care, Hap.
Why yes, which is precisely why I don't want the government involved with health care. They'll just make it worse. Technocrats always vastly overestimate their own understanding and ability. It's why you should never be in a leadership position Mark, lest you find that out the hard way.
Oh Santa. I think you're a bit bitter that nobody gave you the "fuck you Santa" that you wanted when you came here. Hug time?
>Forgot about this. Yes, they do.
Without even going into whether those examples represent perfect competition, are those examples anywhere close to the markets that you are complaining about for being inefficient? No? They aren't? Then why are you even talking about perfect competition (price = marginal cost) in relation to those markets? Price, in the oil market, doesn't equal marginal cost. And it never will. So.. why are you bringing it up?
>It's nice that you pointed that out but their personal attacks have about as much weight with me as "You are picking on me because I am black"-a common statement I hear at school.
You do realize Mark, that taking the high road sort of requires that you actually be on the high road yourself, right? You guys have this really weird disconnect where you happily insult all of us, and then act shocked, shocked! when you get it back in return. I'll remind you again - you aren't fooling anyone, except apparently yourselves.
Nikto and I showed it to you.
Bullshit. You talked a bit about bad working conditions, but you said NOT ONE FUCKING thing about consumers not benefiting. That's because you can't - there is no case to be made there.
Oh wait, I remember, you or someone was all boo-hoo I don't get the service I used to get before all the hoi-polloi got to fly. Which the obvious answer was - pay for first class if you want first class service. And stop fucking whining.
I will reiterate my challenge for any of you lame fucking leftwads to nut-up and answer:
How exactly are you harmed by Soros, Buffet, Jobs or Gates becoming obscenely wealthy? Answer that or kindly STFU about how bad the concentration of wealth is.
Anyone? Buehler?
Larry, I can't have a substantive discussion with you when you ignore facts.
Most U.S. airlines raised fares after a standoff between Republicans and Democrats in Congress on funding for the Federal Aviation Administration caused federal excise taxes on tickets to expire on July 23. In effect, the airlines grabbed the money that previously went to the government instead of passing the tax break to consumers.
Deal with this and then maybe we can talk.
Hap, regarding oil prices, there's not much anyone can do except take steps to break free of the oil teat. Price ceilings are out and we can't just simply attack these nations for their oil. Oh, wait....:) With demand as high as it is in the world, it's up to our nation to lead the way with alternative forms of energy. Sadly, energy firms here are not going to give up that power easily...power that the use to influence the government.
at least be coherent with their claims.
And the personal attacks...living #2 of Boaz's 14 points to the fullest, are we? I'm not an idiot, Hap. I know exactly why you say stuff like this. Admitting that I might know more than you about a subject is just unthinkable. Resorting to personal attacks is a sure sign that you are out of your depth. If you weren't, you'd simply disagree, explain why, and move on.
why do you think the government is good at fixing such things?
Regarding health care, I submit Social Security and Medicare/Medicaid as being successful. I know you don't like them but that doesn't mean they haven't worked. The government is also the appropriate tool for protecting property rights which makes markets more efficient.
Governments should never be involved in health care, huh? The Heritage Foundation ranks Hong Kong, Singapore, Australia, New Zealand, Switzerland, Canada, Ireland and Denmark ahead of the US in terms of their measurements for economic freedom. All have government involvement in health care with Singapore, Switzerland, Canada, Ireland, and Denmark being government run.
Now, you could make the case that an entirely government run system HERE might not work due to the stifling of innovation and our own set of unique challenges. But saying that the government should never be involved in health care and will make it worse isn't supported by facts. Your slip (ideology) is showing, again, Hap:)
Anyone? Buehler
Answered several times, juris. When you are ready to listen, let me know:)
Seems like you're the one ignoring facts. Your own quote says that not all airlines did. How can we have a substantial discussion when you ignore key facts?
Regarding health care, I submit Social Security and Medicare/Medicaid as being successful.
SocSec isn't about health care. M/M was added on to address health care. Am I just picking nits, or is your brain so haphazardly connected that any 'welfare' spending must be about health care?
Answered several times, juris.
Shameless, pathetic liar. Shut me up by posting a link to one of those answers - a real answer, not one of those fucking stupid "corporations frame our lives" steaming piles of shite. M'kay? You've never answered this - and I seriously doubt you ever will. You can't answer because it is a matter of faith to you - and faith doesn't look for or need evidence. If you understood that much, I would be okay with that, really! Just say it is a matter of belief for you - and I'll stop asking for evidence and reason. Then we can have an honest disagreement - instead of your moronic mendacity.
where you happily insult all of us
No. That's not what happens. I'm normally just a reader here but that is preposterous. Mark makes statements-some of which are factual others of which are opinions. In response to them, you personally attack and insult him. This is especially true when you don't have the facts on your side or they don't fit your perception of how things should be. Or both.
Obviously you've never read any Mark's many posts where he comes right out and accuses Conservatives, Republicans, libertarians, and pretty much all non-liberal progressive Democrats of being stupid and/or evil fascists and racists, with political views comparable only to Nazis, etc., etc., ad nauseum. Combined with his reliance on argument by repeated assertion while ignoring both countervailing evidence and calls for supporting evidence, his schtick quickly becomes pretty transparent, and any of us commenting here for more than a few months aren't willing to cut him any slack. Mostly because he deserves none. Hell, if it wasn't for the fun of watching this endless slow-motion train-wreck of a blog go off the tracks, along with the entertaining nature of Mark's general cluelessness and delusions of adequacy, I wouldn't bother. Or if I did, I'd be a lot less polite.
Also, Mark's shameless deployment of blatant double-standards, all the while strenuously denying that he does any such thing (MARK: "Who are you going to believe, me or your lying eyes?"), and his endless self-regard (mistaken for self-reflection) makes this a kind of comedy gold.
Take a look at the latest big idea from Marxy's economics hero, Paul Krugman:
Paul Krugman Calls for Space Aliens to Attack Earth Requiring Massive Defense Buildup to Stimulate Economy
Space Aliens! Frikkin' Space Aliens! You call this serious economics?!?
I've noticed that the level of batshit-crazy from Marxy and Nikito has been rising here. Apparently they're in lockstep with Krugman.
Why does anyone take these nutcases seriously?
Pay attention to this rant, Mark. It's your kind of language.
http://www.youtube.com/watch?v=tRmZ9zH-mYM
Short one for Miriam: I'm curious. To use a recent example - would you say calling someone a "corporate cock sucker" is an insult? A compliment? Just telling it like it is? How about likening conservatives to Nazis?
Interesting video, Ed. Was it OK when Reagan didn't pay the bills and ran up the debt? If it was, then why is it not OK now especially given the economic crisis we faced?
Miriam, thanks for the post. I appreciate it but don't feel like you have to answer or defend what you wrote. It will likely end up as it always does.
>Hap, regarding oil prices, there's not much anyone can do except take steps to break free of the oil teat.
Come on Mark, tell us - what are those steps? You seem to think that it is just a matter of finding the will.
>lead the way with alternative forms of energy.
Which alternative forms of energy? You seem to be functioning from the underpants gnome theory of finding new sources of energy:
1. Gee, it would sure be nice if oil wasn't such an important part of the global market.
2. ????
3. Alternative form of energy found!
>And the personal attacks...
Please. You might want to look up the definition of "incoherent" Mark. It isn't the same as "poopiehead", which would be a personal attack. If I called you a "government cock sucker", to use a turn of phrase popular with you, that would be a personal attack, now wouldn't it.
>Admitting that I might know more than you about a subject is just unthinkable.
See, I could actually believe that you may have read more books on economics than me. You certainly like to speak as if you are well read in the subject. (Note that "well read" and "knowledgeable" are not the same thing.) Where you go off the rails is that you seem resolutely against taking what you read and thinking about how it might and might not apply to the real world around you. A good example is you talking about price equalling marginal cost in this thread. Obviously, you read that in an economics book. Did you ever stop to think about whether the concept is useful when applied to the real world? You seemed to sort of comprehend that none of the markets you were complaining about are even close to being perfectly competitive when I pointed it out to you. So why did you bring it up from the very start? In my line of work, kids that come out of college tend to do this in interviews. They'll wax poetic about some cool concept they recently heard or worked with, and try to apply that concept to problems they encounter without thinking about whether the concept makes sense to use for the problem they are trying to solve. One of the reasons you get a lot of pushback here is because you tend to act like those kids - you read some concepts, and then make claims and conclusions based on those concepts, without appearing to give any thought as to whether they are even relevant to the subject at hand. The unfortunate difference between you and a lot of those kids is that those kids are often able to recognize that they are inexperienced, and thus are willing to reexamine their claims. You, not so much. This is because you haven't stepped outside the little ivory tower bubble you apparently live in.
>Regarding health care, I submit Social Security and Medicare/Medicaid as being successful.
Social Security isn't related to health care, as you have been already told. Beyond that, we have different definitions of successful. Yours appears to be "helped someone." Mine, for programs like those, would be more along the lines of "helped someone in need, in a manner that is sustainable over the long run so that there won't have to be painful complaints when benefits have to be inevitably clawed back." You'll notice that I don't consider a program to be successful merely for giving out money. As you may guess, such a program will of course be quite popular with the recipients, and they will heartily argue that they are made better off by receiving money. Hard to predict that one, eh?
>But saying that the government should never be involved in health care and will make it worse isn't supported by facts.
Really? You aren't saying that you can't think of any case in which government involvement has made things worse.. Are you?
>due to the stifling of innovation
Wait what? Government involvement stifles innovation? Say it ain't so Mark! Why do you think that is? What other negative impacts might we expect government involvement in healthcare to result in? Would you expect that costs of things would go down or up?
Finally, Mark, lets get back to the questions that you ignored. Once again - what exactly should the government do to increase efficiency in the oil market? How about the airline market? Not just breezy platitudes about alternative energy sources Mark. What real, concrete, specific policy steps do you think that the government should take to reduce the inefficiencies you think you see in those markets?
>Answered several times, juris.
Nope. You simply haven't answered this question other than to nebulously handwave about wealthy people, and it has been posed to you over and over again, in numerous ways. Economics isn't a zero sum game Mark. I may need a macro for that, since it seems to inform so many of your economic misconceptions. Wait a second - how you can you claim to be well versed in economics and not know that economics isn't a zero sum game?
>I appreciate it but don't feel like you have to answer or defend what you wrote.
Mark, don't encourage behavior like your own. You may not have the stones to apologize or even acknowledge the more indefensible stuff you've done, but theres no need to encourage other people to do the same.
No. That's not what happens.
Yes, Mark's always very well reasoned and polite when he calls us racist corporate cocksuckers who are too stupid to understand him.
I don't mind defending you, Mark. Haplo9-calling someone a corporate cock sucker is a poor choice of words and it is insulting. That doesn't make it inaccurate, however. He has said other things that would have been better choices like corporate worship or carrying water for corporations. He hasn't actually called anyone a Nazi. He simply said that the propaganda techniques used by the Nazis in the 1930s are the same ones used today by the conservative movement. They are similar, wouldn't you agree? The fierce nationalism and "otherism" is also the same.
His remarks are different from yours in that they are based in fact. Yours are not. He does have extensive knowledge in many of the areas discussed on here and it's Captain Obvious that when you personally insult him, it's because this bothers you for whatever reason. This is just a forum so my opinion here is pure conjecture but it seems terribly insecure of you because either you don't have the facts on your side or you realize that he does have a greater depth of intelligence on whatever subject is being discussed so you lash out. It's likely both. This is typical for these types of forums.
If you don't agree with him, explain why using facts and available information. Support your argument without a single personal remark. He's done a far better job of that than some of you.
what are those steps?
Now I'm repeating myself. A national drive, both public and private, to pursue all alternate forms of energy, including nuclear. Now that I think about it, nuclear should be in the top three. It won't be easy but think about the long range problems it solves with national security and our economy as well as our environment. As the president has said, "This is our Sputnik moment." For the greatest country on the planet, this should be par for the course, no?
Did you ever stop to think about whether the concept is useful when applied to the real world?
Answered. A farmer's market or a food bazaar located anywhere in the world. Free software is another example. Again, repeating myself.
you tend to act like those kids
#3. Projection/Flipping.
lets get back to the questions that you ignored.
So we can forget about the comments I made and the questions I asked that were intelligent and well rounded? Another classic. I'm growing weary of this game, Hap. You keep the focus on me as a way to avoid answering the tough questions that your ideology has no fucking prayer of solving. You do a great job of being a critic but offer very little input other than libertarian idealism. When I (not surprisingly) refuse to write a 30 page policy paper on how to solve these problems with specific directions, you accuse me of being child like, chicken, or lacking detail...pretty bullshit when you think about it.
The fact is that there aren't any easy answers to managing the oil market or the airline market. Even pursuing alternative forms of energy will require a massive shift in how we consumer and produce energy in this country. With prices available online, it's tough to pursue accusations of price collusion. In this case, the government needs to be more aggressive about building cases against the airline companies that are being accused of collusion. In other words, enforce the existing law. That would be enough for me. We don't need price ceilings or more rules.
Hey, thanks for the comment Miriam. I believe I did apologize to juris for making that comment. You are quite right. Bad choice of words and insulting. I will continue to describe his (and others) self defeating worship of corporations in other ways:) I will not, however, apologize for the comparisons to the propaganda machine of the Nazis. There are many frightening similarities.
The conversation between Crandall and Putnam is a real world example, Haplo9. He's not operating in abstracts here at all. The farmer's market is a real world example of perfect competition.
I think you blur the line between tolerate and worship. Even support vs. worship.
One of the reasons why I stopped posting is the discussions essentially became a rectal exam of Mark. This thread is another example. Most of Haplo9's comments are ridiculous commentary on Mark. Barely any are assertions of his or her own weighted with evidence. If he or she has that much time to put into commenting, they could at least address the core issues more thoroughly. I can't always devote that kind of time and that's why my posts aren't as long or detailed.
What I am essentially saying is I'd like to see what Haplo9's plans are for the oil market and the airline market. How would you address the problems that are very clearly there, Haplo9? I'd also like to throw in that something needs to be done about the anonymous posters. I can't tell who is who half the time.
The conversation between Crandall and Putnam is a real world example, Haplo9.
Is it? I asked for a source since there was no link. For all I know this was nothing but two voices having a "discussion" in M's head. That is the only evidence available; the rest is taking it on faith.
Miriam, I could say you are a stupid whore and that would be a poor choice of words and insulting, but not necessarily inaccurate.
Just love the self righteous zealotry so typical of the Leftboro Baptist Church!
Juris: By the way, what is the source for the phone conversation you relate?
Mark: My source was Greg Mankiw's Principles of Microeconomics, Third Edition, p.364.
Juris: I asked for a source since there was no link. For all I know this was nothing but two voices having a "discussion" in M's head. That is the only evidence available; the rest is taking it on faith.
???
I have that text. It is indeed on p.364.
Oh! My bad, I didn't catch that that comment was directed back to me. Thanks mjh.
Is it okay to note the irony that Braniff was one of the corporations that couldn't compete (even in those halcyon days of stern regulation)?
And just to double up the irony, how many times has M run down Mankiw? I recall at least 3 or 4 where Mankiw has run afoul of M's ire. Krugman of course is on the side of the angels.
Well, Tess, the rectal exams of Mark wouldn't be happening if Mark would stop both showing his ass and talking out of it. Not pulling stuff out of it would help, too.
Bad choice of words and insulting. I will continue to describe his (and others) self defeating worship of corporations in other ways:)
So in short, it's okay to call those who disagree with you corporate cocksuckers and "the dance of the low sloping foreheads" as long as you dress it up in big words.
Thanks for clearing that up.
What I am essentially saying is I'd like to see what Haplo9's plans are for the oil market and the airline market.
I love the liberal/progressive/left need for a plan for these (and all other) markets.
What is wrong with the airline market that anyone needs a plan for it? More people fly today, more cheaply, than during the allegedly great era of regulated flight. If that is bad, I'd like an explanation of why.
You want a plan for the oil market - kill the depletion allowance tax break (that was a Democrat [LBJ] gift to the oil industry). Charge more for drilling rights on public land (but don't ban drilling). What more plan is needed?
>How would you address the problems that are very clearly there, Haplo9?
Tess, I'd like you try, for a moment, to try to step outside your own little bubble. Try to step into someone's shoes that doesn't share your priors about how the world works. You might learn that a statement like "problems that are very clearly there" isn't something you can merely assume to be true. As a matter of fact, I'm quite familiar with the oil industry, as I'm an avid investor in it. Therefore, I'd have to see a lot more meat than "prices are high!" before I'd agree that there is a problem that needs to be solved. Have you ever considered that the high price of oil is not representative of a problem but merely a reflection of the oil market's belief as to what the proper price of oil is, based on some combination of:
a. the ever increasing demand for it
b. the steadily decreasing supply of it
c. the frequent political instability of some of the common places to get it
Put another way - the price of oil, adjusted for inflation, started its most recent runup (with a few ups and downs) around 2004, when it was up $10 from the previous year. (http://www.inflationdata.com/inflation/inflation_rate/historical_oil_prices_table.asp)
Did something change around then? Did the oil market suddenly become an oligopoly in 2004 when it wasn't before that point? If not, then what sudden power was given to the oligopoly that allowed it to suddenly charge much higher prices?
This blithe assumption that there is a problem to be solved is itself a problem, I think. You simply empower politicians to meddle, which will usually increase prices, rather than reduce them.
I know less about the airline market, but again, simply saying "prices are high!" isn't nearly enough. We would certainly expect that prices would definitely rise along with jet fuel costs. Is there some other price rise that is complaint worthy?
Miriam:
>That doesn't make it inaccurate, however.
Ah, I see. It's a personal insult but its all truthy in your opinion. Well, strangely enough, I don't think it's very truthy. In fact, I think its downright silly. But people can disagree on these sorts of things, right? So you won't hold on to a double standard if my own opinion is that Mark is incoherent, right?
>choices like corporate worship or carrying water for corporations.
So again I'm curious. You seem to think those are reasonable descriptive terms. I would call them pejoratives. To test that theory, would you think it a reasonable descriptive of Mark (and maybe you) if I were to start referring to you as government worshippers? If not, why not?
>They are similar, wouldn't you agree?
No. I think it's a deeply unserious and silly comparison. It's about as useful as people on the right claiming that certain lefty policies or ideas are communistic. They pretty obviously do that to try to imply that those ideas will lead to the same things communism lead to - a big body count, and thus are repugnant. If you think that there is something wrong with the particular brand of nationalism displayed by conservatives, why not, you know, just say what you think is wrong with that nationalism? If you're trying to say that yes, these traits will lead to attempted genocide by conservatives, like the Nazis, then be explicit about it rather that doing this weasel-like "oh, conservatives are like Nazis in some ways!!" bs.
>He does have extensive knowledge in many of the areas discussed on here
Simply not true. Repeating things you read in books is not the same thing as knowledge and understanding. No, I don't expect that you will agree with that, but 99% of the pushback Mark gets here is because of that. Myself, I like reading Mark because I think he's a good example of the reason we get such bloated and inefficient government in this country. Mark has a nebulous, vaguely defined ill he wants solved. An astute politician picks up on that and offers a "solution" to that problem, and gets Mark's vote. Once that happens, Mark is off on the next crusade to solve an ill. He doesn't seem particularly interested whether the first ill was actually solved, whether it was solvable by the "solution" proposed by the politician, or indeed whether it is even solvable by the government at all. This brand of wish think pretty directly leads to bad government, and I think he's a good example of why it gets that way.
>A national drive, both public and private
Wonderful. A "national drive." Not very hard to imagine how massive amounts of money are wasted with a mandate that specific. So let's review. Mark says oil costs too much because of inefficiencies in the oil market. To remedy this, he wants a national drive for alternative forms of energy. Well, I suppose its something. Just don't complain when it is pointed out that you like to handwave and be nebulous. That's about as nebulous as you can get.
>Answered. A farmer's market or a food bazaar located anywhere in the world. Free software is another example. Again, repeating myself.
Avoided. First, you might want to check the definition of perfect competition. Certain markets are closer to perfect competition than others, it's true. None actually are. Regardless, you're ignoring the original question - what does perfect competition have to do with the oil or airline industries, which you singled out? The answer is nothing. Why did you bring it up then? (Btw Larry Sahagen, thats the answer to your comment.)
>#3. Projection/Flipping.
Oh ok. You want to play that game. From http://smallestminority.blogspot.com/2009/08/standard-responses-of-markadelphia.html
This would be #9. You sure you want to imitate Kevin?
>So we can forget about the comments I made and the questions I asked that were intelligent and well rounded? Another classic.
Rofl. They great avoider (remember, thats #1 in the standard responses at Kevin's) tries to chide someone else for avoiding something. Well, I'm not sure which questions you asked that I avoided, but feel free to point them out. In the meantime, thanks for the laugh.
> With prices available online, it's tough to pursue accusations of price collusion. In this case, the government needs to be more aggressive about building cases against the airline companies that are being accused of collusion.
So.. what does this mean? You aren't able to point to actual wrongdoing, but you're certain that there is something there? If only the government looks hard enough? I'm trying to figure out why you would think its odd that I'm skeptical. Btw, I am glad that you aren't in favor of price ceilings. You are aware that that only causes supply shortages, right?
Finally, I invite you, for the 10th time at least, to once again explain to us how the economy is a zero sum game. You have avoided this question for the longest time, so please, consider putting up or shutting up. Put another way - do you really think the middle class will get richer if we were to forcibly stop Bill Gates from making any more income this year in order to reduce his share of the pie? Isn't that the logical implication of your claims?
>The conversation between Crandall and Putnam is a real world example, Haplo9.
Which happened in 1982 Larry. Braniff subsequently went out of business. Let me see, does it make sense to make claims about the airline industry in 2011 based on something that happened 30 years ago? No, not really. Do you have evidence that such collusion is going on now? Or can you, you know, just feel it, baby?
Hap, regarding oil prices, there's not much anyone can do except take steps to break free of the oil teat.
Come on Mark, tell us - what are those steps?
A national drive, both public and private, to pursue all alternate forms of energy, including nuclear. Now that I think about it, nuclear should be in the top three.
Mark,
Building nuclear plants won't do anything to reduce our use of oil.
First, you might want to check the definition of perfect competition.
I already answered this above with they key characteristics of perfect competition. Here it is again.
A farmer's market is an example of perfect competition. Actually, street vendors around the world who sell food are an example and they are very prevalent. There are a large number of buyers and sellers. There are no entry or exit barriers. Buyers can switch easily to one seller or another. The products are homogeneous.
Essentially, this means that the participants in the market are price takers and not price makers. A competitive market, by the way, is sometimes called a perfectly competitive market (Makniw, Principles, p. 290)
How about another example? Milk. The market for milk is a competitive market. I can't change the price of milk alone by buying less or more and my local grocery store can't charge too much for milk otherwise I will go elsewhere. In fact, this happened to me about a year ago when my grocery jacked up the price. So I went to Target and they lost business because there are many sellers of milk. With oil, there aren't many sellers and demand is inelastic given that it is a world market so they can be price makers.
for the 10th time at least, to once again explain to us how the economy is a zero sum game
And I reject (again) the limitations of your question and submit that your myopic vision (colored by ideology of course) prevents you from listening and accepting certain truths. It seems to me that this question, along with your view, intimates that if people just pulled themselves up by their boot straps and worked harder, they could be accumulating wealth just like the top percentile has done in the last few years. That's complete bullshit. Sooner or later, Hap, you are going to have to accept these numbers.
http://1.bp.blogspot.com/-svtVSHF7_WI/TkvZR9yIZ6I/AAAAAAAABPg/c1yUtmv3WM4/s1600/ineqaulity.png
By looking at from the perspective that you do, it gives you an excuse to avoid dealing with these numbers. This is a shining example of why I will never be on the right. The willful ignorance and titanic hubris is nauseating. So, by framing this the way the way you do (again, classic) you can pretend that when resources are badly allocated in a society (as they are in ours right now) you have leave to do what you guys always do-blame the victim. In other words you use the cover of an expanding (sort of but not really) pie to avoid dealing with who exactly is benefiting from that expansion.
The better question upon which you should reflect is this: if economics is not a zero sum game, how is it that the top percentile has more money and the lower percentiles have less? Better yet, is there a difference between "wealth" and "economics?" How are each like a zero sum game and how are they not?
What I am saying here is stop thinking in such black and white terms with rigid definitions. It might make you feel more comfortable but it doesn't illustrate the various complexities of this topic.
Read this today...many of you should be happy with the economy today.
http://online.wsj.com/article/SB10001424053111903480904576512501087811480.html?mod=googlenews_wsj
Data is from the IRS.
How are each like a zero sum game and how are they not?
How is SocSec like a pyramid scheme, and how is it not.
If it weren't for double standards, M wouldn't have any standards at all!
This is a shining example of why I will never be on the right.
Actually M it is a shining example of how you are everything you criticize "the right" about. Such as...
What I am saying here is stop thinking in such black and white terms with rigid definitions.
Yep, I point out something that doesn't conform to your orthodoxy and you immediately classify it as opposition dogma.
You've never seen a shade of gray in your life, preacher. Tell me, why is it that I keep deluding myself that you are capable of better? [As opposed to your yippee little dog posse - which clearly is a crowd begging to be led around by the nose.] You really fooled me with your take on Manzi - but that little lapse is over and the iron shield of faith now protects.
[As opposed to your yippee little dog posse - which clearly is a crowd begging to be led around by the nose.]
Are you sure they're actually other people?
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