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Free Markets and Regulation

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^ Bingo surfohio[/member]

 

We need to elect politicians and experts to help us do that and vote them out if we don't agree with the choices they are making.  Sure, it will be imperfect, but it's still better than the alternative.

 

We certainly do not need politicians and experts to make these decisions for us.  The reflexive need for political authority to determine what we can and can't buy by definition eschews our choice.  If you don't want to buy from Wal-Mart, fine.  More power to you.  But introducing political power to tell me I can't buy from Wal-Mart because it doesn't fit your values is an illegitimate use of state authority.

 

Well, you're twisting my words a bit there.  I'm not suggesting that the government tell people they can't buy from WalMart.  I'm suggesting that the government outlaw practices that we collectively agree are unethical and then oversee that companies follow these laws.

 

The key to why I believe this isn't because I think the government is some great thing that will save us all, but because I believe we all ARE the government.  Any of us can run for office.  We all can vote.  We all have a say, directly or indirectly, if we choose to.

 

With corporations, the only say you have is with your wallet.  That's fine when there's competition.  But capital begets more capital, so without regulations and taxes, capital accumulates amongst a small oligarchical "ruling class" (we're seeing wealth inequality skyrocket already as it is).  If you think there's barriers to entry now, wait until we have no middle class like a third world country.  It's pretty hard to start up a store to take on WalMart or a factory to beat out Nike when you live in a mud hut and the pennies a day you make working for those companies 80 hours a week are the only way you can put food on the table.

 

The funny thing is that instead of being the referee, government has turned into more of a crony to the largest corporations which is why you have companies that have oligopolistic power. If you allow markets to thrive, business often is the best regulator of itself. the bad players are always weeded out and they do not compete very long. Those that screw people over, are exposed regardless of what any law says. When you insert government regulations and rules to fight the often "perceived" injustice, it allows bad players to continue because they can hide behind the government shield a lot easier, essentially by paying off the government regulator.

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The funny thing is that instead of being the referee, government has turned into more of a crony to the largest corporations which is why you have companies that have oligopolistic power.

 

Or do you have corrupt politicians because of these corporations?  I'm not sure you're getting the cause and effect right.

 

I'm sure this is something many of us will never agree on.  If there was an easy answer which was clearly correct, then wouldn't the "free market" of voting have sorted it all out for us and weeded out the "incorrect" political theory/party? ;)

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I like top think I'm a pretty educated consumer, but we all purchase many items and we don't have enough time in the day to research every company and all suppliers down the chain for every product we buy every day. 

 

Okay, I think this is funny. There's a need out there for a trusted source to provide consumers with this kind information. You're first instinct is to elect people to elect politicians to do that. My first instinct is that there's a market need for a trusted, private source to provide that information.

 

I don't think we could ever be friends haha.

 

(but seriously, most of my friends are downright socialists....) 

 

But again, those resources would cost money and would be in it for profit.  And you'd have to do a ton of research to figure out which resources you believe and who is possibly influencing them.  And you'd be overpaying those resources since they're going to try to make as much money as possible performing the work, likely having a CEO making millions.  But most importantly, the end game would be a few large companies (or maybe just one) controlling the sector, squeezing out little guys that try to start up, and providing you with the information they want you to get.  And since we wouldn't have regulations or anti-trust laws or anything in this Randian paradise, this company likely would also be selling many of the products they are recommending.

 

You're stating your opinions from the standpoint that profits are a bad thing. If the CEO who publishes Consumer Reports makes millions, then that's fine by me. If they're exposed for corruption by a competitor or some media outlet then their value will suffer. There's existing laws to punish certain behaviors there, but by and large the damage to reputation is the real penalty.

 

Also I'm not at all suggesting any kind of "Randian paradise" without any semblance of regulatory oversight.

 

I had a burrito the other day that was terrible. Really subpar, especially considering I'm eleven miles from Mexico. We already have a health department making sure an "A" was in their window. Glad for that, but that burrito still sucked. Should we elect a "Good Burrito" politician who makes sure that every restaurant reaches some sort of taste threshold. In some dystopian future that may be the only route. But thanks to ample consumer choice I can go across the street to the other Mex place.

 

I know this example is super simple and not analogous to every issue. But it's a real example. And it shows that simply adding more regulation is not the solution to every problem. 

 

 

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The funny thing is that instead of being the referee, government has turned into more of a crony to the largest corporations which is why you have companies that have oligopolistic power.

 

Or do you have corrupt politicians because of these corporations?  I'm not sure you're getting the cause and effect right.

 

I'm sure this is something many of us will never agree on.  If there was an easy answer which was clearly correct, then wouldn't the "free market" of voting have sorted it all out for us and weeded out the "incorrect" political theory/party? ;)

 

I think it goes to determining efficient markets. Now, in an efficient market, the bad player will be exposed however, it will take time. At the end of the day, the efficient market will weed them out but they will be out of business. The downside is that a few people will get harmed along the way while the market adjusts, however, it will ensure more competition and more sustained competition because the barriers to entry will be fewer as there is less regulation and less cronyism. The sandbox will be big enough for many competitors.

 

When you create government roadblocks and obstacles, people still get harmed, and there is a lot less competition. People put their faith that the government watchdog will take care of them because they regulate, but what we get is less competition and fewer options to go to when a bad player does emerge. A perfect example of this is the Epi Pen scandal. You have a highly regulated industry where large players are able to curry influence with regulators to ensure they get monopoly or close to monopoly power. With less regulation (not saying none) you get the ability for more competition to compete in the marketplace and you have inefficiencies.

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You're stating your opinions from the standpoint that profits are a bad thing. If the CEO who publishes Consumer Reports makes millions, then that's fine by me. If they're exposed for corruption by a competitor or some media outlet then their value will suffer. There's existing laws to punish certain behaviors there, but by and large the damage to reputation is the real penalty.

 

I do not believe profits are a bad thing.  But absurd profits can be a sign that something is wrong.  Many of the free market principles conservatives espouse rely on assumptions such as perfect competition.  However, if this ever were the case, there would be no profits.  With perfect competition, new companies enter whenever there are profits to be made, which pushes the supply curve to the right, lowering the price equilibrium.  This continues until profits are eliminated.  This is the irony of the arguments about consumer choice.  They rely on an unrealistic economic system where profit takers don't exist.

 

That being said, the ways companies DO make profits are mainly by either (1) stifling competition (or being in a sector with high barrier to entry) or (2) innovating.  Government allows profit taking through innovation mainly through intellectual property law.  I think we can all agree that this is a good thing (although there are also necessary limits to intellectual property).  Stifling competition however is bad.  There will always be factors preventing sectors from having perfect competition, but the easiest shortcut to big profits is to corner the market by blocking others out.  This hurts consumers more than anything and allows companies to bleed money out of the economy without providing any extra value.  This is what I am against and am in favor of any regulations which prevent this from happening.

 

Also I'm not at all suggesting any kind of "Randian paradise" without any semblance of regulatory oversight.

 

I had a burrito the other day that was terrible. Really subpar, especially considering I'm eleven miles from Mexico. We already have a health department making sure an "A" was in their window. Glad for that, but that burrito still sucked. Should we elect a "Good Burrito" politician who makes sure that every restaurant reaches some sort of taste threshold. In some dystopian future that may be the only route. But thanks to ample consumer choice I can go across the street to the other Mex place.

 

I know this example is super simple and not analogous to every issue. But it's a real example. And it shows that simply adding more regulation is not the solution to every problem. 

 

Those regulations would be ridiculous and I would never suggest such a thing.  I would only recommend regulations for things like ensuring safety, environmental health, nondiscrimination, and as I stated above anti-competitive practices.  I sure there are some others that I'm missing but those are the big ones that come to mind.  Regulating consumer preferences would be stupid.  I would bet you'd be hard pressed to find anyone recommending something so silly.  You even admitted yourself that some regulations are necessary, however (which makes me think we may agree on more things than you'd expect if this discussion was over a few beers :P ).  When people these days speak of free market and less regulation, I believe that they are referring to getting rid of some of the regulations I noted above as being beneficial.  I don't find the converse to be very true.  When liberals want more regulation, I don't usually find their recommendations (I say usually, there are always exceptions) to be for ridiculous things like "consumers shouldn't be allowed to buy lime green cars because they're ugly" or "McDonald's burgers should be taxed higher than Heck's burgers because they don't taste as good" or "we need to disallow sales of iPhones because they're inferior to Android phones".

 

There are exceptions, and I would break with party lines on things (I like to think I'm more moderate than I get credit for...I don't just vote a straight ticket).  I don't believe sin taxes or pop taxes or things like that should be used to generate revenue, for example.

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^ Bingo surfohio[/member]

 

We need to elect politicians and experts to help us do that and vote them out if we don't agree with the choices they are making.  Sure, it will be imperfect, but it's still better than the alternative.

 

We certainly do not need politicians and experts to make these decisions for us.  The reflexive need for political authority to determine what we can and can't buy by definition eschews our choice.  If you don't want to buy from Wal-Mart, fine.  More power to you.  But introducing political power to tell me I can't buy from Wal-Mart because it doesn't fit your values is an illegitimate use of state authority.

 

This is in many ways the essence of conservatism.  Sure, we distrust business.  We distrust government at least as much though, and one can always decline to do business with a specific company.  Unless, of course, the government gets involved.

 

There's also the factor that the laws of economics are sometimes about as breakable as the laws of physics, while political laws can change on virtually a whim.

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Haha, touché.  Although, that does sound more like it was motivated by right-wing xenophobia than left-wing economics. ;)

 

The two don't go together sometimes?  Economics and xenophobia teamed up to give us the Japanese internment.

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  And you'd have to do a ton of research to figure out which resources you believe and who is possibly influencing them.

 

We never have such concerns with the government....  :)

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We never have such concerns with the government....  :)

 

Of course you still have to do your homework on government officials when voting.  My point was that this in not an advantage of having a private company evaluate other private companies.  You have just inserted another profit taking middleman into the process and yet still have the task of researching their influences in turn.

 

I do think it's easier to make these evaluations for government entities, however, because nearly everything they do is public record.  Good luck obtaining meeting minutes for the inner workings of a privately held company.

 

Again, I'm not saying the government should run everything (or even many things), but that there are certain things (which I mentioned above) which are so important to get right that we can't leave them to the (IMO non-existent) "invisible hand".

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^ Bingo surfohio[/member]

 

We need to elect politicians and experts to help us do that and vote them out if we don't agree with the choices they are making.  Sure, it will be imperfect, but it's still better than the alternative.

 

We certainly do not need politicians and experts to make these decisions for us.  The reflexive need for political authority to determine what we can and can't buy by definition eschews our choice.  If you don't want to buy from Wal-Mart, fine.  More power to you.  But introducing political power to tell me I can't buy from Wal-Mart because it doesn't fit your values is an illegitimate use of state authority.

 

This is in many ways the essence of conservatism.  Sure, we distrust business.  We distrust government at least as much though, and one can always decline to do business with a specific company.  Unless, of course, the government gets involved.

 

There's also the factor that the laws of economics are sometimes about as breakable as the laws of physics, while political laws can change on virtually a whim.

 

Without government intervention, businesses tend to collude and reduce actual choice.  They also corner markets and exploit both people and shared natural resources.  Why compete if you can avoid it?  Why worry about a future beyond your next board meeting?  We can never allow anarchy in business.

 

There aren't very many "laws" of economics, since there's no good way to isolate the variables.  Rather than being mutually exclusive, most economic theories require bits and pieces of each other in order to function.  "Pure" versions of capitalism and communism are absurd.  As a science, economics is mostly just a roundabout way for people to expound on their moral and political beliefs.  At some point those beliefs become inescapable premises. 

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^ Bingo surfohio[/member]

 

We need to elect politicians and experts to help us do that and vote them out if we don't agree with the choices they are making.  Sure, it will be imperfect, but it's still better than the alternative.

 

We certainly do not need politicians and experts to make these decisions for us.  The reflexive need for political authority to determine what we can and can't buy by definition eschews our choice.  If you don't want to buy from Wal-Mart, fine.  More power to you.  But introducing political power to tell me I can't buy from Wal-Mart because it doesn't fit your values is an illegitimate use of state authority.

 

This is in many ways the essence of conservatism.  Sure, we distrust business.  We distrust government at least as much though, and one can always decline to do business with a specific company.  Unless, of course, the government gets involved.

 

There's also the factor that the laws of economics are sometimes about as breakable as the laws of physics, while political laws can change on virtually a whim.

 

Without government intervention, businesses tend to collude and reduce actual choice.  They also corner markets and exploit both people and shared natural resources.  Why compete if you can avoid it?  Why worry about a future beyond your next board meeting?  We can never allow anarchy in business.

 

These are all good points.  What you've identified is the foundation of anti-trust theory and the "tragedy of the commons" theory.  Both are legitimate market failures that mainstream free market advocates accept as requiring intervention.  Those in favor of total market anarchy are anarcho-capitalists who are a fringe of the libertarian fringe.  The anarchic model becomes the favorite strawman of those arguing vaguely from the left: how will we get roads?! people will be able to pollute! Have you heard of Standard Oil!?

 

In reality, no sensible person is in favor of no government regulation or presence in the economy, even the most strident libertarian types.  The question is not whether or not we need to draw a line but where that line should exist.

 

This is a good debate (long, sorry) between a classical liberal and an anarcho-capitalist.  I think the former does a good job of articulating a view of government that intervenes when necessary but whose power is neccessarily limited to true market failures:

 

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By the time we address all these "market failures" we've tacitly accepted that socialism is a core component of modern society.  So I guess we're all on the same page then.

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By the time we address all these "market failures" we've tacitly accepted that socialism is a core component of modern society.  So I guess we're all on the same page then.

 

Watch the debate.

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By the time we address all these "market failures" we've tacitly accepted that socialism is a core component of modern society.  So I guess we're all on the same page then.

 

Watch the debate.

 

Not likely, I have work to do.  Make your points in your own words.  Synthesize and evaluate.

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By the time we address all these "market failures" we've tacitly accepted that socialism is a core component of modern society.  So I guess we're all on the same page then.

 

Watch the debate.

 

Not likely, I have work to do.  Make your points in your own words.  Synthesize and evaluate.

 

Oye

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What you've identified is the foundation of anti-trust theory and the "tragedy of the commons" theory.  Both are legitimate market failures that mainstream free market advocates accept as requiring intervention.

 

I would argue that many of the regulations shouted down by the right ARE in fact targeting these free market failures in a similar vein as Second Amendment supporters shouting down common sense gun regulation.

 

If you're more sensible than that, great!  Where do you draw the line?  What is and what is not acceptable to be regulated?

 

How about food safety regulations?  Pollution regulations?  Banking regulations?

 

Should a greedy few who hide their tangled web of deceit well be allowed to take down the housing market again?  When you get a mortgage, are you supposed to know whether or not that mortgage may be repackaged and gambled on in a way that could topple the economy?

 

Should companies be allowed to sell food which may taste really good, but has hidden dangers that you have no idea about until they kill you 5 years later?  How would you even know which food it was that was unhealthy?  How can things like that be self regulated by consumer choices?  Many times, it's not obvious whether a product has ill long-term effects.

 

Should companies be allowed to slowly pollute the water supply because the massive profits outweigh the long-term damage (whose cost will be spread amongst everyone)?

 

There are so many things to consider with what should and should not be regulated that free market advocates gloss over.  I'm not sure they have considered the ramifications of deregulation.  Either that or they don't care because it will net them more money.

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Should companies be allowed to slowly pollute the water supply because the massive profits outweigh the long-term damage (whose cost will be spread amongst everyone)?

 

There are so many things to consider with what should and should not be regulated that free market advocates gloss over.  I'm not sure they have considered the ramifications of deregulation.  Either that or they don't care because it will net them more money.

 

There's a ton of information out there regarding market-based solutions to environmental problems. I don't subscribe to all of them because imho you cannot always solve every issue with a cost benefit analysis. Anyhow FYI.

 

http://www.perc.org/about-perc/free-market-environmentalism

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What you've identified is the foundation of anti-trust theory and the "tragedy of the commons" theory.  Both are legitimate market failures that mainstream free market advocates accept as requiring intervention.

 

I would argue that many of the regulations shouted down by the right ARE in fact targeting these free market failures in a similar vein as Second Amendment supporters shouting down common sense gun regulation.

 

If you're more sensible than that, great!  Where do you draw the line?  What is and what is not acceptable to be regulated?

 

How about food safety regulations?  Pollution regulations?  Banking regulations?

 

Should a greedy few who hide their tangled web of deceit well be allowed to take down the housing market again?  When you get a mortgage, are you supposed to know whether or not that mortgage may be repackaged and gambled on in a way that could topple the economy?

 

Should companies be allowed to sell food which may taste really good, but has hidden dangers that you have no idea about until they kill you 5 years later?  How would you even know which food it was that was unhealthy?  How can things like that be self regulated by consumer choices?  Many times, it's not obvious whether a product has ill long-term effects.

 

Should companies be allowed to slowly pollute the water supply because the massive profits outweigh the long-term damage (whose cost will be spread amongst everyone)?

 

There are so many things to consider with what should and should not be regulated that free market advocates gloss over.  I'm not sure they have considered the ramifications of deregulation.  Either that or they don't care because it will net them more money.

 

You raised a lot of great points.  Each is complex enough that entire libraries can be written about the theory and complexity of each area.  I just don't have the time to respond to each one in depth.  I would reorient the focus of the conversation however.  First, it's important to build a overarching philosophical framework so we can analyze each question based on guiding principles.  If you have time, here is a good place to start:

(This guy has a lot of podcasts that address some of the issues you raised: http://www.hoover.org/publications/defining-ideas/libertarian)

 

Once again, no one is arguing for anarchy here.  I lament that his debate is almost always framed in straw man terms as "anarchy v. my common sense regulation."  For each problem, the question must be raised: is this something the government can stop? Then, is this something the government should stop?  If yes to the first two questions, it becomes a debate about tradeoffs.  No regulation comes without tradeoffs and second, third, fourth, etc. order effects.  Some are easily decided in favor of the regulation and some against.  Most debates are closer to the middle.  Again, the question is not whether a line should be drawn but where it should be drawn.  Regulations come with costs and tradeoffs, some justifiable and some not, that's what makes the debate so interesting.

 

Edit: In the background of this argument is the proper avenue of regulation.  Some problems are best solved by non-coercive means that allow people to favor or disfavor certain actors based on their behavior (substandard providers will lose the ability to sell things at a certain price and may go out of business altogether, people with abhorrent or obnoxious views stand to lose business, etc.).  Some problems are best left to the tort/contract/property/criminal law system which served as the primary regulator of market actors until the recent creation of the administrative state. (I would argue that this system still does a very good job)  Some problems are best left to the ongoing watch of an administrative agency.  Each avenue presents different strengths and weaknesses, some self evident and others less so.

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The Economic Stupidity of the Carrier Bailout

It’s not conservative, but rather a rejection of economic reality.

 

One particularly tough and indigestible nugget of talk-radio stupidity afflicting the guts of conservatism is the idea that there is some sort of fundamental difference between bribing a business with tax cuts and bribing it with a wheelbarrow full of cash. The Trump-Pence bailout of Carrier’s operations in Indiana provides an illustrative case.

 

This is an example of banality hardening into orthodoxy, the worst habit of the pop-con mind. It started with a good point. Once upon a time, U.S. personal-income tax rates were very high: 91 percent in the Eisenhower years, though hardly anybody paid that rate. Democrats such as John Kennedy and Republicans such as Ronald Reagan believed that these rates were far too high. Both Kennedy and Reagan made what we might broadly call “Laffer curve” arguments for tax cuts, though Reagan’s actual budget proposals were not quite as sunny as Arthur Laffer tends to be on the question of the real budgetary effects of tax-rate reductions. Milton Friedman took a more gimlet-eyed view with his advice that if tax cuts produce revenue growth, then you haven’t cut them enough.

 

http://www.nationalreview.com/article/442665/trump-carrier-bailout-economically-unsound

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We Do Not Have a Trade Deficit

We have a capital surplus

 

Thank goodness for Kevin McCarthy!” isn’t something one says every day, but in the matter of President-elect Donald J. Trump’s backward and destructive plan to resurrect 19th-century tariffs, the gentleman from California is invaluable. Trump wants to impose 35 percent tariffs on . . . somebody. He does not seem quite sure. One of the reasons for that is that Trump has the question of trade deficits mixed up in his head with the question of offshoring and, like most Americans, he does not understand either of them very well.

 

http://www.nationalreview.com/article/442828/donald-trump-trade-deficit-ignorance-and-misunderstanding

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Hahaha, more "Freedom" crap. This isn't about personal freedom, it's about regulations that certain companies find annoying.

 

It's very easy for the word "freedom" to mean nothing, just like in the Megadeth song.

 

 

 

House ‘Freedom Caucus’ Asks Trump To Undo 232 Rules On Net Neutrality, Tobacco, Nursing Homes & Ceiling Fans

 

https://consumerist.com/2016/12/15/house-freedom-caucus-asks-trump-to-undo-232-rules-on-everything-from-net-neutrality-to-tobacco-to-nursing-homes-to-ceiling-fans/

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These people think undoing net neutrality will bring about more freedom?

 

People seem to have this issue backwards, but that's true of many economic issues these days.  Maybe the title of this thread should be "Corporate Oligarchy and How To Achieve It."  Insistent terminology can work both ways but our side rarely uses it.

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Many real estate developers want to build in disinvested communities, but regulations discourage these projects http://bit.ly/2hs6hVH


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Why do we have regulations, especially building inspectors and safety laws? This is the view from my wife's old apartment in Cherkassy, Ukraine now used by her family. The new apartment tower is unoccupied because no one wants to live there. Why? Because the building leans down to the left side. No one stopped the builder after the first floor was put in because there are no building inspectors and even if there were, Ukraine is a kleptocracy which means that government exists to protect the criminals and big business. No one is going to stop them except for a strong government, answerable to the people, which does not exist here. Buildings like this provide a cautionary tale to America.


"Life is 10% what happens to you and 90% how you respond." -- Coach Lou Holtz

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Why do we have regulations, especially building inspectors and safety laws? This is the view from my wife's old apartment in Cherkassy, Ukraine now used by her family. The new apartment tower is unoccupied because no one wants to live there. Why? Because the building leans down to the left side. No one stopped the builder after the first floor was put in because there are no building inspectors and even if there were, Ukraine is a kleptocracy which means that government exists to protect the criminals and big business. No one is going to stop them except for a strong government, answerable to the people, which does not exist here. Buildings like this provide a cautionary tale to America.

 

When you have regulations made by people who don't understand business you end up with an economy that under performs. That is why the Obama administration was horrid when it came to creating jobs and working with business. THey just did not care, and really did not even pretend to understand how business works and operates.

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Why do we have regulations, especially building inspectors and safety laws? This is the view from my wife's old apartment in Cherkassy, Ukraine now used by her family. The new apartment tower is unoccupied because no one wants to live there. Why? Because the building leans down to the left side. No one stopped the builder after the first floor was put in because there are no building inspectors and even if there were, Ukraine is a kleptocracy which means that government exists to protect the criminals and big business. No one is going to stop them except for a strong government, answerable to the people, which does not exist here. Buildings like this provide a cautionary tale to America.

 

When you have regulations made by people who don't understand business you end up with an economy that under performs. That is why the Obama administration was horrid when it came to creating jobs and working with business. THey just did not care, and really did not even pretend to understand how business works and operates.

 

It’s potentially just as dangerous that we have now have a President who thinks he knows, but whose experience is in real estate and entertainment.  Making things and trading things is a very different situation indeed.

 

Much depends on whether or not his ego will allow him to admit others know more.  That’s still debatable.

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^Uh a government that is properly run is not very sexy or exciting. How would you apply market theory to government?  Waiting for your ideas.

  This is why right wingers want small government and very little regulation. No regulation will basically have anarchy which is not the purpose of government.

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Not an assumption, it is pretty much a proven fact. a true free market is efficient, Econ 101

 

My economics education goes well beyond ECON 101.  Those simplistic theories you know rely on a bunch of assumptions which are never met in real life.

 

I'm not saying free markets are bad.  They do provide the most individual freedom and often times also a pretty good outcome.  However, they are not perfect, and sometimes they do fail.  Government intervention also often fails.  It doesn't mean that some things aren't important enough to continue to search for a better solution, though.

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Not an assumption, it is pretty much a proven fact. a true free market is efficient, Econ 101

 

My economics education goes well beyond ECON 101.  Those simplistic theories you know rely on a bunch of assumptions which are never met in real life.

 

I'm not saying free markets are bad.  They do provide the most individual freedom and often times also a pretty good outcome.  However, they are not perfect, and sometimes they do fail.  Government intervention also often fails.  It doesn't mean that some things aren't important enough to continue to search for a better solution, though.

 

Then you seem to forget the basics. Long term a true market is very efficient. WHen you limit the regulation the market will find equilibrium.  I do not buy into the Keynesian theory spouted out by many in Krugman's ilk. I have read all his books and tend to find him wrong about many issues. I think the Kenynesians are very reactionary and often create more problems with their attempt to find solutions. However, people are a fickle group and tend to be reactionary and panic instead of letting the market correct itself properly.

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Not an assumption, it is pretty much a proven fact. a true free market is efficient, Econ 101

 

My economics education goes well beyond ECON 101.  Those simplistic theories you know rely on a bunch of assumptions which are never met in real life.

 

I'm not saying free markets are bad.  They do provide the most individual freedom and often times also a pretty good outcome.  However, they are not perfect, and sometimes they do fail.  Government intervention also often fails.  It doesn't mean that some things aren't important enough to continue to search for a better solution, though.

 

Then you seem to forget the basics. Long term a true market is very efficient. WHen you limit the regulation the market will find equilibrium.

 

Then you have a very basic understanding of the basics.  This requires perfect competition, perfect consumer knowledge, no barriers to entry, etc., etc.  Never happens in the real world.  You can argue whether the outcome is better than it would have been without regulation or not, but you can't argue that it is always the perfect outcome.

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What is an example of a true free market?  In a true free market, there wouldn't be any regulation, no barrier to monopolies, no consumer protection.  That is not what we have or what we have ever had.  That doesn't mean we don't utilize free market principles in guiding our decisions.  We certainly do.  Are there any examples of countries who use one?

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