To Bail or Not to Bail...

[ArmLegLegArmHead]

i dont know about you guys but i cant wait to see what california does in the next couple weeks. prisoners being ordered to start releasing, holding welfare and tax returns and college grants. its not even isolvency its default. they are in trouble. soooo, is the gov going to bail them out. if not seniors needing assistance for mental health arent going to get help and neither are disabled. uh oh. domino #1 is about to fall.

check out what some states are doing.
HOUSE CONCURRENT RESOLUTION 6:
A RESOLUTION affirming States’ rights based on Jeffersonian principles.
SPONSORS: Rep. Itse, Rock 9; Rep. Ingbretson, Graf 5; Rep. Comerford, Rock 9; Sen. Denley, Dist 3
COMMITTEE: State-Federal Relations and Veterans Affairs

That should any such act of Congress become law or Executive Order or Judicial Order be put into force, all powers previously delegated to the United States of America by the Constitution for the United States shall revert to the several States individually. Any future government of the United States of America shall require ratification of three quarters of the States seeking to form a government of the United States of America and shall not be binding upon any State not seeking to form such a government

thats the start of it. other states are getting legislation ready in the case of martial law that they can call service men back to their home state to defend it, making that state sovereign.

and this.
That any Act by the Congress of the United States, Executive Order of the President of the United States of America or Judicial Order by the Judicatories of the United States of America which assumes a power not delegated to the government of United States of America by the Constitution for the United States of America and which serves to diminish the liberty of the any of the several States or their citizens shall constitute a nullification of the Constitution for the United States of America by the government of the United States of America. Acts which would cause such a nullification include, but are not limited to:

I. Establishing martial law or a state of emergency within one of the States comprising the United States of America without the consent of the legislature of that State.

II. Requiring involuntary servitude, or governmental service other than a draft during a declared war, or pursuant to, or as an alternative to, incarceration after due process of law.

III. Requiring involuntary servitude or governmental service of persons under the age of 18 other than pursuant to, or as an alternative to, incarceration after due process of law.

IV. Surrendering any power delegated or not delegated to any corporation or foreign government.

V. Any act regarding religion; further limitations on freedom of political speech; or further limitations on freedom of the press.

VI. Further infringements on the right to keep and bear arms including prohibitions of type or quantity of arms or ammunition; and

That should any such act of Congress become law or Executive Order or Judicial Order be put into force, all powers previously delegated to the United States of America by the Constitution for the United States shall revert to the several States individually. Any future government of the United States of America shall require ratification of three quarters of the States seeking to form a government of the United States of America and shall not be binding upon any State not seeking to form such a government;

what are they anticipating?

 

[iKotomi]

Especially when that company's actively working to shut any competition down as well. I do wonder how long they would've held on without government interference.

Where's U.S. Steel now? When you can't easily exclude other firms, monopolies are impossible to maintain in the long run. Something like Oil can be easily excluded because of the nature of the supply.

Doesn't that really depend on the operators in the business? The sure way to ensure success is to remove your competition.

I disagree. Under a perfectly competitive market, as long as you sell everything you produce, you are guaranteed success. Engaging in "uncompetitive" practices introduces risk and potential to lose. What happens when you start a price war? You are guaranteed a net loss, but you have the potential to gain a monopolist status in the long run. How much that helps you is completely dependent on the market conditions like elasticity, but it is far from a guaranteed success, especially when it doesn't change the fact that people will enter the market when the price is inflated high enough for them to get at some of the profit.

Are newspapers a natural monopoly?

Hmm, I think there are good arguments for newspapers being a natural monopoly. Newspapers are an interesting commodity because of the increasing returns to scale. Once you have the reporting, the cost of producing an additional newspaper is negligible if you are capable of operating at a large scale. When you are a small independent paper company, that cost is not negligible. The value of large amounts of capital, and the returns to scale lend itself towards becoming monopolistic. Furthermore, the main source of revenue for newspapers, is advertising. If you're a large newspaper, people will be willing to pay more for advertising.

But that's only in relationship to physical newspapers. The news industry is clearly not a monopoly, because anybody can put up information on the internet for a very cheap price. There's really no reason for me to buy a newspaper now, since there are so many sources on the internet to get news from.

Yes. What I'm curious about now is, was there ever an operating free market? Just sounds like a pie in the sky economic form of anarchism the more I hear about it.

The problem with free markets is that all the theory lies on the existence of long run equilibria, and the necessity for the market to dictate prices. Because there are a variety of industries that are considered vital to society, short run shocks lead to the government intervention. What it comes down to is the fact that theory assumes that you will make trade-offs, but in practice, people don't want to make these trade-offs and pay the price for it (government regulation).

You need stability and security for markets to work. You can't have a free market if you have a mafia, rebels, military regime, etc. physical preventing you from competing. Furthermore, free markets need distinct property rights, or else the result is a market failure with externalities.

Once you have these pre-conditions though, the free market will tend to get you an efficient allocation in the long run. You need to be in a state to worry about the long run first though. But once you have that foundation, societies tend to be more prosperous when the markets are more free, because there is no waste (everything that is demanded becomes produced).

 

[Archangel]

Under a perfectly competitive market, as long as you sell everything you produce, you are guaranteed success.

Yeah, and in a perfect world communism would work fine. But guess what? It doesn't.

Engaging in "uncompetitive" practices introduces risk and potential to lose.

And potential to gain, which is why everybody does it. What naive school of economics did you go to?

 

[iKotomi]

Yeah, and in a perfect world communism would work fine. But guess what? It doesn't.

Perfect competition and perfect world are two very different uses of the word perfect. Firms sell goods at quasi-market prices every day. I never open a newspaper to find that every single good is undergoing a price war, because firms are for the most part happy to settle for the market price.

And potential to gain, which is why everybody does it. What naive school of economics did you go to?

Umm...what? I didn't say that firms don't take risks, and I definitely stated that some firms have an incentive to take such risks given market conditions. Trying to knock down an argument as a strawman by stating a claim made in the original argument doesn't work very well. People compete, but most firms do not aggressively try to get rid of the competition, because any plan to do so has such high risks and low probability of success that it would be stupid to even try, regardless of potential to gain. You don't see much commotion of run of the mill generic products being taken over by brand names for a reason.

 

[Marginal]

Umm...what? I didn't say that firms don't take risks, and I definitely stated that some firms have an incentive to take such risks given market conditions. Trying to knock down an argument as a strawman by stating a claim made in the original argument doesn't work very well. People compete, but most firms do not aggressively try to get rid of the competition, because any plan to do so has such high risks and low probability of success that it would be stupid to even try, regardless of potential to gain. You don't see much commotion of run of the mill generic products being taken over by brand names for a reason.

How many does it take? McDonald's deliberately went this route even though the idea of cornering the hamburger market's absurd.

"The competition, send them south. If they ain't gonna drown, put a hose in their mouth." ;)

The school of thought is definitely out there. Some would argue that MS has aimed for the same thing.

This is an interesting conversation. (Even if you don't agree with me.)