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Globalism

Econ101

Well-known member
RobertMac said:
Good read for those that are interested.

http://sound.westhost.com/manufacture.htm

There was an article in the WSJ some months ago about some of the very points this article brings up. The Chinese were gaining market power in a certain article (I forget exactly what it was but it doesn't really matter as the theme is not only global but universal). They were then coordinating with their countrymen to limit the supply so they could build a cartel and increase the prices.

Economically this is what every(if they have no limitations or rules to follow in the market) company tries to do to maximize profits. The more they can increase the barriers to entry, the more excess profits they can make. Opec is a perfect example to this theme. Whenever increased prices resulted because of Opec flexing its marke power muscle for an extended period of time, there would begin to be substitutes for the energy source developed. Coal replaced oil, and so did natural gas. When the Opec economists saw this was happening, they would open the spigots to flood the market once again so oil would be cheaper than these substitutes and infrastructure would be built back towards oil.

Thus, their manipulation of oil has kept the world more dependent on oil so that they could exploit their markets and create barriers to entry (payoffs to infrastructure change). These economists are smart enough to find ways to extract wealth from the market through these tricks and Congress is just too dumb to see what and how they are doing it. It is either that or Congress is just getting paid off by lobbyists through donations or captured by the "D.C. bubble" the lobbyists create with their propaganda.

Pareto's contribution to economics was that he realized there would be an equilibrium attained in the market between all factors and that no one would be able to extract additional resources from the market---the additional monies would come from someone else's pocket. Tyson has developed that model in poultry due to the lack of enforcement of our PSA while they take from the producer's share.

The use of market power allows companies to extract greater returns on the market this way. It is astounding to me that the courts, in their zeal to protect the profits of the large corporations, allow this to happen. It is the consumer surplus argument gone awry by people who think they know economics but just don't. That is what the 11th circuit did in their Pickett decision. It is what they do when they can not enforce the market power laws on the books.

Everyday I see new billion dollar mergers in the WSJ. The largest international one happens to be the Mittel steele deal. Who wants to bet we will all pay the price for it later and the Congress will pander with their political tactics of crisis management that makes the news? That is exactly what happened in the oil business this last year. This short term thinking is going to ruin our country.

We have a government that is abandoning the wisdom already learned and embodied in law for the short term gain some of these corporations devise. We all pay for it.
 

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