Brad S said:
Does red ink in processing cattle prove to you there is no market power being exerted? If that is your belief, you are a fool. The previous court order regarding the beef trust in regards to substitutes admits the true threat. If you and GW had a sense of history, we wouldn't be in the messes we are in today. When will you stop with the packer talking points
First, being called a fool by Econ101 is high praise by double negation. Second, in all markets short of perfect competition, market power is exerted. GW and I are both accused of having too much sense of humor - you know the smartass fraternity charge. Packer concentration in the beef sector hasn't changed significantly during the Bush administration, and we're not in a mess. I will stop the packer talking points when I stop beating my wife - no wait I mixed argumentative falacies. I will stop packer talking points uh sometime after I begin them.
HELL YES PACKERS COMPETING OVER LIMITED SUPPLY TO THE POINT OF LOSING MONEY SUGGESTS THE OLIGOPOLY/OLIGOPSONY IS SUFFICIENTLY COMPETITIVE.
No, Brad, it does not. It means that at this time, absent the affects of substitutes, the packers may be competing in beef (you don't really know if packer margins are in the red, you are just taking someone else's word for it---guess whose word?). It does not mean that the packers are not employing market power because we do not have enough information.
Hyper competitiveness, as you call it, is almost always a precursor to consolidation and the gaining of more market power.
You need to read the book, "The Robber Barrons" that accurately described this phenomena during the latter half of the 19th century. This strategy was used by Rockefeller with his Standard Oil company as well as the Beef Trust, the Sugar Trust, the railroads, and many more industries. These abuses lead to labor strikes, the Pinkertons trying to do the corporation's bidding, labor laws, and the antitrust laws.
One of the hardest things to prove is collusion. You almost have to have a confession to prove this. You don't know that this is not happening currently, it is just your belief. It is an absolute certainty that Tyson is colluding with itself in the substitutes it has huge market shares in (poultry). Swift is probably in the same boat with pork. All of the big guys who are into foreign sources of beef are colluding with themselves over the foreign supplies they own. This is the problem with integration--the collusion between oneself, although anticompetitive at its core, is not looked on as being collusion. That is the reason past court orders have limited packer's ability to hold these substitutes, again, if you had a sense of history, you would know this.
As I said, if you had a sense of history, you would know these things. Instead, you use the same old arguments that held no water with past courts looking at market power and hence have bought into packer propaganda.
As I said before, Brad, you are a fool. I hope that is not a double negation for you.
A fool by choice is a fool indeed. You have had a chance to study these issues but have decided against informing yourself. Ripe grounds for packer propaganda.