patrick.net

humanity says

Reality says

Standard Oil had little price setting power when it was offering the lowest price)

Wasn't the purpose of the low price to prevent small start ups from entering the business profitably so as to compete ? Left alone, Standard could become like a single utility company controlling nearly all oil production and sales. At that point they would have price setting power in the extreme.

That Pinky-and-Brain dream of taking over the world was already proven impossible before the government broke up Standard Oil. Standard Oil market share was already declining in the US due to competitors copying its efficient refinery practices (Standard Oil never had a stranglehold on wells and crude production, not even allegedly); worldwide, Standard Oil market share was rapidly declining before the breakup due to German chemical giants refining eastern europe crude oil.

The Morgan sponsored scribes made up a lot of sensationalistic stories about Standard Oil. In reality, Standard was simply an efficient producer like a modern automibile moving into what had been wasteful horsecab mom and pop shops. Before Standard Oil, the bulk of crude feed stock was thrown away in Kerosene production.

Calling long distance with AT&T was cheaper in the 80s than in the 90s, right?

thunderlips11 says

Calling long distance with AT&T was cheaper in the 80s than in the 90s, right?

The AT&T monopoly was a classic case of government regulation creating monopoly. Remember the great goverment plan to wire up all rural America while putting a price cap on how much companies can charge on calls originating from there? Guess who headed the committee to regulate that price and wiring? The Boss of AT&T! Many states even banned competing telephone lines being installed, so the allged "natural monopoly" could be maintained!

Yes, some utilities were government-regulated monopolies.

But it's ridiculous to assert that monopolies are impossible w/o government intervention. The trusts of the late 19th century are a classic example. They are proof that unregulated capitalism leads to monopolies and trusts. It took government intervention to "bust" the trusts.

"Reality" is using the debate tactic known as the "Gish Gallop." That is, throwing out so much bullshit in so little time that it's impossible for anyone to refute every single point in real time. He just keeps repeating the same PRATTs over and over again, hoping that some of the bullshit will "stick."

freak80 says

Yes, some utilities were government-regulated monopolies.

Try "practically all of them whenever a monopoly was established"

But it's ridiculous to assert that monopolies are impossible w/o government
intervention. The trusts of the late 19th century are a classic example.

Like which one? Be specific. Which "trusts"?

They
are proof that unregulated capitalism leads to monopolies and trusts. It took
government intervention to "bust" the trusts.

What is this "they" that you are talking about? Give a couple examples. Some others already tried: Standard Oil and AT&T; the former was not a monopoly but only called a monopoly by the government, the latter was put into monopolistic power by the government in the 20th century.

Reality says

Standard Oil kerosene price was undercutting the production cost OF ITS
COMPETITORS! That's because Standard Oil was a much more efficient refiner than
its competitors before the latter copied its practice. Standard Oil was pulling
out gasoline, diesel, lubricants, vaseline and wax to sell, all at high premium
because of lack of competition; of course that meant it could sell Kerosene at
low price

Reality says

Like usual, you bring your chart to prove your own ignorance. The rapidly
rising profit at Standard Oil was indicative of its high efficiency, not
deliberate price war loss leading.

Golly, I can barely spell Game Theory but wouldn't a steeper slope for the growth of assets vs. earnings indicate falling margins?

control point says

Golly, I can barely spell Game Theory but wouldn't a steeper slope for the
growth of assets vs. earnings indicate falling margins?

Falling margins reflecting both competitive pressure as well as capital amortization (i.e. profit decline only in the accounting sense).

Reality says

Citing Viacom is all the more specious, as it is the underdog compared to Disney,

I think you and I have very different perspectives on Viacom and the other big media companies. Too me, this looks like an oligopoly possibly headed towards a monopoly.

And I think this oligopoly was established intentionally by corporations seeking to cut down markets not by government socialistic policy.

Government's role in establishing this oligopoly has been in abandoning anti-trust law enforcement. Prior to Reagan, corporate mergers involving major telecommunication or media companies were unheard of. The government simply didn't allow large companies in the same industry to merge. After Reagan, mergers have become so normal they are expected and demanded by share holders to make quick profits.

Reality says

Falling margins reflecting both competitive pressure

hmm..page 3 seems to contradict this - shows falling margins up to 1895. Standard controlled 70% of refining capacity and 91% of production through 1904, after which you could argue competitive pressure.

http://www.ewi-ssl.pitt.edu/econ/files/courses/110908_misc_industrialtrustsgraphs.pdf

What I'm saying is Standard's margins (refined-crude) fell while they were gaining larger and larger market share through 1895. Seems to me exactly was you'd expect from predatory pricing.

Reality says

capital amortization (i.e. profit decline only in the accounting sense).

Thats a stretch. Do you have any support for that? The chart could easily represent EBITDA as earnings.

Dan8267 says

I think you and I have very different perspectives on Viacom and the other
big media companies. Too me, this
looks like an oligopoly possibly headed towards a monopoly.

Do you not realize the role of government licensing in maintaining media oligopoly? Some local media markets can indeed be described as approaching oligopoly, largely as result of licensing requirement and regulation. There is no media oligopoly emerging for online media for example, for now anyway before government gets its sticky hand on the internet.

Dan8267 says

And I think this oligopoly was established intentionally by corporations
seeking to cut down markets not by government socialistic policy.

Of course it's created by government socialistic policies to cut down market freedom. Everyone can dream about monopolistic or oligopolistic pricing power . . . only government regulations can enforce it and prevent someone else to jump in and take the customers from the monopolists and oligopolists. Even you realize only the government can stop Indian software programmers come here to take your lunch when the customers are looking for less expensive software.

Government's role in establishing this oligopoly has been in abandoning
anti-trust law enforcement.

No. The government role in establishing monopoly and oligopoly is in establishing barriers to entry.

Prior to Reagan, corporate mergers involving major
telecommunication or media companies were unheard of. The government simply
didn't allow large companies in the same industry to merge. After Reagan,
mergers have become so normal they are expected and demanded by share holders to
make quick profits.

That's ridiculous. Governments at the federal, state and local levels were instrumental in the creation of the AT&T monopoly since circa 1918, with tax on urban calls to pay AT&T to build rural network and prevent rural networks charging high rate that would attract competitors. That's how governments install monopolies: by trying to pretend "doing good" while channel wealth to cronies, counting on morons and simpletons to cheer along the way to their own financial destruction.

Early in Reagan terms saw the break-up of AT&T. Before the break up, AT&T was wired telephone service; there wasn't much to merge since the 1920's. After the break-up, there were more than one major company in the field, so mergers became possible.

control point says

hmm..page 3 seems to contradict this - shows falling margins up to 1895.
Standard controlled 70% of refining capacity and 91% of production through 1904,
after which you could argue competitive pressure.

Oil industry only emerged around the time when Standard Oil was founded in the 1860's. Margin compression was normal for a new industry as it expands to economy of scale and reaching more and more customers over its first 30 years. Witness the personal computer industry from 1975 to 2005.

control point says

What I'm saying is Standard's margins (refined-crude) fell while they were
gaining larger and larger market share through 1895. Seems to me exactly was
you'd expect from predatory pricing

Predatory pricing for 30 years? When do the investors plan on collecting their profit? in the after-life? The decades long trend was simply the result of the industry maturing. Standard Oil's own margin compression was indicative of its lack of pricing power. Latent competition risk can drive down price just as existing competition. Let's also not forget, the German chemical giants would be quite willing to export to the US if Standard did not cut prices. They did not have to be physically present in the US to generate competitive pressure.

control point says

capital amortization (i.e. profit decline only in the accounting sense).

Thats a stretch. Do you have any support for that? The chart could easily
represent EBITDA as earnings.

EBITDA is recent invention. The chart was showing corporate earnings as reported by accountants to minimize taxes. The rapid rising asset coupled with declining earnings was indicative of accounting procedures being undertaken.

Reality says

Do you not realize the role of government licensing in maintaining media oligopoly?

If you are going to define any involvement of government in business, as government running the business then every business is ran by the government. The mere fact that corporations have legal charters makes them "touched" by government.

Reality says

EBITDA is recent invention. The chart was showing corporate earnings as reported by accountants to minimize taxes. The rapid rising asset coupled with declining earnings was indicative of accounting procedures being undertaken.

Do you know why it is a recent invention? In the US, the Corporate income tax was first enacted in 1909. Why would accountants maximize depreciation (lowering earnings) in a tax-free environment.

They wouldn't. Come on, just admit you're making this one up. You have absolutely no support for your assertion that falling margins in the face of exploding assets is in accounting margins only.

Dan8267 says

Reality says

Do you not realize the role of government licensing in maintaining media oligopoly?

If you are going to define any involvement of government in business, as government running the business then every business is ran by the government. The mere fact that corporations have legal charters makes them "touched" by government.

The Corporation is indeed a legal entity created by the government. The Corporate Veil shield individuals from business failures is a big part behind the high risk gambling that the Wall Street Corporations engage in. For a long time, Wall Street firms had to function as partnerships (in order to be acceptable to clients), where the partners were not shielded from gambling failures.

In the media corporations, the influence of government is all the more significant as licensing and spectrum restrictions come into play. Like I illustrated in the previous post but you chose to snip, the contrast between the segment of the media industry that requires government licensing vs. the segment that does not (internet online media) behave very differently as far as oligopolistic tendencies are concerned.

Reality says

Predatory pricing for 30 years? When do the investors plan on collecting their
profit? in the after-life?

They maintained profitability throughout those 30 years. Their monopoly power was derived from economy of scale and control of natural resources.

Standard was able to charge a low enough price for refined oil to make competition difficult because they also controlled a large portion of distribution channel throguh Flagler and Rogers.

You are kidding yourself if you think they couldn't have set the market price higher for refined products when they controlled 90%+. They didn't because of Sherman - they were trying to avoid breakup.

elvis says

President Johnsons no so Great Society redistributed trillions of dollars through a "stable distribution of income and wealth".

The end result? Nothing.

The best way to redistribute wealth is by free enterprise...something retarded liberals just can't figure out for yourselves.

Actually the end result of free enterprise will always be major winners and major. Losers. If you think free enterprise can efficiently solve inequality then how is it that the rich keep getting richer? Please don't try to tell us that the Scrooge mcducks of the world can continue to hoard their wealth and resources AND everyone else can STILL have their fair share.

Survival of the fittest so that the human race improves over time. Let the weak disappear and stop propping them up. It's called evolution and we need to stop interfering with progress.

elvis says

Income, intelligence, strength, independence, cleanliness, honesty, etc will NEVER be equal. Thats why some athletes earn millions per year and others make nothing. Thats why some business people earn fabulous incomes and others go out of business.

There are race norses and there are work horses, they will never be equal. Why do liberals have such a hard time understanding that simple principle? Could it be their unrealistic obsession with utopia?

I think it is an inborn character flaw that causes them to want to fix everyone else's problems. Usually they are unfortunately oblivious to their own shortcomings and therefore utterly incapable of diagnosing anyone else. They mean well, but cause more harm with their good intention than laissez faire ever could.

elvis says

Why do liberals have such a hard time understanding that simple principle?

Liberals understand it fine. They also understand that when wealth disparity gets to the current levels, the economy stops working. And that's why they favor a strongly progressive tax so that the disparity won't ever get to the point that it's at today (or 1929) and we can always enjoy a strong economy.

Why can't conservatives understand this?

tatupu70 says

elvis says

Why do liberals have such a hard time understanding that simple principle?

Liberals understand it fine. They also understand that when wealth disparity gets to the current levels, the economy stops working. And that's why the favor a strongly progressive tax so that the disparity won't ever get to the point that its at today (or 1929) and we can always enjoy a strong economy.

Why can't conservatives understand this?

But don't solve wealth disparity through force, solve it by creating an environment that allows private enterprise to grow and by reducing welfare and social entitlements so that it lights a fire under people's asses. Otherwise, the motivation to excel or even survive is sapped.

debyne says

But don't solve wealth disparity through force, solve it by creating an
environment that allows private enterprise to grow and by reducing welfare and
social entitlements so that it lights a fire under people's asses. Otherwise,
the motivation to excel or even survive is sapped.

Unfortunately, history has proven that your proposal doesn't work. There was minimal welfare or social entitlements in the 1920s and wealth disparity was very high.

debyne says

But don't solve wealth disparity through force, solve it by creating an environment that allows private enterprise to grow and by reducing welfare and social entitlements so that it lights a fire under people's asses. Otherwise, the motivation to excel or even survive is sapped.

Here in the real world . . .

http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html

tatupu70 says

Why can't conservatives understand this?

"Got mine fuck you"

elvis says

There are race norses and there are work horses, they will never be equal. Why do liberals have such a hard time understanding that simple principle? Could it be their unrealistic obsession with utopia?

Because the libertopia you clowns want is hell on earth for millions if not billions of people.

I am a left-libertarian in that the libertarian crap is great in theory, but in practice (since the earth is finite) access to the earth's wealth needs to be controlled by extra-market forces -- i.e. democratic government -- else we fall into the open-loop state of ever-concentrating wealth in fewer and fewer hands.

http://geolib.com/essays/sullivan.dan/royallib.html

Again, here in the real world, the current status quo is getting semi-hellish for millions of Americans already as access to the commons is being sold off again.

http://www.bloomberg.com/news/2013-10-23/blackstone-creating-rental-home-bonds-after-buying-spree.html

This is one of the more subtly evil things I've seen in my 40+ years on the planet.

So much of the violent conflicts of the past 100+ years have been land tenancy revolts in disguise.

Cuba and Vietnam for two.

http://india.nydailynews.com/newsarticle/1c26f7ae86b65a52f81278155ffd686f/uw-professor-fights-poverty-one-land-plot-at-a-time

tatupu70 says

Unfortunately, history has proven that your proposal doesn't work. There was minimal welfare or social entitlements in the 1920s and wealth disparity was very high.

Bellingham Bill says

Here in the real world . . .

Why can't you mutts look at the truth?

Even if you tax the rich at 100% it would not solve the problem.

The northern European countries owe the "success" of their socialism to the free market that preceded their current system.

Hell even Somalia has made big gains in their standard of living for all their people with no government save the tribal law that predates their last government.

indigenous says

Even if you tax the rich at 100% it would not solve the problem.

Assuming the problem you refer to is wealth/income disparity, then I think a 100% tax on the rich would solve that problem. It would, however, create other problems instead.

In any event, nobody is advocating a 100% tax. So, let's stick to the issue.

tatupu70 says

Assuming the problem you refer to is wealth/income disparity, then I think a 100% tax on the rich would solve that problem.

The GDP is around 12 trillion a year of which you might somehow divine 10% profit from the 12 trillion which would be 1.2 trillion if you took all of that you would get 1.2/17= .07% nope that would not work not to mention 100 trillion in unfunded liabilities.

indigenous says

The GDP is around 12 trillion a year of which you might somehow divine 10% profit from the 12 trillion which would be 1.2 trillion if you took all of that you would get 1.2/17= .07% nope that would not work not to mention 100 trillion in unfunded liabilities.

Maybe you didn't read very closely. The problem I refer to (as well as the OP) is income/wealth disparity. Not the debt.

Although if you solve the first problem it will go a long way towards solving the second.

tatupu70 says

Maybe you didn't read very closely. The problem I refer to (as well as the OP) is income/wealth disparity. Not the debt.

Although if you solve the first problem it will go a long way towards solving the second.

As has been stated ad nauseum equality is irrelevant what you care about is the standard of living for most people otherwise N Korea would be the most equal.

Also the inequality is greatest when the government overreach is at it's greatest. (inflation)

indigenous says

As has been stated ad nauseum equality is irrelevant what you care about is the standard of living for most people otherwise N Korea would be the most equal.

You can state it as much as you want, but it's still 100% false. When inequality gets to levels like now (or 1929) bad things happen because the economy doesn't work.

indigenous says

Also the inequality is greatest when the government overreach is at it's greatest. (inflation)

Was government overreach at its greatest in the late 1920s?

tatupu70 says

You can state it as much as you want, but it's still 100% false. When inequality gets to levels like now (or 1929) bad things happen because the economy doesn't work.

tatupu70 says

Was government overreach at its greatest in the late 1920s?

You do realize that in both cases now and in the 1920s government overreach was at it's height. The creation of too much credit in the 1920s and in the early 2000s.

Which created the inequality at both times in 1920s with deflation and now with inflation created by uncle Ben

Bellingham Bill says

debyne says

But don't solve wealth disparity through force, solve it by creating an environment that allows private enterprise to grow and by reducing welfare and social entitlements so that it lights a fire under people's asses. Otherwise, the motivation to excel or even survive is sapped.

Here in the real world . . .

http://www.inc.com/magazine/20110201/in-norway-start-ups-say-ja-to-socialism.html

Sounds great when they use their oil resources to fund most of it...not taxes. Norway is already worried that because of drops in oil prices, they're going to have to cut their welfare programs. Socialism works great when you hopefully have an everlasting source of income to fund it, but that's actually NOT the real world if you have a country that funds it's government and social programs by taxing the rich.

indigenous says

You do realize that in both cases now and in the 1920s government overreach was at it's height. The creation of too much credit in the 1920s and in the early 2000s

So when the history books all talk about Laissez Faire 1920s, they actually mean government overreach?? OK then. Please detail this overreach and how government "created" too much credit.

indigenous says

Which created the inequality at both times in 1920s with deflation and now with inflation created by uncle Ben

The 1920s were a boom decade--ever hear roaring 20s? Until the Great Depression. In any event, please detail how deflation causes inequality. And also how inflation causes inequality.

tatupu70 says

So when the history books all talk about Laissez Faire 1920s, they actually mean government overreach?? OK then. Please detail this overreach and how government "created" too much credit.

They kept interest rates too low which created inflation. There were also international reasons.

tatupu70 says

Until the Great Depression. In any event, please detail how deflation causes inequality.

If you have dollars during deflation the value of your money goes up.

tatupu70 says

And also how inflation causes inequality.

Inflation conversely helps those who have investments.

sbh says

The point is that government causes inequality by its every act, by its very existence. It can only better itself by destroying itself. Short of that it should destroy every monetary molecule it has contaminated over its time on earth. Such monetary ethnic cleansing would reset wealth purity at the quantum scale. Don't you get it?

Yea you jest there does have to be a rule of law. On the other hand Somalia has improved the standard of living for it's people without it except tribal law.

indigenous says

They kept interest rates too low which created inflation. There were also international reasons.

No they didn't. Rates were actually quite high when compared with the CPI.

indigenous says

If you have dollars during deflation the value of your money goes up.

indigenous says

Inflation conversely helps those who have investments.

Hopefully, even you can see how ridiculous those two statements are. Except that I will add that the natural state of a free market tends toward inequality. The government must intervene to limit that natural force.

tatupu70 says

indigenous says

They kept interest rates too low which created inflation. There were also international reasons.

No they didn't. Rates were actually quite high when compared with the CPI.

indigenous says

If you have dollars during deflation the value of your money goes up.

indigenous says

Inflation conversely helps those who have investments.

Hopefully, even you can see how ridiculous those two statements are. Except that I will add that the natural state of a free market tends toward inequality. The government must intervene to limit that natural force.

tatupu70 - why are the statements that indigenous made ridiculous?

I do agree that a pure free market will drive toward inequality and limit equal opportunity. We must have some regulation.

tatupu70 says

No they didn't. Rates were actually quite high when compared with the CPI.

The actual rate was around 7%. Prices for consumer items should have gone down but were instead going up because of FED lowering of the interest rates.

tatupu70 says

Except that I will add that the natural state of a free market tends toward inequality. The government must intervene to limit that natural force.

Not true in fact the opposite is true. The inequality is made much worse by government intervention. Which is just a way for the cronies to get rich at our expense. You and your ilk have bought into their propaganda hook line and sinker. Like your friend sbh who can only mock and has no clue about the reality of this

indigenous says

The actual rate was around 7%. Prices for consumer items should have gone down but were instead going up because of FED lowering of the interest rates.

Huh? So, now that you realize that inflation was, in fact, very low at the time, you're saying that the problem was that it "should" have been deflation??

Could I ask how you determine what inflation/deflation "should" have been?? I'm assuming you have some sort of scientific formula, right?

indigenous says

Not true in fact the opposite is true. The inequality is made much worse by government intervention. Which is just a way for the cronies to get rich at our expense. You and your ilk have bought into their propaganda hook line and sinker. Like your friend sbh who can only mock and has no clue about the reality of this

OK--let me ask you this then. What was the cause of the 30 years of lower inequality that the US enjoyed in 50s through 70s? Are you going to argue that there was less government intrusion during that period?? (with a straight face?)

errc says

We would have 60-80 hour work weeks?!?

Someone is smoking on a Wednesday am, and its not me.

My friends that work in union shops, do work 60 hour work weeks.

Johnson and Johnson

Armstrong

They actually have said, they don't work. They stand around and finger their phones, and take naps and bullshit with the other union shleps, for 28$ per hour. The machines do all the work. If the machines break, they call in a tech to repair them

I 2nd this. I do some work but really the work can easily be done in 2-3 hours tops. Well technically it is, but the other 5-6 hours is day dreaming and BS. Sometimes I'll chip in and do extra but not if everyone else is sitting around on their arse all day. Funny thing is I make about $19 an hour, plus benefits and retirement.