The Economy Part 4 (sort of)
Regulation: When is Enough Enough?
i probably touched on this a little... Regulation becomes necessary when it helps protect the nature of the free market and it prevents fraud. Regulation may also be necessary when a product's true cost is not reflected by the price the consumer pays. Regulations are also necessary to promote ethical (legal) activity and a level of safety for the consume for whatever endeavor a person is in.
So, regulation in and of itself is not evil. What is evil is when politicians misuse/overuse regulation. Regulation should be used sparingly and only when absolutely necessary. Conditions may exist where regulation make sense in the short-term, but longer term make no sense.
Monopolies and the Anti-Trust Act
The Sherman Anti-Trust Act started out with good intentions of preventing those with great market power from exploiting their customers with exorbitant prices.
i heard in Economics classes all of the time that monopolies were somehow harmful (at least that is in theory) and that competition was best for the consumer. But what they ignore is that oligopolies (few players) or monopolies are the usual result of competition (as weaker/more inefficient companies fall by the wayside or are absorbed).
Competition is not about the number of players in an industry - it is about efficiencies and economies of scale; it is getting the most out of the resources used. It should be a goal of a company to be a monopoly and dominate their rivals (if they do, they are the best).
Monopolies do have a higher degree of market power and can set prices within limits, but there are always alternatives. However, the real price gougers in a monopoly arena are those that have a high degree of government interference and regulation (like so called Natural Monopolies - usually utilities).
Monopolies in other industries (very few, most are oligopolies), tend not to abuse their customers with price increases, mostly because there is some form of substitute good. It is not like they are the only company selling air on Mars.
Now for the anti-trust act, i am not a huge fan. The anti-trust act was supposedly designed to prevent the so-called evil monopoly from exerting its power at the expense of the consumer by promoting competition. However, having many competitors for a given item is usually not a great thing.
i'm talking more about monopolistic competition and not about the "pure competition" example of agriculture with a ton of sellers (price takers). In monopolistic competition the business grows by being the best and getting the best usage of its resources. The top competitors rise and grow; the less successful firms go away or stagnate. This should lead to an oligopoly type scenario where a few firms dominate.
Sometimes in this situation you'll see price fixing, like has happened with basically all optical media.
Back to the point i guess... The anti-trust laws have been used more as tools by companies who could not compete on their own merits/value proposition. It is not necessarily about protecting the consumer (or benefitting them somehow), it about sticking to the flawed concept that more vendors equals more competition and that competition is ultimately better for the consumer.
This is not necessarily true. You should not measure a "monopoly" by market share, if you want to have anti-trust laws it should be for companies abusing their power (with specific incidences). Things like adding a free browser (a benefit to the consumer) to an OS when a "competitor" was charging for it is not an abuse of monopoly power.
To be completely clear, i am against anti-trust laws as currently enforced. They are based off a false assumption overstating "monopoly" impact on end consumers (based off of theory) which ignores price elasticity and substitute goods. Competition is not about the number of competitors (as inefficient companies are not true competitors).
Debt
i see debt as an evil (not a necessary evil). Though if you can generate more than the interest rate + principal, you can gain money from it. Some cultures reject the concept of charging interest for debts. There is no such thing as a good debt, but sometimes using debt can be beneficial. That said, it should be used sparingly.
There are sometimes you just don't have the money to purchase some things you want (not talking credit card or impulse buys). Buying a car, house, college education are good examples. These are big money transactions where you may not have enough money laying around to pay for them (the house and college examples, likely having lower interest rates). Either way it is good to limit your exposure to interest (likely paying more than the minimum payment).
The government may also give you tax breaks for using debt (though this sort of thing should not exist in the tax code). Corporations use this potential savings using the tax code to slightly reduce the cost of funding projects. However, debt/leveraging can have harmful consequences (see how much trouble companies got into after the 1929 stock market crash).
i believe the capital structure of many companies in the US is too debt heavy (partially due to the tax breaks, which i would eliminate if i could). Debt should be minimized in the private sector and eliminated in the public sector.
Views About Money (wrong section? better in intro?)
Some people feel irrational guilt about success. Not everyone can be successful. You should never feel guilty for using your brains and luck to achieve success. Afterall, success is about being ready at the right time when opportunity presents itself. Some of it is luck/connections, but you still have to deliver.
Own your own successes, they are not everyday occurrences. You should not feel guilty that you are successful (it is not your fault/responsibility that some people have less than you do.) If you feel some kind of need to give something to your community or the world (and you have the resources), do it. But you have no obligation to do so.
It is one thing to do what you want with your own money, but it is an entirely different matter to go into politics and spend someone else's money. Now, there are people on the outside looking in with envious eyes. To those people, you are greedy if you have more money than you think they should (usually more money than they make).
Economics dictates the conditions. There is a difference in what most people call greed and the reality. Most people think of it as greed to make over a certain amount of money, but greed is an irrational love of money and doing everything in your power (regardless of legality to obtain it). What people really see is others acting in their own rational best interests (that is not greed).
Some people use greed as a pejorative insult. What they fail to account for is the work it takes to achieve what you have. People want what is best for themselves, sometimes they just need someone to blame.
Other View or Money
Fiat money is a dangerous thing. i do not have much faith in the US Government. Asset backed currencies would suit me much better (having an actual intrinsic value). Quit creating so much money.
i view Cryptocurrency as a scam and a potential threat to sovereignty. It is like fiat currency on steroids - no intrinsic value, too much viability for a general currency platform (would need massive devaluation, garbage store of value), possibly open to cyberattacks, theft, EMPs, and fraud. Kind of makes monetary policy impossible (though that may not be a bad thing).
No to a virtual currency. i'm a little old school, but i want to feel actual currency in my hand. i always thought if i had kids, it would help them associate the value of work (chores/allowances). A physical representation of their efforts. i also like it for shopping reasons (control spending, etc). There are all kinds of "1984 big brother" scenarios possible - like only allowing you to buy certain goods, or financially cancelling people.
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