On Jun 4, 2:57=A0am, Tom Plunket <to...@[EMAIL PROTECTED]
> wrote:
> trader4 wrote:
> > > > For the same reason every other advancement in every other
commercia=
l
> > > > field has taken place. Advancing technology is how you increase
> > > > sales and stay in business. If you have a better product at a
bett=
er
> > > > price, people will buy it. This is economics 101.
>
> > > Economics 101 makes assumptions that are not true, then. We /have/
> > > advanced technology in many areas, but the companies don't have
> > > incentive to release them when the present technologies have a
higher
> > > margin. This is real life, not some utopian textbook vision.
>
> > Nonsense. Exactly what economic assumptions of basic economics do you
> > claim are untrue?
>
> The basic assumption that a better product for a better price will
> automatically yield a "win" in the sector.
>
>
>The thing that "economics 101" seems to leave out is marketing.
With
> adequate marketing, people can be made to buy anything. Marketing
>requires money, therefore those who are established in the
marketplace
>are the ones who can afford the marketing in the first place and
they
> happen to have a vested interest in keeping their customers.
That didn't work real well for Detroit did it? Despite all their
marketing and enormous clout, the Japanese competition kicked their
ass, exactly per economics 101. Today GM's market share is lower
than it's ever been. Or how about the computer industry examples I
gave you? IBM was a power house, with a huge brand image and
marketing, yet they were sent reeling by the likes of upstarts like
Compaq, Dell, etc.
>
> > In free markets, if one company doesn't release the technology,
> > another company soon enough will, because they see it as an
> > op****tunity to gain business, lower costs, make more profit, etc.
>
> In the US, one company can patent whatever they want and thereby prevent
> others from competing in the first place.
Not true. Companies can't patent whatever they want. Most product
improvements aren't patentable at all. Just look at the competition
between Intel and AMD, which I previously pointed out. Despite this
being a very high tech arena, no patents have prevented AMD from being
a fierce competitor to Intel.
>
> > What do you think would happen if Intel decided to not introduce their
> > newest processor for a year? AMD would eat their lunch.
>
> I highly doubt that. AMD has regularly ****pped new technology
> significantly before Intel, and Intel is still the market leader. In
> this case AMD's offerings are not only priced "better," they're also
> arguably more powerful. So how exactly does all of this jive with
> "better product sooner =3D win"?
This is the essence of economics 101. You claimed that economics 101
is wrong because companies can just sit on new and better products and
hold them back. I pointed out the classic example of Intel and AMD
because they are constantly battling each other for business. That
competition includes bringing new products to market quickly, not
sitting on them. Of course part of that competition is constantly
battling in price/performance, etc. Competition in the free market
works. So, what's your point?
>
> > What happened to IBM and DEC, when they tried to ignore the PC and
> > protect their existing business? IBM is still with us, after massive
> > losses, layoffs, and restructuring. DEC went through the same, only
to
> > be swallowed up by Compaq, which was only a little upstart competitor
a
> > decade earlier.
>
> IBM was wedded to the idea of service contracts. They were pu****ng a
> product that consumers didn't want. This isn't really the same thing as
> a competitor coming along with a superior product at a better price,
> this in fact is giving /less/ product for a lesser price.
While service was indeed a part of IBM revenue, it was just one
component of the equation and not the central cause of their
problems. IBM badly misjudged changing markets twice, by not
offering the right products. Once was in the 70's when upstarts like
DEC, Data General, Wang, etc took them on with the mini-computer that
was a more cost effective and better solution for many applications
compared to the mainframe. Later, in the late 80s and 90s, all the
above companies were hit the same way by the PC. They didn't react
to it, embrace it, etc. As a result, IBM was sent reeling with
massive layoffs, losses, restructuring and their survival was in
question. The others, DEC, Data General, Wang are gone.
And I'd point out that your premise that these new computer
competitors offered less product for a lesser price is wrong. The
minicomputer companies pushed service contracts just as much as IBM
did. And both the minicomputer and the PC offered MORE performance at
a lower price. If you look at how many minicomputers you could buy
for the same dollars, you wound up with MORE MIPS. Later the market
moved to the PC, which offered MORE MIPS per dollar than the
minicomputer in a distributed scheme.
And it really doesn't matter, what part of the competition they got
wrong. The simple fact is, per economics 101, there were plenty of
competitors ready to step in and give the customers what they wanted.
>
> > The politicians and political hacks control the process though from
> > start to finish. They write the specs, control the bidding process
and=
> > make sure the contracts get steered to their buddies who provide
> > campaign funding and/or bribes. Which is exactly my point.
>
> And you call the "liberals" paranoid whack-jobs?
>
> > > > That level of incompetence would never exist in the private
sector..=
..
>
> > > LOL, ok, I guess I've worked in different companies than you have.
>
> > What happened to the likes of Digital Equipment, Lucent, and Enron?
>
> I never worked at any of those companies, but that's a pretty funny
> list. Wasn't one of Lucent's main competitors Worldcom, who "won" by
> faking their books and inventing revenue that didn't exist?
No. Lucent was the manufacturer of telecom gear spun off from AT&T.
Hence they had the mindset of a monopoly, where you could do what you
claim occurs routinely in free markets. That is, they took their
sweet time in rolling out new products. When they were part of AT&T
for most of a century, they could decide when to release a new phone,
PBX, or central office switch, because their own company, AT&T was the
customer for 90% of the product they sold. So, they were more like
a govt, where cost and overhead didn't matter. Consequently, they
had huge overhead, huge inefficiencies, and little focus on changing
markets. Then, with the break up of AT&T, their ass was kicked by
fierce competitors like Alcatel, Siemens, and the change from
traditional phones to VOIP which brought into play competitors from a
whole new arena, like Cisco.
What
> product(s) did Lucent's competitors offer that were better and cheaper
> than Lucent's, just for the record?
Essentially, Lucent missed the whole change over from traditional wire
phones to VOIP. Along the way, competitors like Simens, Alcatel,
Northern Telecom rolled out products for everything from central
offices to PBX's that offered better price/performance/features,
etc. Lucent's last hurrah came in the 90's, when they were getting
fat, dumb and happy selling all their existing products into a dying
market. What was happening was telecom carriers and the baby Bells,
were ordering lots of traditional, old line equipment. One big
reason was everyone was getting second phone lines for modems. That
meant you needed more CO switches, at $1Mil+ a pop. They rode that
gravy train right into the ground and didn't react to the changing
market around them. The result, once again, was competition forced
massive losses, layoffs, plant closings.
And finally, when there stock was reduced from $100 to a couple bucks,
they were bought out by Alcatel.
>
> Enron is a gold mine. Not sure why you threw that out there; they were
> making profit hand over fist, the dream of the stock market and the
> ****ning star of capitalism. Which of their competitors came out with a
> better product for less money again?
Nothing exceptional here and again it's consistent with economics
101. While Enron was involved in many businesses, actually starting
out as a gas pipeline company, they are best known for trading
energy. They had competitors in that arena, from the traditional
futures exchanges, to companies like Dynegy. Enron lead the way
into ever more convoluted and customized energy derivatives. The
problem of course, is there were no profits. Enron was a massive
fraud. So, again, an excellent example of economics 101. They were
able to grow faster than competitors because they were able to
recklessly undercut them, offering products at what was actually a
loss, and taking on ever more risky deals, because like a Ponzi
scheme, they had to keep growing the company to hide what was really
happening.
That no competitors totally followed them into the abyss is not
surprising at all. These potential competitors were scratching their
heads, saying "How the hell did Enron do that deal? It doesn't make
sense to us, because we couldn't make money at it, it's too high risk,
etc"
>
> > Have you seen any govts go bankrupt or out of business? On the other
> > hand, we have had massive govt programs that went on for decades and
> > continue to this day. Like the war on poverty, started by Johnson.
> > Despite trillions spent, the poverty rate remains the same.
>
> "Massive government programs went on for decades," huh? GM is massive
> and has gone on for decades.
That doesn't answer the question. Lots of companies have either
failed and are gone. Show us one govt, that has disappeared. Or how
about one govt that is SMALLER, by any measure than it was 10 or 20
years ago.
As for GM, sure they are still around. However, they once had a 60%
market share. In the 70's, they had a 45% market share. Today
their marketshare is 25%. Proving once again, that competition in
free markets is a powerful force and works.
So is IBM. They both continue to this
> day.
Yes, they sure do. But once again, they were forced by competition
to drastically change their business. And their market share
experience has been far worse than GM. IBM's share of the total
computer business today is a small fraction of what it was in the 60's
or 70's, when they owned almost the whole thing.
>
> The thing that really kills me about the fiscal conservatives these days
> (I've been reading Ron Paul's manifesto, and sadly it's more of the
> same) is that they go on and on about what government shouldn't do.
> Government shouldn't tax people, shouldn't provide healthcare, shouldn't
> ensure education, shouldn't wage continuous war, shouldn't subsidize
> corn... I have seen nothing on what the government should actually be
> doing, short of, "read the Constitution," which I feel to be a complete
> cop-out. Do we, as citizens of the United States, (quite) arguably one
> of the wealthiest nations on the planet, care about anything at all
> beyond maximizing profit?
Trying to maximize profit is a good thing. When you have competitors
in a free market, all of them trying to maximize profits leads to an
efficient use of resources. If profits get high enough, it attracts
new competitors, which then moderates the price.
Has anyone considered that the most likely
> outcome of taxes being minimized would be a substantial reduction of
> everyone's disposable income?
Hmmm, how can that be?
Imagine if every couple of city blocks I
> had to pay a toll to the owner of that stretch of road.
That's how the Garden State Parkway, which is run by the state, runs
here in NJ. It used to be much worse, until they ripped out half the
toll plazas they previously installed and also put in EasyPass.
EasyPass was another great govt experience. First they spent $500mil
putting it in. Then a mere few years later, they embark on the "high
speed" Easy Pass, requiring another similar amount of money to redo
part of what they just did.
Also, with NJ govt going broke from out of control spending, guess
what one of the proposals is? Placing tolls on more state roads.
Imagine if my
> neighbors didn't pay their fire insurance so the fire fighters didn't
> come 'til my house was already burning down? Imagine if we didn't have
> freeways at all? Doesn't seem like utopia to me.
Minimizing taxes, having free market competition wherever possible,
and having no govt services at all are very different things.
>
> Anyway, consider this: some number of people buy some quantity of a
> product from some company. That company posts a profit. From the
> consumer's perspective, that profit is by its very nature waste.
I don't see it as waste at all, nor should any consumer. It's no
more waste than the cost of the raw materials, the wages to make the
product etc. It's part of the cost of doing business, which is to
say, it's what attractis capital and makes the business possible.
> If the
> company had sold its products for just a little bit less, then all
> consumers wouldn't have had to pay as much for them, and they would have
> had a little bit more money in the bank. So- we're happy to buy
> products for whatever amount companies choose to sell them for, and we
> actaully applaud them when they make massive profits. Out of the other
> side of our mouths we curse government programs (like road construction,
> to use an example that's been brought up in this thread) as being
> "wasteful," even though the exact same market economics are in play. I
> find this thought to be quite interesting.
The same market economics are most certainly NOT in play. In your
free market example, consumers are free to decide to buy that product
or not. If profits are too high, more competitors will enter the
market to drive the price and profits back down.
In the case of the road, you have political hacks writing the bid
specs, controlling the bidding process, and the contract goes to one
of several companies, all of whom are politically connected, make
large campaign contributions, and in many cases kickbacks. Here in
NJ the US attorney has successfully prosecuted a whole laundry list of
local and state politicians on the take doing exactly that.
So, if the politicians rebuild a road twice, instead of once, do
paving that isn't really needed, or pay 50% more for a project that
isn't needed, not only doesn;t it negatively impact them, they have
even more money to spread around to their connected buddies.
>
> > > > ...because the business would have failed long ago. Why do you
thin=
k
> > > > institutions like public schools are dead set against voucher
> > > > programs, which would allow parents to use them to decide where to
> > > > send their kids?
>
> > > Ok so we agree that public school sucks.
>
> > And exactly why is that and why are they so afraid of vouchers?
>
> Are you serious? People are afraid of vouchers (not just school
> administration, but also people who send their kids to public school)
> because it necessarily means that they lose money.
>
Lose money? And how exactly is that? They get a voucher for what
it would cost to educate their student in the local public school
system. They can then use that voucher either at the public school
or at a private school of their choice.
> > So, the crappy school has 20% less students and 20% less funding and
> > that's "cutting their funding?" Seems very reasonable to me.
>
> Of course it seems reasonable to you, stuck in Econ101. Have you ever
> heard of the efficiency gains that come from mass production? You get a
> similar effect in institutional settings; while the money given to the
> school is linear on the number of students, the cost to educate those
> students is substantially sub-linear. Cutting the number of students by
> 20% does not lower the cost of adequately educating that body of
> students by 20%.
No contradiction here with Economics 101. Sure, there is efficiency
gains from mass production. Nothing new. But, what you wind up with
in the free market is a reasonable number of competitors that takes
that into account. What's better? That we have GM, Ford, Chrysler,
and foreign competitors as well, or ONE car company? With vouchers,
you would have the GM, Ford, Chrysler situation. What you have with
public schools is the one company solution and the results that go
with it.
>
> > Meanwhile the 20% have a better education and now the poor school has
an=
> > incentive to improve.
>
> I'm not sure what you're thinking they should magically "improve." They
> should magically get all of these kids parents back together? They
> should magically make the kids' parents care about their kids'
> educations? Regardless, nobody's holding a gun to your head when it's
> time to send your kids to school; if you don't want to participate in
> the public school system that's your own perogative, but your community
> at one time deemed it an im****tant role of the community.
Offering vouchers is not a cure all. But here is where conservatives
and liberals disagree. Voucher systems are both practical and easy
to implement. And many people are not free to choose alternatives to
the public schools. Only the more affluent are. So, you are denying
the people of modest means the ability and some would say the right,
to send their children to schools of their own choice. And at the
same time, you are requiring them to pay significant taxes for public
schools. Here in NJ, the average house is paying $5K a year in
property taxes, with $3K of that going for schools.
Why are you so against people being free to choose?
>
> > Here in NJ the liberal Supreme Court...
>
> I find it amusing that when self-professed conservatives talk about any
> group of people who makes decisions that they personally disagree with,
> they label that group "liberal" or even "activist." It is quite
> amusing. ...and sad, but so it goes. (I do not believe that the
> definition of "liberal" is "disagrees with me," but I also don't
> understand why the definition of "conservative" has become "wishes to
> wage eternal war.")
I don't call them liberals because they made some decisions that I
personally disagree with. I call them liberals because they have
made countless decisions that are consistent with the liberal
philosophy, they were appointed by Democrat liberals, and they are in
fact liberals.
>
> > ...ruled a decade ago that it was unconstitutional for public schools
in=
> > poorer areas to not be receiving as much money per student as more
> > affluent areas.
>
> What's the function of a "state" in the United States? Just so we're
> clear, I'm curious what people think it should be. Should a state
> provide for its citizens? Equally? If we tear down State and Federal
> "interference" in our local programs, what's the point of having states
> or a country in the first place?
To handle as little as necessary, not to introduce their heavy hand
where ever they please. Take education as example. Once it was
handled entirely at the local level. Then you had state involvement,
which makes sense. Then, in the 70's, Jimmy Carter created the DOE
as a cabinet level organization. Why do we need a whole additional
federal bureaucracy to run education, which occurs at the local level?
I'm truly curious, because I know many
> conservatives think the "redistribution of wealth" is pretty much the
> primary sin of government, but if we take it to its logical conclusion,
> what's the point of having it in the first place? (I think this
> hemisphere would be a much nicer place if the states were independent
> nations, myself, but I also think that the conservatives would be truly
> screwed were that to happen.)
>
> > Never mind that the NJ constitution says nothing to that effect.
>
> Isn't the point of government to enact the will of the people? Isn't
> the whole idea behind democracy one that you pretty much vote for the
> people who represent your wishes? Doesn't it then fairly trivially
> follow that if your government is acting against your wishes, then you
> live in an area hostile to your desires? At that point either you can
> 1) vote to change things, 2) run for office, or 3) complain. Option 3
> seems to be a popular one among conservatives these days. (Tip: put
> forward candidates worth voting for! That whole "better product"
> discussion is relevant here as well.)
>
>
LOL, like only conservatives complain? I hear liberals ***** plenty
too. GWB seems to be a favorite topic.
>
> > > ...unless you admit that only those who come from money are worth
> > > educating, but that would just mean that you would prefer that "the
> > > poor" turn to more crime against you.
>
> > This is the liberal notion that poor equals crime. There are plenty
> > of rich drug dealers and plenty of poor people who never commit a
> > crime.
>
> ...
>
> read more =BB- Hide quoted text -
>
> - Show quoted text -
|
