True or False

Increasing the power of private interests makes the market freer.

Why, or why not?

 

Taxcutter says:
If you mean increasing the power of the private sector over government: True.

Government distorts markets and makes them less free.

 

Is this an absolute truth? (i.e. would then complete private sector power and 0 government power be as free as possible?) How so?

 

Depends, some restraints on market participant power are legitimate and make markets -better-. Reasonable antitrust laws, health and safety regulations, pollution laws, market integrity rules (insider trading and disclosure), limited antidiscrimination laws, etc., create a more confident, stable investment base, lessen volatility, increase liquidity and the quality of markets. To be very clear, though, we are way past that reasonable point in the hyperregulatory status quo of an unhinged central executive branch and at other levels of govt. Unecessary, costly regulations decrease investor confidence and stability, accompanying arbitrary civil and criminal litigation sap away liquidity, sap away growth. Until this problem is addressed, we will continue in malaise, like a sick dog with a giant tick attached, wandering from fight to fight, weakening all the while. Which fight will kill the dog outright? Will it be the upcoming student loan fiasco? Some war we get dragged into? Who knows? What I do know is that exccessive government is the prime mover of the sickness.

 

Taxcutter says:
Yes. With zero government power new competitors would be free to enter markets without having to waste capital and time on government regulations.

 

Where is the over-regulation at? Which regulations do you think aren't accomplishing this?

 

Start here:

http://en.wikipedia.org/wiki/List_of_United_States_federal_agencies

Realize that most of these bureaus promulgates massive bodies of regulations on businesss and individuals. Then look here at state and federal levels:

http://www.nbcnews.com/id/45819570/...ws-toughen-rules-abortions-immigrants-voters/

The answer to your question is truly vast, but it is "most of them are too much." I recently posted that a client of mine who has never hired employees before was considering it. Doing so would necessitate compliance with at least 23 state and federal laws and cost about 30-50k a year in addition to much higher insurance premiums. If you were my client, would you undertake the hassle and risk of hiring people and creating stable jobs? Or would you continue using contractors and pocket the extra 30-50k a year? Millions of small business owners are faced with that decision every day in the US due to a hyperregulatory state that consumes too much in taxes. Millions.

The irony is that many of these regulations are bought and sold for the purpose of weakening competition, liquidity, markets, in government's primary line of business... selling graft to its entrenched true constituency. As long as there is graft to sell, graft will be sold. So the solution is the Night of the Living Dead solution, "Kill the brain, kill the ghoul." Government must be severely pruned.

 

So you cannot foresee any possible way that private interests could make the market less free? How do competitors enter a monopoly market? I don't understand how you can claim that abolishing the government is a strawman's argument, and then claim that skewing the balance of government and private interests absolutely to the private side is the freest market. What does the word leverage mean to you?

 

How do we solve this? I know this may seem odd, but I would say that the government needs to be able to be strengthened enough to stand on its own 2 feet before we could hope for it to effectively deregulate. As it stands, private interests fund the campaigns of our elected officials and their efforts to deregulate under this pressure would surely not go well. Private interests don't want a free market anymore than government agencies do.

 

Almost everyone seems to be able to easily identify how a government might manipulate a free market. The real dupe here, is that a large portion of us have been convinced that private interests wouldn't do the exact same thing.

Where is my misstep in logic here.

1.) The government can manipulate the market.
2.) The government's elected officials campaigns are funded by private interests.
3.) Our current representatives have manipulated the market in ways that are not in our best interests.
4.) Their re-election campaigns continue to be funded by these private interests.
5.) Private interests would not fund campaigns that did not benefit them.

Given these truths (unless you object to one). Wouldn't it be more logical to assume private interests are exerting this manipulation inherently, and not the government itself? Why else would private money continue to be injected into these campaigns?

 

If he can't figure out how to make money off that employee he shouldn't hire him or her. So once you get rid of all the regs and lower prices, he still has to compete so not much has changed.

 

The power of private interests inside which environment ?
The notion that those private interests want the market to be free is laughable.

 

I swear that's how a lot of people think they operate. As long as you tell them you're only doing it to them because of the free market, they'll buy almost anything.

 

Off course just ask US steel

 

I think you're mistaken, if government just got out of the way, private interests could just get back to doing what they are designed to do: Make things fair.

 

Nonsense. It would be very easy for large companies to prevent competition in their sectors. The 1870's to early 1900's were full of examples of monopolization of large sectors of the economy. Standard Oil did not allow competitors, the railroad trust did not allow competition, Carnegie monopolized the steel industry, allowing little steel only to deal with customers Carnegie didn't want to bother with. Government stayed out of business in those days.

 

Yeah, but that was then, it would be different THIS time.

 

Private interest have no responsibility to make things fair. It just happens that way because the market just automatically makes everything fair as long as no government regulates it.

The invisible hand don'cha know.

 

The government is way too strong as it is. This allows government to sell more graft. Much of the growth of the executive branch in the 20th-21st centuries is illegitimate growth and deeds way too much legislative power into the Executive as opposed to the people's elected representatives in the legislature. Every tyranny in history has started this way. If most legislative power were removed from the Executive to the states and localities, and what remained was more strictly in accordance with Constitutional enumerated powers, then the anticompetitive effects of hyperregulation would begin to abate to the benefit of markets.

 

The government is plenty big, but not very strong. Maybe I should have used the term independent instead of strong. I don't count the strength of government that businesses have given it to be real strength, but rather to be more or less an extension of business interests.

 

No. Larger companies than my client can realize economies of scale that reduce their per unit regulatory costs, so were many of the regulations removed, large company costs would not change much. My clients' per unit costs OTOH increase exorbitantly due to hyperregulation, and would benefit more from decrease as well. Same reasoning applies to insurance costs. Larger companies can mostly self-insure certain risks, allowing them to purchase less insurance and in volume. Not so for upstart competitors, who must fully insure, at retail prices, more risk more expensively.

People in this country are constantly complaining about stagnating middle and lower worker wages in comparison to what innovators make and high unemployment rates. Anticompetitive hyperregulation is a big part of this problem. What we have done is traded a mass of govt jobs and contracts that exist outside the competitive markets for voluntary private sector market health, a very bad idea that creates anemia and malaise in the economy, chases upstart competition out or stifles their growth, entrenches large graft purchasers.

 

There is no such thing as independent government by definition. Any government with violent fiat power (army, printing press, police power) is infinitely strong compared to any other entity or individual.

 

OK, I'll be VERY cautious of semantics here. I think that the government, while unable to be completely independent, needs to become more independent of private interests than it currently is (although it would be impossible to completely achieve this).

 

The reverse is the case, large, entrenched private interests need to become more independent of government graft. We accomplish this by deregulating and decentralizing all but core regulations and insuring that the regulators are the -elected- legislators of the people they have to live across the street from, not sit imperiously, unelected in Washington, choking competition while lining their own pockets with graft proceeds. Bill Clinton was millions in debt when he left office. He is a decamillionaire today. So where'd that money come from? That's a helluva lot of speaking engagements just to get out of the hole, let alone get rich.

 

This is a fallacy that I bought into for a long time. It starts to break down when you realize that these candidates campaigns are funded by the private interests themselves. They ARE the government currently.