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Thread: Deregulation
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10-16-08, 11:37 AM #22Re: Deregulation
If I read the voting correctly most Republican politicos voted to let those who lived by the sword to also die by it. To me that says they were choosing to let free enterprise work itself out. To you it says they were begging for re-election.
Here is my take, and I preface it by the fact that I do not have a degree in PoliSci, Law, or really anything, but what the hell, I can't do much worse that those on Wall Street that had all those cool skins on the wall, right?
Regulations do not prevent companies from sometimes being over-hyped, and thus over-bought, and thus over-valued. From what I know of regulations they say only these few will be trusted to do this type of business. By doing so they create monopolies. These monopolies are then able to conduct business however they see fit as long as they meet the regulatory requirements which typically do not control value of the product/service. My definition of value covers the cost and quality of the deliverable.
When these regulations are removed it opens the field for everyone to play. Then if I want to be the electric company, the phone company, the bank, or the brokerage firm I can be, and I can compete with the old monopolies. If I do it well, and offer value, I will grow. If I do it poorly, and overprice or under deliver, I will either die off, or be eaten by another company that does it better.
The problem with free market is that it puts the onus on the individual to research and decide if what they are buying or investing in is a good value. With regulations in place I can simply trust that it is because my government says so.
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10-16-08, 12:51 PM #23Re: Deregulation
actually most economist and most book talking about macroeconomics i have read usually say that you can't beat a monopoly, thats why they are a monopoly. but i believe bacon touched on it in a thread awhile ago, the problem with few choices isn't that we have too many regulations, it is that the anti-trust laws aren't being enforced, allowing companies to make monopolies. if anti-trust was enforced then yes you could compete with the monopolies.
Not to forget sometimes the idea of having only a couple companies in a market is for consumer protection. Would you rather have a government sponsered company providing your energy or Akhmad's Power Supply Co.?
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10-16-08, 12:56 PM #24Re: Deregulation
The reason there was, and still is, some regulation on energy, cable, phone, etc is because it would be difficult and wasteful to have 4 different companies run power lines, cable lines, and/or phone lines to the same house/business. Why would Reliant, TXU, and Akhmad all want to run power lines to my property? How is that beneficial to anyone?
Now if TXU is getting power from burning coal, but because they are a behemoth so they waste money and charge more, Reliant is getting energy from solar, hydro, and wind sources, and are just as expensive as TXU, and Akhmad is burning coal, but because of the efficiency in his company he is cheaper I have good choices on my electric service. Do I want the old monopoly just because I hate change, the eco friendly, or the cheap? The choice is mine and/or yours.
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10-16-08, 01:10 PM #25
Re: Deregulation
Civil, you bring up good points on multiple companies running wires for utilities and so forth. Forcing companies to share a resource, such as a power line or a calbe TV coax cable, is an example where regulations can help competition. If each company had to pay for his own wires then whoever entered the market first, wins. No competition. The second player won't, and couldn't get easements across all of the land. The government has to force companies to share the land easements for phone poles, wire troughs, etc.
Here's a video of an independent discussing deregulation.
http://www.youtube.com/watch?v=uYrhh935h0I
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10-16-08, 01:27 PM #26Re: Deregulation
my point is we can't deregulate and allow just anyone to have a power company because Akhmad could possibly be a terrorist and use his company to destroy our power infrastructure.
however i could probably agree on allowing competition as long as they did compete and not just all raise and lower their prices like the oil industry. And as long as we kept tabs on the companies and screened before they were able to become a energy company to make sure they don't start attack infrastructure.
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10-16-08, 01:42 PM #27
Re: Deregulation
Can you imagine anyone deregulating to the point that they would allow traditional criminal behavior? I can't.
Buy electricity from me or I blow up your house! Silly. Not even the most hard-line deregulationist would take it that far. He wouldn't even take it to the point of allowing price fixing.
The differences between regulation and deregulation are much more subtle, however the long term effects are very real. That's why neither one is the right medicine for every situation.
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10-16-08, 01:45 PM #28Re: Deregulation
Originally Posted by Red_Lizard2
Bacon, did not have time to watch the video yet, but regulation is tricky. For example I would like to have Verizon, since they are upgrading a vast majority of their markets to fiber optics. AT&T is not, or is very slowly in my area. Why? They don't have to. I can call another company to deliver my service, basically who I am paying my bill to, but I can't get new lines installed. Why? Regulations from way back in the day said that MaBell was granted certain territory, a vast majority of the US at the time, but to keep them from being a monopoly the government would grant small rural pockets to GTE, now Verizon.
If Verizon were allowed to install infrastructure anywhere they chose would some AT&T neighborhoods suddenly get fiber from Verizon? Probably, but I bet even more would get fiber from AT&T, so they could keep their market share.
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10-16-08, 02:43 PM #29Re: Deregulation
who decides? this thing we have called the criminal justice system. Akhmad been shipping money to his buddy Bin Laden? no power for you. Its not deeming your business, it deeming if you have a dangerous record. Do you want Bill Ayers running a power company in your area?
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