2020 US Election (Part One)

[Zardnaar]

And what does this mean?

The right is more pragmatic and ruthless than the left.

The left often throws up a wet noodle type candidate that's diverse but they have 0 electoral appeal.

USA for example hasnt had a female leader.

NZ, UK, Australia, and Germany all have and they came from the right for the first one iirc.

The common thread for virtually every right wing party is tax cuts and as long as the leader supports that the right is a bit less concerned when push comes to shove at voting time.

I wouldn't be surprised if the first US female leader comes from the ranks of the GoP. Then again if the GoP crashes and burns with Trump this year they might have trouble winning for the next decade or two.

 

[luiz]

Why is private sector experience important? Her focus of study is bankruptcy law, personal finance, commercial codes, and consumer debt - seems pretty real world to me.
Since presumably spending a month flipping burgers wouldn't satisfy your desire for private sector experience, what would satisfy your desire for private sector experience?
It's not like private sector experience is all its cracked up to be - Exhibit A is the Orangutan sitting in the Oval Office.

Well you don't have to have private sector experience yourself if you're advised by smart people who do. But if that was the case with Warren, she would not be advocating idiotic policies like breaking up big tech. So I'm guessing she's advised by equally clueless academics.

Google or Amazon have far more power than Union Carbide, US Steel, or Anglo-American ever had.

Not true at all. Google and Amazon only have market power while they keep prices low. They totally lack power to obtain monopoly rents like say Standard Oil once did. If Amazon jacked up its prices, either in its consumer or cloud businesses, they would lose market share real quick. Google might have some more market power, but still less than what most people think.

 

[luiz]

Can you show your work, please?

Any introduction to economics text book should do.

 

[stinkubus]

It's just an article of faith that somehow the private sector is magically better or more relevant than the public one. It's almost a textbook case of confirmation bias in action.

Any introduction to economics text book should do.

Can you link me to one that actually says this because Econ 101 is exactly what informed me of the opposite.

 

[luiz]

It's just an article of faith that somehow the private sector is magically better or more relevant than the public one. It's almost a textbook case of confirmation bias in action.

It's nothing of the sort.

Can you link me to one that actually says this because Econ 101 is exactly what informed me of the opposite.

Hum, Mankiw's is alright I guess.

 

[stinkubus]

Hum, Mankiw's is alright I guess.

Market power is explicitly discussed as a market failure on page 12 of the 5th edition.

The entirety of chapters 15 through 17 are dedicated to demonstrating how the results of monopoly, monopolistic competition, oligopoly, etc. will differ from perfectly competitive markets. It's standard neoclassical stuff and doesn't contradict anything in my post.

 

[luiz]

Market power is explicitly discussed as a market failure on page 12 of the 5th edition.

The entirety of chapters 15 through 17 are dedicated to demonstrating how the results of monopoly, monopolistic competition, oligopoly, etc. will differ from perfectly competitive markets. It's standard neoclassical stuff and doesn't contradict anything in my post.

Yes it does. Perfect competition, which is what you were talking about, is extremely rare. But it's not at all necessary in order for markets to be efficient, at least under the mainstream assumptions you will find in Mankiw. If you got that from reading his book, I suggest a re-read.

 

[stinkubus]

Yes it does. Perfect competition, which is what you were talking about, is extremely rare. But it's not at all necessary in order for markets to be efficient, at least under the mainstream assumptions you will find in Mankiw. If you got that from reading his book, I suggest a re-read.

OK I'm going to try this one more time, and I'm even going to give you the page numbers which show the graphs that demonstrate where each model differs from the efficient allocation predicted by the perfect competition model. This is silly because this book has literally zero content that wasn't taught when I was an undergraduate 20 years ago.

The dead weight loss from monopoly is shown in figure 8 on page 325 of chapter 15.

That price exceeds marginal cost under monopolistic competition is demonstrated in figure 4 on page 351, chapter 16.

Equilibrium under oligopoly is discussed on pages 368 and 369. The author concludes in the first paragraph of page 369 that oligopolies do not produce efficient outcomes, even in the absence of collusion.

 

[luiz]

OK I'm going to try this one more time, and I'm even going to give you the page numbers which show the graphs that demonstrate where each model differs from the efficient allocation predicted by the perfect competition model. This is silly because this book has literally zero content that wasn't taught when I was an undergraduate 20 years ago.

The dead weight loss from monopoly is shown in figure 8 on page 325 of chapter 15.

That price exceeds marginal cost under monopolistic competition is demonstrated in figure 4 on page 351, chapter 16.

Equilibrium under oligopoly is discussed on pages 368 and 369. The author concludes in the first paragraph of page 369 that oligopolies do not produce efficient outcomes, even in the absence of collusion.

Yes and?
Markets are still efficient under classical forms of Monopolistic competition.

Perfect competition basically only exists within some very limited products. It's almost a theoretical formulation. That doesn't mean, at all, that markets are never efficient.

Any market where brand name plays a role is monopolistic competition. But it would take some real hardcore Stalinist to suggest say the market for deodorant or potato chips is not efficient. They clearly are, even if they are not at all perfect competitions, and several players have significant market power.

Efficient market and perfect market are two different concepts.

 

[Naskra]

real hardcore Stalinist to suggest say the market for deodorant or potato chips is not efficient.

Funny you should mention this. Bernie Sanders took this position (on deodorant, not potato chips).

 

[stinkubus]

Nothing you are saying is actually supported by the content of the textbook that you held up as an authority on the subject.

 

[Takhisis]

In China, Baidu and Ali are allowed to grow as much as they want. But they are clearly subordinate to the power of the government, which is very quick to intervene when they do something perceived as against national interest. So they are not all-powerful at all. And this is an area where the US could perhaps learn from China.

Am I correct in interpreting your tone as being in favour of totalitarian China's business-with-social-control model?

 

[stinkubus]

Yes and?
Markets are still efficient under classical forms of Monopolistic competition.

Perfect competition basically only exists within some very limited products. It's almost a theoretical formulation. That doesn't mean, at all, that markets are never efficient.

Any market where brand name plays a role is monopolistic competition. But it would take some real hardcore Stalinist to suggest say the market for deodorant or potato chips is not efficient. They clearly are, even if they are not at all perfect competitions, and several players have significant market power.

Efficient market and perfect market are two different concepts.

I was under the assumption that efficiency meant that price would be driven down to marginal cost and that the market would clear. What are you using the word to mean?

 

[luiz]

I was under the assumption that efficiency meant that price would be driven down to marginal cost and that the market would clear. What are you using the word to mean?

That's absolutely not what efficient market means. For starters, efficient market is more applicable to asset pricing than competition models. Further, any market in which innovation plays a heavy role or in which brands are important will never see price fall to marginal cost. That doesn't mean they're not "efficient". I mean you can get potato chips for next to nothing in the US, you have plenty of choice etc etc, but price is not mathonal cost and it's not perfect competition. Only a giant imbecile would suggest intervention in the potato chip market (I mean from a competition POV, not a health POV, where it certainly needs regulation).

 

[stinkubus]

I didn't suggest intervention in the potato chip market was necessary. Not all forms of market inefficiency are worth eliminating. I'm only challenging the contention that the market is efficient in the first place. It's the same conclusion reached by the textbook you told me to consult so I'm not understanding your objection.

 

[luiz]

I didn't suggest intervention in the potato chip market was necessary. Not all forms of market inefficiency are worth eliminating. I'm only challenging the contention that the market is efficient in the first place. It's the same conclusion reached by the textbook you told me to consult so I'm not understanding your objection.

You are confusing perfect competition, which is very rare, with efficient markets, which are very common.

The potato chip market is not a perfect competition, but it's still efficient. Intervening in it would in all likelihood deteriorate outcomes for consumers.

 

[stinkubus]

"Efficient" and "doesn't warrant intervention" are not the same thing.

 

[luiz]

"Efficient" and "doesn't warrant intervention" are not the same thing.

Again, efficient markets relates to how well they can price assets. By and large, most markets are efficient.

Perfect competition is a model in which no player has market power and products are entirely indistinguishable, so prices reach equilibrium at marginal cost. While this exist in some limited cases, it's quite rare. But it doesn't say anything about the efficiency of markets.

You are confusing two different concepts.

 

[Zardnaar]

This is a crushing sledge on Julia Gillard lol

She was the first female Aussie OM? Our first one wasn't elected in an election she rolled the other guy.

 

[luiz]

Am I correct in interpreting your tone as being in favour of totalitarian China's business-with-social-control model?

I thought I replied to this but can't find my post...
China is authoritarian but not totalitárian. And I don't support their authoritarianism, but merely suggested that perhaps the US could learn something from the way they ensure big business don't go against perceived public interest.