tag:blogger.com,1999:blog-582368152716771238.post8906351381296032862..comments2024-03-28T14:41:03.793-05:00Comments on The Grumpy Economist: The hard road of free marketsJohn H. Cochranehttp://www.blogger.com/profile/04842601651429471525noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-582368152716771238.post-27208451752753468382017-12-19T18:36:21.850-06:002017-12-19T18:36:21.850-06:00John says democracy requires voters to understand ...John says democracy requires voters to understand how things work. But what if voters don't know how ballots are "used to defeat the franchise", and generations of us have been misled about how two party political systems prevail?Jim Stewarthttps://www.blogger.com/profile/12655995934168951644noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-78640912786954791972017-12-15T19:57:03.187-06:002017-12-15T19:57:03.187-06:00Matt,
The promise of free markets with no barrier...Matt,<br /><br />The promise of free markets with no barriers to entry / exit and no "stifling government regulations" is that suppliers of goods will compete to increase margins by increasing their productivity.<br /><br />There are obvious constraints in terms of Uber drivers - number #1 being safety. I doubt you see any Uber drivers in two seater Formula 1 cars driving 250 MPH down the street.<br /><br />Another way that Uber drivers can increase their margins is by colluding together on price.<br /><br />Is this crony capitalism? Not really.<br /><br />https://en.wikipedia.org/wiki/Cronyism<br /><br />This is more like cartel action.<br /><br />https://en.wikipedia.org/wiki/Cartel<br />FRestlyhttps://www.blogger.com/profile/09440916887619001941noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-6814219315817240882017-12-13T11:47:28.633-06:002017-12-13T11:47:28.633-06:00You still need the private competition to create t...You still need the private competition to create the incentive to innovate and adopt technology.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-27963502720679259952017-12-13T09:09:47.027-06:002017-12-13T09:09:47.027-06:00I would love to see a study that shows convinces m...I would love to see a study that shows convinces me that deregulation was the dominate factor in changing prices in these industries. I have the belief that technological innovation was already decreasing costs in these industries. As anecdotal evidence of this I offer this statement, there are several state sponsored airlines around the globe and they are still able to compete. The fact is, both of these industries were nascent in both their technology and their development before deregulation.<br /><br />Furthermore, if Aviation was a completely free market passengers would be in trouble. Passengers would have to foot the bill for the whole aviation system (Airports, security, air traffic control). Yes they pay some fees now, but no where near what is costs to run the system. Additionally, I don't know that Boeing would exist without the support they receive from the federal government.<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-45784447582263674252017-12-13T04:27:14.618-06:002017-12-13T04:27:14.618-06:00I live in downtown San Jose and can speak first ha...I live in downtown San Jose and can speak first hand on this issue, voters do not understand how free markets work. The reason there has been an increase in jobs in San Jose is because it is in the heart of the Silicone Valley, thus making a central hub for people who dream in working at the next big Tech company. Freeways here are ridiculously packed at all hours of the day, but the solution so far has been the expanding VTA and BART public transportation system. The BART is now being built to extend to San Jose, most likely because of how you mentioned that since this is the heart of the Silicone Valley more people are migrating here for work. People cannot afford to live in San Jose because of sky rocketing housing prices making a dilapidated 2 bedroom house worth an easy million dollars. No average earning person can afford to live here and most of them do not understand which way they should vote to solve this issue.Anonymoushttps://www.blogger.com/profile/14306052148190894436noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-55678808895399150882017-12-13T04:24:34.738-06:002017-12-13T04:24:34.738-06:00I live in downtown San Jose and can speak first ha...I live in downtown San Jose and can speak first hand on this issue, voters do not understand how free markets work. The reason there has been an increase in jobs in San Jose is because it is in the heart of the Silicone Valley, thus making a central hub for people who dream in working at the next big Tech company. Freeways here are ridiculously packed at all hours of the day, but the solution so far has been the expanding VTA and BART public transportation system. The BART is now being built to extend to San Jose, most likely because of how you mentioned that since this is the heart of the Silicone Valley more people are migrating here for work. People cannot afford to live in San Jose because of sky rocketing housing prices making a dilapidated 2 bedroom house worth an easy million dollars. No average earning person can afford to live here and most of them do not understand which way they should vote to solve this issue.Anonymoushttps://www.blogger.com/profile/14306052148190894436noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-43718207336428795322017-12-12T21:01:42.084-06:002017-12-12T21:01:42.084-06:00I don't quite understand the pressure to have ...I don't quite understand the pressure to have high density.<br />200 years ago, to function, you *had* to be in the city core since communication was limited to face to face (and snail mail).<br />180 years ago, the first railroads and electrical telegraphy started to loosen those bonds. Forty years later came the telephone. And thirty years after that Henry Ford's Model T. (All this by WW I.)<br />Twenty to thirty-five years ago (that's a generation, folks) we had Interstate highways, the Internet, and the cell phone.<br />So why the insistence upon living one on top of another?<br />My own guess is that our economy is much more complexly inter-related than we know, much more competitive (and therefor much more responsive to even minuscule competitive advantages), and mediated communication is still much more attenuated than face-to-face.<br />So we still need to be within walking distance of each other.<br />(Then again, how to explain millennials who shy from face-to-face conversation and much prefer text messages? And -- heaven help us -- courting young couples who prefer texting to talking?))<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-64632034682801086732017-12-12T08:52:30.894-06:002017-12-12T08:52:30.894-06:00So, please show me how Houston has less inequality...So, please show me how Houston has less inequality, income segregation, and perpetuation of economic status. Anonymoushttps://www.blogger.com/profile/12127320748697349065noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-13918814396564548672017-12-11T21:28:58.246-06:002017-12-11T21:28:58.246-06:00I would be interested to know how a truly "fr...I would be interested to know how a truly "free" market would be crony?Matthttps://www.blogger.com/profile/16035326682145000363noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-90707355583807184122017-12-11T17:10:51.788-06:002017-12-11T17:10:51.788-06:00It sure is in my small county in the mid-west. We ...It sure is in my small county in the mid-west. We could put several hundred people to work here today but we can't get them here because of a lack of housing. It is zoning, here the cost is driven up buy all kinds of requirements that drive up the cost of the shelter to no good purpose.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-44732222774328837072017-12-11T16:25:10.367-06:002017-12-11T16:25:10.367-06:00Great article. John is right at the epicenter of ...Great article. John is right at the epicenter of it, Palo Alto. My wife and I were there a few weekends ago. There is an old dirt track from a defunct, closed high school where the land would sell for 5 million or more if someone could build multi-story on it. I'm sure no more than 10 people a week run on it. So what would it take to make real estate prices reasonable in northern california. Manhattan like density from Marin to Santa Cruz?flashgordonhttps://www.blogger.com/profile/11522908696550749612noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-92035680555305520632017-12-11T15:47:53.448-06:002017-12-11T15:47:53.448-06:00We face a steady drum beat from the media about th...We face a steady drum beat from the media about the benefits of regulations but if we look hard we would find that in areas that have been deregulated, the consumers have been the big winners. I shudder to think what we would be paying for phones if still under government regulation or what airline tickets would cost. We see Uber and Lyft successfully competing against government regulated taxis. Many professional licences do more to protect existing professionals than the public. We can only dream of the benefits if we ended our socialized school systems. The media, bureaucrats and politicians stand in the way of a free market that benefits the consumers.PhilNaghttps://www.blogger.com/profile/07164324221468509425noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-37641141575782584022017-12-11T15:43:50.191-06:002017-12-11T15:43:50.191-06:00Besides zoning and housing restrictions, certifica...Besides zoning and housing restrictions, certification of barbers and hair-weavers is hampering the economy.jimbinohttps://www.blogger.com/profile/09684677214800358793noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-12399970988038860632017-12-11T15:11:11.033-06:002017-12-11T15:11:11.033-06:00Here, in California, we AIMED at the housing short...Here, in California, we AIMED at the housing shortage. Over thirty years ago the various cities adopted "greenlines" to prohibit urban sprawl. The land area for development became fixed. Gee golly, the demand for housing did not. More people on less land equals higher costs for those land resources.<br /><br />To compound the problem, those same cities demanded higher impact fees, higher density and the associated costs of those types of structures, restricting infrastructure capacities to limit the overall growth to whatever the growth caps were...and voila...a housing shortage.<br /><br />Now, the politicians are all complaining about the cost of housing...and doubling down and making market rate pay for the cost of creating "affordable" housing. They act ignorant as to the cause...ummm...policy, housing policy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-18301899783852135142017-12-11T13:04:00.211-06:002017-12-11T13:04:00.211-06:00The policy conversation needs to move from "w...The policy conversation needs to move from "what is important" to "what is more important".<br /><br />When resources are limited, its not really about identifying important goals, it's about prioritizing them. Is it "important" that people be able to afford the road? Yes. Is it *more* important than clearing up travel? This is a much better question. <br /><br />Fish Goldsteinhttps://www.blogger.com/profile/13864053986442147618noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-24181925072300218292017-12-11T01:08:59.419-06:002017-12-11T01:08:59.419-06:00You do not want free markets you want competitive ...You do not want free markets you want competitive markets. Crony capitalism is something not to desire!not trampishttp://nottrampis.blogspot.com.au/noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-70859448876522550362017-12-10T13:22:08.854-06:002017-12-10T13:22:08.854-06:00"The reaction to Uber surge pricing is a simi..."The reaction to Uber surge pricing is a similar test. Economists love it."<br /><br />https://www.pbs.org/newshour/economy/uber-drivers-game-app-force-surge-pricing<br /><br />"As University of Warwick researchers Mareike Möhlmann and Ola Henfridsson and Lior Zalmanson of New York University say in their best academese: We identify a series of mechanisms that drivers use to regain their autonomy when faced with the power asymmetry imposed by algorithmic management, including guessing, resisting, switching and gaming the Uber system.”<br /><br />"So what are the drivers doing in response? Gaming the system by tricking the algorithm."<br /><br />"The researchers report that drivers organize mass switch-offs. The dearth of drivers in a given area then triggers the surge pricing mechanism."<br /><br />"Want evidence? On the Uberpeople.com website, according to the paper, Driver A said: Guys stay logged off until surge.’”<br /><br />"Driver B said: Uber will find out if people are manipulating the system.”<br /><br />"Driver A: They already know cos it happens every week. Deactivation en masse coming soon. Watch this space.”<br /><br />"Drivers are also revolting against UberPool, the customer option of sharing a ride with other passengers at a discounted price. Infuriatingly, it has been the default on my own Uber app more often than not, despite my never once having wanted to use it. But it turns out to be extremely unpopular with drivers too, who get a much lower commission on UberPool rides, according to the researchers."<br /><br />"In retaliation, says Professor Henfridsson, Drivers either accept the first passenger on UberPOOL then log off, or just ignore requests, so they don’t have to make a detour to pick anybody else up. They then still pocket the 30 per cent commission for UberPOOL, rather than the usual 10 per cent.”FRestlyhttps://www.blogger.com/profile/09440916887619001941noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-75900433961283434302017-12-10T00:56:08.938-06:002017-12-10T00:56:08.938-06:00Hugo is one of the very few HRC district Republica...Hugo is one of the very few HRC district Republicans to have survived the 2017 Dem wave. Had the Dems in VA taken every HRC district, they'd be calling the shots in the House of Delegates. Of course he'd move to the left to benefit his liberal constituents.pithomhttps://www.blogger.com/profile/13997094225496018110noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-1388279402292702442017-12-09T19:43:01.455-06:002017-12-09T19:43:01.455-06:00Add on: the solution to tight housing markets is t...Add on: the solution to tight housing markets is the abolition of property zoning. But when it comes to their own neighborhood, every influential person is pink. Do you want 40-story condos across the street from your single-family house, with ground-floor retail? Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-59760377000748521162017-12-09T16:46:22.819-06:002017-12-09T16:46:22.819-06:00We had a similar reaction to toll lanes in Atlanta...We had a similar reaction to toll lanes in Atlanta. I85 was heavily congested during rush hour. Prices are higher during peak and lower otherwise. Those lanes are almost always filled and the state is building more in response to public consumer request. Rent controls are a killer as well. In the late 80's, developers bought rental property in Hoboken and Jersey City. They bought tenants out and converted those 500 sq ft units to condos. Today, one of those shoe boxes trade for 300k to 400K. No increase in housing stock! David Seltzernoreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-80504727701529433152017-12-09T09:15:18.608-06:002017-12-09T09:15:18.608-06:00Nice post...worth pondering: we hear a lot of jibb...Nice post...worth pondering: we hear a lot of jibber-jabber about "labor shortages." For large sections of the country, are labor shortages really housing shortages?<br /><br />Benjamin Colehttps://www.blogger.com/profile/14001038338873263877noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-20519588324510399082017-12-09T00:50:29.554-06:002017-12-09T00:50:29.554-06:00Zurich has successfully been following a policy of...Zurich has successfully been following a policy of densification (increasing its population density by relaxing zoning restrictions) for many years, letting people live closer to where they work. This policy has regularly been confirmed by public votes, so I would not be so cynical about democracy. In my opinion, the regular public votes have lead to better decision taking, as they helped stopping a number of ill-conceived and overly costly projects the city proposed (somehow politicians tend to like those).Luzius Meisserhttps://www.blogger.com/profile/06987859804935271173noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-52040594805660306452017-12-08T23:56:24.050-06:002017-12-08T23:56:24.050-06:00 I-66 can never be a true market, it is the feeder... I-66 can never be a true market, it is the feeder for the DC bureaucrat. <br /><br />Whatever the price, prime time on the route is pre-allocated to members of central government. I think the normal policy is to tax Kentucky and use the proceeds to supplement toll charges for the federal bureaucrat.Matt Younghttps://www.blogger.com/profile/08404998406161097199noreply@blogger.comtag:blogger.com,1999:blog-582368152716771238.post-74268993434467035242017-12-08T20:37:13.896-06:002017-12-08T20:37:13.896-06:00Are people are upset about toll rates that they co...Are people are upset about toll rates that they consider unfair? There's no point in scolding them for being human. The way forward is to put more science into our policy-making, by turning to Chicago Booth scholars like Richard Thaler. It may be too late to reform the thinking of other leaders of the profession, but award committees are intervening and helping to steer the profession in a productive direction.Anwerhttps://www.blogger.com/profile/08277173974258559733noreply@blogger.com