Tag Archives: Competition

The Myth Of American Capitalism Exposed: Competition Is Dying As The Biggest Corporations Gobble Up Everything, by Michael Snyder

Many industries are becoming increasingly concentrated or are already alarmingly concentrated. From Michael Snyder at endoftheamericandream.com:

Vibrant competition is absolutely essential in order for a capitalist economic system to function effectively.  Unfortunately, in the United States today we are witnessing the death of competition in industry after industry as the biggest corporations increasingly gobble up all of their competitors.  John D. Rockefeller famously once said that “competition is a sin”, and he was one of America’s very first oligopolists.  According to Google, an oligopoly is “a state of limited competition, in which a market is shared by a small number of producers or sellers”, and that is a perfect description of the current state of affairs in many major industries.  In early America, corporations were greatly limited in scope, and in most instances they were only supposed to exist temporarily.  But today the largest corporations have become so huge that they literally dominate our entire society, and that is not good for any of us.

Just look at what is happening in the airline industry.  When I was growing up, there were literally dozens of airlines, but now four major corporations control everything and they have been making gigantic profits

AMERICA’S airlines used to be famous for two things: terrible service and worse finances. Today flyers still endure hidden fees, late flights, bruised knees, clapped-out fittings and sub-par food. Yet airlines now make juicy profits. Scheduled passenger airlines reported an after-tax net profit of $15.5bn in 2017, up from $14bn in 2016.

What is true of the airline industry is increasingly true of America’s economy. Profits have risen in most rich countries over the past ten years but the increase has been biggest for American firms. Coupled with an increasing concentration of ownership, this means the fruits of economic growth are being monopolised.

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Not Too Big to Fail: Facebook’s Long Reign May Be Coming to an End, by Brittany Hunter

It seems like a daunting challenge to knock Facebook off its pedestal, but seemingly unbeatable companies come and go all the time. By the way, I deactivated my Facebook account. From Brittany Hunter at theantimedia.org:

Sears and Blockbuster fell because neither was able to adapt and grow with its consumer base. Is Facebook making the same mistakes?

Over the last several years, Facebook has gone from facilitating the free flow of information to inhibiting it through incremental censorship and account purges. What began with the ban of Alex Jones last summer has since escalated to include the expulsion of hundreds of additional pages, each political in nature. And as more people become wary of the social media platform’s motives, one thing is absolutely certain: we need more market competition in the realm of social media.

Facebook might seem too big to fail, but rest assured it is not. Unless it is protected by a government monopoly, every single product and service is vulnerable to market forces, even those considered too powerful. Just a few weeks ago, the once-mighty Sears announced its plans to file for bankruptcy and close 142 of its department store locations. It also wasn’t so long ago when Blockbuster Video, a staple of weekend fun in the 90s, announced its closure, as well. These institutions were at the top of their games at one point but were each unable to satisfy their customers as they once did. And both were inevitably replaced by better services like Amazon Prime and Netflix.

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Trump’s Trade Deals Are a Futile Conceit, by Bill Bonner

Nobody but a few cronies win if an economy is walled off from competition. From Bill Bonner at bonnerandpartners.com:

The rich man’s wealth is his strong city, and as a high wall in his own conceit.

– Proverbs 18:11

We are following up on Friday’s discussion by connecting a few final dots. Then, we promise we will never mention “trade” again.

Reader Challenge

Talk about a “ball joint,” a “female end” or a “coupling” in Congress, and they are likely to get the wrong idea.

Half the members of Congress are professional, lifelong politicians. Most of the others are lawyers by trade. Then there is an assortment of dentists, psychiatrists, and car dealers. But not a single plumber.

And yet, some people think that Congress and the administration are, at least, in part responsible for our toilets. That is the assumption built into our Dear Reader Bradley J.’s challenge. He wrote:

The purpose of a nation is to defend the common interests of its citizens. Certainly the ability to earn a living at a standard of living higher than that of the Chinese worker with his family’s bathroom at the end of his block, shared with 50 other families, is part of what our nation exists to achieve.

There is no mention of improving standards of living or increasing wealth in either the Declaration of Independence or the Constitution.

And we know that, in the U.S., the private sector is responsible for toilets.

But the question presumes that the feds who run “our nation” can make you richer – by either offensive or defensive actions – than you would be on your own.

Is that true? How?

Can they somehow create or protect higher wage rates? And if they can, how come they don’t do it everywhere?

If you live in Nigeria, where the hourly wage is about $3, can the feds raise wages by setting the minimum wage at $10? Or by blocking the importation of foreign goods? Or by closing the border to immigrants? Is there something else they can do?

It seems pretty obvious that the answer is no. Nigerians make $3 an hour, grosso modo, because that’s what their labor is worth. They lack the training, capital, equipment, infrastructure, evolved financial and commercial institutions, knowhow, and markets that would make their labor more productive.

Locally, the Nigerian authorities could build a wall around the whole country and prevent anyone from getting in. Then, they could set a minimum wage of 100,000 kobos. Or a million kobos. But it would still only be worth $3 an hour.

To continue reading: Trump’s Trade Deals Are a Futile Conceit 

Making America Competitive Again, by Robert Gore

“Make America Competitive Again” outlined the problems confronting Donald Trump’s administration as he tries to make the American economy competitive, with more and better paying jobs. This article recommends ways to achieve those goals.

If you want to make America competitive again in today’s global economy, start with education. It stinks. There is no assurance that a high school graduate can construct a sentence, much less a paragraph, read anything more challenging than a text message, or perform simple algebra. Robotics, computers, and automation are wiping out jobs and creating new ones. It remains to be seen whether the former will outweigh the latter. Historically, innovation has been decried but predictions of net job losses have not been borne out. Bet the ranch, however, that the desirable jobs of the future will require workers who can construct paragraphs, read complex material, and possess mathematical proficiency beyond simple algebra.

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Compulsory education is an oxymoronic euphemism for indoctrination. Not only are students not being educated, they’re being brainwashed. After over a century of government-provided (and mandated) education, a substantial portion of the public believes that sustenance flows from the government—which owes it to them—rather than their own efforts. When the government becomes responsible for everything, nobody is responsible for anything. As statist dogma replaces true education—curiosity, questioning, research, experimentation, learning, thinking for one’s self—intellectual ossification sets in. The brainwashed cannot handle challenges to that dogma, want to forbid them, and retreat with fellow zombies to their execrable safe spaces.

People see the results of markets, incentives, choice, competition, and exchange every time they go to a grocery store. It’s quite a contrast to the government. To convince the populace that the forces which produce supermarket abundance have no applicability to the provision of education has indeed required long-term brainwashing. Minds are infinitely more important than mayonnaise and detergent, far too important to leave to the government.

For the US to have any chance of reaching its full potential, education must be 100 percent privatized. Parents and students have to be able to freely choose from a myriad of educational providers and philosophies. The education market must be free to organically adapt to new knowledge and society’s constantly changing requirements. Only a free market will be able to adjust to the continuing education needs of the workforce as new technologies replace old ones. There were no government retraining programs when America made the transition from an agricultural to an industrial economy. Companies trained workers in the skills they needed and both sides had obvious incentives to make that arrangement work. Command and control in the current government-dominated system guarantees perpetual stagnation and regress.

The government is turning health into a disaster similar to education. The current public-private bastardization gives the US the worst features of both: overarching governmental command and control, destruction of competition and the enshrinement of cartels in pharmaceuticals, medical devices, and insurance, and restriction of supply through professional licensing and government determinations on the “need” for hospitals and other facilities. Consequently the US spends a higher percentage of its GDP on medical care than most of the nations with which it competes, for more expensive service that is of no better quality and is often worse.

Many pine for nationalized health care, although such systems bear a large share of the responsibility for bankrupting Europe’s high-tax, no-growth welfare states. Donald Trump is on to something, advocating the abolition of Obamacare and allowing insurance to be sold across state lines. He at least recognizes that government is the problem. However, tinkering at the margins of the current system is like pulling 20 percent of the weeds from a garden. There may some superficial improvement, but the remaining weeds quickly overrun the garden. Health, like education, must be the beneficiary of free markets, competition, and choice, or the US will continue to waste trillions on medical care.

Speaking of wasting trillions, look at the loss represented by much of the US’s military and intelligence spending. Here too Trump is on to something when he talks of withdrawing from nation building and making our allies pay more of the bill for defending themselves. Here too, however, tinkering at the margins amounts to pulling 20 percent of the weeds. Hacking spending down to size requires a wholesale reevaluation of policy, which would begin by putting the defense back into defense policy. Global intervention since World War II has been an unmitigated disaster. The US is the most defensible country on the planet: it has the Atlantic and Pacific moats; varied, hard-to-conquer terrain; a well-armed population; friendly bordering countries; and the world’s largest nuclear arsenal to annihilate anyone who invades or launches a nuclear attack. Spending could be cut by at least half if the sole charge of the military and intelligence agencies was to defend the US proper, and not dubious “interests” in far-flung corners of the world.

Trump, as a businessman, is well aware of onerous taxes, wasteful spending, mounting debt, and the deadweight losses imposed by regulation. With the arguable exception of debt, he has vowed to address them. Absent an actual revolution, eliminating them would be like trying to eradicate kudzu. If he manages to whack 20 percent he’ll have done well. Spending, taxes, and regulations are Washington’s stock in trade. The bureaucrats Trump instructs to economize and to review existing laws and regulations will nod, say “Yes, sir!” and then go back to business as usual. It’s why Trump must be Feared, Not Loved.

Washington’s stock in trade has powerful beneficiaries, too. They will counterattack with all their lobbying and public relations might. If Trump is to have any long-term impact, he’s going to have to link his attacks with the idea that Washington doesn’t owe anybody anything. This, of course, runs counter to decades of indoctrination and practice. The idea that individuals are “entitled” only to what they’ve earned, put into practice, would completely upend the existing order. Trump can make the case now, or ballooning debt, unfunded entitlements, an aging population, rising interest rates, and the credit markets will make it for him. That is the fate meted out by compound interest and a long spell of debt growth in excess of economic growth.

The chances of all or even some of the above happening are slim. However, the issue is American competitiveness, and we’ve gone downhill so long, that’s what it’s going to take. America elected a man who has successfully competed all his life and among his many victories just won the biggest political prize. None of the apparatchiks, cronies, and time-servers he defeated has the brains, guts, or fortitude to tackle these monumental challenges, but Trump, who knows? He certainly has the moxie. The legions who have underestimated him so far have only the egg on their faces to show for it.

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Participation Trophy Nation, from The Burning Platform

When everyone is a winner, nobody wins. From theburningplatform.com:

What a pathetic nation of entitled whiners we’ve become. When did participation in a sport or any competition deserve a trophy? Trophies are for winners. Trophies are for the people who excelled. Trophies are for the people who worked harder than their competitors and won. The bullshit about every child being a special snowflake has permeated our society and created generations of momma’s boys and girls. They think they deserve a trophy for showing up at their jobs now. They think they deserve automatic B’s for showing up at college classes. They think they deserve pay raises because they came to work.

You get ahead in life by hard work, using your brain, and refining your social skills. The free shit army mentality permeating our culture drives the participation trophy bullshit. Real free market capitalism (not the crony capitalism/socialism) has winners and losers. Losers need to work harder to become winners. Not in America today. The losers have a million excuses and think they deserve exactly what the winners have achieved.

Trophies for all. Do it for the chilrun. We must boost the self-esteem of losers so they think they are winners.

On HBO’s return of “Real Sports with Bryant Gumbel” Tuesday night, Bernard Goldberg looks into the current culture of handing out trophies to children just for showing up, and how this trend potentially leads to damaging psychological effects.

“We want to make each child feel special,” says Brian Sanders, president of i9 Sports, the largest youth sports franchise in the nation.

How does he make them feel special?

By giving them all trophies. At an event outside Tampa, Fla. with 650 kids in attendance all will receive trophies, there is a division champion award and everyone else receives an “All-Star” trophy, both prizes are the same size.

This isn’t just a phenomenon with his sports league. Janet Anderson is the regional commissioner in Los Angeles for AYSO Soccer and she told Goldberg for her 1,200 under-eight players, “If there name is on the roster, they get a trophy.”

This means that players who don’t even show up can receive an award. On top of that, her league doesn’t keep score, no one is a loser.

And what happened when Anderson decided to stop giving trophies to all participants for players over age eight? “Some parents went out and bought their own trophies for the whole team,” explained Anderson to Goldberg.

To continue reading: Participation Trophy Nation

A Review of Spare Parts, by Robert Gore

Here’s hoping the movie Spare Parts doesn’t get swept out to sea in the American Sniper tsunami. Spare Parts is based on a true story about four undocumented immigrants from Mexico, students at Carl Hayden High School in Phoenix, who put together an underwater robot that competed in the college division at a national robotics competition in 2004. They employed ingenuity, perseverance, used car parts, and a production budget of less than $800 (versus their competition’s five-figured expenditures) to build their robot.

The movie has many of the standard plot twists and devices of the “underdog” genre—Hoosiers meets Stand and Deliver. Even thinking this team, in the Arizona desert, would have a chance in an underwater competition is audacious folly. A down-on-his-luck substitute teacher, Fredi Cameron, played by George Lopez, guides the team, aided by Gwen, a regular teacher (Marisa Tomei) with whom he may or may not develop a love interest. The father (Esai Morales) of one of the students, Lorenzo Santillan (José Julián) is a roadblock to his son’s ambitions, but eventually comes around. The students encounter all sorts of conflicts and problems, some internal, some external (including the INS), and there is the required last-minute glitch that threatens the whole project, but which gets resolved in humorous, but ingenious, fashion.

The movie was based on a Wired magazine story, “La Vida Robot,” published in April, 2005. It has numerous Hollywood embellishments, but the last minute glitch is accurate, humor and all, and unlike some movies based on “true” stories, the basic story happened. Surprisingly, the movie underplays the group’s actual accomplishments at the competition, perhaps in the interest of simplification.

Three things lift this movie into the upper echelon of its genre: its story, acting, and political questions. As is Stand and Deliver, the competition is intellectual, putting it above countless sports yarns. The movie treats its audience with respect, not shying away from or simplifying the technology, because it can’t; technology is central to the story. While much of the Hollywood embellishment comes in the four students‘ stories away from the robot’s construction, the gripping and unique part of the drama is their minds: their ability to imagine, to experiment, to test, to overcome obstacles, and to manipulate technology and make it do wondrous things. In that, it has some of the same appeal as TV’s The Big Bang Theory.

While Lopez, Tomei, Morales, and Jamie Lee Curtis (as the Carl Hayden principal), all perform well, the four actors playing the students: Carlos PenaVega as Oscar, David Del Rio as Christian, Oscar Gutierrez as Luis, and Julián carry the show. These kids are different, and as happens in real life and the movies, they face ostracism and abuse because of it. Unlike many movies, the social problems are incidental, to be dealt with but not dwelt upon. The real challenge is making an underwater robot that can perform a complicated series of maneuvers and tasks. The four convey marvelously the excitement of that challenge, the triumph of ingenuity, competence, and hard work, and the camaraderie that often develops among those involved in difficult undertakings.

The four students were undocumented migrants, and the movie has some things to say about immigration. In the current immigration debate, one extreme sees immigrants as an unalloyed blessing, the wellspring that has flowed continuously since the founding, renewing American social, political, and economic life. The other extreme, which may find this movie annoying, sees immigration as an unalloyed curse, a threat to American ideals and solvency. However, America could obviously use more kids like these four, and the movie’s ever-menacing threat of deportation looks like insanity. Oscar’s dream is to join the military, and Lorenzo pointedly asks him why he wants to serve a country that wants to throw him out. The Dream Act was in part motivated by this story, and President Obama is shown briefly in the movie’s epilogue. While the movie is not going to change minds, it may prompt an acknowledgement from a few in the deport-the-illegal-immigrants camp that they can’t all be put in the “welfare-state moocher, anti-American” box.

It will be a shame if this movie does poorly at the box office, or does not get a wider audience than the Hispanic Americans to whom most of its advertising has been directly. It will appeal to anyone who likes inspirational, David-versus-Goliath movies, but it doesn’t simply recycle the conventions of the traditional formula. It’s an enjoyable and uplifting family film, especially for teenagers. Even if it drops out of the theaters quickly, it should become a DVD and download favorite.