The Stimulus Didn't Work

[mawilson 2,133]

If free-markets naturally generated such coercive monopolies, then why don't we all drive Ford Model T's? Ford owned the automobile market. So what happened? Did our good government friends tell Henry Ford to lose some of his market share? Or did Chevrolet come into to existence to compete with Ford's market share?

One problem with this argument is that a large firm can often produce goods at a lower

average total cost than a smaller firm - a barrier to entry which prevents other firms

from entering and expanding market supply.

Monopolies can also use other barriers to entry to protect themselves from competition;

for example, patents. Try competing with Microsoft or IBM when they've spent millions

of dollars patenting every single trivial idea used in their products.

[Heracles 417]

If free-markets naturally generated such coercive monopolies, then why don't we all drive Ford Model T's? Ford owned the automobile market. So what happened? Did our good government friends tell Henry Ford to lose some of his market share? Or did Chevrolet come into to existence to compete with Ford's market share?

One problem with this argument is that a large firm can often produce goods at a lower

average total cost than a smaller firm - a barrier to entry which prevents other firms

from entering and expanding market supply.

Monopolies can also use other barriers to entry to protect themselves from competition;

for example, patents. Try competing with Microsoft or IBM when they've spent millions

of dollars patenting every single trivial idea used in their products.

That is exactly right. There are numerous industries that are impossible to enter due to various barriers. As such, the only way to do it is for the government to intervene and free-up the market. Basically force the monopoly into submission. The old BT is a great example of that. Try bypassing them when they own everything.

[mRx 16]

One problem with this argument is that a large firm can often produce goods at a lower

average total cost than a smaller firm - a barrier to entry which prevents other firms

from entering and expanding market supply.

I've never really liked the textbook Keynesian monopoly theory. It basically just says that Average Total Cost (ATC) will decrease as production increases. While this is true in a static economy, the theory completely overlooks the fact that firms have the ability to alter costs. If the large firm is operating at maximum efficiency, and is providing the product at a reflective cost, then there is no need for another firm to enter the field, unless they believe they can compete (i.e. create a better product, or create it for a lower price).

Now if this large firm decides to charge a non-market price, then in the short-term they may make a profit, depending on the elasticity of demand, but non-market prices are signals that something is inefficiently being managed, and there would be opportunities for other firms to enter, and this would put downward pressure on prices.

Monopolies can also use other barriers to entry to protect themselves from competition;

for example, patents. Try competing with Microsoft or IBM when they've spent millions

of dollars patenting every single trivial idea used in their products.

True. Patents are probably the most widely used barrier to entry. But patents are not products of markets, but of governments and laws. I posted a good topic on patents here.

[HYENA 4]

stim package went to pay off banks and lobbyists.

where the F did the 5 billion go? HUH? where? both parties aren't talking when asked. billions of missing money.

Interestingly the Federal Reserve is NOT a government institution, it's a private bank with a cool name.

we're all gonna die!

Don't ya love how they crammed that stimulus through legislation despite US dissent? It's because they're all on the same side...bastards!

[Kevin and 10]

stim package went to pay off banks and lobbyists.

where the F did the 5 billion go? HUH? where? both parties aren't talking when asked. billions of missing money.

Interestingly the Federal Reserve is NOT a government institution, it's a private bank with a cool name.

we're all gonna die!

Don't ya love how they crammed that stimulus through legislation despite US dissent? It's because they're all on the same side...bastards!

More than once.

[Dan J 277]

stim package went to pay off banks and lobbyists.

where the F did the 5 billion go? HUH? where? both parties aren't talking when asked. billions of missing money.

Interestingly the Federal Reserve is NOT a government institution, it's a private bank with a cool name.

we're all gonna die!

Don't ya love how they crammed that stimulus through legislation despite US dissent? It's because they're all on the same side...bastards!

What 5 billion are you talking about? The bailout was something like 400 billion and the stimulus was over 800 billion.

The federal reserve is not a government agency (Like the Treasury department) or a private bank like Bank of America its a central bank with both public and private functions. This was done to keep it politically independent of government (I suppose you could question how well that works).

[HYENA 4]

You didn't hear about the 5 billion that was "stolen"? When dems and repubs were asked they basically said STFU! Obvious lobbyist payoffs. I was shocked no one followed that but then again if you follow the chain of command of the media, it all comes down to a happy wealthy few who pay off the government.

Ever heard of deferred wealth? What most presidents do...favors then once out of office they buy a few houses and estates on their meager 400k salary. THAT's why everyone wants into politics...it's a get rich quick scheme.