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jerryking : uncompetitive   4

Why the US economy isn’t as competitive or free as you think
November 14, 2019 | Financial Times | by Martin Wolf.

The Great Reversal: How America Gave up on Free Markets, by Thomas Philippon, Belknap Press RRP$29.95, 368 pages

It began with a simple question: “Why on earth are US cell phone plans so expensive?” In pursuit of the answer, Thomas Philippon embarked on a detailed empirical analysis of how business actually operates in today’s America and finished up by overturning much of what almost everybody takes as read about the world’s biggest economy.

Over the past two decades, competition and competition policy have atrophied, with dire consequences......America is no longer the home of the free-market economy, competition is not more fierce there than in Europe, its regulators are not more proactive and its new crop of superstar companies not radically different from their predecessors.

Philippon's argument:
(1) US markets have become less competitive: concentration is high in many industries, leaders are entrenched, and their profit rates are excessive.
(2) this lack of competition has hurt US consumers and workers: it has led to higher prices, lower investment and lower productivity growth.
(3) contrary to common wisdom, the main explanation is political, not technological: Philippon traces the decrease in competition to increasing barriers to entry and weak antitrust enforcement, sustained by heavy lobbying and campaign contributions.”....... the US economy has seen a significant reduction in competition and a corresponding rise in monopoly and oligopoly.

What should the US want? The answers, suggests Philippon, are: free entry; regulators prepared to make mistakes when acting against monopoly; and protection of transparency, privacy and data ownership by customers. The great obstacle to action in the US is the pervasive role of money in politics. The results are the twin evils of oligopoly and oligarchy. Donald Trump is in so many ways a product of the defective capitalism described in The Great Reversal. What the US needs, instead, is another Teddy Roosevelt and his energetic trust-busting. Is that still imaginable? All believers in the virtues of competitive capitalism must hope so.
antitrust  barriers_to_entry  books  book_reviews  campaign_contributions  Citizens_United  competitiveness_of_nations  crony_capitalism  dark_money  economics  economists  entrenched_interests  EU  FAANG  free_markets  French  gun_laws  healthcare  lobbying  market_concentration  monopolies  monopsony  oligopolies  oligarchs  regulators  Theodore_Roosevelt  uncompetitive 
november 2019 by jerryking
A Quiet Giant of Investing Weighs In on Trump
FEB. 6, 2017 | The New York Times | Andrew Ross Sorkin

In his letter, Mr. Klarman sets forth a countervailing view to the euphoria that has buoyed the stock market since Mr. Trump took office, describing “perilously high valuations.”

“Exuberant investors have focused on the potential benefits of stimulative tax cuts, while mostly ignoring the risks from America-first protectionism and the erection of new trade barriers,” he wrote.

“President Trump may be able to temporarily hold off the sweep of automation and globalization by cajoling companies to keep jobs at home, but bolstering inefficient and uncompetitive enterprises is likely to only temporarily stave off market forces,” he continued. “While they might be popular, the reason the U.S. long ago abandoned protectionist trade policies is because they not only don’t work, they actually leave society worse off.”

In particular, Mr. Klarman appears to believe that investors have become hypnotized by all the talk of pro-growth policies, without considering the full ramifications. He worries, for example, that Mr. Trump’s stimulus efforts “could prove quite inflationary, which would likely shock investors.”.....“The big picture for investors is this: Trump is high volatility, and investors generally abhor volatility and shun uncertainty,” he wrote. “Not only is Trump shockingly unpredictable, he’s apparently deliberately so; he says it’s part of his plan.”

While Mr. Klarman clearly is hoping for the best, he warned, “If things go wrong, we could find ourselves at the beginning of a lengthy decline in dollar hegemony, a rapid rise in interest rates and inflation, and global angst.”...In his recent letter, he explained for the first time his decision to say something publicly. “Despite my preference to stay out of the media,” he wrote, “I’ve taken the view that each of us can be bystanders, or we can be upstanders. I choose upstander.”....How Mr. Klarman wants investors to behave in the age of Trump remains an open question. But here’s a hint: At the top of his letter, he included three quotations. One was attributed to Thomas Jefferson: “In matters of style, swim with the current; in matters of principle, stand like a rock.”
Seth_Klarman  investors  hedge_funds  Donald_Trump  investing  ETFs  value_investing/investors  money_management  Andrew_Sorkin  countervailing  the_big_picture  nobystanders  Thomas_Jefferson  quotes  stylish  principles  uncompetitive 
february 2017 by jerryking
African Guyanese leaders must be much more development oriented
November 20, 2007 | Stabroek News | by Lin-Jay Harry-Voglezon.

Cheddi Jagan said around 1990, that the PNC government was preparing the Afro community to fail. He meant the high concentration of Afro Guyanese in the bloated public service sector which was unsustainable, and the practice of giving them opportunities on the basis of party cards, as a way of up-keeping the government, would backfire on the community. He meant that when the system of things changed the community would be uncompetitive for it would by then have nurtured the wrong ethics, expectations, and attitudes. The psyche of dependency on the state would be so ingrained that it would fail to be as resourceful as it is ought to be and was capable of being........I have argued in the past that the Afro community, owing to its historical conditions of survival, had crystallised a false sense of importance and security under PNC governance. I indicated that it is not a government of black faces, PNC or otherwise that would transform the Afro communities, but transformation in cultural ideas and economic groundings, which could be induced through changed conditions of survival and an improved understanding of self. Of all Afro leaders, Walter Rodney was best trained and equipped to lead that transformation. His death was a tremendous loss.

This additional response to Osafo Modibo’s letters is that the problems at Buxton are fundamentally symptomatic of cultural and economic deficiencies. While Modibo accuses myself and others of being silent on the extremities in that village he fails to acknowledge that the very executors of the excesses are mainly Afro Guyanese. The Afro community should realise that the highest form of emancipation would be when every black child grows up with the doctrine that he must be black, honourable and economically creative. So whether he is poor, rich, or an officer of state he must never pawn his common sense and dignity to others.
uncompetitive  letters_to_the_editor  economic_development  Afro-Guyanese  ethnic_communities  entrepreneurship  mindsets  generational_wealth  public_sector  psyche_of_dependency  human_psyche  Cheddi_Jagan  cultural_values  false_sense_of_security 
september 2013 by jerryking

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