Shrinking Pie Economics
THE GOLDEN PINNACLE, ROBERT GORE'S NEW NOVEL OF FREEDOM, CAPITALISM, AND THE INDUSTRIAL REVOLUTION, IS NOW AVAILABLE ON AMAZON, BOOK OR KINDLE! And an excerpt from the latest on straightlinelogic.com:
After 100 years of regulation, the banks have the government by the short hairs and the rest of us pay for it. This is what happens when the government “regulates” an industry. After the “reformers” who pushed the regulatory legislation move on to their next cause and the public’s attention drifts, the regulated have every incentive to capture the regulatory apparatus and use it to their own purposes: cartelize their industry, reduce competition, stifle innovation, and protect profits. Donations flow, a revolving door revolves as regulators take jobs with regulated companies and their lobbyists and vice versa, and a government-sanctioned oligopoly is enshrined. No one else has any incentive to undertake the daunting task of challenging these cozy arrangements.
In real capitalism, the regulator is the market itself. Uncompetitive banks, like other uncompetitive businesses, go out of business. That still happens in industries, like technology, where capitalism’s competitive forces are allowed to play out. “Dominant” companies come and go. IBM was going to rule the world, until personal computers came along. Then Microsoft and Intel were going to rule the world, until the Internet and mobile computing came along. Now Google and Apple will rule the world...until something else comes along. There’s been plenty of roadkill on the information superhighway. Capitalism, as Joseph Schumpeter noted, is “creative destruction.” Getting to the top is tough and staying on top for any length of time almost impossible, which is why business people turn to the government. Beneath all the “public interest” jingo, they use it to prevent their own creative destruction. The rich get richer by erecting regulatory roadblocks against those who might compete against them.
To access the rest of the article, go to straightlinelogic.com, or hit the link above.
After 100 years of regulation, the banks have the government by the short hairs and the rest of us pay for it. This is what happens when the government “regulates” an industry. After the “reformers” who pushed the regulatory legislation move on to their next cause and the public’s attention drifts, the regulated have every incentive to capture the regulatory apparatus and use it to their own purposes: cartelize their industry, reduce competition, stifle innovation, and protect profits. Donations flow, a revolving door revolves as regulators take jobs with regulated companies and their lobbyists and vice versa, and a government-sanctioned oligopoly is enshrined. No one else has any incentive to undertake the daunting task of challenging these cozy arrangements.
In real capitalism, the regulator is the market itself. Uncompetitive banks, like other uncompetitive businesses, go out of business. That still happens in industries, like technology, where capitalism’s competitive forces are allowed to play out. “Dominant” companies come and go. IBM was going to rule the world, until personal computers came along. Then Microsoft and Intel were going to rule the world, until the Internet and mobile computing came along. Now Google and Apple will rule the world...until something else comes along. There’s been plenty of roadkill on the information superhighway. Capitalism, as Joseph Schumpeter noted, is “creative destruction.” Getting to the top is tough and staying on top for any length of time almost impossible, which is why business people turn to the government. Beneath all the “public interest” jingo, they use it to prevent their own creative destruction. The rich get richer by erecting regulatory roadblocks against those who might compete against them.
To access the rest of the article, go to straightlinelogic.com, or hit the link above.
