The Real Cause of Blackouts

[Nielsio]

Let's see..

* Complete government centralized control of the food supply. Everybody dies.

* For the large part free market in food supply: complete and total abundance in everything at low, low prices. So low that even the poorest part of society can be fat pigs.

Hmm... correlation?


Something people never, ever, ever mention about their fascist/communist economy they are 'selling': there is simply no mechanism or motive for the monopolist group (govt) to PROVIDE any decent service to their slaves (yes, the word is slaves, NOT customers).

[bluesbassman]

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Watch "The Corporation" - Enron is not a bad apple - it is standard operating procedures for corporations -

you guys put way too much faith in the altrustic motives of the free market when time and time again the market is proven it cannot be trusted with the responsibility to regulate itself without seriously screwing over the American people.


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Nice leftist rant, but it has nothing to do with reality.

I hold a senior engineering position at a small aerospace corporation, Orbital Sciences. (We have about 2900 employees, which is small as far as aerospace companies go.) I design spacecraft in the space systems division.

Our "standard operating procedure" is to make money by producing value to our customers, in this case by making small spacecraft and launch vehicles. To do that successfully requires the highest degree of dedication and integrity at every level of the corporation. The aerospace business is competitive, and to design and build spacecraft which are technically reliable as well as profitable requires the solution of formidable engineering and managerial/fiscal problems. Any attempt to "screw over" anyone will result in painfully obvious technical or business failures (or both).

It is true my motives aren't altruistic, nor should they be. For my career to flourish along with my coworkers, we must scrupulously fulfill our obligations to our shareholders and customers. That means producing technically sound, innovative aerospace products at a competitive price.

We can debate what went wrong at Enron, but most corporations can thrive only one way: by producing genuine value, not by committing fraud or stealing. The free market will ultimately and ruthlessly punish anything else (unless a company is propped up by the government).

[toor]

There can be shortages especially in areas where products have very special properties. Electricity is one of those products.

There are high costs to entry.

It takes a lot of time to increase the output of a generator by small amounts. I.e. if you want to output 10% more then u are currently it can take hours to get there.

Electricity consumption changes by the minute in huge directions.

Electricity cant be stored (a truly rareproperty). ANy extra produced is waste. And you can't produce a certain amount in the morning and then see how demands develop over the day. You need to produce the perfect amount at every given time.

So to maximize profits as a company you only want to produce exactly what demand is. But demand can change quickly, and even though the marginal cost of production might be low ($) wise, in terms of time you can't simply "up your output" it takes hours. But the demand doesnt last that long.

Not your standard good in other words. So yes you could have shortage even though marginal utility > marginal cost of production.

[Riddick]

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none of the claims made here apply to the Enron blackouts -


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which was a prime example of price gouging

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What is price gouging? Is that when market prices get too high for your personal liking?

When demand for a good plummets, like say, winter clothing in the spring, should the government step in and stop vendors from lowering the price of the winter clothing? Why, afterall, aren't evil consumers taking advantage of the vendors??

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natural monoplisitic practices

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What exactly was natural about Enron? The permits obtained to trade in the state operated energy pool? The billions of taxpayer dollars that Clinton gave them throughout the 1990's?? When a firm is so deep in the pockets of the politicians who routinely favored and/or bailed out Enron for a decade, why would any other firm dare step into the fray a compete???

I guess that's natural monopoly theory for you though.

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and typical psychopathic behavior from a corporate entity more concerned with profits then with actually serving the public trust.


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Why should I care if a business cares about me? I sure as hell don't care about the business. God forbid a business care about profits.

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you guys put way too much faith in the altrustic motives of the free market when time and time again the market is proven it cannot be trusted with the responsibility to regulate itself without seriously screwing over the American people.


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I'd like to read about one example, just one, of the free market screwing over the American people, where in fact it wasn't the government actually screwing over the American people.

[xorbie]

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riddick,

how much do you know about "natural monopolies"?

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About as much as I know about Unicorns.

In all seriousness, it is my understanding that a monopoly cannot exist naturally.

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you're wrong.

[pvn]

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riddick,

how much do you know about "natural monopolies"?

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About as much as I know about Unicorns.

In all seriousness, it is my understanding that a monopoly cannot exist naturally.

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you're wrong.

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Perhaps you could provide an example, then.

[xorbie]

pvn,

not sure what you are asking for. there aren't a lot of examples that people who disagree with me fundamentally couldn't point to and say it was the government's fault or some such. however, whenever the fixed costs are so high and the variable costs relatively low, average cost is actually much lower when only one firm produces the product/service than when two firms produce it. competition or not.

[pvn]

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pvn,

not sure what you are asking for. there aren't a lot of examples that people who disagree with me fundamentally couldn't point to and say it was the government's fault or some such. however, whenever the fixed costs are so high and the variable costs relatively low, average cost is actually much lower when only one firm produces the product/service than when two firms produce it. competition or not.

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There aren't a lot of examples of unicorns, either. I wonder why that is.

[xorbie]

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pvn,

not sure what you are asking for. there aren't a lot of examples that people who disagree with me fundamentally couldn't point to and say it was the government's fault or some such. however, whenever the fixed costs are so high and the variable costs relatively low, average cost is actually much lower when only one firm produces the product/service than when two firms produce it. competition or not.

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There aren't a lot of examples of unicorns, either. I wonder why that is.

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let me try this again.there aren't a lot of examples that people who disagree with me fundamentally couldn't point to and say it was the government's fault or some such.

and even so, there are plenty of examples where one company provides a service in one area with almost no competition. there would obviously be more if not for various laws.

[BCPVP]

xorbie,

An article to consider on natural monopolies.