Common Cents
Brian Blackwell
Brian Blackwell is the newest reporter at the Southeast Missourian, focusing on business. A May 2008 graduate of the University of Nebraska, Brian is an avid Cornhusker fan. When he is not covering the business community for the newspaper, Brian enjoys spending time with his wife and church family, cheering on the Cubs and Cornhuskers, wishing for snow and hiking on the numerous area trails.
Happy birthday wishes to the King and sad news for Super Mario Brothers (January 8, 2009)
Cape Communications to relocate in early spring (January 7, 2009)
Budget Auto Repair relocates to former Precision Transmission building (January 6, 2009)
Business in 2008: Newcomers, expansions balanced cutbacks (January 5, 2009)
New Mexican restaurant opens across the river (January 2, 2009)
Can Detroit catch a break in 09? (December 30, 2008)
What business story was tops in 2008? (December 29, 2008)
Greetings from Birmingham (December 26, 2008)
Merry Christmas! (December 25, 2008)
Former Jackson Diner undergoing a facelift (December 24, 2008)
Joplin moves chiropractic office (December 23, 2008)
CRH Transportation acquires most of Elfrink's business (December 23, 2008)
El Durango moving locations (December 23, 2008)
AAA thinks you may be home for Christmas (December 22, 2008)
DeWitt to appear at baseball and softball instructional facility grand opening (December 19, 2008)
Gas prices rising in area (December 18, 2008)
Something's brewing at Elfrink (December 17, 2008)
Candlewood Suites coming to Cape (December 17, 2008)
Saturn of Cape Girardeau closing (December 16, 2008)
Be careful out there today (December 16, 2008)
What will become of Howard's? Speculation abounds (December 15, 2008)
Another tattoo parlor set to open Monday (December 13, 2008)
Karate school relocates (December 12, 2008)
Ribbon cutting tonight (December 11, 2008)
Ribbon cutting at Bahama Tan; NFL cuts staff by 10 percent (December 10, 2008)
Saint Francis announces partnership with Cape Girardeau Physician Associates (December 9, 2008)
Keeping an eye on the weather today (December 9, 2008)
Peanuts' Linus had it right (December 8, 2008)
Comfort Keepers of Southeast Missouri moves to new location (December 5, 2008)
West Park Mall says its gift card option a safe and secure Christmas present (December 4, 2008)
Fab u lous business opening in downtown Cape Girardeau (December 3, 2008)
Linus had it right (December 2, 2008)
Will it snow, will it snow, will it snow? (November 30, 2008)
Cape Girardeau Branding Iron closes (November 29, 2008)
Happy Black Friday (November 28, 2008)
Wieser acquires Suzuki franchise from Minor's Harley Davidson (November 27, 2008)
The Economic Earthquake (November 26, 2008)
Are you planning to shop on-line this holiday season? Or are you planning on getting bargains or getting up early on Black Friday? (November 24, 2008)
The business buzz: High hopes for Thanksgiving weekend (November 24, 2008)
New nail salon set to open next month (November 22, 2008)
What do you think of the auto bailout? (November 21, 2008)
Is the economy keeping you closer to home this Thanksgiving? Are you planning on doing anything to cut back on the holiday? If so, I want to hear from you today (November 21, 2008)
New hospice option offered in Southeast Missouri and my first trip to Marble Hill (November 20, 2008)
Austin's of Alto Pass, Ill., closing after 23 years in business (November 19, 2008)
Latest mall news (November 18, 2008)
Chambers adding members thanks to October drive (November 17, 2008)
The start to my Friday morning - running over a deer (November 14, 2008)
Guess who's moving into the old Fred's building in Jackson (November 13, 2008)
Bott Radio Network expands into four Southeast Missouri cities (November 13, 2008)
Renovations, expansion underway at Fireplace Center/River City Masonry (November 12, 2008)
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I liked how Glenn Beck put it. Our economy is a 747 with all four engines on fire. We can either spend the money and find an open field to land in, or don't and blow up in the sky. It's crappy either way, but just like the Republicans got us stuck in Iraq, they got us stuck in this mess as well.
Of course you could buy all the gas you want, and sell it for whatever you want. That's absurd that you couldn't. It's your gas, not mine to tell you how much you ought to get for it. You're not hurting anyone at all. In fact, I'd say this guy is in an extremely precarious position economically: any guy who is willing to make less money with the same efficiency or as much money with more efficiency is going to bring his price tumbling down.
All of your other examples are examples of force or fraud. If you want to see the manifestation of all of your examples in a government-controlled economy, see China.
I'm sure you'd be screaming for government help if something happened with gas prices...oh wait people are already doing that.
In a free market I could buy all of the gas stations in SE MO (or most and drop prices to shut out competition) then charge everyone $7 for a gallon of gas. You might buy less but you'll still buy. ThenI'll jack it up to $10...$12 a gallon. This would not stop at gasoline, this would occur on any inelastic good...food, electricity, etc.
without regulations drug companies could put out any product they wanted and say what they wanted about the product. Suddenly there will be 10,000 people selling sugar pills for some retarded price saying "It has proven to cure cancer" and people will flock to it.
Without regulation companies can pollute as much as they want to increase their bottom line. Then suddenly we'll be like China with rivers w/o life.
Without regulation I could dump the waste from my nuclear power plant in your backyard.
etc etc etc...
Basically regulations shift the costs from the public to the private sector. Bad for businesses in a sense but it allows for businesses who want to maintain high ethical standards a chance to succeed. An owner with little to no morals would be much more likely to succeed and the country would be filled with corruption. This is also important (yes I agree some regulations aren't as effective or good) because of information assymetry. Obviously a business is going to know more than an individual. Without regulations it would be entirely easy for businesses to take advantage of the less informed public.
Also if the wealth gap in our country isn't bad enough as it is, if there were no regulations you'd see like 95% of the GDP controlled by 1% of the population
Enron could not have happened without the heavy hand of government. They practically lived at the Congressional doorstep. They got their lackeys in government to force incumbent utilities out of the generation game. They lobbied for price controls on access to grids. They got control of the grids moved over to bought-and-paid-for state governments.
Despite all that, capitalism is simply the economic manifestation of freedom and liberty. It's the right of two parties to agree to trade that which is theirs, with no interference from uninvolved parties, no matter how big the stick they carry, or how many people vote for them. But it's not the same as anarchy -- you can't have freedom unless you have some entity that protects you from force (via police or military) and fraud (via contract enforcement). If there were contract violations, then (and only then) it's the government's job to step in.
A preemptive strike on freedom through market regulation is not the same thing as contract enforcement. Government regulation makes risk impossible to assess (because you have no idea whether or not the government is going to make you business impossible to run or ridiculously wealthy in a week, a month, a year, or never), and it usually breaks future competition by trying to keep things the same when markets are ready to move on (the stagnant U.S. auto industry can be blamed on price-fixing foreign automobiles and the assumption that the government will never let it fail, for example).
U2Bono77,
That actually may be a good idea, to post my column on the Monday morning blog. I'll post it shortly in my next blog.
Enron...
futile_rant: That would be my suggestion, keep the government and its needless regulations and oversight out of the marketplace. If the government had just stuck to prosecuting theft and fraud, it could still be useful, but it didn't. Government has given special privileges to some in the market at the expense of others. It has became a source for fraud.
ok, lets completely keep the government out of the markets then. No regulations what so ever, no over sight.
That'd be capitalism and free markets right?
bearded_sage, very good post.
Many Americans put far too much faith in government, and too little faith in the marketplace.
It doesn't really address the underlying cause of this whole problem: the price fixing of the interest rates by the Federal Reserve. So you may see a mild bounce-back, but this ship is going down sooner or later.
So far, the economy has been suckered into bouncing back each time they drop the interest rates by printing more money. Unfortunately, that doesn't effect real change in the system, it just moves money from private holdings into investor hands. Even if it worked forever, you have to give it up and let the interest rates rise or risk destroying the currency.
Despite my severe lack of faith in this bailout, I've got to say that even if I thought it would work and that people would get to continue borrowing money with no high interest rates ever, and even if I thought that the taxpayers (or more likely the presses at the Treasury) would be made whole, it's still government meddling in the markets. It's still the government gambling public money on private assets. It's still Sec'y Paulson picking and choosing which enterprises are too important to fail (moral hazard).
If you believe in personal freedom, personal property, and capitalism, you cannot reconcile this bailout with your beliefs.
LOL...talk about putting my foot in my mouth...I just found the article online....it has new information...geez...so sorry....I guess I need to learn when to shut up...keep up the good work
ok, so I noticed in the actual paper, you have your business buzz article, it is filled with information you already posted online...so I guess you did have an article out today but not posted online and nothing quite new since the last time you posted...my bad
So, I have to ask again. Are we moving your column to another day? Here it is Monday and nothing new from you except your blog...I'm not trying to be a pest but we are used to the business article coming out every Monday, is this changing now???
It's great! It really worked this time!!
*rolling eyes flamboyantly, sighing heavily, coughing, and heaving dramatically.*
Thanks Hilleco. I'll look it up.
Brian, there is an article at the Mises Institute by Jesus Huerta de Soto "Financial Crisis and Recession" http://mises.org/... that is a worthwhile read on economics. It explains the economics of a recession far better than I can.
The worst recession that the US faced during the 20th century was the 1921 recession. Government stood to the side and allowed the market to clear mal-investments caused by WWI. The 21 recession was short lived. When the government stepped in in 1929 the economy went into a depression. The government should step to the side and allow the market to clear.
futile_rant: I didn't read the NY Times piece. You forget that the Japanese government did do something, it expanded infrastructure spending and did bail out failing banks. It built plenty of bridges to nowhere.
Hilleco, again... Sweden had the same problem in the early 90's and solved it & got out of it quicker than say the Japanease (who did nothing as most US tax payers are wanting to do) who suffered with stagflation and even deflation for about 14 years.
http://www.nytimes.com/...
Taxpayers just feel the bank stockholders (who you probably own some of) are getting off the hook and should pay. Well if the government bought ownership of a banka nd it still failed you would lose out on a lot of money...
however by buying the bad assets they can sit there and sell for a profit later on (ie pay $150,000 for a $300,000 mortgage and sell it for $200k+ later) There is a lot less risk in that b/c of the HUGE discount that the government will likely get.
So would you rather
a) Try to get out of it like the Swedes
or
b) Let it fix itself and risk being like the Japanese, being stuck at your current wage for a decade but still paying higher prices on gas, etc.
The bailout is a bad scam. The $700 billion is not real money at this time but will eventually be made real at the expense of savings and production which make up real wealth and a healthy economy. I believe that the bailout will somewhat delay the inevitable.
Why all the pork?
http://sayanythingblog.com/...
Oh thank goodness for Sec.317 and the seven year cost recovery period for motorsports racing track facility and how could we ever live without Sec. 503 Exemption from excise tax for certain wooden arrows designed for use by children.
well if this takes care of the problem then I am all for it but who is paying in the long run......my 401k has dropped so much not sure it can ever recover.
Most people know that most of this is happening because the election is so close, (I am not for or against the republican or democratic party) the republicans sure scrambled all of sudden to make this work......so go figure. Evertime there is an election so close something of this sort happens it just happens that Bush has the ball in his court this time.
Just_me, the bill's intention is and was not to make the stock market go up
The whole thing makes me sick. Those in charge need to be taken out of leadership positions & prosecuted if they acted illegally. I find it interesting that they scrambled to pass a bill to "save the country from another Depression", yet the Dow dropped even more after they passed this bill reaking of pork.
Did you know that Barney Frank was sleeping with one of the execs at Fannie Mae in the 1990's while on the House Banking Committee?
http://www.foxnews.com/...
I am glad they are taking a proactive approach to the problem.
The Japanease and Swedes both went through a similar situation in the 1990s. Japan tried to tough it out and was stuck for 10 years. The Swedes did essentially what the bailout is (just approached it from the equity side instead of asset side) and it got them out a lot quicker. The asset side will make this safer for tax payers too.
The pork that was put into the bill, as well as how long Congress took to pass it, makes me sick though.