Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: portage who wrote (105894)	6/1/2001 2:45:21 AM
From: Don Lloyd	Read Replies (2) \| Respond to of 436258

p - ...My point is simply that I don't agree with the main argument I keep hearing against a reasonably high temporary price cap, that it will prevent future investment in increasing the capacity for providing additional supply down the line. ... There is substantial truth to this position, as far as it goes, but it is not the whole story. It is not that future investment will be prevented per se, but that it will be increasingly substantially impaired as the teeth of regulation are sharpened. Out of the universe of potential investors in a given economic segment, the field is winnowed down as regulation and political risk increase and reduce the potential risk-adjusted rewards. This form of adverse selection is what directs the most capable entrepreneurs into lightly regulated fields like semiconductor manufacturing and attracts the experts in political influence and gamesmanship into the highly regulated fields. This seems to be consistent with your claims of gouging, whether it actually exists or not. In any case, it is clear, at least to me, that the results, both episodically (I didn't realize that my entire life had been spent waiting for an opportunity to use, or misuse, that in a sentence. -g-), and over extended time, are that highly regulated fields are far less successful in providing quality products and services at low cost to the consumer. This is why I believe that it is preferable to prevent the gouging opportunities by using the retail prices to reduce demand, rather than trying to control an undesired result directly. If people write to their congressmen and complain that the sun rises too early and deprives them of needed sleep, it seems preferable to permit and encourage them to earn the money needed to buy window shades, as opposed to passing legislation that purports to legally prohibit the early appearance of the sun. Regards, Don