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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Raymond Duray who wrote (37593)	8/31/2003 2:11:04 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

Raymond, the deregulation of electricity supplies bears [in both New Zealand and the USA] a similar relationship to free markets as a naughty weekend does to marriage. <The electricity/energy sector is one where there are no longer any legitimate arguments to made that it is a success. Enron is the poster child for free markets and California's rape by Enron, Dynegy, Sempra, El Paso Gas, etc. is a perfect example of how to wreck a system that was working, and replace it with chaos, criminality and crisis. In the case of electricity, almost all sane parties are in agreement that deregulation is failing. That more regulation and control is required in order to stabilize the system. > The markets weren't deregulated in California. The profits of control were handed to a bunch of opportunists by stupid public servants and mindless voter-driven politicians who were clueless, or negligent, or criminal, about what they were doing. Privatisation and free marketeering doesn't mean giving away the community's assets to the highest bidder [or favoured mates] along with some half-baked 'deregulation'. The community which owns the assets should charge what the market will bear and then fully deregulate the market and have an auction for manageable chunks of the assets. By charging what the market would bear, the community could cut other taxes, probably to almost nothing, at least for a few years. Then, the community could retain a 50% or 20% shareholding to retain a share of the profits, but maintaining politician busy-body wastrels at a distance from the controls. Blaming free markets for the electricity failures and accounting scams [and other failures of deregulation] is silly. Putting a wolf and an easily-fooled, voter-driven bureaucrat in charge of releasing sheep to the wild isn't likely to increase the wool harvest. The sheep will be let out on a long string at night for some "freedom" to forage on the free market range, but in the morning, when reeling in the sheep for harvesting, there will be just a bloody mess at the end of the rope and no extra wool to harvest. That doesn't mean it's bad to have free-range sheep, it means the wolves need to be shot, or kept on a short leash if they are acting as sheep-dogs. To say that electricity supplies were 'working' under government control would have been as true there as here. I have spent years going around hundreds of various industries including government-owned electricity suppliers. They are a horribly inefficient, feather-bedded, bunch of wastrels. Where a private company might have the boss talk to me on the run while he works on something else, the government departments would book a meeting room, get every man and his dog in on the act, take up ages and make bad decisions. Government-run railways might have been worse that electricity departments, but it was a close call. Government-run airlines were worse because airlines are more fun and everyone wants a free ride and to wear a fancy hat and get a big salary for such a "glamourous" business. Charging what the market will bear is the key, thus maximizing return to the owners of the assets, then letting competition loose to get prices down and quality and service aligned with what people prefer to pay for. Mqurice

To: Raymond Duray who wrote (37593)	8/31/2003 3:50:22 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 74559

<The same thing applies in wheat markets, where we find in the U.S. that a one pound loaf of bread, costing $2.89 in the supermarket contains $0.07 paid to the farmer for the wheat. This is a wacky and distorted market that no longer rewards those who make it all possible. > I think what that mainly shows is that the value of the modern downstream stuff far exceeds the eons-old value of territory. It also shows how efficient wheat production is these days. How unimportant land is. You won't find subsistence farmers with a sickle or scythe these days, threshing it by hand and delivering it to market in bushels, by horse and dray. I think those words would draw blank looks in most young people. Dray? Bushel? Sickle? Scythe? Threshing? Huh? I doubt that bread is a protected market. Surely anyone can buy wheat and go into the bread business. Judging by how many bread brands there are, I think so. I have been tempted to go into the bread business myself in the USA because the bread is so disgusting and expensive. It's loaded with sugar and is fluffy and revolting. But I suppose it's each to his own and Americans like it like that. I am amazed at how expensive it is. Same with 'cereals' which are not so much cereals as chocolate flavoured sugar bombs. There is a lot of money not going to the wheat grower. US$2.89 is just on NZ$5, which seems absurd for a loaf of bread. I can buy a cheap loaf for NZ$1 and supermarket brand for $1.50 and major brands for $2 and special luxuries such as Vogels for $3 [which we now don't buy as they are too expensive - they are super popular; a Kiwi tradition]http://www.woolworths.co.nz/homeshopping/shop.asp?sid=4GSXFJ83C27D9G3WAXDFH58WJSE5D951 Vogels and supermarket prices there The US$ looks from here as though it should be cut in half to get to about the "right" price, though it has been high for 3 decades, so I'm not holding my breath. Surely you don't think there should be a government loaf? They loaf around all day as it is, without putting them in charge of bread, which would be stale and even more expensive and disgusting, available at few places and in short supply Mqurice

To: Raymond Duray who wrote (37593)	8/31/2003 4:05:59 AM
From: maceng2	Read Replies (1) \| Respond to of 74559

This is a wacky and distorted market that no longer rewards those who make it all possible Thats more like it Raymond. Those earlier arguments were very bad indeed. Lets just say people scoff at Hitler and Stalin, thinking we could do no worse. Sorry, think again and just check on the world population today for example. So I was going to use "FMV" for some modeling perhaps. I need to be able to model the world economy with all types of "FMV". Any idea's on how I should define it? I just want something mathematically defined for a 'puter program. See my earlier post for my initial definition and suggested value of 0.3 I fully agree btw it should be a plan for the USA and other Western counties to pull the third world up to our standards of living, not the other way around. That is plain sense as I see it. So having a regulation in Europe about who is allowed and qualified to wire an electric plug is one thing, and where to dump the toxic waste in Goola Goola land is another. That is just a thought process. The idea is the folks in Goola Goola land have a standard of living similar to ours, and are trained and able to wire three pin plugs without some dumb idiot making a regulation on it -g-