Wednesday, August 31, 2011

Ridiculous Gone Wild!

I listened to a DOJ wonk give their reasons for blocking the ATT/TMobile merger and it was the usual drivel about being bad for competition, will under serve the poor and result in a lower quality product. Wireless comms is a cutthroat business and all you need are two big players to keep each other in check. Think Coke and Pepsi. Are the products really going to suffer because there are not a dozen inefficient carriers? And which one wants to lose Apple's carrier deals?

And then there is the very serious attempt to pass affirmative action rules for ugly people. Seriously! First of all, who would put that on their resume?  Please check your race, gender, age, sexual preference and whether that preference even matters because you are butt ugly.

The spectre of QE3.  If Benny and Barry think this is going to save the country then they meet the definition of insane.  You know, doing the same thing over and over and expecting different results.

How about the NLRB requiring companies to post union information? Or telling Boeing where they can build a new jet?







3 comments:

Amalan said...

Beg to differ - when only two companies control the market, it is called duopoly, only slightly less bad than monopoly. Think Canada - they had only three carriers, and as a consequence the most expensive communication plans among all the OECD countries. As soon as the Govt allowed more companies to set up shop, down came prices.

What is always lost in the "good for business" argument is that the business under consideration does not represent the entire nation, and hence higher and higher profits at the business ends up being at the cost of the people at large.. of course, this does not mean everything should be given away free, but a happy medium can be reached and it is not at a duopoly situation.

Derrick H. said...

I agree with Amalan. Coke and Pepsi are bad example--they are limited by consumption, not competition. Oligopoly in most cases is just as bad as monopoly, despite what microeconomics says. I'd much rather see t-mobile as the low price competitor putting pressure on AT&T. If AT&T and Verizon are the only two, I can imagine that my wireless bills will go WAY up...

Quick Takes Pro said...

What about all the low cost providers already out there? Can't name them without looking them up but with people sick of fees and contracts this niche is important. No contract, disposables, etc...

In banks, I was sick of big bank fees and low customer service and there are dozens from which to choose. I went to a credit union and am very happy with all the services I had before. The market gave me an alternative away from the traditional and I took it.

Coke and Pepsi push each other. There is still room for all the other brands to make their way and when you get sick of bland cola you will switch to Stewarts or Jones or.....

Here is a kicker on this merger - unions. The Prof from Maryland was on the tube this morning saying that the deal should be blocked because it would make unions too strong as two former baby bells seek to go back to the old way.

But here is another piece with his views saying it would indeed be bad for competition.
http://community.statesmanjournal.com/blogs/editorialblog/2011/08/31/peter-morici-u-s-government-justified-in-seeking-to-block-att-t-mobile-merge

Pick your poison. I think I'll go back to charts where I should have stayed.