Given that Poly has granted me the ability to time travel....

[KrazyHorse]

This is why I miss Adam Smith. He'd have mounted the intelligent objection immediately (instead of leaving me to argue with myself), and would have provided some interesting links to empirical and theoretical work on the subject.



Adam Smith

Then I would have trolled him about the Nobel Prize in Economics not being a real Nobel...

Me

[duke o' york]

Hay Zeus, this thread has become tedious. Can we get back to KH going back in time and pulling his mother please? That's what all the cool time travellers do.

[KrazyHorse]

Trust me, going back 24 minutes wouldn't make her attractive.

[Kuciwalker]

I cheated and found out what I think KH is looking for.

[Flubber]

Flubber, why is it that we can't force lawyers to testify against their clients?

Damn I knew I should have paid more intention in that ethics and "professional responsibility" class. I'm sure they mentioned it somewhere

[KrazyHorse]

I cheated and found out what I think KH is looking for.

Post it then...

[Kuciwalker]

People can choose to be investors but they can't really choose to be insiders, and by allowing insider trading we reduce the reward for the former and increase the reward for the latter, depressing activity overall.

At least, that's what I think it actually means for the cost of capital to increase.

[KrazyHorse]

No, that is not the objection I was thinking of.

Once more: why is it that we don't force a lawyer (or, more on point, a psychiatrist,who has just been told some secret about his client which implicates the client in a crime, to testify against his client?

If the client is guilty, it's good that we put him in jail. Where is the social benefit in granting privilege to this relationship?

[Kuciwalker]

The psychiatrist wouldn't have been entrusted with the information if it weren't priviliged. By analogy, the investors would be less likely invest their money in a venture not run by themselves - but isn't that pretty much equivalent to the "raises the cost of capital" formulation?

[Al B. Sure!]

Information belongs to the corporation

[Al B. Sure!]

I have a question... why is 'soft' price control of money through monetary policy not economically destructive? Or is it somehow not a price control?

[Aeson]

So what? By limiting producer competition he is HARMING CONSUMERS.

Perhaps you should ask for some further informatino about what his job is before deciding it's effects. You've got it backwards, because he's there to represent the consumers' interests. As I stated. There are others there to represent the producers' interests (I don't think they are on the panel, but could be wrong). They reach some sort of agreement.

It may not be (and I'd say is certainly not theoretically) the best way to protect consumers. But given that there is a an organization of growers (to the point of monopoly on fresh cherries in this country), someone has to do this particular job or things could get really out of hand one way or the other. It is a very important job in that light.

There is no way around that.

Except reality.

Whether or not he is also harming producers is dependent on how far below market equilibrium he's driving production. A bit below and he increases prices enough to more than make up for the drop in volume. Too far below, and their profits

He's not driving production. He and others on the panel are deciding limits how far it can be driven. Without that government intervention, the producers would decide themselves, and the effect would always be less cherries and higher prices (because their margins go up if so).

Also, it's more complicated than this because cherries aren't just competing with cherries, but with all other fruits, previous season's canned cherries, foreign imports, and (to a much smaller extent) even more dissimilar agricultural products and processed foods. And not everyone behaves rationally. The producers (or at least a good portion of them) for instance may want to leave more of their crop (as aggregate, no one wants to be the only one to do it) on the field than they have to, to forgo the major expenses on that crop and raise prices. But if they were allowed to do that, no one buys cherries anyways because instead they can have apples, pears, peaches, ect. So it has the potential to kill producers, while hurting consumers because it limits choices more than it has to be.

If on the other hand it's a good year and they forgo leaving crops on the field (as individuals, and thus aggregate), then the market is flooded with cherries, and all producers lose money one way or the other. The smart ones in that case were the ones who just don't pick their cherries because they lose more money than they've already lost for every pound of cherries they do pick and process. If all of them were smart, then it wouldn't be a problem, they could all limit their production to the point where they were profitable... but they are farmers, and no one's set up the necessary markets for them... this is their way of coordinating it. It's an organization of cherry growers...

The panel my dad is on is a government agency regulating that organization.

I'm sure there are investment banks and insurers out there who could set it up better than the farmers can, but since that hasn't happened (for whatever reason... probably because there just isn't much room for profit in orchards of certain crops) this is probably better for consumers in the long run than the actual alternatives the orchards have now, or no government intervention at all because without some form of coordination, there would be massive shortages of cherries on "bad" years, because most of the producers would go out of business on "good" years (or rather chop their trees and plant alfalfa... it happens even so), and it takes several years for new competitors to enter the market.

This is a retarded set of claims made throughout time by idiots who have absolutely no appreciation of how markets work. "If we didn't increase prices then the farmers would go out of business and prices would go way up for everybody".

The intended effect of the panel my dad is on is to lower prices for consumers. Without that panel (or something to replace it's function in some way), the price setting would be done by producers only. Which would lead to higher prices in the short term, and probably much higher prices long term, as there would be a lot less production in cherries on poor weather years (best case) and in good weather years, there would still be more room for the producers to limit their production.

I can't. Then again, I tend to believe in reason, unlike you.

I don't think you know much, if anything, about cherry production or my dad's job. Perhaps after this post you will know more. (I myself don't know everything, so we'll still be in the dark somewhat even if you did listen to what I was saying instead of jump to unsupported conclusions.)

No, he isn't. He's there to watch out for producers', if his job description is what you claim it is.

I claimed his job was to watch out for consumers' interests. How is that describing watching out for producers' interests? You simply ignored the only qualification I gave about his job, and claimed the opposite.

BY RESTRICTING PRODUCER COMPETITION HE INCREASES CONSUMER PRICES. PERIOD.

He's actually restricting how much producers (as an aggregate) can restrict their competition. Since the producers' organization is essentially a monopoly on fresh cherries in this country.

Too bad he doesn't know any economics. He'd resign immediately.

To bad you don't know anything about my dad. He probably knows the economics involved better than anyone else on the planet... he's also very adamant about the government not sticking it's nose into business. (Moreso than you in fact.) He just knows if he doesn't do this particular job, which exists even though he wouldn't choose for it to exist, it will be worse for everyone (producers and consumers) because someone less qualified will make those decisions anyways, as has been decided by law.

No... you should stick to calling him immoral for doing a job that pays him less money than he could make working to screw over consumers (and probably producers to given the realities of the cherry business).

[Aeson]

Forgot to address this:

So what?

So, you were trying to draw a dichotomy between price fixing and price stability to attack my statement, and so I pointed out how the price fixing achieves (admittedly artificial) price stability. That's what

[Dauphin]

No, that is not the objection I was thinking of.

Because you'd, as a client, i) never take advice and ii) would hoarde information.

Both not good.

[Dauphin]

ii) should be hoarde certain information, and only share certain other information.