FREE MARKET 101
June 14th, 2009
The United States is the leader in the free world. This was accomplished through a free market system, a system of healthy growth through innovation and perseverance of U.S. citizens. The marketplace governs the economy. The economy pays for government through our efforts. The harder we work the better the return and the stronger the economy. We are the boss. The politicians are public servants. At least that is how it is supposed to be.
When the government sticks its nose in the economy, things go wrong. Putting a person or persons in charge above the nature of the free market equation undermines a strong economy. The market and economy live through a mathematical equation. Man, his emotions and his self-serving ways can destroy this equation. The government is a group of self-serving men and women. This is no secret.
Just imagine you own a barbershop…
Joe owns a barbershop too.
You and your workers give great haircuts.
Joe and his people do not.
You charge 12.50.
Joe charges 12.50.
You do more business.
Can you see why?
You can expand soon or open another business that employs more people.
Suddenly a man called Mr. Drama who seems to have a take-charge attitude robs everyone in the neighborhood of 100.00.
Mr. Drama now funds Joe with the people’s money. Even yours and your employees
Joe lowers his price to 9.00 and buys more advertising.
You lose a third of your customers to Joe.
Times are tough and they will live with a bad haircut.
Joe has a bottomless checkbook now and a new partner
You eventually close shop.
You have no barbershop, no expansion or second business, and you can’t create new jobs.
After a few days, Joe raises his price to 15.00
Joe and Drama have shut down the competitor, and no one else dares open.
The quality of his haircuts is even worse than before.
Who can compete with a man who has a bottomless checkbook?
If we disallow failure, we disallow success.
Does this sound familiar?
How will Ford compete with GM or Chriat (Chrysler/Fiat)?
Can you say monopoly?
Is this what we want in our future?
This formula will eventually destroy our country.
In socialist countries, the government controls industry. Ask anyone who has ever lived in a socialist or fascist country about growth, productivity, about self-improvement or pride in ones abilities. In a recent conversation between a man from Romania and a radio talk show host the caller said, “The government lies about how good they pay, and the workers lie about how hard they work.
This house of cards will fall just like the mortgage industry. By the way, our president had more to do with the mortgage scandal than most Americans know. Even before he was a senator, Obama was destroying our economy with his ACORN involvement. Later when the conservatives warned the democrat controlled congress, Obama kept quiet and received payoffs from others involved in that house of cards, including $126,000 from Fannie Mae, and Freddie Mac.
Categories: Basic Lessons
Hey, great post, really well written. You should post more about this.
Hello,
I don’t think you took other factors into consideration.
The automobile industry is an oligopoly not a monopoly. If your remarks were true, then other auto makers wouldn’t exist (i.e., BMW, VW, Mercedes, and Toyota). Also, there are countless of used cars in the market for consumers to purchase cars. Such as the used car I purchased five years ago from a used Honda car dealership. Thus, for Ford to be a true monopoly, no other substitute products have to exist.
As for your second comment that government should not interfere with the economy, this too is inaccurate. The government does not intervene to slow or make the economy better. It is the Federal Reserve that intervenes to stabilize the economy. Such as the monetary policies it uses. To bring you up-to-date, the Fed Reserve does this through the purchase and sale of Federal T-Bills/Bonds, change the interest rate, and change the required reserve ration (RRR).
As for your third comment, it’s bit hearsay.
-Tony
It’s true that the automobile industry is an oligopoly with only a few domestic manufacturers and some foreign manufacturers. However, since the government can pass a law to shut out foreign competition at any time and is subsidizing Chrysler through the bailout, effectively lowering the cost/price of each automobile that they produce, the domestic automobile manufacturers are at a competitive disadvantage. Ironically, the other domestic automobile companies and their employees are forced to subsidize their own downfall with their own tax dollars. As to your point about the used car market, about all Cuba has is a used car market with a spattering of imports from Europe. My point being is that is not where we want to be. Eventually new cars wear out and have to be replaced.
Tony, You missed my point completely, in regards to the oligopoly I was refering to the domestic new car market. I addition you might want to reread my post. With the government backing both Chrysler and GM, It would be the the Government creating a monopoly not Ford. They would be the victim. With tax dollars paying the bills, both GM and Chrysler could sell their cars at any cost. Basically they could operate at a loss and the Tax payers would subsidize them.
Finally, as to hearsay, There is lots of evidence. If you watch or read the mainstream media you wont likely find it. “The evidence found……” video clip in the “Housing Crisis” category of this site is just one of many videos backing up that dems and Obamas involvement in the mortgage crisis. Watch the whole video. Hearsay? We can all HEAR Obama SAY he supported it.