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Profiting From Market Failure: How Today's Capitalists Bring Bad Things to Life

Business  (tags: business, corruption, corporate, consumers, americans, news, world, usa, politics, marketing, society )

- 2168 days ago -
Capitalists are perpetuating, and making big bucks from, market failures that deliver crappy products and shoddy services.

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Teresa W (782)
Tuesday July 10, 2012, 3:54 am

Past Member (0)
Tuesday July 10, 2012, 6:10 am
Noted. Thanks.

Gloria p (304)
Tuesday July 10, 2012, 8:40 am
It's not capitalism it's the greed.

Kathleen R (138)
Tuesday July 10, 2012, 1:57 pm
noted & read

Stephen Brian (23)
Tuesday July 10, 2012, 3:53 pm
Yup, planned obsolescence is an issue. On the other hand, there is also a market-driven solution to that: Competition. If one company holds back so it can offer a better product next year and the other goes all out, we know which one will corner the market. The reason it lasted so long in the automotive industry was that entry-costs were high and transport costs were high enough that only local competition mattered. It was, and to some degree still is, an oligopoly.

The failure described for the medical industries is a little more complex than described: With politics threatening to overhaul the industry, who in his right mind would take a major long-term risk? Imagine if you had sunk a whole lot of money into setting up and coordinating a communal HSA, effectively an insurance-coop (rather than current insurance company-structures). That sounds like a wonderfully innovative solution: The policies would be fair with the "clients" being the same as the "shareholders", and a lot of the trouble with the current system could disappear. Then ObamaCare turns HSAs into a thing of the past and destroys the company. The regulations are changing too quickly right now for the kind of risk-taking that the article demands. Imagine if Joe Wilson did not expect IP-laws to stay the same for more than about five years: He never would have taken the risk because he could not be assured, even if the technology worked out as he expected (which it did), that he would ever see a profit from it.

As for the financial markets, there are serious problems in this AlterNet article (like every other AlterNet article I have ever seen): The article cited in the claim regarding manipulation of the tax code and capital markets actually does not support the claim at all. It actually says that Bain Capital invested heavily in the steel-industry just before prices dropped and costs jumped by buying a lot of small businesses. I should probably point out that by effectively pooling the revenues and accounts of all those businesses, Bain probably saved a lot of them that would otherwise have gone under. It couldn't save them all because closures happen when an industry goes through a rough time.

Eternal Gardener (745)
Tuesday July 10, 2012, 5:48 pm

Stephen Brian (23)
Tuesday July 10, 2012, 10:02 pm
Before too many people report it and get it removed, I think the spam by "Shi S" is oddly appropriate here. :D

Past Member (0)
Wednesday July 11, 2012, 4:36 am
“Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

Kerrie G (116)
Wednesday July 11, 2012, 8:36 pm
Noted, thanks.
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