The Competitive Fallacy

[Steelplate]

Why doesn't anyone ever question the exorbitant prices that colleges and universities charge. The rates increase every year.........yet, they always get a pass and nobody....except the students, complain. Why?

For OP's number 1. I don't see how anyone could disagree with that. Each business makes different decisions.

As for the scenario, I wouldn't move my company to a state where taxes are substantially higher. I would rather pay lower taxes, innovate my service, and hire more employees.

I'd love to... It's fucked up and wrong. But.... according to the right... it's all about the Free Market. They can charge whatever they want as long as people pay it. Funny how when the manufacturing jobs left the country that the price of education soared though...

Which brings me to the word... CAPITALISM. What does it mean to CAPITALIZE? Oh yeah... take ADVANTAGE of another's misfortune or mistake.

 

[LordBrownTrout]

Why doesn't anyone ever question the exorbitant prices that colleges and universities charge. The rates increase every year.........yet, they always get a pass and nobody....except the students, complain. Why?

For OP's number 1. I don't see how anyone could disagree with that. Each business makes different decisions.

As for the scenario, I wouldn't move my company to a state where taxes are substantially higher. I would rather pay lower taxes, innovate my service, and hire more employees.

I'd love to... It's fucked up and wrong. But.... according to the right... it's all about the Free Market. They can charge whatever they want as long as people pay it. Funny how when the manufacturing jobs left the country that the price of education soared though...

Which brings me to the word... CAPITALISM. What does it mean to CAPITALIZE? Oh yeah... take ADVANTAGE of another's misfortune or mistake.

It doesn't seem right for a kid to come out of a state university owing 100 plus thousand dollars now. I believe we should look at the people who are loaning these kids the money. They're actually encouraging this type stuff.

I'm all for capitalism. I don't necessarily see it through the prism of taking advantage of someone else. I see it as a challenge.

 

[Dragon]

The real point about the competitive fallacy is that sometimes a condition which benefits "my business" is actually HARMFUL for the economy as a whole. Something that is good for ME, because it gives ME a competitive advantage over YOU, can be very bad for US.

We get arguments, though, that low taxes and lax regulations and low wages are good for the economy and something we should pursue, on the grounds that when a state pursues them it will induce businesses to relocate there. This benefits, say, the economy of Georgia over that of California. But Georgia doesn't receive this benefit because its taxes are low and its regulations lax -- it receives it only because its taxes are lowER and its regulations laxER than its competition. There is no reason to believe on this basis that we would be better off if ALL states were to adopt similar policies. If California were to lower its taxes and relax its regulations to equal those of Georgia, then Georgia would have no more competitive advantage, many of the businesses would move back to California -- and the only thing that would have changed is a change for the worse: lower state revenue and more damage from whatever the regulations were supposed to prevent.

The thing to keep in mind is that there's a difference between a policy that gives you something good in and of itself, and one that only does good by helping you win a competition.

 

[Steelplate]

Why doesn't anyone ever question the exorbitant prices that colleges and universities charge. The rates increase every year.........yet, they always get a pass and nobody....except the students, complain. Why?

For OP's number 1. I don't see how anyone could disagree with that. Each business makes different decisions.

As for the scenario, I wouldn't move my company to a state where taxes are substantially higher. I would rather pay lower taxes, innovate my service, and hire more employees.

I'd love to... It's fucked up and wrong. But.... according to the right... it's all about the Free Market. They can charge whatever they want as long as people pay it. Funny how when the manufacturing jobs left the country that the price of education soared though...

Which brings me to the word... CAPITALISM. What does it mean to CAPITALIZE? Oh yeah... take ADVANTAGE of another's misfortune or mistake.

It doesn't seem right for a kid to come out of a state university owing 100 plus thousand dollars now. I believe we should look at the people who are loaning these kids the money. They're actually encouraging this type stuff.

I'm all for capitalism. I don't necessarily see it through the prism of taking advantage of someone else. I see it as a challenge.

No... it doesn't seem right. My son graduated from Penn State in the spring of '11. Polly(my wife) and I paid for most of that education. We only required him to get the Stafford loan so that he would have skin in the game. He still ended up $26K in debt. Thank God Polly and I were financially able to do what we did. Our Daughter is starting at PSU Harrisburg Campus in January. Not sure how we're going to swing it, but we'll figure it out.

 

[asterism]

You do realize that not all people have the ability to attain those types of degrees, right? You must also realize that there are some people out there that do not have the intellectual ability to even go to College. Those people make up a large part of our population. I am of the opinion that those types of people are not "throwaways" of our society. They should be treated with as much respect as any other citizen. They should also have a path to raise a family and have a reasonably comfortable life.

Respect, yes. But at some point it becomes a drain on the intellectual capability of our country when they are catered too.

Funny how it wasn't until the escalating consequences of "trickle down" economics reared it's ugly head. Those people have been hit the hardest and continue on a downward spiral and mostly all I see from the right is them blaming THEM for their own situations.

That's quite a revisionist view of history. If things were so great before, why the need for the Great Society and the ever expanding welfare state?

 

[asterism]

The real point about the competitive fallacy is that sometimes a condition which benefits "my business" is actually HARMFUL for the economy as a whole. Something that is good for ME, because it gives ME a competitive advantage over YOU, can be very bad for US.

We get arguments, though, that low taxes and lax regulations and low wages are good for the economy and something we should pursue, on the grounds that when a state pursues them it will induce businesses to relocate there. This benefits, say, the economy of Georgia over that of California. But Georgia doesn't receive this benefit because its taxes are low and its regulations lax -- it receives it only because its taxes are lowER and its regulations laxER than its competition. There is no reason to believe on this basis that we would be better off if ALL states were to adopt similar policies. If California were to lower its taxes and relax its regulations to equal those of Georgia, then Georgia would have no more competitive advantage, many of the businesses would move back to California -- and the only thing that would have changed is a change for the worse: lower state revenue and more damage from whatever the regulations were supposed to prevent.

The thing to keep in mind is that there's a difference between a policy that gives you something good in and of itself, and one that only does good by helping you win a competition.

That assumes a static view of the economy and the economy isn't static. Lower taxes overall would be good for business. Governments at all levels are currently too bloated and inefficient. You're also ignoring the benefit of that competition, which is innovation. Without competition there is no incentive to change. The California vs. Georgia situation is a means to see which level of government intrusion is best.

 

[asterism]

Why doesn't anyone ever question the exorbitant prices that colleges and universities charge. The rates increase every year.........yet, they always get a pass and nobody....except the students, complain. Why?

For OP's number 1. I don't see how anyone could disagree with that. Each business makes different decisions.

As for the scenario, I wouldn't move my company to a state where taxes are substantially higher. I would rather pay lower taxes, innovate my service, and hire more employees.

I'd love to... It's fucked up and wrong. But.... according to the right... it's all about the Free Market. They can charge whatever they want as long as people pay it. Funny how when the manufacturing jobs left the country that the price of education soared though...

Which brings me to the word... CAPITALISM. What does it mean to CAPITALIZE? Oh yeah... take ADVANTAGE of another's misfortune or mistake.

It wasn't the manufacturing decline, it was the federal subsidies that caused the prices to skyrocket.

 

[asterism]

I'd love to... It's fucked up and wrong. But.... according to the right... it's all about the Free Market. They can charge whatever they want as long as people pay it. Funny how when the manufacturing jobs left the country that the price of education soared though...

Which brings me to the word... CAPITALISM. What does it mean to CAPITALIZE? Oh yeah... take ADVANTAGE of another's misfortune or mistake.

It doesn't seem right for a kid to come out of a state university owing 100 plus thousand dollars now. I believe we should look at the people who are loaning these kids the money. They're actually encouraging this type stuff.

I'm all for capitalism. I don't necessarily see it through the prism of taking advantage of someone else. I see it as a challenge.

No... it doesn't seem right. My son graduated from Penn State in the spring of '11. Polly(my wife) and I paid for most of that education. We only required him to get the Stafford loan so that he would have skin in the game. He still ended up $26K in debt. Thank God Polly and I were financially able to do what we did. Our Daughter is starting at PSU Harrisburg Campus in January. Not sure how we're going to swing it, but we'll figure it out.

Thank you for demonstrating how broadening the tax structure would work well. It gives everyone "skin in the game." Otherwise we have a plurality of the voters favoring expensive programs we can't afford but they don't care because they won't have to pay for it.

 

[Steelplate]

Respect, yes. But at some point it becomes a drain on the intellectual capability of our country when they are catered too.

Funny how it wasn't until the escalating consequences of "trickle down" economics reared it's ugly head. Those people have been hit the hardest and continue on a downward spiral and mostly all I see from the right is them blaming THEM for their own situations.

That's quite a revisionist view of history. If things were so great before, why the need for the Great Society and the ever expanding welfare state?

Ummm... because they weren't so great? The Robber-baron days of the early 1900's gave us the great depression... the latter day version was 2008. Congratulations... the economic policies you support gave us a second need for the "ever expanding welfare state". Btw... why don't you do a little research and see just how many of our citizens are totally on the government dole? Now... I am not talking about the working poor who may get food stamps and/or Medical Assistance... but the full fledged welfare recipients who you hate so much. I think you'll find the numbers aren't NEARLY as dramatic as you may have assumed.

 

[Steelplate]

It doesn't seem right for a kid to come out of a state university owing 100 plus thousand dollars now. I believe we should look at the people who are loaning these kids the money. They're actually encouraging this type stuff.

I'm all for capitalism. I don't necessarily see it through the prism of taking advantage of someone else. I see it as a challenge.

No... it doesn't seem right. My son graduated from Penn State in the spring of '11. Polly(my wife) and I paid for most of that education. We only required him to get the Stafford loan so that he would have skin in the game. He still ended up $26K in debt. Thank God Polly and I were financially able to do what we did. Our Daughter is starting at PSU Harrisburg Campus in January. Not sure how we're going to swing it, but we'll figure it out.

Thank you for demonstrating how broadening the tax structure would work well. It gives everyone "skin in the game." Otherwise we have a plurality of the voters favoring expensive programs we can't afford but they don't care because they won't have to pay for it.

Thank you for thinking that's an accurate analogy. Once again.. do some unbiased research. I'm not talking about the crazies from Heritage.org, or Freedomworks... I mean actually go to the Health and Human Services website and do some actual work. and no... I won't do it for you... you apparently need to have some skin in the game.

 

[Dragon]

That assumes a static view of the economy and the economy isn't static.

I'm not assuming that; I'm assuming to the contrary. But I don't even see why the economy's dynamism even bears on the question.

Lower taxes overall would be good for business. Governments at all levels are currently too bloated and inefficient. You're also ignoring the benefit of that competition, which is innovation. Without competition there is no incentive to change. The California vs. Georgia situation is a means to see which level of government intrusion is best.

No, it's not, because business will always go to whichever situation benefits its own competitive position best. So that's really all it will tell us. There is absolutely no benefit to a competition for capital among states or nations if it results in a race to the bottom, which normally it does.

That government is "too bloated and inefficient" is your own subjective judgment. I don't see any objective rationale behind making that judgment. There are a great many government services, starting with education, and going on to the national infrastructure, that are badly underfunded. Really, the only government functions that are overfunded are the military and corporate subsidies, and in both cases only because they are funded for purposes we should not be pursuing. (If we really should be policing the world, the military would be just about right.)

All of the evidence presented for the assertions you're making -- low taxes help the economy, etc. -- is derived from the competitive fallacy. It's not good evidence for that reason.

 

[asterism]

Funny how it wasn't until the escalating consequences of "trickle down" economics reared it's ugly head. Those people have been hit the hardest and continue on a downward spiral and mostly all I see from the right is them blaming THEM for their own situations.

That's quite a revisionist view of history. If things were so great before, why the need for the Great Society and the ever expanding welfare state?

Ummm... because they weren't so great? The Robber-baron days of the early 1900's gave us the great depression... the latter day version was 2008. Congratulations... the economic policies you support gave us a second need for the "ever expanding welfare state". Btw... why don't you do a little research and see just how many of our citizens are totally on the government dole? Now... I am not talking about the working poor who may get food stamps and/or Medical Assistance... but the full fledged welfare recipients who you hate so much. I think you'll find the numbers aren't NEARLY as dramatic as you may have assumed.

So what policies created the need for the Great Society programs?

 

[asterism]

No... it doesn't seem right. My son graduated from Penn State in the spring of '11. Polly(my wife) and I paid for most of that education. We only required him to get the Stafford loan so that he would have skin in the game. He still ended up $26K in debt. Thank God Polly and I were financially able to do what we did. Our Daughter is starting at PSU Harrisburg Campus in January. Not sure how we're going to swing it, but we'll figure it out.

Thank you for demonstrating how broadening the tax structure would work well. It gives everyone "skin in the game." Otherwise we have a plurality of the voters favoring expensive programs we can't afford but they don't care because they won't have to pay for it.

Thank you for thinking that's an accurate analogy. Once again.. do some unbiased research. I'm not talking about the crazies from Heritage.org, or Freedomworks... I mean actually go to the Health and Human Services website and do some actual work. and no... I won't do it for you... you apparently need to have some skin in the game.

First you ask me to do some unbiased research and then you tell me to go to the government bureaucrats. Which is it?

 

[Steelplate]

Oh... Ok.... I guess you don't know how to read raw data. You'd rather have your statistics spoon fed to you by some right wing Propaganda site... so you don't have to use your "Critical Thinking" skills... they can just do it for you.

 

[asterism]

That assumes a static view of the economy and the economy isn't static.

I'm not assuming that; I'm assuming to the contrary. But I don't even see why the economy's dynamism even bears on the question.

You stated that cuts in business taxes would deprive the states of revenue and that's not accurate. Cuts in the rates would increase overall revenue if done correctly.

Lower taxes overall would be good for business. Governments at all levels are currently too bloated and inefficient. You're also ignoring the benefit of that competition, which is innovation. Without competition there is no incentive to change. The California vs. Georgia situation is a means to see which level of government intrusion is best.

No, it's not, because business will always go to whichever situation benefits its own competitive position best. So that's really all it will tell us. There is absolutely no benefit to a competition for capital among states or nations if it results in a race to the bottom, which normally it does.

Not always. Some businesses simply can't relocate and other businesses will and do step in to fill demand. Wherever there are millions of people living there are businesses serving those consumers. Some industries depend on a large trained workforce and those are only found where millions of people live. The key is balancing the role of government. Southern states are taking advantage of the situation in northern states that have expanded government and taxes too much.

That government is "too bloated and inefficient" is your own subjective judgment.

True.

I don't see any objective rationale behind making that judgment. There are a great many government services, starting with education, and going on to the national infrastructure, that are badly underfunded.

Whereas I don't think they are underfunded, they are poorly managed. Education is a prime example. Washington DC has one of the highest per-student funding rates and very low quality schools. Utah has one of the lowest per-student rates but above average schools.

Really, the only government functions that are overfunded are the military and corporate subsidies, and in both cases only because they are funded for purposes we should not be pursuing. (If we really should be policing the world, the military would be just about right.)

That is an opinion made from a position of political bias and no actual perspective on the rampant waste in all levels of government.

All of the evidence presented for the assertions you're making -- low taxes help the economy, etc. -- is derived from the competitive fallacy. It's not good evidence for that reason.

No. Low taxes help the economy because there's less being sucked out by the government and wasted. Nobody benefits in the long term from a Solyndra or GM debacle, nobody benefits from all the redundancies in the various levels of state, local, and federal government. There is no reason for a city health department to have a compliance clerk that does nothing but aggregate state health regulations to give to a state health clerk to then get passed down to a city inspector. There is no reason (in my county) for the county health department clerks reviewing the city health clerk records, they have no authority to do anything because the city reports directly to the state now. Those roles are redundant and remnants of a prior time. I'm not advocating no government, just less of it that is managed more efficiently.

 

[asterism]

Oh... Ok.... I guess you don't know how to read raw data. You'd rather have your statistics spoon fed to you by some right wing Propaganda site... so you don't have to use your "Critical Thinking" skills... they can just do it for you.

I know how to read raw data just fine. However, I don't blindly accept data from policy wonks with a vested interest in demonstrating the need for their bureaucracy. Regardless, raw data on the number of people 100% dependent on government aid is not germane to my point. You are the one that tried to interject it.

Your assertion about about where I get my statistics is laughable. But when you only have a bag of hammers, everything starts to look like a nail.