TCS Daily

Trading Exaggerations

By Philip Levy - October 11, 2007 12:00 AM

As the Bush Administration and Congress gird for battle this fall over four newly signed free trade agreements, one could be forgiven for thinking that these FTAs must be economically momentous to merit the looming conflict. But one would be wrong. While the global political stakes are huge, the domestic economic stakes are penny ante.

The agreements with Panama, Peru, and especially Colombia and South Korea are immensely important for U.S. foreign policy. They can also play an important role in spurring economic development in these U.S. allies. But the debate in the United States has largely focused on how the U.S. economy and U.S. workers will fare. By that measure, these agreements are trivial.

How can it be that FTAs' impact is so badly misconstrued? There are multiple layers of confusion. To begin with, there is a general tendency to see trade as affecting workers more than research really supports. Technological change and domestic competition have both had a large impact on workers in recent decades, but they are much harder to protest than trade agreements.

Whatever one thinks about trade's effects on workers in general, there are two reasons to think that the impact of the FTAs under discussion would be much more muted. First, these FTA partners are small relative to the size of the United States. South Korea is the most significant of the bunch, with an economy just under 10 percent the size of the United States, but it's a developed economy with an average income of roughly $25,000 per year. Colombia's economy is less than 3 percent of the size of the U.S. economy. Peru and Panama are smaller still.

The second key point is that the United States is already open to trade with these countries. Colombia, for example, already gets special access to the U.S. market through existing preference programs. In 2006, 92 percent of U.S. imports from Colombia entered duty-free - that's before any agreement is adopted! The new liberalization that occurs under such agreements is thus lopsided in favor of U.S. exporters. Given the countries' small size, though, even these benefits are small.

One needn't be steeped in the mysteries of international economics to discern all this. Congress requires that before the Administration submits an FTA, it must first get an assessment of the agreement from the independent non-partisan U.S. International Trade Commission (USITC). Those publicly-available reports make for rather repetitive reading. The USITC found that the Peru agreement might increase U.S. output by more than $2.1 billion. If that sounds impressive, remember that U.S. annual output exceeds $13 trillion. So we're talking about an increase of less than 0.02 percent. The positive effects of the Colombia FTA were estimated to be a bit larger, but still less than 0.03 percent. In the case of Panama, the USITC found that "U.S. imports would not likely grow significantly since most Panamanian products already have duty-free access to the U.S. marketas a result of trade liberalization under the TPA because most Panamanian products already enter the U.S. market duty free."

In other words, the likely economic effects of these agreements are positive, but so small that they would be wiped out as rounding errors in ordinary newspaper reports on U.S. economic progress.

One might ask why we should bother with such agreements, if we can barely discern their effects on the U.S. economy. The answer is that FTAs can have an enormous political and economic impact on our trading partners. In the case of Peru, for example, President Alan GarcĂ­a barely beat a staunch opponent of the United States in the last election. He did so promising economic reform and trade. An FTA between the United States and Peru would cement those reforms in place and reward Peru's allegiance.

Colombia is even more significant politically. As Hugo Chavez in neighboring Venezuela has attempted to rally Latin America against the United States, Colombia has remained steadfast in its support. To repay them with the public repudiation of a negotiated FTA would leave the United States' reputation in the region in tatters.

As bad as this would be, at least the United States' commitment to the Western Hemisphere is clear. If the United States were to forsake South Korea, that would likely be read as the U.S. abandonment of Asia. China has already been maneuvering to arrange regional Asian groupings that exclude the United States. To spurn the Koreans would almost certainly further U.S. exclusion in the region.

True enough, these are political arguments for economic agreements. But if the economic effects of the FTAs in the United States are negligible, why not focus on the political impact? If these agreements have enormous foreign policy benefits coupled with very small economic benefits (not costs!) it is hard to fathom how anyone looking out for the United States' best interests could oppose them.



Prying sovereignty open
Trade agreements all sound well and good. Who could possibly be against something like "free trade"?

The problem is, these agreements are used as a pry bar to compromise national sovereignty on issues that diverge greatly from simple trade. Take Costa Rica for example.

Part of the "quid" demanded, so that the "quo" of access to international markets might be granted, is that Costa Rica be required to dismantle its telecommunications, health care and insurance sectors, should any foreign investors be interested in muscling in on them.

These have been run successfully on a not-for-profit basis since the 1940s. Further, no one alleges that these sectors are in any way deficient. They offer the Costa Rican public solid, dependable services AT COST.

That is all likely to change, now that that country has reluctantly signed onto the deal.

So why did they do it? Well, the United States told them we have two kinds of trading rules. Which do you want?

To link access to markets with this kind of intrusion into domestic affairs is extortion of the worst variety. But I suppose that is the way the world is to be run now, under the American Regency.

Costa Rica?
You mentioned that they had to dismantle the its state monopoly on telecommunications. Last time I visited CR, when they still had the stalinist phone system, my friend, a math prof at the university STILL could not get a phone in his apartment after waiting for about a year, and anticipated another one. It was kind of what if was like in the old east block, or even some western european countries till that past 10 or 15 years. Telecom is always better in coutries where they don't have stalinists systems.

What a bigot!
You don't think Costa Ricans can compete in their own markets?

Monopolies do nothing to advance an idustry.

When the government took away ATT's monopoly power, the US telecommuncations market expanded dramatically providing better severice at lower costs and better quality and convenience.

AT higher COST
"Costa Rica has the highest fixed telephony rate in Latin America (30.7 percent), but lags behinds all its Central American neighbors when it comes to wireless penetration, according to a Latin Business Chronicle analysis of ITU data for 2006. Lifting ICE's monopoly is expected to boost Costa Rica's wireless market by 18 percent a year until 2011, according to a report from consultancy Signals Telecoms Consulting.

Meanwhile, Costa Rica's insurance market is also expected to grow considerably once the monopoly of state insurer INS is lifted. Costa Rica last year posted the highest growth in insurance premiums (12.2 percent) in Central America, but the lack of competition has resulted in the lowest insurance penetration in the region (1.8 percent), according to credit ratings agency Fitch."

Roy, why do you want to protect monopolies? I forgot, your a socialist, sorry.

Roy, maybe you should move to VT.
"If Sen. Bernie Sanders (I., Vt.) really thinks trade causes poverty, he should encourage the Vermont legislature to erect high tariff barriers against goods from the other 49 states ("Free Trade Treaties Mean Impoverishment," Letters to the Editor, Oct. 4). Or perhaps he can organize a "boycott Vermont" campaign and encourage companies to refuse to sell goods and services to Vermonters.

Just think, if the citizens of Vermont no longer face competition from outside the state, they could open up auto plants and steel mills, reopen shuttered textile factories, and cultivate every acre of open space and forest land with crops. Using Sen. Sanders's flawed logic -- he also claims free trade has been a bane to Mexico, but a boon to China -- this would be a windfall for the state. But the more probable outcome, at least if 99% of economists who have ever lived are right, is that the standard of living of Vermonters would plummet. But at least they would then be closer to the vaunted goal of equality that Sen. Sanders seems to cherish more than freedom, consumer choice, and wealth creation."

"There are many flaws in Sen. Sanders's arguments, but one of them really stands out: He thinks free trade hurts both sides. Let's take his argument that Americans would lose jobs under Cafta to countries like Costa Rica. If we pretend that he's right, doesn't that have to mean that Costa Ricans are gaining jobs? So how can he say with a straight face that then somehow even though they're gaining all these jobs, they're still worse off?

I challenge Sen. Sanders to find any situation in history where free trade hurt everyone involved."

reality vs. roy
1) If it's such a bad deal for Costa Rica, why are they so eager to sign?

2) Given your track record, I very much doubt the details of the pact come anywhere close to your over heated rhetoric.

But not at first,
and that is the problem with contemporary Americans; they want every major issue resolved within one work week.

At first, telephone rates went through the roof with the breakup of AT&T, and the new telephone companies notoriously engaged in "slamming" for a while. Ah yes, I remember it well. My parents went ballistic and bitched and moaned about the breakup, and marveled that the government couldn't leave a good thing alone.

I actually worked for AT&T for a few months (as a hired gun through a PR agency) and my job was to try to preserve as much of their business as possible, or take it back from "slammers". I worked businesses only, no residential clients. By the time I got there, AT&T had indeed come up with superior rates and plans for most cases.

That was then, this is now. Now my parents, 20 years later, living in the same house in the same place (NJ), have signed on with and have greatly enjoyed a flat-rate plan that lets them have unlimited local-toll and long-distance calling (including to Canada, though they have no need of using that aspect). In terms of real dollars, they are now saving money, not to mention having a considerably more convenient service than what the old AT&T could offer.

But it's not as if they are looking back and saying, "wish we knew them what we know now".

The typical American cannot see the problem with monopolies because, contrary to "conventional wisdom", monopolies do NOT price-gouge. Indeed, monopolies offer pretty damn good prices. The problem is just what Marjon iterated: "monopolies do nothing to advance an industry".

The typical American doesn't give a dead rat's ass about advancing an industry. He only cares about his wallet in the Here and Now. If his ability to spend profligately, without reflectin, gets impinged on, then he's pissed.

But spending money to make money? Spending money in the short run to advance an industry in the long run? That's not your everyday Starbucks conversation.

When did ATT offer good prices?
You had to LEASE a massive black or beige phone.

Long distance was expensive.

Why can't monopolies price gouge? The government does. A monopoly is just another branch of the government.

I did not say they "can't",
I said, they don't.

To put it simply for the time being, they don't because it would disrupt their business--IE, they'd be caught and competitors would emerge and pounce.

Look up the Standard Oil monopoly. Same thing happened as with AT&T. Standard Oil offered excellent prices. The true heavy cost was the lack technological advancement--not the actual price of oil.

AT&T's prices were better than those that were offered by the new-start telephone companies at first. I observed people's reactions first-hand. They might not be any good at macroeconomics, but average, coupon-clipping people sure do know when their normal telephone rates, including long distance charges, have suddently gone up by a significant amount.

Very much off the point
Trade is, of course, a good thing. I think if you'll revisit my comment you'll find I was not knocking the notion of trade.

What I was knocking was the devising of trade agreements so as to include non-trade items, such as structural adjustments to a sovereign nation's economy. These items have nothing to do with trade, but are put in the agreements just to tell small nations that unless they change their form of government to suit the mighty United States they will be frozen out of the international arena.

That's what I was saying. If you didn't catch my drift the first time, here it is more explicitly.

America is currently engaged in a one-time chess game to control the flow of all goods around the world, by means of these FTAs. And, as Thom Friedman points out, the invisible hand (of the markets) does not work for the US without the iron hand in the velvet glove being employed first. If these little penny ante nations decide not to run their internal affairs the way we'd like them to, we'll just shut off their markets and watch them scream.

It stinks.

Playing Monopoly
(By the way, our household never owned any massive black or beige telephones. Our household owned two perfectly normal-sized--even by today's standards--telephones, one of which was white and the other of which was red, and my parents had bought them both from the telecommunications store.)

"Predatory pricing is one of the oldest big business conspiracy theories. It was popularized in the late 19th century by journalists such as Ida Tarbell, who in History of the Standard Oil Company excoriated John D. Rockefeller because Standard Oil's low prices had driven her brother's employer, the Pure Oil Company, from the petroleum-refining business...During the 1970s AT&T estimated that it spent over $100 million a year defending itself against claims of predatory pricing. It has been estimated that the average cost to a major corporation of litigating a predation case is $30 million [in 1992 dollars]."

Standard Oil
1) Standard Oil was never a monopoly.
2) The reason Standard Oil came to have such a large market share was precisely because they were the technology leader. They developed processes which allowed them to produce oil products at a lower price than their competitors could manage.
3) They started losing market share when their competitors started catching up. Which was long before the trust busters even got started.

When did ATT sell phones?
Before the break-up they only leased phones.

Free trade is, well, free.
They can keep their monopolies and we can keep ours and leave it at that.

The only reason Chavez can afford socialism is beacuse the world buys his oil.

No one needs Cuban cigars and since Cuba has no oil, that's the result of no free trade.

When the world stops buying oil from Chavez, Venezuala will be like Cuba or DPRK.

Still waiting for evidence that free trade reduces libety and prosperty. Don't you want liberty and prosperity for all people or do you believe some deserve tyranny and poverty?

You opposed sanctions and boycotts of South Africa?
"If these little penny ante nations decide not to run their internal affairs the way we'd like them to, we'll just shut off their markets and watch them scream.

It stinks."

I guess so.

Biggest trading partners by size: NAFTA, EU, China, Japan, Korea. TCS says Korea's small?
Lets start by noting that there isn't going to be another NAFTA. Canada is the US' #1 trading partner, Mexico is #3. China is #2 and isn't in a trading block with other serious partners. Even an APEC FTA wouldn't add as much as the existing APEC member FTAs already cover.

Next, lets note that the US can't have FTAs with individual EU countries, any more than California can have an FTA with countries that Schwarzenegger likes. Trade is federal. would be with the EU. Although Merkel talked about it, there are obvious and insurmountable political difficulties with having a trade deal that essentially locks out the third world. China is similarly unlikely to pass. Getting Congress to maintain normal trading relations is hard enough, and the Chinese aren't terribly keen, either. Heck, there isn't even a Bilateral Investment Treaty or a Trade and Investment Framework Agreement.

The largest that would be remotely possible, then, would be Japan. The next largest would be South Korea. If South Korea's FTA passed, it'd be the biggest since the NAFTA. It'd be about three times the size of the CAFTA (roughly 80 billion bucks compared to roughly 25).

If Mr. Levy doesn't think that trading with other nations is important to the domestic economy, then he should say so clearly. Suggesting that nations considerably smaller than the US aren't significant is saying that, because all nations are considerably smaller than the US, but Mr. Levy relies on reader's unfamiliarity with the numbers to make it appear as if Korea isn't a huge deal.

Levy is misleading about the current state of expiring trade agreements with Colombia and Peru, hidi
Levy notes that much of Colombia's trade is already free. He then suggests that this means that the FTAs are unimportant. As he surely knows, most of Colombia's (and Peru's) trade is currently free because of the Andean Trade Preference and Drug Enforcement Act, a sort of unilateral FTA that is not WTO compliant and cannot be maintained. The FTA is, to a large extent a way of making this relationship permanent.

If you walked away from this article thinking that South Korea was unimportant economically and the FTAs with Latin America weren't significant to intra-american trade, the Korean falsehood would be the more important one. Still, the American misrepresentations are the ones that verge closer on dishonesty.

I don't know what Mr. Levy's qualifications on trade law are, so it may be that he's simply fallen for someone else's line. Certainly, much of the rest of the article is insightful and interesting and it appears that Mr. Levy's heart is in the right place. Still, if this were in the Economist or the NYT, it'd be another reminder about why you should not trust the MSM.

Not entirely true
they sold phones as well, but their lease was the best deal out there. That is why you didn't hear too much about purchases. My grandpa bought a phone from AT&T in the 60s because, as he said, "The damn things never break so why pay for it every month." He was right, he had that phone until he died. My dad liked the lease deal because, if anything went wrong, he just had to call the office and he had a new phone, and a full line check, the next day or, at worst, in two or three days.

How much did it cost?
Was it cordless?

Did it have a built in answering machine?

How about caller ID?

How can there be free trade...
...when there are strings attached?

"The only reason Chavez can afford socialism is beacuse the world buys his oil."

All you're describing is an arm's length transaction. Party A wants Party B's product. Once he buys it, Party B should be free (to use your word) to spend his money any way he damn well pleases.

Cuba is not so successful because (a) they don't have any oil, gold, diamonds or anything else anyone wants to buy, and (b) Castro is a terrible business man.

"Still waiting for evidence that free trade reduces libety and prosperty..."

For the third time, you moronic and repetitive little twit, I am all in favor of free trade. Always have been. My point is that trade with strings is not free trade.

These demands for structural adjustments, etc are just strong arm tactics designed to enslave the weaker party to the deal. When one party is over a barrel, there is no longer a willing seller and a willing buyer. It's not free trade.

Sanctions rarely work as intended. And I'm not so sure sanctions against South Africa were what made the apartheid regime change its ways. It was brittle, then one day it broke. Just like the Soviet Union.

But those sanctions, at least, were intended to compel moral behavior. Free trade agreements are intended just to initiate political hegemony. They have nothing to do per se with either trade or with morality.

Take it or leave it.
Explain how eliminating a monopoly is not free trade.

political hegemony
How does free trade initiate political hegemony?

With such language your definition of free trade is different than mine.

the Dietmar Free Trade Act
Instead of fussing about with littel bilateral free trade packs, I recomment that the US just decare a world wide free trade zone with everybody, including enemies like Cuba and Iran. But some will object and ask, 'what if everybody went and did it'? Then I would answer that I did wish that everyone did it, then we would have ACTUAL free trade, with the predictable result that the world would become richer.

It's more like ra pe
"Explain how eliminating a monopoly is not free trade."

I'll be happy to. Read the following, which describes the stranglehold being put on the South Korean film industry. They're forcing open the doors and requiring people to trade against their will.

What's wrong with free trade?
"How does free trade initiate political hegemony?"

You obviously haven't looked at the sunject in any depth. Just because it's called, euphemistically, "free trade" doesn't mean that's what it is.

To have a condition of actual free trade, all you have to do is to sign an agreement saying you will put no special taxes or tariffs on imported goods from the other country, and you will not unfairly subsidise exports from your country to theirs.

Free trade agrrements demanded by the US do neither. They are a predatory tool employed to force market penetration, allowing the dumping of cheap, subsidised US goods on unprepared markets. FTAs also include structural adjustment requirements whose purpose is to undo social programs-- Costa Rica's public health system for instance but also many agreements dismantling public works such as water delivery, sanitation, electricity and even social services.

The threat, should other countries fail to comply with our every demand, is that they will be isolated and strangled, with all our trading partners too afraid to trade with them. It's a bully tactic.

You need to do more reading on the subject.

How does increasing competition hurt the market?

Especially in such a consumer driven market as television and movies?

"...television dramas in South Korea will need to improve in order to survive in the "more challenging media environment" that the FTA will bring forth."

Why is this bad?

"...Korea's film industry is strong enough to compete with Hollywood blockbusters. He also said that Koreans have different tastes than Americans have, which American films do not necessarily cater to."

Or this?

"The screen quota reduction that was incorporated into the FTA -- which changed the minimum percentage of domestic films that had to be shown at Korean theaters from 40 to 20 -- first appeared in January 2006."

Why force anyone to show, or watch something they don't want?

Have you looked at satellite TV in the USA? Channels and programming are avialable from all over the world. With internet, films from anywhere can be watched from anywhere.

I don't see any "strangle hold".

Free trade combats socialism.
Which is why you oppose it.

No arguement from me.

How old are you??

I have no clue what grandpa paid nearly 40 years ago. The lease deal was a couple of dollars a month in the early 70s. All phones supplied by the phone company were rotary dial phones. You could buy phones (or I suppose lease for a higher rate) in those days with touch-tone and other features, but I never saw one in a home. The AT&T break-up went through in the 80s. I never saw a built-in answering machine until about 1985 and caller ID came in vogue in the late 80s/early 90s. (I'm sure it was available earlier but, again, I never heard of it)

So, indeed
"Why force anyone to show, or watch something they don't want?

"Have you looked at satellite TV in the USA? Channels and programming are avialable from all over the world. With internet, films from anywhere can be watched from anywhere.

"I don't see any "strangle hold"."

In the United States there has been nearly complete penetration of the market by corporate content providers. This in turn has raised generations of passive viewers who are not only content to watch the stuff, but who are unable to see any problem with it. Celebrity dancing, inane games and contests, "reality" programming and the incessant gore shows about depraved serial killers and worse.

The stuff is popular. But we should have a choice, as a minority among us don't care for that sort of thing. Allowed total market penetration by these vendors, the whole world will become obsessed with Britney, etc, and easily manipulated into watching trivia to the exclusion of anything else.

There's a place in life for that. I think every television market on earth should allow access for these extremely popular American forms of entertainment, to cater to the tastes of those who prefer it. But I think space should be reserved also for locally originating, publicly sponsored programming as well as programming for the niche markets. These more intellectual audiences, you will readily understand, are underserved by purely profit-oriented purveyors of entertainment.

In other words "films from anywhere" are not actually being shown. There is an ever narrowing variety of available fare being offered by a smaller and smaller number of vendors to a wider and wider mass market. And the purpose of all this is not to elevate the viewer's perception of his reality, but to offer the investors a greater profit.

We are being profitably dumbed down to our lowest common denominator. And young viewers, unexposed to good television, are unaware of there being any difference.

Compare, for instance, the Mexican film industry and Hollywood. The contrast should make my point apparent.

Fourth repetition
What an utter moron. For the fourth time, actual free trade is good. It is the lifeblood of human commerce. I don't oppose it. You're either not astute enough to follow what I'm saying, or not even trying.

Nor does free, uncompelled trade "combat socialism". It has nothing to do with socialism. What we have been discussing is forced trade, with advantages built in for the stronger party to the deal.

" minority among us don't care for that sort of thing." DON'T WATCH!
If there is no market, it will go away.

Such an elite snob trying to force people to watch programing YOU think is good for them!

How do you force trade?
Unless the government creates a monopoly?

Japan forces its people to buy local rice.

Other counrtries force their people to buy only certain products.

Why can't we buy turbo diesel's in the USA?

Or how about MA? The don't allow competition for auto insurance. The ONLY state in the nation that does not. Is that free trade?

Not at all my point
At several points I do comment that most people have been conditioned to like that sort of thing (network programming), and that's fine by me. I have no problem with it. I know you recall my saying that.

I just see the need for some sort of non-profit oriented intervention when it comes to ALSO providing content that I like. I'm a minority. I need something worth watching too. And the Hidden Hand sees no need to provide it for me.

I believe the South Korean government sees it the same way. So they keep their native film industry alive by giving it a subsidy (much the same way the US government keeps Cuban sugar barons in Florida alive by giving them a subsidy). And the US media conglomerates can't stand that. They'd prefer to be able to eliminate all competition, so everyone would have the usual seventy channels of total crap to watch, without any alternative.

I wouldn't
Is this supposed to be a brilliant refutation of my position? None of those are examples of free trade, according to the definition I've been using..

Markets are free when we can choose from all products available. In the case of South Korean TV, you will note they were not keeping US programs out of the country. What they were doing was limiting them to no more than 60% of total programming.

That gives the consumer there more choice, not less.

"non-profit oriented intervention " "eliminate all competition"
Who is that?

You want to take my tax money to fund your non-profit intervention?

Eliminate all competition so all programs meet your approval?

Don't like it? Don't watch.

It won't be long before ALL programing will be pay per view.

Not if the consumer doesn't WANT to watch 40% Korean programming.
With satellite TV and the internet, people can watch what they want, when they want.

Many musicians are now going on-line and telling the record companies to pound sand.

What I see happening is more diversity with competition, not less.

Maybe you can find something to watch here.

There are two channels from Cube, one from Zimbabwe and one from DPRK.

I'd like to see more competition
You're trying your best to make a case against something I'm not arguing. Competition is fine. I'm not against competition.

In fact in the US what competition there is is due to public funding of PBS. Otherwise we'd have a narrower spectrum of programs.

May public funding-- and public regulation-- continue. We can still get broadcast programs for free-- although the tendency is to go to paid access like cable or dish. If the government abandoned communications to the market, all we'd get would be very expensive, corporately produced mind mush.

And if the government had made internet access free of charge, we wouldn't have to pay a fat monthly fee to our ISP. That, I think, would have been a good use of taxpayer dollars.

That's not greater diversity
Without a rule requiring some exposure for local Korean productions, in time all you'd have would be American programs. With a rule in place, both American and Korean programs would be available.

The issue has to do with mass culture. You can make more money appealing to mass tastes than you can appealing to educated tastes. Therefore profit-oriented networks would end up showing nothing but fluff like Entertainment Tonight and Celebrity Dancing-- both very popular shows, but not what many of us might want. In other words the rest of the world would in time become as brainless and tasteless as Middle America.

My revolutionary notion, which I know you disagree with, is that there are some things in life that are more important than the money that can be made from them. So I go for a certain degree of legislation that resists Total Market Penetration by large moneyed interests.

That's just me. But I get one vote, just like you.

More competition because of PBS? Free internet? Do you want to destroy it?
How do you figure that?

Ever hear of the History Channel, Food Network, Learning Channel, National Geographic Channel, .....

There is more PBS type programming on cable than on PBS.

What does PBS have to offer that I have to pay for?

(I don't have to pay for cable.)

The ONLY reason you can get high speed internet is because of competition. Internet rates have fallen as speed has increased. That would not happen with a government internet.

Even France has finally given in to the WWW.

Elite socialist: "educated tastes"
You really can't understand the free market can you?

There are now entire channels devoted to 'independent' movies that appeal to "educated tastes".

You can purchase "educated tastes" on DVD.

With hundreds of channels, distributions costs drop permitting those few with "educated tastes" and too cheap to pay for it, have more access to "educated tastes".

Maybe you can afford internet TV?

Should be plenty of diversity.

ABC and other networks are putting their programming on line.

And if the government gave me a house, I wouldn't have to pay a big fat mortgage. What a cheap skate. Go to a library and get your internet for free.

After the breakup
What incentive did ATT have to sell phones or add 'features' when they controlled the market?

I bet the price your grandfather paid was more than several new phones today.

Such intellectuals; ready to reach for the gun at the drop of a hat

That's all true, Mark, and I agree with you,
but the point is Standard Oil is widely considered to have been a monopoly and anti-trust actions were brought against it.

Just like the silly anti-trust actions attempted against MicroSoft.

Roy must work for the NAB or some such organization

Roy mistakes "competition" for "what he likes",
which is a classic error when evaluating and analyzing "free" market economics.

Sadly (at least a lot of the time), it is not the place of the Market to address matters of Quality--only of demand.

It is true, nobody ever went broke by underestimating the taste of the American people. There's a helluva lot of junk out there.

Nevertheless, it's a very small price to pay when one considers the alternative, which is some variation on the theme of top-down governmental controls over what can be produced

Just like I would defend to the death, if need be, the rights of people to write useless or absurd things here and elsewhere. Putting up with a lot of useless talk is a small price to pay for having the right to freedom of speech.

It is up to individuals to change their minds about what they like, and the market them follows suit. It does not do this automagically, just like the stock market does not go straight up. But it DOES happen.

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