It doesn't make sense to use flaws in a heavily regulated market, as an example of the failure of the free market. You're mixing apples and oranges here.
I agree that America is not a pure free market. My point is to illustrate that we were moving closer to a free market (increased deregulation) and to show some of the problems with short-term incentives.
Regulations are piled on top of each other to correct distortions (in the market) caused by a prior regulations.
For example, if the government puts price caps on gasoline, this will cause shortages. As a result, they will ration the gas (apply quotas) to prevent shortages.
Now, if they remove the quota (deregulate), the resulting shortages will not be the result of the "free market", but the result of prior intervention (i.e. price fixing).
The point I'm illustrating here, is that removing one regulation, does not return the market to it's natural state. That logic is completely flawed. If there is a problem in the market, you will find, if you look for it, some form of prior government intervention causing the distortion (removing the market's natural checks and balances).
I don't understand this video at all. If you think the American economy is a "free market", then I'm not sure you know what the term "free market" means.
We don't even have a free market in currency. The economy is controlled by a government granted monopoly (i.e. the Fed). So it doesn't make any sense at all to use the American economy as a standard by which to measure free market economic theory (or which there are several schools of thought).
It doesn't make sense to use flaws in a heavily regulated market, as an example of the failure of the free market. You're mixing apples and oranges here.
D4Shawn 2 years ago
I agree that America is not a pure free market. My point is to illustrate that we were moving closer to a free market (increased deregulation) and to show some of the problems with short-term incentives.
kanjohvideo 2 years ago
Regulations are piled on top of each other to correct distortions (in the market) caused by a prior regulations.
For example, if the government puts price caps on gasoline, this will cause shortages. As a result, they will ration the gas (apply quotas) to prevent shortages.
Now, if they remove the quota (deregulate), the resulting shortages will not be the result of the "free market", but the result of prior intervention (i.e. price fixing).
D4Shawn 2 years ago
The point I'm illustrating here, is that removing one regulation, does not return the market to it's natural state. That logic is completely flawed. If there is a problem in the market, you will find, if you look for it, some form of prior government intervention causing the distortion (removing the market's natural checks and balances).
D4Shawn 2 years ago
I don't understand this video at all. If you think the American economy is a "free market", then I'm not sure you know what the term "free market" means.
We don't even have a free market in currency. The economy is controlled by a government granted monopoly (i.e. the Fed). So it doesn't make any sense at all to use the American economy as a standard by which to measure free market economic theory (or which there are several schools of thought).
D4Shawn 2 years ago
*OF which there are several schools of thought
D4Shawn 2 years ago
What about the vesting period of four years? Isn't that long enough?
manjiris 2 years ago