The government owns the roads, which means it controls who can dig up the roads in order to run cable. Local governments use their road monopoly to stifle ISP competition. Local governments justify this stifling by using your "natural monopoly" theory. In other words, the natural monopoly theory is a self-fulfilling prophecy.
After all, it doesn't make sense to have multiple companies each running cable to your house so you can choose your favourite.
You control your property. You should decide what makes sense and what doesn't. Perhaps if we never had "right-of-way" laws (which usurp individual property rights), people would insist on owning the cable running through their properties. And even if people were content to allow cable companies to own the actual cable, cable companies would still be more inclined to be more competitive in such a scenario, because of the constant threat that individual property owners could choose to run a second line at any time (Oh no, two cables in the ground! The horror! Who would have thought that competition involved duplication?)
There is nothing natural about the way our infrastructure has evolved.
Someone explain to me why high speed trading is a good idea for anyone?
First off, it doesn't hurt anyone to be able to trade quickly. I'm not saying it is necessary, but it doesn't hurt anything. Think of the stock market like an auction. At an auction, does it matter if someone is able to bid quickly? No. Let them make their bid as quickly as they want. You can respond by making an even higher bid.
That being said, the current latency war is indeed unnecessary. It is caused by SEC Rule 612, also known as the Sub-Penny Rule. This rule prevents market makers from competing on price, so they are forced to compete on speed. For more information, see Part 1 and Part 2 of "A High Frequency Trader's Apology".
Okay, suppose these newcomers build some plants before they are driven into bankruptcy by the oligarchs. The plants would still be in existence after the bankruptcy, and could be picked up for a song at an auction by more newcomers. Eventually, the oligarchs will be driven into bankruptcy, or they will have to raise their prices. Why should the newcomers stop coming, when they can pick up capital at firesale prices and they know the practices of the oligarchs are unsustainable? The "scorched earth" metaphor fails, because the companies are not literally at war with each other; there is no literal destruction. Capital doesn't disappear into the night, it simply changes hands.
Even if the price of selling in the market is low, the price of production, especially the capital costs are often not low. And once players are driven out of the market, the capital costs need to be paid all over again for any new entrant. Which means that the monopoly or duopoly parties can temporarily cut prices to make it uneconomical for any new parties to enter the market. And so no new competitors enter the market.
At least, until the monopoly or duopoly raises prices and then it becomes economical again for new competitors to enter. And so, virtual competition regulates the market: The monopolist is forced to keep their prices low, lest they invite new competition.
Now, you might argue that's a bad thing, because a monopoly means there are few choices. But that assumes that more choice is always a good thing, no matter what it costs. The reality is that, every time you have multiple competitors in a market, you have duplication of resources. Thus, the fact that the market discourages competition, until it is actually needed, is a good thing, because it discourages the unnecessary duplication of resources that competition brings (i.e. the market puts up with a certain amount of crap from the monopolist, but eventually consumers get so fed up they actively seek out new competition).
Amen to that. What the submitter is asking is similar to asking, "How can I get this girl to like me?" The answer is, don't bother. You won't change her opinion, and trying to only builds resentment. Just move on to better opportunities.
When/. discusses labor and wage issues in the US (unions, living wage, income inequality), the common sentiment is that executives/owners/investors can afford to give up more of their profits to help ensure a more livable life for their workers.
It doesn't matter if executives/owners/investors can "afford" to give up profits or not. As long as their profits came through voluntary trade, they are morally entitled to those profits.
Also, sometimes owners and investors lose money. Suppose that a business owner paid you a nice pay check for several months, but eventually his business failed due to lack of sales. Do you feel obligated to give him some of your earnings, because you can "afford" to do so? No? Well, then if the business turned out to be successful instead, why should the owner pay you any more than what the market can bare? Talk about double standards...
The fact that neo-nazi groups actively attacked minorities does not prove we need multiple standards of justice. Also, since members of "group A" face harsher sentencing when they target someone from "group B", but members of "group B" do not, it is fair to say that membership in "group A" is one of the defining factors that results in a harsher sentence. My original point stands.
That makes it quite obvious and a matter of basic fairness to have laws that makes life safer for members of group B.
But rights are a zero-sum game. If you wish to give members of group B special rights to make their life safer, then you must take rights away from group A. And this is exactly what "hate crime" legislation has done: Instead of a single standard of justice, we now have different standards of justice, depending on which groups the perpetrator and victim belong to. If I belong to group A, my crime will be judged harsher, simply because I belong to the "wrong" group. I fail to see the fairness in that.
I don't see the difference between B and C. In both cases, the criminal clearly intended to kill the victim. Assuming that both crimes were planned, then the intent was the same, and both crimes qualify as murder in the first degree.
What you seem to be advocating is a system where justice is not blind. After all, if some classes are protected, then by definition, some classes must not be. If my aggressor hates me because of my haircut, as opposed to my skin color, then that is a lesser crime, under the "hate crime" system.
You could argue that some groups are indeed special, but I could never follow you down that road, because I believe everyone should be treated equally under the law. Once I start breaking people into groups, with only certain groups being protected, I will have abandoned that sacred principle.
Limited liability is an implied contract between shareholders and creditors. When the creditors loan money to the shareholders, the creditors do so with the understanding that the shareholders are only willing to risk the company's money. The shareholders also agree that an individual shareholder can't simply take his money out of the company at any time. But that does not imply non-ownership. If I rent my house out to a tenant, I agree that I can't just enter my house whenever I feel like it. Does that mean I no longer own my house? No. Similarly, limited liability is just a type of contract; it has nothing to do with ownership.
The shareholders own the company. Everyone in the company, including directors, are merely agents acting on behalf of the shareholders. Therefore, all of the company's expenses are actually the shareholders' expenses.
So, we not only have double taxation, but triple taxation: The company pays an income tax. Then that money is taxed again when it is distributed to shareholders as dividends. A shareholder may opt to sell his shares instead of collecting future dividends, but the corporate income tax and dividend tax will cause his shares to be worth less. Why? Because all company revenue is taxed twice before any individual shareholder can actually spend it. Thus, any tax on the money made from the sale of stocks (i.e. the capital gains tax) is a triple tax.
Every dollar in circulation has been taxed at least once
Yes, but the dollar should only be taxed once per change in ownership. If the dollar has been taxed twice before the owner has changed, then that is double taxation. You could argue that a company is a type of owner, but a company does not act; only people do. Directors and CEOs act, but only on the behalf of the shareholders, and they can be replaced by shareholders. The shareholder is the only one who can not simply be replaced, because the shareholder is the owner.
Constantly full waiting rooms are not an unavoidable fact of life, but a product of a "priceless" supply system.
Here is an excellent article on the subject: http://mises.org/daily/4719
Perhaps the staunchest conservatives, but certainly not the libertarians. Unless you consider war rationing to be the end of a depression (and I don't), then the depression actually ended when the stimulus spending and price controls stopped, which was after WWII was over.
The point of all economic activity is to increase production. That's what for-profit businesses do, by definition. Making large profits (in a legal way) is proof that a business is satisfying its customers in a very efficient way (high revenue = satisfied customers, low costs = efficient use of resources). Conversely, needless jobs, by definition, are created without any respect to profit. Therefore, they are very inefficient; they represent capital that could be put to much better use.
Furthermore, the fact that needless jobs put money in the hands of consumers is irrelevant. The economy is driven by production, not spending. If we doubled everyone's bank account, what would that do? Nothing. Prices would simply double. But what if we doubled the supply of goods in the economy? Then everyone would be wealthier. That's the difference between spending and production.
The right question isn't, "How do we create more jobs?" The right question is, "Why isn't the market naturally creating more jobs?" And the answer is always that it has been distorted by the government. The government attempts to slow down the adjustment process by propping up falling industries (e.g. housing, banking, etc.), but that just drags out the depression. If we just allowed businesses to fail, liquidated everything, stopped paying unemployment insurance, etc., then the economy would be fixed very quickly. That's exactly what happened in 1921. Unemployment shot up to 12%, the government did nothing, and we recovered in less than a year.
The other guys should say "Hey, how come you can afford to pay more than half of our bar tab, when we are the guys doing all the work?
So, let those 9 guys gather up their savings and start their own business (most millionaires are self-made, after all, so don't pretend as though the 10th guy had some advantage). Let them see how "helpful" the government is when they're the ones trying to run a business. And, if they actually manage to successfully grow a business, let's see how generous they are when their first employee, who didn't share any of the risk, comes along with his hands out and demands his "fair share" of the profits.
Wal-Marts tend to drastically reduce the number of decent jobs in an area
Let's talk about how things are supposed to work: The point of all economic activity is to produce goods, not jobs. When Wal-Mart comes in and undercuts competitors, that's a good thing. Why? Because Wal-Mart's low prices indicate that they are producing and distributing goods more efficiently. Of course, the page you linked to doesn't want to concede anything at all to Wal-Mart, and so it asserts that Wal-Mart does not really save consumers money. But if consumers don't feel like they're getting something more for their money, why would they willingly shop in a newly constructed Wal-Mart, instead of continuing to shop at mom and pop stores?
Now, greater efficiency in a particular sector, such as the retail sector, often means that fewer workers are required, leading to unemployment. And if those unemployed workers continue to compete in the same area over the same jobs, then the wages for those jobs will go down. If we want to help those workers, then we should (ideally through voluntary charity, not government coercion) help them chase higher paying work in different fields and/or geographical areas. The market is trying to communicate information to us through prices and wages; we should listen! Low wages is the market's way of saying, "Too many people are working in this area. Your labor would be more useful in other areas." To demand that employers pay higher wages for work that is in low demand is to ignore the market, and thus, to ignore the wishes of consumers.
This results in a group of people who are long-term dependent on public assistance
No, offering long-term public assistance results in long-term public assistance. If people know that their current situation is sustainable because of the public safety net, then they have less incentive to make the tough decisions. Private charity is a much better system, precisely because people can't be sure if they will be able to rely on it or not. That uncertainty pushes people to make every effort to improve their situation. Public, guaranteed charity, on the other hand, (and I have seen this with my own eyes) actually discourages people from making tough decisions. Sure, they'll willingly take a much higher paying job, but when it comes to a marginally better paying job, they might turn it down, because a slightly higher income may disqualify them from certain state-provided benefits.
In summary, don't blame Wal-Mart for the negative effects of the government's safety net, which, despite good intentions, actually encourages behavior that perpetuates unemployment and poverty.
Fragile? The system may have "broke" in a flash, but it also fixed itself in a flash. The only people who were hurt were those who sold because everyone else was selling (stop loss orders).
This entire issue boils down to a particular group of people whining about a single firm's stupid computer algorithm, because that algorithm broke the stupid computer algorithms that group relies on (i.e. stop loss orders). For value investors, this whole thing is just a bunch of noise. Civilization rolls on.
The obvious solution is for the local government to sunset the monopoly, buy back the infrastructure, and lease it to whomever wants to use it.
Why not use the same approach that people use to build gated communities? They voluntarily form a Home Owner's Association (HOA), and the HOA builds and maintains the infrastructure. Why not let each HOA buy back the infrastructure for their communities and lease it to whomever wants to use it? Unlike the "local government" idea you proposed, we wouldn't have any rent seeking behavior (i.e. HOA's would have no obligation to subsidize infrastructure maintenance in rural or low-income areas). Plus, if you don't like the way your HOA is spending your dues, you don't have to move far to escape their petty tyranny.
Is that why the USPS can't deliver on Saturday anymore? My guess is that it has more to do with their refusal to do layoffs. I agree with Obama: "It's the Post Office that's always having problems." We need to remove the laws that protect USPS from competition. If we did, maybe they would have some real competition. Maybe their competitors would start offering service seven days a week, without the junk mail, for the right price.
I have yet to hear a single empirically sound argument against public health care.
According to the WHO, when it comes to "level of responsiveness" (i.e. patient satisfaction and how quickly and efficiently the system works), the US beats all other countries.
percentage of GDP spent on health care and life expectancy.
The US has a lower life expectancy because the US has a higher proportion of people who are fat and live an unhealthy lifestyle.
Slashdot even covered United Airlines stock dropping from $12 to $3...
You call this "dangerous"? I would love it if one of my stocks dropped 75%, because I would be able to buy more shares at a great price!
There seems to be a lot of people here whining about what would happen if 95% of the market participants were day traders and only 5% were long term investors. Guess what? Those long term investors would love it, because the day traders would create endless opportunities for the long term investors to buy low and sell high.
Too little inspection, accidents happen. Too much inspection, and you get "analysis paralysis". Every company has an incentive to find the right balance between these two extremes. The market rewards companies who find the right balance, and punishes companies who fail (e.g. BP).
Now, you expect me to believe the government will magically be able to find a better balance between the two extremes (even though they have no real financial incentive to do so), simply because the head guy "supports effective regulation"? Sorry, but a single company's failure does not prove the government can allocate resources any better.
What I will believe, however, is that you can find a government bureaucrat who will go to the "too much inspection" extreme and give us "analysis paralysis". In other words, there will be so much red tape that few projects will ever be started, and therefore, there will be few major accidents. I'm sure that some will say he's doing a great job because so few accidents have happened under his watch, but does that really mean he's allocating resources correctly? Unlike a private company, there are aren't any profits and losses we can use to objectively measure his performance. And that's the general problem with government regulation.
stop losses salvaged a year's gains on my BP stock just one week ago
So, you piggy-backed off others' decisions. In other words, some people read the news about BP and decided how much they wanted to sell. But you didn't make your decision based on the news; your decision to sell was based on the fact that the herd was selling. And that turned out to be a good decision. Nothing wrong with that. But there's nothing wrong with people shaking off their coattails, either. If the smart money managers realize that their moves will simply be copied by the herd, then they're perfectly within their rights to game the tactics of the herd. I'm not saying what happened was intentional...but even if it was, I don't see anything wrong with it.
The computer with the fastest network access wins.
No, the smartest investor, man or machine, wins. You can buy or sell within milliseconds, but that doesn't help you if you don't know what will happen in the next millisecond.
How exactly does micro-penny programmed trading accomplish [efficient allocation of capital]?
The same way all trading does: By shifting resources from one use to another. Micro-penny programs just shift micro-resources within fractions of a second, and all of those micro-transactions eventually add up to a major transaction. If you're wondering how a program can possibly make a good decision within milliseconds, then I'd ask, "Does the program make money over the long-term?" If so, then the program must not be random; it must be taking advantage of some pattern it sees. In the end, it doesn't matter how the computer came to its decision; results are all that matter.
one undeniable side affect of it is to distort and destabilize the market.
Suppose the market was only open for one day of the year. Then it would be very stable for 364 days. But stability does not imply efficiency. Sometimes the most efficient thing to do is to allocate resources very quickly and dramatically. You could argue that the 1000-point swing was "random" or "destabilizing", but money was transferred from one group to another, and as you said yourself, these groups are not random. If the second group ends up making better decisions with their new resources, then the market did allocate resources more efficiently within those few minutes!
Effectively the shares were stolen... transfered from the small investors who can't watch their stocks all day long...
That's the risk you take when you choose to follow the herd. I'm also a small investor who can't watch my stocks all day long, but guess what? When my stocks go down 10%, I buy more. In fact, some of my stocks were down 90% from their highs during the crash of '08. Yes, I bought more, and yes, I ended up making a lot of money. Of course, I made no where near the kind of returns John Paulson made, so I still have a lot to learn.
Stock market investors basically control society's capital. Their decisions determine how efficiently our resources will be used. So, excuse me for saying this, but I want money to be transferred from emotional, panicky investors to calm, smart investors, because I believe the latter will allocate our resources more efficiently. You can say that you're not an emotional investor, but you've set a trigger (i.e. stop-loss limit) that programs your account to behave like an investor who panics when everyone else is selling.
As a side-note, I hate it how people want to change the rules of the game whenever their strategy stops working: "I set a stop-loss limit, which caused my shares to be sold when they clearly under-valued, so the system must be broken! We have to close the markets early next time." Or: "I blindly trusted the rating agencies (even though they're paid by the companies they're rating) and I lost a lot of money, so the system must be broken! We have to regulate the rating agencies." And on and on and on. People, the system is not fragile. The system is not broken. But your strategy might be.
Slashdot Mirror
It was never illegal to start a new ISP.
The government owns the roads, which means it controls who can dig up the roads in order to run cable. Local governments use their road monopoly to stifle ISP competition. Local governments justify this stifling by using your "natural monopoly" theory. In other words, the natural monopoly theory is a self-fulfilling prophecy.
After all, it doesn't make sense to have multiple companies each running cable to your house so you can choose your favourite.
You control your property. You should decide what makes sense and what doesn't. Perhaps if we never had "right-of-way" laws (which usurp individual property rights), people would insist on owning the cable running through their properties. And even if people were content to allow cable companies to own the actual cable, cable companies would still be more inclined to be more competitive in such a scenario, because of the constant threat that individual property owners could choose to run a second line at any time (Oh no, two cables in the ground! The horror! Who would have thought that competition involved duplication?)
There is nothing natural about the way our infrastructure has evolved.
Someone explain to me why high speed trading is a good idea for anyone?
First off, it doesn't hurt anyone to be able to trade quickly. I'm not saying it is necessary, but it doesn't hurt anything. Think of the stock market like an auction. At an auction, does it matter if someone is able to bid quickly? No. Let them make their bid as quickly as they want. You can respond by making an even higher bid.
That being said, the current latency war is indeed unnecessary. It is caused by SEC Rule 612, also known as the Sub-Penny Rule. This rule prevents market makers from competing on price, so they are forced to compete on speed. For more information, see Part 1 and Part 2 of "A High Frequency Trader's Apology".
Okay, suppose these newcomers build some plants before they are driven into bankruptcy by the oligarchs. The plants would still be in existence after the bankruptcy, and could be picked up for a song at an auction by more newcomers. Eventually, the oligarchs will be driven into bankruptcy, or they will have to raise their prices. Why should the newcomers stop coming, when they can pick up capital at firesale prices and they know the practices of the oligarchs are unsustainable? The "scorched earth" metaphor fails, because the companies are not literally at war with each other; there is no literal destruction. Capital doesn't disappear into the night, it simply changes hands.
Even if the price of selling in the market is low, the price of production, especially the capital costs are often not low. And once players are driven out of the market, the capital costs need to be paid all over again for any new entrant. Which means that the monopoly or duopoly parties can temporarily cut prices to make it uneconomical for any new parties to enter the market. And so no new competitors enter the market.
At least, until the monopoly or duopoly raises prices and then it becomes economical again for new competitors to enter. And so, virtual competition regulates the market: The monopolist is forced to keep their prices low, lest they invite new competition.
Now, you might argue that's a bad thing, because a monopoly means there are few choices. But that assumes that more choice is always a good thing, no matter what it costs. The reality is that, every time you have multiple competitors in a market, you have duplication of resources. Thus, the fact that the market discourages competition, until it is actually needed, is a good thing, because it discourages the unnecessary duplication of resources that competition brings (i.e. the market puts up with a certain amount of crap from the monopolist, but eventually consumers get so fed up they actively seek out new competition).
Amen to that. What the submitter is asking is similar to asking, "How can I get this girl to like me?" The answer is, don't bother. You won't change her opinion, and trying to only builds resentment. Just move on to better opportunities.
When /. discusses labor and wage issues in the US (unions, living wage, income inequality), the common sentiment is that executives/owners/investors can afford to give up more of their profits to help ensure a more livable life for their workers.
It doesn't matter if executives/owners/investors can "afford" to give up profits or not. As long as their profits came through voluntary trade, they are morally entitled to those profits.
Also, sometimes owners and investors lose money. Suppose that a business owner paid you a nice pay check for several months, but eventually his business failed due to lack of sales. Do you feel obligated to give him some of your earnings, because you can "afford" to do so? No? Well, then if the business turned out to be successful instead, why should the owner pay you any more than what the market can bare? Talk about double standards...
The fact that neo-nazi groups actively attacked minorities does not prove we need multiple standards of justice. Also, since members of "group A" face harsher sentencing when they target someone from "group B", but members of "group B" do not, it is fair to say that membership in "group A" is one of the defining factors that results in a harsher sentence. My original point stands.
That makes it quite obvious and a matter of basic fairness to have laws that makes life safer for members of group B.
But rights are a zero-sum game. If you wish to give members of group B special rights to make their life safer, then you must take rights away from group A. And this is exactly what "hate crime" legislation has done: Instead of a single standard of justice, we now have different standards of justice, depending on which groups the perpetrator and victim belong to. If I belong to group A, my crime will be judged harsher, simply because I belong to the "wrong" group. I fail to see the fairness in that.
I don't see the difference between B and C. In both cases, the criminal clearly intended to kill the victim. Assuming that both crimes were planned, then the intent was the same, and both crimes qualify as murder in the first degree.
What you seem to be advocating is a system where justice is not blind. After all, if some classes are protected, then by definition, some classes must not be. If my aggressor hates me because of my haircut, as opposed to my skin color, then that is a lesser crime, under the "hate crime" system.
You could argue that some groups are indeed special, but I could never follow you down that road, because I believe everyone should be treated equally under the law. Once I start breaking people into groups, with only certain groups being protected, I will have abandoned that sacred principle.
Limited liability is an implied contract between shareholders and creditors. When the creditors loan money to the shareholders, the creditors do so with the understanding that the shareholders are only willing to risk the company's money. The shareholders also agree that an individual shareholder can't simply take his money out of the company at any time. But that does not imply non-ownership. If I rent my house out to a tenant, I agree that I can't just enter my house whenever I feel like it. Does that mean I no longer own my house? No. Similarly, limited liability is just a type of contract; it has nothing to do with ownership.
YOU are not taxed twice for same money.
The shareholders own the company. Everyone in the company, including directors, are merely agents acting on behalf of the shareholders. Therefore, all of the company's expenses are actually the shareholders' expenses.
So, we not only have double taxation, but triple taxation: The company pays an income tax. Then that money is taxed again when it is distributed to shareholders as dividends. A shareholder may opt to sell his shares instead of collecting future dividends, but the corporate income tax and dividend tax will cause his shares to be worth less. Why? Because all company revenue is taxed twice before any individual shareholder can actually spend it. Thus, any tax on the money made from the sale of stocks (i.e. the capital gains tax) is a triple tax.
Every dollar in circulation has been taxed at least once
Yes, but the dollar should only be taxed once per change in ownership. If the dollar has been taxed twice before the owner has changed, then that is double taxation. You could argue that a company is a type of owner, but a company does not act; only people do. Directors and CEOs act, but only on the behalf of the shareholders, and they can be replaced by shareholders. The shareholder is the only one who can not simply be replaced, because the shareholder is the owner.
Constantly full waiting rooms are not an unavoidable fact of life, but a product of a "priceless" supply system. Here is an excellent article on the subject: http://mises.org/daily/4719
Perhaps the staunchest conservatives, but certainly not the libertarians. Unless you consider war rationing to be the end of a depression (and I don't), then the depression actually ended when the stimulus spending and price controls stopped, which was after WWII was over.
The point of all economic activity is to increase production. That's what for-profit businesses do, by definition. Making large profits (in a legal way) is proof that a business is satisfying its customers in a very efficient way (high revenue = satisfied customers, low costs = efficient use of resources). Conversely, needless jobs, by definition, are created without any respect to profit. Therefore, they are very inefficient; they represent capital that could be put to much better use.
Furthermore, the fact that needless jobs put money in the hands of consumers is irrelevant. The economy is driven by production, not spending. If we doubled everyone's bank account, what would that do? Nothing. Prices would simply double. But what if we doubled the supply of goods in the economy? Then everyone would be wealthier. That's the difference between spending and production.
The right question isn't, "How do we create more jobs?" The right question is, "Why isn't the market naturally creating more jobs?" And the answer is always that it has been distorted by the government. The government attempts to slow down the adjustment process by propping up falling industries (e.g. housing, banking, etc.), but that just drags out the depression. If we just allowed businesses to fail, liquidated everything, stopped paying unemployment insurance, etc., then the economy would be fixed very quickly. That's exactly what happened in 1921. Unemployment shot up to 12%, the government did nothing, and we recovered in less than a year.
You make it sounds like if everybody invested money, everybody would be 10x richer? Where do you think all this extra money comes from, trees?
Yes, if everybody invested money, everybody would be richer. Not in terms of money, but in terms of goods.
The other guys should say "Hey, how come you can afford to pay more than half of our bar tab, when we are the guys doing all the work?
So, let those 9 guys gather up their savings and start their own business (most millionaires are self-made, after all, so don't pretend as though the 10th guy had some advantage). Let them see how "helpful" the government is when they're the ones trying to run a business. And, if they actually manage to successfully grow a business, let's see how generous they are when their first employee, who didn't share any of the risk, comes along with his hands out and demands his "fair share" of the profits.
Wal-Marts tend to drastically reduce the number of decent jobs in an area
Let's talk about how things are supposed to work: The point of all economic activity is to produce goods, not jobs. When Wal-Mart comes in and undercuts competitors, that's a good thing. Why? Because Wal-Mart's low prices indicate that they are producing and distributing goods more efficiently. Of course, the page you linked to doesn't want to concede anything at all to Wal-Mart, and so it asserts that Wal-Mart does not really save consumers money. But if consumers don't feel like they're getting something more for their money, why would they willingly shop in a newly constructed Wal-Mart, instead of continuing to shop at mom and pop stores?
Now, greater efficiency in a particular sector, such as the retail sector, often means that fewer workers are required, leading to unemployment. And if those unemployed workers continue to compete in the same area over the same jobs, then the wages for those jobs will go down. If we want to help those workers, then we should (ideally through voluntary charity, not government coercion) help them chase higher paying work in different fields and/or geographical areas. The market is trying to communicate information to us through prices and wages; we should listen! Low wages is the market's way of saying, "Too many people are working in this area. Your labor would be more useful in other areas." To demand that employers pay higher wages for work that is in low demand is to ignore the market, and thus, to ignore the wishes of consumers.
This results in a group of people who are long-term dependent on public assistance
No, offering long-term public assistance results in long-term public assistance. If people know that their current situation is sustainable because of the public safety net, then they have less incentive to make the tough decisions. Private charity is a much better system, precisely because people can't be sure if they will be able to rely on it or not. That uncertainty pushes people to make every effort to improve their situation. Public, guaranteed charity, on the other hand, (and I have seen this with my own eyes) actually discourages people from making tough decisions. Sure, they'll willingly take a much higher paying job, but when it comes to a marginally better paying job, they might turn it down, because a slightly higher income may disqualify them from certain state-provided benefits.
In summary, don't blame Wal-Mart for the negative effects of the government's safety net, which, despite good intentions, actually encourages behavior that perpetuates unemployment and poverty.
Fragile? The system may have "broke" in a flash, but it also fixed itself in a flash. The only people who were hurt were those who sold because everyone else was selling (stop loss orders).
This entire issue boils down to a particular group of people whining about a single firm's stupid computer algorithm, because that algorithm broke the stupid computer algorithms that group relies on (i.e. stop loss orders). For value investors, this whole thing is just a bunch of noise. Civilization rolls on.
The obvious solution is for the local government to sunset the monopoly, buy back the infrastructure, and lease it to whomever wants to use it.
Why not use the same approach that people use to build gated communities? They voluntarily form a Home Owner's Association (HOA), and the HOA builds and maintains the infrastructure. Why not let each HOA buy back the infrastructure for their communities and lease it to whomever wants to use it? Unlike the "local government" idea you proposed, we wouldn't have any rent seeking behavior (i.e. HOA's would have no obligation to subsidize infrastructure maintenance in rural or low-income areas). Plus, if you don't like the way your HOA is spending your dues, you don't have to move far to escape their petty tyranny.
Let's face it, mail is only going to decrease.
Is that why the USPS can't deliver on Saturday anymore? My guess is that it has more to do with their refusal to do layoffs. I agree with Obama: "It's the Post Office that's always having problems." We need to remove the laws that protect USPS from competition. If we did, maybe they would have some real competition. Maybe their competitors would start offering service seven days a week, without the junk mail, for the right price.
I have yet to hear a single empirically sound argument against public health care.
According to the WHO, when it comes to "level of responsiveness" (i.e. patient satisfaction and how quickly and efficiently the system works), the US beats all other countries.
percentage of GDP spent on health care and life expectancy.
The US has a lower life expectancy because the US has a higher proportion of people who are fat and live an unhealthy lifestyle.
Slashdot even covered United Airlines stock dropping from $12 to $3...
You call this "dangerous"? I would love it if one of my stocks dropped 75%, because I would be able to buy more shares at a great price!
There seems to be a lot of people here whining about what would happen if 95% of the market participants were day traders and only 5% were long term investors. Guess what? Those long term investors would love it, because the day traders would create endless opportunities for the long term investors to buy low and sell high.
Too little inspection, accidents happen. Too much inspection, and you get "analysis paralysis". Every company has an incentive to find the right balance between these two extremes. The market rewards companies who find the right balance, and punishes companies who fail (e.g. BP).
Now, you expect me to believe the government will magically be able to find a better balance between the two extremes (even though they have no real financial incentive to do so), simply because the head guy "supports effective regulation"? Sorry, but a single company's failure does not prove the government can allocate resources any better.
What I will believe, however, is that you can find a government bureaucrat who will go to the "too much inspection" extreme and give us "analysis paralysis". In other words, there will be so much red tape that few projects will ever be started, and therefore, there will be few major accidents. I'm sure that some will say he's doing a great job because so few accidents have happened under his watch, but does that really mean he's allocating resources correctly? Unlike a private company, there are aren't any profits and losses we can use to objectively measure his performance. And that's the general problem with government regulation.
stop losses salvaged a year's gains on my BP stock just one week ago
So, you piggy-backed off others' decisions. In other words, some people read the news about BP and decided how much they wanted to sell. But you didn't make your decision based on the news; your decision to sell was based on the fact that the herd was selling. And that turned out to be a good decision. Nothing wrong with that. But there's nothing wrong with people shaking off their coattails, either. If the smart money managers realize that their moves will simply be copied by the herd, then they're perfectly within their rights to game the tactics of the herd. I'm not saying what happened was intentional...but even if it was, I don't see anything wrong with it.
The computer with the fastest network access wins.
No, the smartest investor, man or machine, wins. You can buy or sell within milliseconds, but that doesn't help you if you don't know what will happen in the next millisecond.
How exactly does micro-penny programmed trading accomplish [efficient allocation of capital]?
The same way all trading does: By shifting resources from one use to another. Micro-penny programs just shift micro-resources within fractions of a second, and all of those micro-transactions eventually add up to a major transaction. If you're wondering how a program can possibly make a good decision within milliseconds, then I'd ask, "Does the program make money over the long-term?" If so, then the program must not be random; it must be taking advantage of some pattern it sees. In the end, it doesn't matter how the computer came to its decision; results are all that matter.
one undeniable side affect of it is to distort and destabilize the market.
Suppose the market was only open for one day of the year. Then it would be very stable for 364 days. But stability does not imply efficiency. Sometimes the most efficient thing to do is to allocate resources very quickly and dramatically. You could argue that the 1000-point swing was "random" or "destabilizing", but money was transferred from one group to another, and as you said yourself, these groups are not random. If the second group ends up making better decisions with their new resources, then the market did allocate resources more efficiently within those few minutes!
Effectively the shares were stolen ... transfered from the small investors who can't watch their stocks all day long...
That's the risk you take when you choose to follow the herd. I'm also a small investor who can't watch my stocks all day long, but guess what? When my stocks go down 10%, I buy more. In fact, some of my stocks were down 90% from their highs during the crash of '08. Yes, I bought more, and yes, I ended up making a lot of money. Of course, I made no where near the kind of returns John Paulson made, so I still have a lot to learn.
Stock market investors basically control society's capital. Their decisions determine how efficiently our resources will be used. So, excuse me for saying this, but I want money to be transferred from emotional, panicky investors to calm, smart investors, because I believe the latter will allocate our resources more efficiently. You can say that you're not an emotional investor, but you've set a trigger (i.e. stop-loss limit) that programs your account to behave like an investor who panics when everyone else is selling.
As a side-note, I hate it how people want to change the rules of the game whenever their strategy stops working: "I set a stop-loss limit, which caused my shares to be sold when they clearly under-valued, so the system must be broken! We have to close the markets early next time." Or: "I blindly trusted the rating agencies (even though they're paid by the companies they're rating) and I lost a lot of money, so the system must be broken! We have to regulate the rating agencies." And on and on and on. People, the system is not fragile. The system is not broken. But your strategy might be.