Rare that I appreciate an opinion piece from the NYT

[keepthefaith]

28 minutes ago, whatdrought said:

 

do you have any evidence? Because again, you're seemingly simply equating market trends as collusion. 

 

Well I could gather and post all of the rates and terms and conditions for both companies but not worth the time.  I live with this relationship everyday.  We spend well into 6 figures a year with shipping companies.  Quite familiar with the subject.  What they are doing is very obvious. 

 

 

22 minutes ago, GG said:

 

Pricing finds its own equilibrium and once it's set than they generally move in lockstep.   That's not anti-competitive behavior, nor is there lasting consumer harm.  If one company jacks up prices to juice its profit, the competitor will gladly keep prices low to grow share, knowing that the price "gouger's" investors will hammer it for losing share.  If both companies jack up prices to juice profit, that will introduce an environment for another competitive entry.  That's why the Rule of Three is vital, because the 3rd, the weakest, competitor keeps the two leaders' behavior honest.

 

The #3 is USPS but they aren't a serious competitor.  Their existence though probably helps keep the other two from anti-trust trouble. 

Edited November 30, 2018 by keepthefaith

[Foxx]

58 minutes ago, GG said:

 

Rule of Three is the natural outgrowth of global and highly capitalized industries.  Antitrust policy has nothing to do with the basic facts that a company that cannot invest or attract investment in its growth is going to get acquired or will go out of business.   Anti-trust regulation should only be focused on companies that actually cause consumer harm as a result of their size, not just because they are big.  Funny how the proclamations of companies being too big usually come from two parties that control US politics.

 

 

i might argue that when a company becomes, to big to fail, that that is a potential problem.

[whatdrought]

2 minutes ago, keepthefaith said:

 

Well I could gather and post all of the rates and terms and conditions for both companies but not worth the time.  I live with this relationship everyday.  We spend well into 6 figures a year with shipping companies.  Quite familiar with the subject.  What they are doing is very obvious. 

 

Why don't you switch to DHL? Or one of the other parcel shipment companies?

 

My point is that market stagnancy is not proof of collusion. 

[GG]

1 minute ago, whatdrought said:

 

Why don't you switch to DHL? Or one of the other parcel shipment companies?

 

My point is that market stagnancy is not proof of collusion. 

 

You beat my response.  DHL is the third option that keeps the others honest.  The reality of running a national door to door delivery company isn't cheap.

 

BTW, Amazon is launching its own transportation & logistics division because they have enough volume to justify their spend.  

[whatdrought]

1 minute ago, GG said:

 

You beat my response.  DHL is the third option that keeps the others honest.  The reality of running a national door to door delivery company isn't cheap.

 

BTW, Amazon is launching its own transportation & logistics division because they have enough volume to justify their spend.  

 

Who cares about Monopolies when we'll all be bowing to Bezos before long. ?

Edited November 30, 2018 by whatdrought

[keepthefaith]

Just now, whatdrought said:

 

Why don't you switch to DHL? Or one of the other parcel shipment companies?

 

My point is that market stagnancy is not proof of collusion. 

 

DHL no longer has a domestic package delivery service and hasn't in many years.  They have a good international service and a boutique domestic service partnered with the postal service.   There isn't any stagnation in the market.  Just 2 dominant competitors with identical pricing structures and rates who raise prices by 4.9% every year within weeks of each other. 

[GG]

1 minute ago, whatdrought said:

 

Who cares about Monopolies when we'll all be bowing to Bezos before long. ?

 

He pulled a nice stunt by getting the courts to rule that Apple engaged in anti-competitive behavior in ebooks.

[keepthefaith]

2 minutes ago, GG said:

 

You beat my response.  DHL is the third option that keeps the others honest.  The reality of running a national door to door delivery company isn't cheap.

 

BTW, Amazon is launching its own transportation & logistics division because they have enough volume to justify their spend.  

 

Posted about DHL also.  Yes, barrier to entry in package business is very high.  Amazon is coming into the market but will be a long time before they have a nationwide service that delivers packages other than their own.   Drones though!

[whatdrought]

1 minute ago, keepthefaith said:

 

DHL no longer has a domestic package delivery service and hasn't in many years.  They have a good international service and a boutique domestic service partnered with the postal service.   There isn't any stagnation in the market.  Just 2 dominant competitors with identical pricing structures and rates who raise prices by 4.9% every year within weeks of each other. 

 

I didn't know that about DHL- thanks for the insight. 

 

The flip side of that is that your evidence is still antidotal. While I have no problem believing what you see, and I definitely dissent to your knowledge as you seem well versed. But I think it's hard to call it a monopoly, or duopoly, without concrete evidence. Especially since there is no market control. DHL left because they couldn't make money. Sounds like business to me. But, I will give it some thought, as you do seem to know the business much better than me. 

[GG]

8 minutes ago, keepthefaith said:

 

Posted about DHL also.  Yes, barrier to entry in package business is very high.  Amazon is coming into the market but will be a long time before they have a nationwide service that delivers packages other than their own.   Drones though!

 

The example of DHL proves that the industry is not monopolistic.  If UPS/Fedex were gouging above market rates, there would have been enough profit available for DHL to stay in the market.  But their subscale relative to UPS/Fedex meant they didn't earn enough to invest and remain competitive.

[keepthefaith]

25 minutes ago, whatdrought said:

 

I didn't know that about DHL- thanks for the insight. 

 

The flip side of that is that your evidence is still antidotal. While I have no problem believing what you see, and I definitely dissent to your knowledge as you seem well versed. But I think it's hard to call it a monopoly, or duopoly, without concrete evidence. Especially since there is no market control. DHL left because they couldn't make money. Sounds like business to me. But, I will give it some thought, as you do seem to know the business much better than me. 

 

So if once a year for the past 15 years or so, you and I looked at a pricing matrix from both companies with rates for all zones and package sizes and weights and ran the sheets through an excel compare, we'd find them identical each year or with such minute differences we'd call it identical. Then every fall over the same period we'd receive what I call the annual love letters from both companies announcing their identical rate hikes.  Additionally, every time 1 company changed a fee, the other would follow suit and the timeframes of these changes are so close together you'd have to question if either company could have made the same independent decision on their own so quickly. 

Edited November 30, 2018 by keepthefaith

[keepthefaith]

4 minutes ago, GG said:

 

The example of DHL proves that the industry is not monopolistic.  If UPS/Fedex were gouging above market rates, there would have been enough profit available for DHL to stay in the market.  But their subscale relative to UPS/Fedex meant they didn't earn enough to invest and remain competitive.

 

It's price collusion that I'm accusing them of based on the statute that was referenced several posts ago.  I'm sure the law is more complicated than those few sentences and that I don't fully understand the law.   Truly believe though that their practices are very questionable and it's clear that they don't like talking about it, that it comes up with customers regularly and that their representatives are schooled on responding to the subject. 

 

 

[whatdrought]

33 minutes ago, keepthefaith said:

 

So if once a year for the past 15 years or so, you and I looked at a pricing matrix from both companies with rates for all zones and package sizes and weights and ran the sheets through an excel compare, we'd find them identical each year or with such minute differences we'd call it identical. Then every fall over the same period we'd receive what I call the annual love letters from both companies announcing their identical rate hikes.  Additionally, every time 1 company changed a fee, the other would follow suit and the timeframes of these changes are so close together you'd have to question if either company could have made the same independent decision on their own so quickly. 

 

You definitely may have a point. Again, I’ll trust your judgement on that. 

 

But theres a limit to how far the argument of price comparison will take us in the collusion argument. The fact that a banana costs $1 at Tops and Kroger doesn’t mean they colluded to make it so.

[3rdnlng]

1 hour ago, whatdrought said:

 

You definitely may have a point. Again, I’ll trust your judgement on that. 

 

But theres a limit to how far the argument of price comparison will take us in the collusion argument. The fact that a banana costs $1 at Tops and Kroger doesn’t mean they colluded to make it so.

I would hope a single banana wouldn't cost $1 but seriously, each grocery chain hires price checkers to go up and down the aisles of their competitors marking down their prices. I wonder what for? -)

[TPS]

21 hours ago, GG said:

 

Rule of Three is the natural outgrowth of global and highly capitalized industries.  Antitrust policy has nothing to do with the basic facts that a company that cannot invest or attract investment in its growth is going to get acquired or will go out of business.   Anti-trust regulation should only be focused on companies that actually cause consumer harm as a result of their size, not just because they are big.  Funny how the proclamations of companies being too big usually come from two parties that control US politics.

 

 

Yes, Oligopoly is the natural outgrowth of capitalism, we agree.  I guarantee you that antitrust policy is what prevents it from becoming an observed "rule of 2".

 

Anti-trust regulation was established to protect small business from the power of concentrated capital, not the consumer. The Economics and Law movement is a Trojan Horse used to support economic concentration by arguing bigness helps the consumer.  It's Horseshit.  It's real easy to find a hired economic gun to say that a merger will lead to greater consumer welfare over time when in fact the opposite occurs in the long run.  I'm amazed at how easy it is to sway the average Joe to support economic concentration and economic power.  Gee, it's just the free market at work.  And free means freedom...it's those damn liberals who are ruining America.....

 

We're at a stage now where large corporations generate so much profit they can't find productive outlets because of weak demand overall--AND, as Tasker and I agree on, they are the ones that help write the regulations that protect themselves from competition.  With so much profit and no outlet, we see more and more M&As and buybacks.  It's the reason corporate tax cuts haven't led to your so-called "real" economic growth.  

Rant over.

[/dev/null]

Speaking of DHL

https://hardware.slashdot.org/story/18/12/01/0250201/dhl-to-invest-300-million-to-quadruple-robots-in-warehouses-in-2019

 

[KRC]

On ‎11‎/‎30‎/‎2018 at 2:11 PM, billsfan89 said:

Does the USPS follow a similar methodology? I find the USPS to have in general better pricing than UPS or Fedex in most cases anyway. Just interested to hear if you know. 

 

It has been about two years since I did work for USPS as a contractor. They use UPS and FedEx planes to ship. They pick based on which is cheaper. One charges by weight and the other charges by package size. Depending on which is cheaper, the items are routed to the respective carrier. Not sure if that is still the case, but that is what they did a few years ago.

[GG]

On 12/1/2018 at 11:56 AM, TPS said:

Yes, Oligopoly is the natural outgrowth of capitalism, we agree.  I guarantee you that antitrust policy is what prevents it from becoming an observed "rule of 2".

 

Anti-trust regulation was established to protect small business from the power of concentrated capital, not the consumer. The Economics and Law movement is a Trojan Horse used to support economic concentration by arguing bigness helps the consumer.  It's Horseshit.  It's real easy to find a hired economic gun to say that a merger will lead to greater consumer welfare over time when in fact the opposite occurs in the long run.  I'm amazed at how easy it is to sway the average Joe to support economic concentration and economic power.  Gee, it's just the free market at work.  And free means freedom...it's those damn liberals who are ruining America.....

 

We're at a stage now where large corporations generate so much profit they can't find productive outlets because of weak demand overall--AND, as Tasker and I agree on, they are the ones that help write the regulations that protect themselves from competition.  With so much profit and no outlet, we see more and more M&As and buybacks.  It's the reason corporate tax cuts haven't led to your so-called "real" economic growth.  

Rant over.

 

Anti-trust should only be concerned about consumer harm, period.  The government shouldn't be in a position to decide which companies win or lose.

 

Your rant is only about the profit motive of private enterprises, and you think that because they are very profitable then a legal/regulatory remedy must be enforced.   Only if you can demonstrate consumer harm is when you should enforce stricter options.  That's what differentiates (or at least it used to) the US and EU.   EU's rules try to protect industries, US rules tried to protect the consumer.   One is much better than the other.

 

Please tell me how I would benefit from buying cell service from a local telecom provider that can't get volume discounts from Apple or Samsung?  What would you do to force WalMart to give up precious shelf space to a small drink company?  Would you buy a family car from a guy who opened up a little factory on the outskirts of town?

 

 

[TPS]

On 12/3/2018 at 8:33 AM, GG said:

 

Anti-trust should only be concerned about consumer harm, period.  What about harm to other businesses? Which is what concentration of economic power does. And, as I mentioned, you can hire an economist to "prove" there will be no harm, but it's based on assumptions about prices over time, which is unknowable.

The government shouldn't be in a position to decide which companies win or lose.

They are not deciding winners and losers, They are in the position of preventing mergers that create greater concentration of economic power in an industry.

 

Your rant is only about the profit motive of private enterprises, and you think that because they are very profitable then a legal/regulatory remedy must be enforced.   Only if you can demonstrate consumer harm is when you should enforce stricter options.  That's what differentiates (or at least it used to) the US and EU.   EU's rules try to protect industries, US rules tried to protect the consumer.   One is much better than the other.

Again, not at all.  Competition is what regulates prices--more competition is better for consumers by keeping prices lower and providing more choices. Also, more competition doesn't mean small firms, it simply means preventing one or two firms from dominating an industry.

Firms desire less competition which gives them more pricing power and profits.  More profits are a consequence of eliminating competition.  That's a different argument than saying I'm ranting about the profit motive; I'm ranting about using the excuse of consumer welfare as an mechanism for increased concentration and less competition which leads to higher profit (and less innovation btw).  

 

Please tell me how I would benefit from buying cell service from a local telecom provider that can't get volume discounts from Apple or Samsung?  What would you do to force WalMart to give up precious shelf space to a small drink company?  Would you buy a family car from a guy who opened up a little factory on the outskirts of town?

Straw man or irrelevant arguments. The issue is preventing excessive concentration, not trying to re-create the fable of perfectly competitive markets. The fact that there are smaller telecom providers gives you more choices and keeps the others in line.  Walmart will react when that small drink company becomes popular. That last one is just plain dumb. I can easily give you as many counterarguments as you like...How are those airlines treating customers lately? 

 

 

 

[GG]

1 hour ago, TPS said:

 

 

You haven't described the ills of size other than size of its own.   Show how size equates to consumer harm.    I've said that government shouldn't be in the business of protecting individual companies, because the government is not in a good spot to know which companies to help or hurt.

 

Speaking of strawmen, you're assuming that bigger companies don't provide additional choices to the consumer, while the data is contrary to your position.   Is consumer in a better or worse position after Goose Island is sold to AmBev?