If you think you know something every now and then you must Question all your Assumptions about what you think you know periodically to see if they are still or ever were true. Science advances when we uncover mistaken assumptions and start over.
Today I question the idea of Free Markets being left to regulate themselves free of Government regulations as being the best way to grow the economy, create jobs and bring new products to market.
But I need help can anyone give me an example where Free Markets left to regulate themselves free of Government regulations proved to be the best way to grow the economy, create jobs and bring new products to market.
I have been looking for examples of this to do a pro vs con post and generate debate but I can’t find any. But its not for lack of trying.
Example 1) Power Deregulation was supposed to provide cheaper power and better service for consumers by letting market forces compete to give customers a cheaper price and better service and let the power companies make more profit from increased market share the innovators who could do that would be rewarded and get rich and customers would benefit win/win…well that was theory.
In Practice this happened
.
Senator Phil Gramm, the second largest recipient of campaigncontributions from Enron, succeeded in legislating California’s energy commodity trading deregulation. Despite warnings from prominent consumer groups which stated that this law would give energy traders too much influence over energy commodity prices, the legislation was passed in December 2000.
As Public Citizen reported, “Because of Enron’s new, unregulated power auction, the company’s ‘Wholesale Services’ revenues quadrupled—from $12 billion in the first quarter of 2000 to $48.4 billion in the first quarter of 2001.”[21]
Before passage of the deregulation law, there had been only one Stage 3 rolling blackout declared. Following passage, California had a total of 38 blackouts defined as Stage 3 rolling blackouts, until federal regulators intervened in June 2001. These blackouts occurred mainly as a result of a poorly designed market system that was manipulated by traders and marketers. Enron traders were revealed as intentionally encouraging the removal of power from the market during California’s energy crisis by encouraging suppliers to shut down plants to perform unnecessary maintenance, as documented in recordings made at the time.[22][23] These acts contributed to the need for rolling blackouts, which adversely affected many businesses dependent upon a reliable supply of electricity, and inconvenienced a large number of retail consumers. This scattered supply raised the price exponentially, and Enron traders were thus able to sell power at premium prices, sometimes up to a factor of 20x its normal peak value.
http://en.wikipedia.org/....
My Bold 38 blackouts vs 3 blackouts what great Customer service and a 20 times increase in the cost of power. We can discuss why Enron was crooked but with no rules nobody stopped them. How can we trust deregulation corporations are made up of people and some people are crooks. We need laws!
Example 2) The Airline Industry deregulating the Airline industry from Government regulation was supposed to let the Free Market reward Airlines that could provide better customer service cheaper and more routes to where they wanted to go. The companies that did that were suppose to create more jobs and get richer. Again that was the theory but what happened was this.
In the 27 years before airline deregulation, no airline went bankrupt. Since 1978, 160 airlines have come and gone. In the last quarter-century, the rate of bankruptcy among air carriers has been as much as 10 times higher than that of the general business community
http://www.alternet.org/....
There is a joke in the Stock Market about how to make a small Fortune investing in the airline industry start investing in the airlines with a large fortune.
Advocates of deregulation point to the fact that the number of air passengers has soared since 1978. They rarely note that it soared just as fast in the years before deregulation. They point out that airline rates have dropped significantly since deregulation for most (but not all) passengers. They rarely divulge that rates fell just as fast in the 27 years before deregulation.
Indeed, the use of price alone as a measure of success is looking increasingly suspect. In the last four years, for example, airfares have dropped more than 15 percent. In the same time frame, 20 airlines have gone bankrupt. United and US Air have walked away from their pension obligations. Northwest just imposed a 25 percent unilateral wage reduction on its machinists. The industry as a whole has lost $25 billion. This is not healthy competition.
http://www.alternet.org/....
My Bold so no increase in the rate of increase in airline passengers thanks to deregulation. No increase in the drop in rates for air fair passengers.
However huge layoffs and cuts in pension funds and 160 Airline Bankruptcies vs No Airline Bankruptcies, fully funded pensions, and the Airlines having a Rep as a good stable job.
Is this what America really wants? Does anyone have an example of deregulation creating jobs, creating new products that consumers want providing better service etc.