Economic Termites: Monopolies not noticeable enough for most of us • Hacker News Board

Re: Economic Termites: Monopolies not noticeable enough for most of us

#51

Post by alephnerd » Sun, Jun 09, 2024, 2:10 PM UTC

doe_eyes wrote: post #35

What I find odd about the article is that it does very little to substantiate its core claim - that the reason the economy is broken are small monopolists-but-not-really-monopolists who are trying to fleece you. It opens with the example of rising construction costs. The only remotely relevant example here is Autodesk, but by the article's own admission, "the cost of these products remains relatively minor". And that…

> is that it does very little to substantiate its core claim - that the reason the economy is broken are small monopolists-but-not-really-monopolists who are trying to fleece you

It's Matt Stoller [0].

He tends to write his substack (and formerly his blog at the OMI under New America) in a very pathos driven manner in order to change the conversation around anti-trust.

He also seems to be trying to become a Republican Rohit Chopra (assuming Hawley climbs the ladder) and is competing with Oren Cass on that front.

There is a need to rework antitrust to take into account digital platforms, but imo Matt Stoller's attempts only serve to undermine the conversation, given that these are very technical conversations that have a high legal bar to pass. Going all "bull in a China store" a la Lina Khan only leads to appeals and out of court settlements in favor of the defendants.

Based on second-hand experience, now's the best time for M&A on that front - you're almost guaranteed to have the FTC fumble a case and settle out of court.

[0] - https://www.politico.com/news/magazine/2023/04/21/matt-stoll...

Re: Economic Termites: Monopolies not noticeable enough for most of us

#52

Post by bobajeff » Sun, Jun 09, 2024, 2:15 PM UTC

throwaway63467 wrote: post #21

I think in many areas the name of the game is to move the entire market to a place where no real competition is possible. Housing in most parts of the world is a good example, there’s no reason prices for housing should’ve gone up 300-400 % above inflation as we really haven’t run out of space in most places, yet here we are. I have a hard time believing this is just the outcome of unfortunate market conditions, it s…

Speaking of housing it looks to me like housing costs are having the biggest effect on the economy as it typically costs more than a third of income for most people. It's probably the biggest cost of living expense and so the reason people are asking for higher wages and why running small businesses is becoming harder or impossible. I'm sure the dominos don't stop there either.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#53

Post by torpfactory » Sun, Jun 09, 2024, 2:16 PM UTC

I have a theory that one of the core problems is that American businesses just expect to make too much money. Everyone seems to be aiming for 30% gross margin or more, and then working to get monopoly power or regulatory capture in order to achieve that.

When I work with businesses in China they sort of expect cutthroat competition and I'm sure they're not seeing 30% margins. Low a behold stuff is a lot cheaper there, beyond what you'd expect given the labor price difference.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#54

Post by talkingtab » Sun, Jun 09, 2024, 2:17 PM UTC

I have an axe to grind, so let me be clear: I believe there is strong evidence that we have moved from something approaching a democracy to a corpocracy. I expect many people will tune this out, but here is the question, crucial one.

Who Benefits?

Do the laws that are passed benefit the common people or corporations? You figure it out. Please do not bother with the whole trickle down nonsense, unless you want to buy this bridge I have. And who can use the law? Can you afford a lawyer? Who can? The author says ".. I want my money back!" Good luck with that. If common people cannot enact laws to their benefit and cannot use the courts to their right wrongs, then we are not a democracy.

The article states: "the last four administrations choosing to ‘privatize’ domain registration". So why did that happen? It happened because we allow corporations to pay for our elections. You want to be elected or get funding to stay there? Lobby, aka bribe.

This is legal because the US Supreme Court in *Citizens United v. FEC* granted personhood to corporations. We have a situation where our "elected" officials owe there election to corporations.

In case you think this analysis is far-fetched here is an article on the American Bar Association site: https://www.americanbar.org/groups/crsj/publications/human_r...

The crucial issue, the emergency, is that these "termites" as the article calls them are now so pervasive that they threaten our society. Our government has decided to use the change in prices, inflation, as the crucial measure of well being. Their argument is that if the rate of change is low, there is no problem. However, wages are the major factor in the economic condition of common people. If common people cannot earn enough (low wages) enough to afford common costs of living we have a new term to add to 'enshitification', etc. It is 'enslavification'.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#55

Post by ghaff » Sun, Jun 09, 2024, 2:19 PM UTC

doe_eyes wrote: post #35

What I find odd about the article is that it does very little to substantiate its core claim - that the reason the economy is broken are small monopolists-but-not-really-monopolists who are trying to fleece you. It opens with the example of rising construction costs. The only remotely relevant example here is Autodesk, but by the article's own admission, "the cost of these products remains relatively minor". And that…

>In fact, no serious study of the construction industry pins cost increases on stuff like that. There are far more powerful factors at play. The laborers you hire want to be paid more than before (and the government is rising minimum wages). Compliance is getting costlier due to ever-evolving building codes, environmental and energy regulations, and zoning. Customer expectations are increasing (higher finish, more sqft). To the extent the materials are getting expensive, it's usually not your lumber mill being greedy.

In general, you're probably seeing some increased disparity between the cost of things that require some significant levels of labor--especially if skills are involved to any great degree--and those that can be dealt with mostly by "just" throwing capital at the problem.

Over time I expect you'll see more automation, more self-service, and--yes--more just doing without of things that cost more to deliver than you can or want to pay for.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#56

Post by harimau777 » Sun, Jun 09, 2024, 2:19 PM UTC

ponector wrote: post #23

spicyusername wrote: post #6

I very much agree with the premise that economists unduly focus on a few metrics of dubious quality - labor force participation, personal consumption expenditures, market capitalization, wage growth, etc - and overfit them to construct a coherent narrative about the "strength" of the economy and what the experience of living in that economy must be like. There's a story right now being peddled by all the talking head…

The answer is simple. Some consumers are feeling terrible and they are vocal about it. People mostly are ok and not talking about it.

Even if that's the case, that's a problem. First, it's bad for society to write people off. Are people going to be willing to contribute if they aren't sure whether they might be the next write off? Second, a small number of disenfranchised people can still cause a lot of problems if they get despirate.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#57

Post by Forgeties79 » Sun, Jun 09, 2024, 2:19 PM UTC

raizer88 wrote: post #14

spicyusername wrote: post #6

I very much agree with the premise that economists unduly focus on a few metrics of dubious quality - labor force participation, personal consumption expenditures, market capitalization, wage growth, etc - and overfit them to construct a coherent narrative about the "strength" of the economy and what the experience of living in that economy must be like. There's a story right now being peddled by all the talking head…

"The thing I have noticed is when the anecdotes and the data disagree, the anecdotes are usually right. There's something wrong with the way you are measuring it," - Jeff Bezos

That’s a pretty weird take to me. Crime stats and polling of people’s perception of crime show this as clearly the wrong approach for instance.

Most studies show that no matter what direction crime is going in, a substantial majority of people think their neighborhoods are safer and that everywhere else is basically a war zone that is getting worse. There’s a total disconnect locally/nationally in perception that is also detached from crime stats.

All of this is to say that the anecdotes are basically all but worthless in the case of understanding how bad crime is on any appreciable scale beyond a few blocks of one’s neighborhood.

* https://www.pewresearch.org/short-reads/2016/11/16/voters-pe...

* https://fivethirtyeight.com/features/many-americans-are-conv...

* https://www.vox.com/future-perfect/23663437/crime-violence-m...

* https://www.pbs.org/newshour/amp/show/as-concerns-grow-aroun...

Re: Economic Termites: Monopolies not noticeable enough for most of us

#58

Post by tomrod » Sun, Jun 09, 2024, 2:20 PM UTC

reaperman wrote: post #50

doe_eyes wrote: post #35

What I find odd about the article is that it does very little to substantiate its core claim - that the reason the economy is broken are small monopolists-but-not-really-monopolists who are trying to fleece you. It opens with the example of rising construction costs. The only remotely relevant example here is Autodesk, but by the article's own admission, "the cost of these products remains relatively minor". And that…

The areas I might agree with this for construction would be something like lumbermills - where we have plenty of timber available but there’s a bottleneck of capital for mill capacity and they’ve been able to raise prices sharply in the past few years. Investors don’t want to pay to build enough capacity to bring prices down because then only older paid-off mills would win a pricing war if there were any excess capac…

Economic theory asserts that where there is profit to be made you will find entrants. So unless something stops entrants for mills (ie funding availability) we should anticipate economic profits to decrease.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#59

Post by notahacker » Sun, Jun 09, 2024, 2:22 PM UTC

doe_eyes wrote: post #35

What I find odd about the article is that it does very little to substantiate its core claim - that the reason the economy is broken are small monopolists-but-not-really-monopolists who are trying to fleece you. It opens with the example of rising construction costs. The only remotely relevant example here is Autodesk, but by the article's own admission, "the cost of these products remains relatively minor". And that…

yeah it's basically a longwinded way of saying "market power is a thing", and a clumsy one that kludges absolute monopoly rentiers like Verisign, companies reneging on partnerships and conventional market leaders tend to put their prices up when their product is much more useful than the alternatives all into the same bracket.

Market power obviously is a thing which affects pricing, but market power in BIM software doesn't have anywhere near as much to do with construction costs or everyday experience as fuel price increases or labour shortages.

Re: Economic Termites: Monopolies not noticeable enough for most of us

#60

Post by alephnerd » Sun, Jun 09, 2024, 2:22 PM UTC

torpfactory wrote: post #53

I have a theory that one of the core problems is that American businesses just expect to make too much money. Everyone seems to be aiming for 30% gross margin or more, and then working to get monopoly power or regulatory capture in order to achieve that. When I work with businesses in China they sort of expect cutthroat competition and I'm sure they're not seeing 30% margins. Low a behold stuff is a lot cheaper there…

Antitrust is different in China.

State-Owned Enterprises and locally backed private conglomerates tend to help put downward price pressures on a lot of goods [0][1] plus there is a system of price ceilings depending on the commodity or product.

Local subsidies and tax breaks also help with minimizing the upfront cost allowing for smaller margins being sustainable over a longer term.

[0] - https://businesslawreview.uchicago.edu/print-archive/chinese...

[1] - https://global.oup.com/academic/product/chinese-antitrust-ex...