441–450 of 590 posts
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There's no such thing as a “competitive market” in the real world.
Yes there is.
It's funny to see that this was my most downvoted comment ever on HN.
Looks like blasphemy against the “free market” religion isn't tolerated here.
"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder." Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing. Kinda like how expensive healthcare is since it is paid for by insurance. Or how you don't care how much you put on your plate or what you choose to eat at an all you can…
> The second you detach the consumer from the price of something, that is when they stop caring about how much something costs, and so the price jumps.
Why should nobody care about prices? The customer gets subsidizes by another payer, in this case governments that have to authorize budgets.
The reverse could be true too, companies raise their prices in lock step because they want to 'detach' more profits off of production and so, the government steps in to subsidize. So what is the causality chain here? Still the government not caring?
IMO you are putting blame onesidedly on payers and not on the ones in charge of price policy, which would include companies too. I dont understand why people dont apply their critizism of large organisations, like a government, to other large organisations, like a company.
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I'm convinced that a great majority of problems in the US these days fundamentally boils down to principal agent problems. The 2008 financial crisis is a great example. Once banks no longer kept mortgages on their own books, it just became a matter of time until that was going to blow up. The incentives change.
It takes more than just misaligned incentives to get a banking crisis -- you have to have structural corruption preventing the transfer of the loss gradient back to the "misaligned" decision makers. It's somewhat disingenuous (or overly innocent) to reimagine the pathways which power structural corruption as "innocent ignorance in the face of bad incentives". The real world has "actually bad" actors -- not just misal…
Nah, you can do it just on the basis of information asymmetries.
Banks can sell mortgages. People think buying mortgages is safe, because banks don't loan money to people they don't think can pay it back, and even if they did, the mortgage is backed by the house so in the worst case you can foreclose and get back your principal. So lots of people buy mortgages.
Then banks figure out that it's easy to sell mortgages, and that if they sell them it doesn't matter that much if the people they loan the money to can pay it back. Plus, the less creditworthy people pay higher interest rates, and you can still foreclose if they default. So banks make a lot of loans to people who can't afford them, and then sell the mortgages, and people still buy them.
Except that if this happens at scale, the people taking out mortgages they can't afford bid up the price of houses. And then when they start to default and you want to foreclose, you'd have to sell the house to get back the money, which at scale means that the prices would go back down to where they were before they got bid up, which means you wouldn't even recover your principal.
If everybody realizes that this is what's going to happen then people wouldn't buy bad mortgages from banks and then banks wouldn't issue them. But if enough people don't notice until after the bubble is inflated...
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If consumers actually directly paid the whole cost for health services (as opposed to a fixed price, like a $20 copay, etc.), the prices charged would become far more regular. An easy way to examine this is to compare the price of over-the-counter versus pharmaceuticals. If a third party weren't paying for them, the price would have to either come down to something affordable to the average person, or else the market…
I'm aware of your and the GP's claim, I'm saying it doesn't survive contact with reality. If you look at e.g. the per-dose price of insulin it's as low or lower in countries with single-payer universal systems, where someone requiring insulin is never going to have any idea what it even costs, because it's just something that's provided for them should they need it. In that case it's usually some centralized state pu…
OF COURSE single-payer means lower prices, the government has a shit ton of power in negotiating prices if they want to. They don't want to because they are corrupt, freaks like the above are only there to rationalize the theft. They need to be defeated politically.
"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder." Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing. Kinda like how expensive healthcare is since it is paid for by insurance. Or how you don't care how much you put on your plate or what you choose to eat at an all you can…
> The second you detach the consumer from the > price of something, even through an > intermediary such as health insurance, that > is when they stop caring about how much > something costs, and so the price jumps. In reality, this claim doesn't survive a cursory glance at the OECD's numbers for health expenditure per capita[1]. You'll find that (even ignoring the outlier that is the US health care system) that in so…
Interesting that the graphs use PPP, but that the age-adjusted graph still shows the richer OECD countries spend more than the poorer ones. I wonder what's up with that.
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I think labor cost alone is most plausible, especially combined with higher quantities. Average yearly salary in urban China is Getting parity with subsidies, worker/environmental protection and regulation overhead would not even come close to make the US price-competitive for labor intensive work like this right now, IMO.
I don't believe labor is that much of the cost of a bus, unless you are talking about the "labor" of investors and high level administrators. Ive worked in many many different manufacturing jobs, and labor of building things has always been the lowest cost of concern despite managers trying to harp on about it. Labor costs are the easiest to control, which is why they get the most attention, but material procurement,…
But those higher wage levels are not just affecting a products core-labor working at the assembly line-- you'll have project managers, sales, purchasing, contractors, even the construction workers building your factories: All of them are affected by this (and those people exist in China, too!). I would assume that the total sales price of a bus contains a larger fraction proportional with hourly wages than you might expect at first glance.
"Federal funding typically covers 80% of bus purchases, with agencies responsible for the remainder." Well, there is your answer. The one making the purchase isn't the one primarily paying for the purchase. This makes them less sensitive to pricing. Kinda like how expensive healthcare is since it is paid for by insurance. Or how you don't care how much you put on your plate or what you choose to eat at an all you can…
That's not the only problem with health. It's a very inelastic resource.
If you and your neighbor's have cancer, and I promise to treat whoever pays most, I can safely assume I'm going to be filthy rich. After all, money is pointless if you die, so barring money for descendants, the logical thing is to give me as much money as you can.
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> The second you detach the consumer from the > price of something, even through an > intermediary such as health insurance, that > is when they stop caring about how much > something costs, and so the price jumps. In reality, this claim doesn't survive a cursory glance at the OECD's numbers for health expenditure per capita[1]. You'll find that (even ignoring the outlier that is the US health care system) that in so…
Markets with prices fixed by the government have fixed prices. This isn’t interesting for markets
Suppose that to devise some treatment for 10 million people worldwide, it costs a billion dollars once for R&D, i.e. $100 each, and then $10 more per person to actually manufacture it. So the average person will have to pay no less than $110.
Then some countries say "that costs you $10 to manufacture, we won't pay more than $40" and if you don't take the $40 you can't sell there at all. So, if you don't recover $30 of your R&D per person there then you recover $0, even though you need to average $100.
If everybody does that it doesn't work; they go out of business. But suppose that half the patients live in those countries and the rest live somewhere that the company can charge enough to sustain themselves, i.e. in those countries people have to pay an average of $180 instead of $40 so the total average can stay $110. Then they don't go out of business, but the countries not paying their share are cheating the people in the other ones.
And to add insult to injury, you then hear the people in the countries paying $40 saying "why are you paying $180 instead of doing it like we do"?
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No, they certainly don’t all come with AC and heat.
I haven't seen a non-AC bus in ages, even in developing countries.
Places a little warmer (England, Denmark, Netherlands, northern Germany) might be warm enough for a few days per year, but the cost of purchase and maintenance of A/C might not be worthwhile.