Privatizing Everything!

[Dingoluv4eva]

If we privatize every single thing, like "paving roads" "health insurance" "water and sewer" "private charities helping in disasters" "privatize the police departments" and the "fire departments"

if we privatize every single thing.. and ofcourse the main thing in business is to increase profits. Even charities have to have a sinister side to them, where they want to retain some cash to increase their value and services.

so if all these things are battling each other, for more and more margin, raising prices trying to keep up with the demand for profits, so that management can keep their jobs, and the shareholders make money..

Wouldnt all this, create uncontrollable inflation?

is it not a huge benefit to society to have government control alot of these things, cause all beurocracy aside atleast they are not driven 100% by the almight dollar and the even worse, the insecurity of upper management trying to preserve their positions and jobs, therefore using cutthroat strategies.

[crosses]

Re: Privatizing Everything!

all beurocracy aside atleast they are not driven 100% by the almight dollar and the even worse, the insecurity of upper management trying to preserve their positions and jobs, therefore using cutthroat strategies.

That isn't the same governent I know. Are you saying that senators don't throw around money left and right in order to keep their jobs?

[jmjj215]

Re: Privatizing Everything!

where they want to retain some cash to increase their value

how would having a ton of cash increase the value of a charity?

so if all these things are battling each other, for more and more margin, raising prices trying to keep up with the demand for profits, so that management can keep their jobs, and the shareholders make money..

How much does your computer cost? How much would the same computer have cost 10 years ago (if it even existed )? Competition drives prices down - not up.

cause all beurocracy aside atleast they are not driven 100% by the almight dollar

Right...they're driven by the dollar just as much as anyone else is - it's called campaign contributions and budget allocations.

Government serves an absolutely vital role in regulating the market, but privitization of some services is very beneficial to the consumer. You really need to strike a balance between the two.

[VJW]

Re: Privatizing Everything!

Jesse,

Competition drives prices down - not up.

Tell that to the American consumer after deregulation of cable, electricity, natural gas, and local telephone service.

Government serves an absolutely vital role in regulating the market, but privitization of some services is very beneficial to the consumer.

I’d be interested in successful examples of such.

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[Bruce Wayne]

Re: Privatizing Everything!

In Britain all manner of industries were nationalised after WW2. With few exceptions all of those nationalised companies are struggling since they were privatised in the 80's and 90's, whilst their competitors continue to thrive.

British Telecom are a prime example because they've been used to having guaranteed income for so long that the competition is shredding their markets in both landline and mobile telecoms.

It's only recently with the removal of the old public sector management team that things are slowly beginning to turn around.

[PrincessPerky]

Re: Privatizing Everything!

Government serves an absolutely vital role in regulating the market, but privitization of some services is very beneficial to the consumer. You really need to strike a balance between the two.

See Voom, Moderation, you never get that in a polatition, but I agree, some things should be, some not.

[CRFSaver]

Re: Privatizing Everything!

There are a few examples where deregulation and privitization have been good things. Also many examples of when they have been terrible decisions. Deregulation of the airline industry brought much lower prices and more competition in that market. So much cheaper to fly now adays compared to my parents time. Interstate trucking was deregulated and that made shipping goods across the country much cheaper. Long distance service was deregulated and now look at how cheap long distance is. A lot of that is from cell phones but even back in the early 90's long distance got super cheap. I would say local telephone has gotten quite a bit cheaper compared to when I was a kid. We used to have to pay per call and per minute. Now I just have a flat fee.

Non-withstanding the fiasco of the last couple years, privitizing the mortgage guarantee business (Freddie Mac and Fannie Mae) has done wonders for the mortgage market. It has created secondary markets that in turn created secondary markets for auto loans, credit cards, home equity, etc. Most people dont realize the role the secondary markets play in allowing you to get a cheap mortgage and fast, or to be able to get those credit card offers and auto loans.

Where has deregulation not worked? In general, public utilities. When you look at the huge investment needed to enter a market to supply for example, electricity, how is any company really gonna compete with the local incumbant. I also worry about them closing the cable and CLEC' to competition. (Insert GW rant here <----) I think in some cases deregulation and privitization works. In other arenas I think its a terrible idea.

[Bruce Wayne]

Re: Privatizing Everything!

I think there will be alot of opportunities for micro-energy generation in the coming decade as devices for wind and solar energy creation become available on the mass market.

This would enable households (and businesses etc.) to generate enough electricity for their own needs and sell any excess back to the grid.

In such an environment deregulation would become very beneficial I would think.

[jmjj215]

Re: Privatizing Everything!

Jesse,




Tell that to the American consumer after deregulation of cable, electricity, natural gas, and local telephone service.





I’d be interested in successful examples of such.

#

Telephone service is cheaper now. Cable is cheaper now. I don't know what you're paying.

As one example, in New Jersey they put out competitive bids for ambulance service (the public sector service was doing mediocre). A few companies came in and made the bid one got it. All of the benchmarks for successful ambulance service were improved. It's been a couple of years since I saw that, but that's one example that comes to mind.

Competition drives prices down VJW, you know that. I didn't say industries shouldn't be regulated.

[jmjj215]

Re: Privatizing Everything!

In Britain all manner of industries were nationalised after WW2. With few exceptions all of those nationalised companies are struggling since they were privatised in the 80's and 90's, whilst their competitors continue to thrive.

British Telecom are a prime example because they've been used to having guaranteed income for so long that the competition is shredding their markets in both landline and mobile telecoms.

It's only recently with the removal of the old public sector management team that things are slowly beginning to turn around.

Have you seen the price for their services decline, or rise as a result of competition?

[Bruce Wayne]

Re: Privatizing Everything!

The prices in telecoms (fixed line, mobile and data) are falling all the time and BT are struggling to maintain market share.

In mobiles their share of the UK market is pretty low and they're 3rd or 4th in the market now (if not lower).

Their share of data traffic is very low as ISP's have stolen a march on them in this area.

They have maintained a reasonably strong position in fixed line services because they have the majority of the cables but the calls themselves can be provided by many other companies now, with most of them cheaper than BT. Companies have also started to offer line leasing too and again prices are quite a bit lower than BT.

On the UK privatisations in general between 1979 and 1997, the proceeds from privatisation were some £90 billion. Firms which were loss making under public ownership began turning a profit. A recent study of 33 privatised enterprises found that, prior to privatisation, they absorbed £500 million of public funds annually and £1 billion in loan finance. By 1987, once privatised, the 33 contributed £8 billion per year to the Treasury. As well as greater profitability, bills have also fallen. Telecom bills have fallen by 49 per cent between 1984 and 2000, gas by 31 per cent between 1986 and 2000, and electricity by 20 per cent between 1998 and 2000.

If you look at each industry in turn:

British Telecom - see above
British Steel - merged with the Dutch steel producer Koninklijke Hoogovens and are now known as the Corus Group.
British Gas - Divided into gas and pipeline businesses. BG is still a major player in the UK gas markets but there are many competitors keeping prices as low as possible.
British Airways - Still a reasonably large player but have been affected by the low cost airlines and are no longer the leading provider in the UK.
British Petroleum - Still a major player and have been aggressive in expanding overseas.
British Rail - Not successful, partly because competition was never generated (track was operated by RailTrack, trains by regional franchises). RailTrack have since been nationalised in a controversial move (shareholders weren't paid anything) after the Hatfield rail disaster.
Cable and Wireless - Mainly provided telecoms to British colonies. Its market share in these regions has dropped considerably.
British Leyland - privatised piecemeal as Rover Group, Jaguar plc, Leyland Trucks, Leyland Bus, Istel, Unipart, Alvis plc, and numerous other companies, some of which have since recombined - Rover have had a very bad time and were recently sold for a pittance after a failed takeover by BMW, who now operate the Mini and Land Rover brands. Jaguar is now a part of Ford.

All in all the companies that were thrown to the markets have not performed particularly well when faced with competition.

[CRFSaver]

Re: Privatizing Everything!

I have noticed that Cable is not cheaper for me. It seems to be going up all the time. Then again, they have natural monopolies.

[VJW]

Re: Privatizing Everything!

Deregulation of the airline industry brought much lower prices and more competition in that market. So much cheaper to fly now adays compared to my parents time.

Yeah, but they’re all going bankrupt and have pulled out of so many markets. Hardly a good example.

Interstate trucking was deregulated and that made shipping goods across the country much cheaper.

And much more dangerous.

Long distance service was deregulated and now look at how cheap long distance is.

Which is why I specifically mentioned LOCAL telephone service, not long distance. Long distance was always highly overpriced.

I would say local telephone has gotten quite a bit cheaper compared to when I was a kid. We used to have to pay per call and per minute. Now I just have a flat fee.

That's before my time.

Non-withstanding the fiasco of the last couple years, privitizing the mortgage guarantee business (Freddie Mac and Fannie Mae) has done wonders for the mortgage market.

Those are still quasi-governmental institutions.

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[VJW]

Re: Privatizing Everything!

Telephone service is cheaper now.

Not local.

Cable is cheaper now.

Cable rates are back up with less channels that people really want. We were promised a la carte with deregulation.

Competition drives prices down VJW, you know that.

That assumes we're operating in a free market, which we are not. There are subsidies, tax incentives, and other regulatory advantages to some over others.

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[CRFSaver]

Re: Privatizing Everything!

Yeah, but they’re all going bankrupt and have pulled out of so many markets. Hardly a good example.





And much more dangerous.





Which is why I specifically mentioned LOCAL telephone service, not long distance. Long distance was always highly overpriced.





That's before my time.





Those are still quasi-governmental institutions.

#

The incumbant carriers have mostly gone bankrupt, the Uniteds, Deltas, etc while SouthWest, JetBlue, Alaskan and some other carriers, while not doing great are surviving. Most of the large national carriers can attribute part of their failure on the hub and spoke system that is not very efficient.

Can you explain what you mean by much more dangerous for interstate shipping?

Freddie and Fannie are quasi-govt institutions but what about Sallie Mae? No longer are they a GSE. They gave that up about 2 years ago. It has worked quite well. At the same time though, because of the secondary markets created in mrotgages it allowed other secondary markets to be created in Credit Cards, Auto, HE, HELOC, etc.