"N2EY" wrote:
"Dwight Stewart" writes:

Product quality is dropping (plastics),

In some areas, yes. But people still buy the products!


People don't have any choice. As an example, I went shopping for a fan
recently (to replace the last one that quit). I couldn't find a well-built,
metal, fan anywhere in the area. I ended up with a plastic fan that will
fall apart in a month or two just like the last ones. I'm not saving any
money because I have to keep buying this plastic garbage every few weeks.


How much corporate profit is excessive? If a company
is worth $1 billion, and their profit is $100 million, that's
a 10% return on investment. Is that excessive? Who
decides?


Are you not aware of our system of government, Jim? You know, the people
we vote for to make exactly these types of decisions.


But without the details it's a moot point. Suppose a
company has a string of bad years and then a good
year - should their profits in the good year be
confiscated and a blind eye turned towards the bad
years?


It's not my job to come up with all the details, Jim. I've already said I
don't have all the answers. But why does that make an idea a moot point.


Price controls were tried in the late '60s and early '70s
to "Whip Infaltion Now". Didn't work in the long term.


I don't remember that.


Because the *market* (people who make the buying
decisions) go to the Wal Mart instead of the local stores.
That's where the real problem lies - people who do not
think about the long-term economic results of their actions.


Why should they? They're going to Wal-Mart to buy a power tool or
whatever, not ponder the global economic implications of that purchase.


Do you know this for a fact? Car price increases also
reflect the enormous investment in engineering and tooling
to build cars using the latest technology. Remember when
most cars fell apart before reaching 10 years or 100,000
miles?


Do I know putting a regulatory cap on credit in the car market will drive
down auto prices? Absolutely. If people have to pay more cash up front, with
less financed by credit, very few would be able to afford the prices of
today's automobiles. Companies will be forced to cut prices if they want to
continue selling automobiles and Americans will have more money in their
pockets to spend elsewhere (benefiting a wider segment of the overall
economy).

And, no, I don't remember when most cars fell apart before reaching 10
years or 100,000 miles. I've owned plenty of older cars in my life
(certainly throughout the 60's and 70's) and I don't think any of them were
less then 10 years old or had less than 100,000 miles on them. And all of
them were built much better than today's models. My $35k SUV today is filled
with plastic that is already starting to decay with only 40,000 miles on the
vehicle. The Jeep I owned in 1972 had almost 200,000 miles on it with all
original body parts (a little dented, but all original).


As long as people are willing to pay the prices, the markets
are driven that way. Supply and demand.


But, as always, companies control the supply. The difference is that
today's monopolistic companies are not dependant on the daily sales of a
single product, so are able to manipulate supply in an effort to raise
prices. Since these companies often control whole market segments, consumer
are left with only two choices - not purchase the goods they want or pay the
higher prices. In today's economy, the concept of supply and demand seems
rather quaint, Jim.


What about people trying to get started as homeowners?
Raising the price of credit makes it impossible for them to
buy a first house.


I said nothing about raising the price of credit. I was referring to
credit caps - a cap on the percentage of the total purchase price that could
be financed or a cap on the percentage of a person's income that could be
used to establish the monthly credit payments. Both were common in the
fifties, sixties, and early seventies, and the economy and consumers did
just fine.


Dwight Stewart (W5NET)

http://www.qsl.net/w5net/