"Dwight Stewart" wrote in message thlink.net...
"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.

As Kim points out, look elsewhere. The 'net gives us a powerful tool
to find other sources. The problem is that you may have to wait for
the item, and pay more for it (delivery vs. sales tax).

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 they do not always make them wisely.

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.

The devil is in the details. A good idea can be ruined by bad details.

But why does that make an idea a moot point.

Because whether such ideas work or not is largely dependent on those
details.


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.

I do. First Nixon, then Ford. Basically came down to denying reality.

The USA economy had been built since at least the end of WW2 on
several concepts:

- lack of foreign competition
- cheap, abundant oil for energy
- high investment of tax dollars in certain technologies (highways and
air transport, military hardware, nukes) and low/nonexistent
investment in other, competing technology (railroads/transit/ships,
domestic electronics, energy conservation and alternative sources).
- unquestioned belief in unlimited growth and consumption, as well as
disposability of almost anything

When the slack ran in, US industry was poorly prepared. Look at the
oil situation alone - gasoline prices had been stable at less than 25
cents/gallon for decades until 1973. Then they doubled overnight, and
5-6 years later doubled again. So did all other petroleum fuel
products. Those increases dominoed through US industry.

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?

Because it's their responsibility. Part of a free market economy is
being a *customer*, not a *consumer*.

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

Then they should not complain when the hardware store and the American
power tool plants shut down, quality degrades, unemployment rises,
etc.

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 the auto companies will be in trouble because their sales are off.

However, I agree with your concept, now that I understand what you
meant. See below.

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).

Those aren't cars - they're trucks.

By "cars" I mean ordinary American passenger cars. And until they had
to deal with foreign competition, they would not last as long as they
do today.

However, note that where and how a car is used makes a big difference.
Those of us in snowy, seaside and humid climates will have far more
trouble with rust than those in arid climes. A car driven 100,000
miles in stop-and-go city traffic has a lot more stresses on it than a
car driven 250,000 miles on the highway. In fact, I've often thought
cars should have running time meters and startup counters in addition
to odometers. Because miles and years don't begin to tell the whole
story.

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.

There are *always* other sources. That's why I built an Elecraft
rather than buy Ikensu.

In today's economy, the concept of supply and demand seems
rather quaint, Jim.

Are you saying Adam Smith is obsolete? I disagree.

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.

Now *that* makes sense - and I agree! Would prevent a lot of
bankruptcies.

Both were common in the
fifties, sixties, and early seventies, and the economy and consumers did
just fine.

Maybe in the 50s and 60s, but not in the '70s! But the 70s problems
were definitely not caused by excessive borrowing by ordinary people.

But it all comes down to a level of personal responsibility,
education, and being a customer, not a consumer.

And accepting that there *are* limits to growth, and what we can
afford. People are not necessarily happier with, say, a bigger house,
if they have to go up to their necks in hock to buy it and take care
of it.

73 de Jim, N2EY