Free Market: greed.../private sector vs public sector

[AtlasShrieked]

I believe (as do others) that a few smart people have reframed arguments about public vs private as free market vs government.

It is a way of keep us from looking at the concrete failures and the greed of the private sector, and to have us argue the merits of the free market --- in which regulation and/or public ownership/participation is really not anathema.

-----

here is a post starter I used someplace else: "I referenced this article in a few posts earlier this week. No one seems to have picked up on it because I assume they do not read the WSJ. I am surprised as so many here speak about economic issues."

I added "my point is that the free market is often pretty ugly. imagine if this were health care?" "many of the rah rah free marketers often blame government for NOT regulating them well enough"


here is the WSJ linked article...

Submerging Markets: Brazil's IPO Rush Hits Rough Patch
By ANTONIO REGALADO, AP
Posted: 2008-06-20 10:00:31
Eds: Via AP.

By ANTONIO REGALADO

The Wall Street Journal

SAO PAULO, Brazil - Brazil's stock market is one of the best performing in the world; its main index is up 22 percent over the past 12 months. But for investors who took part in an unprecedented rush of IPOs last year - when 64 companies went public, more than on London's busy stock exchange - the returns have been decidedly more mixed.

Two-thirds of those IPOs are now trading below their offering prices. Some investors are blaming the banks that brought the deals to market, saying they cashed in on the frenzy for emerging markets by rushing to take unprepared companies public. Along the way, say investors, banks engaged in questionable practices, including lending some companies large sums before taking them public and then collecting extra fees on opening day.

"It's a case of immense bank greed and a lot of naivete on the part of investors with a lot of money on their hands," says Paulo Bilyk, co-head of Rio Bravo Investments, in Sao Paulo, which invests in the local market. "It's our version of the subprime mess."

The difficulties facing Brazil's IPO market show how a loose regulatory environment might have helped feed the frenzy. In 2007, about one in nine companies that went public in Brazil did so after receiving large loans from the underwriters that handled their IPOs. These loans were used to quickly prepare for an offering, in some cases by buying new assets. In exchange for lending money, underwriters collected extra fees after the IPO, either in the form of cash or stock options.

Such loans have the potential to create a huge conflict of interest. The job of an underwriter is to act as an intermediary, advising a company on the opening share price and lining up investors to buy those shares. It then pockets a small fee for each share it sells. But when a bank has a bigger-than-normal stake in the outcome of an offering - such as a large loan it wants to recover or the promise of shares - experts say the bank might set prices too high or rush an IPO of an unprepared company.

Banks in Brazil "took companies without credentials, and gave them credentials," says Octavio Castello Branco, who helps run the Sao Paulo private-equity fund Patria Investimentos.

Credit Suisse says it isn't responsible for Agrenco's performance. The bank says if Agrenco had waited to get a cheaper government loan, it wouldn't have been able to grow as quickly. Credit Suisse says further that it has sponsored some of Brazil's best performing IPOs, including farm company SLC Agricola, up 121 percent since its IPO in June 2007.

But other investors say banks, riding a frothy market, simply arranged too many deals too quickly. For instance, partly because of the success of offerings by home builders like Gafisa, which went public in February 2006, banks piled in, taking 19 more home builders public. By contrast, the U.S. has 10 public home builders and Mexico has six.

"A lot of those companies should never have gone public," says Thomas McDonald, an associate of billionaire Sam Zell, whose investment fund backed Gafisa. "I think the overzealous bankers convinced founders their dreams would come true, and at valuations they never imagined."

Ilan Goldfajn, head of the investment fund Ciano Investments in Rio de Janeiro, was among the investors who bet heavily on new domestic stocks, in retail and other sectors. Partly as a result of wide declines in those shares, his fund sharply underperformed the index last year. "So now I am whining," he says.

later on I added this after seeing more than a few views yet no comments from the loud font crowd of speech makers and blowhards:

ahhh, I suspect many of the moralistic free marketers are unwilling to buy a copy of the WSJ...they'd rather steal...um...borrow free content.

imagine if everyone borrowed free like them? the market would collapse. are faux free marketeers the biggest threat to the free market?

one other thing: this reminds me of the Randian Objectivists who praise selfishness as a virtue...they are the biggest threat to freedom and liberty because if everyone were like them we'd have anarchy...where freedom and liberty would give way to survival ---not of the fittest--- but the most horrible.

nothing is ultimately free...not even the web.

is it possible to get the boobs who always mention the free market to rationally debate private vs public approaches to different issues without them resorting to boogy men, straw man arguments, scare tactics and hooey about socialism, communism and other silly isms?

 

[Paulie]

I believe (as do others) that a few smart people have reframed arguments about public vs private as free market vs government.

It is a way of keep us from looking at the concrete failures and the greed of the private sector, and to have us argue the merits of the free market --- in which regulation and/or public ownership/participation is really not anathema.

-----

here is a post starter I used someplace else: "I referenced this article in a few posts earlier this week. No one seems to have picked up on it because I assume they do not read the WSJ. I am surprised as so many here speak about economic issues."

I added "my point is that the free market is often pretty ugly. imagine if this were health care?" "many of the rah rah free marketers often blame government for NOT regulating them well enough"


here is the WSJ linked article...


later on I added this after seeing more than a few views yet no comments from the loud font crowd of speech makers and blowhards:
is it possible to get the boobs who always mention the free market to rationally debate private vs public approaches to different issues without them resorting to boogy men, straw man arguments, scare tactics and hooey about socialism, communism and other silly isms?

Why should greed be regulated by government? Should a business not be free to earn as much profit as it possibly can? Isn't that what you go into business for? To make profit? When a company breaks the law to make a profit, then they should be dealt with accordingly. Otherwise, it's their business to run how they see fit.

The fact that some companies are greedy should not ruin it for the idea of the free market. The free market isn't just the businesses, it's the consumers as well. We don't have to buy products from the obviously greedy companies, and by not doing so, we would cut their profits down and make them pay for their greed without the need to enact yet even more laws, and expand bureacracy or create NEW bureacracy.

If you believe Wal-Mart is the bain of American existence, for example, then quit shopping there. Don't trash them, and then secretly shop there because you can't find a better deal anywhere else.

How many Wal-Mart haters do you think continue to shop there? I'll bet a LOT.

The free market is dictated by the business/consumer relationship. If you don't know what's best for you, then that's pretty sad.

A greedy company should pay the consequence of lost business from consumers, rather than more laws enacted to stop it.

Again, take responsibility for yourself and stop requesting the government take the responsibility FOR you.

 

[AtlasShrieked]

Why should greed be regulated by government? Should a business not be free to earn as much profit as it possibly can? Isn't that what you go into business for? To make profit? When a company breaks the law to make a profit, then they should be dealt with accordingly. Otherwise, it's their business to run how they see fit.

The fact that some companies are greedy should not ruin it for the idea of the free market. The free market isn't just the businesses, it's the consumers as well. We don't have to buy products from the obviously greedy companies, and by not doing so, we would cut their profits down and make them pay for their greed without the need to enact yet even more laws, and expand bureacracy or create NEW bureacracy.

greed and profit are not the same thing and it is the ignorant amongst us who think so.

we've regulated profit in necessary markets. we did it with energy utilities and were better off for it.

you are using free market where you mean private sector.

If you believe Wal-Mart is the bain of American existence, for example, then quit shopping there. Don't trash them, and then secretly shop there because you can't find a better deal anywhere else.

wassup with the speech and the straw men? is the circus in town?

How many Wal-Mart haters do you think continue to shop there? I'll bet a LOT.

who cares? they are hypocrites and fools. you spend way too much time worrying what other people are doing.

The free market is dictated by the business/consumer relationship. If you don't know what's best for you, then that's pretty sad.

theory and a foolish personal attack

A greedy company should pay the consequence of lost business from consumers, rather than more laws enacted to stop it.

so greed is bad? laws are bad?

Again, take responsibility for yourself and stop requesting the government take the responsibility FOR you.

straw man is in town

 

[AtlasShrieked]

Why should greed be regulated by government?

so what have you added besides a few paragraphs? why is your post filled with rants and raves about straw men and wal mart?

why not stick to a substantive argument? is it too difficult?

 

[Toro]

The market creates the most wealth for the most people most of the time. It is the structure that generates the greatest amount of wealth than any other, bar none.

However, it does not create all the wealth for all the people all of the time.

Where markets fail, or where society deems it too important for the losers in the market to be left behind, government should intervene.

Perhaps the greatest thing government can do in the market is to facilitate and increase transparency. Markets work best and most efficiently the more information sellers and buyers have. Excessive profits, known as "economic rents," are most likely to arise when one party has asymmetrical information relative to the party on the other side of the transaction. It is not possible for all parties to have perfect information, but the more information consumers have, the better choices they will make.

 

[Zoomie1980]

I believe (as do others) that a few smart people have reframed arguments about public vs private as free market vs government.

It is a way of keep us from looking at the concrete failures and the greed of the private sector, and to have us argue the merits of the free market --- in which regulation and/or public ownership/participation is really not anathema.

-----

here is a post starter I used someplace else: "I referenced this article in a few posts earlier this week. No one seems to have picked up on it because I assume they do not read the WSJ. I am surprised as so many here speak about economic issues."

I added "my point is that the free market is often pretty ugly. imagine if this were health care?" "many of the rah rah free marketers often blame government for NOT regulating them well enough"


here is the WSJ linked article...


later on I added this after seeing more than a few views yet no comments from the loud font crowd of speech makers and blowhards:
is it possible to get the boobs who always mention the free market to rationally debate private vs public approaches to different issues without them resorting to boogy men, straw man arguments, scare tactics and hooey about socialism, communism and other silly isms?

Business serves absolutely NO social purpose, whatsoever. IT was never intended to nor will it ever. You go into business to MAKE MONEY. You invest in a business to MAKE MONEY. Business HAS NO OTHER PURPOSE, period.

 

[Diuretic]

Business serves absolutely NO social purpose, whatsoever. IT was never intended to nor will it ever. You go into business to MAKE MONEY. You invest in a business to MAKE MONEY. Business HAS NO OTHER PURPOSE, period.

Yes, any goods we get are side-benefits I suppose. But that seems to me to be a reason to have government involved in providing that which businesses can't or won't.

 

[dilloduck]

Yes, any goods we get are side-benefits I suppose. But that seems to me to be a reason to have government involved in providing that which businesses can't or won't.

What is the sense in our government taxing us and then using our money to buy us the things we could have purchased for ourselves? What is it that business will not provide for a price ?

 

[sealybobo]

deregulations will become a dirty word. the gop was clever to say gov reguations is what's wrong w government. whatever they say, believe the opposite. they never say fair markets. so they deregulate mines and mine safety goes down. so they can bleed the treasury with no oversite. they appoint oil men to oversee oil speculations. next they will call us socialists then commys. they purposely keep oil supplies low and speculate. even now when congress tries to enforce, bush appointees won't enforce. can u not se this is a problem?

 

[RetiredGySgt]

deregulations will become a dirty word. the gop was clever to say gov reguations is what's wrong w government. whatever they say, believe the opposite. they never say fair markets. so they deregulate mines and mine safety goes down. so they can bleed the treasury with no oversite. they appoint oil men to oversee oil speculations. next they will call us socialists then commys. they purposely keep oil supplies low and speculate. even now when congress tries to enforce, bush appointees won't enforce. can u not se this is a problem?

The conspiracy forum is over there. Post your drivel where it belongs.

 

[Diuretic]

What is the sense in our government taxing us and then using our money to buy us the things we could have purchased for ourselves? What is it that business will not provide for a price ?

If there's no profit in something I can't see a business hopping in to provide it.

 

[Toro]

deregulations will become a dirty word. the gop was clever to say gov reguations is what's wrong w government. whatever they say, believe the opposite. they never say fair markets. so they deregulate mines and mine safety goes down. so they can bleed the treasury with no oversite. they appoint oil men to oversee oil speculations. next they will call us socialists then commys. they purposely keep oil supplies low and speculate. even now when congress tries to enforce, bush appointees won't enforce. can u not se this is a problem?

The government is not purposely keeping oil supplies low. They have nothing to do with the oil supplies, other than filling the strategic petroleum reserve, increasing emergency supplies for the country.

 

[Toro]

What is the sense in our government taxing us and then using our money to buy us the things we could have purchased for ourselves? What is it that business will not provide for a price ?

Because private enterprise does not best provide all services society deems necessary.

Should the police be privatized?

 

[AtlasShrieked]

The market creates the most wealth for the most people most of the time. It is the structure that generates the greatest amount of wealth than any other, bar none.

However, it does not create all the wealth for all the people all of the time.

Where markets fail, or where society deems it too important for the losers in the market to be left behind, government should intervene.

Perhaps the greatest thing government can do in the market is to facilitate and increase transparency. Markets work best and most efficiently the more information sellers and buyers have. Excessive profits, known as "economic rents," are most likely to arise when one party has asymmetrical information relative to the party on the other side of the transaction. It is not possible for all parties to have perfect information, but the more information consumers have, the better choices they will make.

great speech.

what market, the fruit market?

 

[AtlasShrieked]

Business serves absolutely NO social purpose, whatsoever. IT was never intended to nor will it ever. You go into business to MAKE MONEY. You invest in a business to MAKE MONEY. Business HAS NO OTHER PURPOSE, period.

thank you.

if we could use this as a foundation to argue further, most of the speechifying here would cease. businesses go into markets to make money. although some try and do other things as sidebars, eventually money will rule. greed trumps most everything most of the time.

 

[AtlasShrieked]

Yes, any goods we get are side-benefits I suppose. But that seems to me to be a reason to have government involved in providing that which businesses can't or won't.

great!


.

 

[Annie]

thank you.

if we could use this as a foundation to argue further, most of the speechifying here would cease. businesses go into markets to make money. although some try and do other things as sidebars, eventually money will rule. greed trumps most everything most of the time.

The above is true, at the same time what does business have to do to make money? Ah yes, produce a product or service that enough want for it to generate profit exceeding their costs.

After you earn whatever money you make as an owner or worker or investor, what do you do with that money? You spend it or save it or invest it or maybe you just send it to the government, hoping they'll take care of you?

 

[AtlasShrieked]

deregulations will become a dirty word. the gop was clever to say gov reguations is what's wrong w government. whatever they say, believe the opposite. they never say fair markets. so they deregulate mines and mine safety goes down. so they can bleed the treasury with no oversite. they appoint oil men to oversee oil speculations. next they will call us socialists then commys. they purposely keep oil supplies low and speculate. even now when congress tries to enforce, bush appointees won't enforce. can u not se this is a problem?

The conspiracy forum is over there. Post your drivel where it belongs.

hey sarge...try explaining what is hooey here. try.

I actually think the poster has made some relevant points.

 

[AtlasShrieked]

The above is true, at the same time what does business have to do to make money? Ah yes, produce a product or service that enough want for it to generate profit exceeding their costs.

After you earn whatever money you make as an owner or worker or investor, what do you do with that money? You spend it or save it or invest it or maybe you just send it to the government, hoping they'll take care of you?

that is the most basic principle and it does not tell the whole story of how things work. advertising and marketing help alot too. there are other forces like greed and fixing of contracts that can make one rich with inferior or adequate products. billionaires like Ross Perot got incredibly wealthy by snagging guv contracts. It's not like his company provided a superior product or provided a service to be found nowhere else.

 

[AtlasShrieked]

The government is not purposely keeping oil supplies low. They have nothing to do with the oil supplies, other than filling the strategic petroleum reserve, increasing emergency supplies for the country.

he didn't say the government was doing those things...read it again. he said the GOP.

now I think he is wrong there on the GOP but the oil companies have cut way back or allowed a decline in/on refining capacity. if profit is teh motive they will do what it takes to increase profit. why is that so hard to understand?