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Rob Spiegel
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Re: Failed free market
Rob Spiegel   3/30/2012 4:18:32 PM
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Good points, Jeff. I think we're seeing that optimism now in the gasoline market. At-the-pump gas prices have gone up about 20 percent in the last coule months, while the cost of oil is only up about 6 or 7 percent. Right now a barrel of oil is only $103, while gas is pushing $4.00. Two or three months ago, gas was about $2.75 while oil was about $98.

jeffbiss
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Gold
Re: Failed free market
jeffbiss   3/30/2012 2:01:32 PM
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One of the tenets of free market theory is that the freer the market, the more accurate the price. The problem is that free markets aren't controlled by the assumptions made by economists and so greed overpowers the mechanism that is supposed to provide negative feedback required to control prices. Therefore, greed and excessive optimism takes over and prices rise until collapse, which directly refutes free market theory.

Now that is in no way implying that a market must be heavily regulated, only to the point that it provides the required negative feedback to control what Greenspan defined as irrational exuberance. So, we need rational, good sense regulation in every market.

In line with the auto market, regulating that safety and efficiency be design considerations is good. Also, forcing manufacturers to correct design flaws is good too. the problem is doing it correctly to not stifle beneficial innovation.

jeffbiss
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Gold
Re: 42 mpg not as good as >45 mpg
jeffbiss   3/30/2012 1:53:39 PM
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You couldn't have had a CRX as they were a two person vehicle. I'm sure that engineers can produce a powerplant/vehicle combo that can get far better than what we see now. the problem is the American public. Most people see cheap oil as their birthright and so auto makers are sort of coerced into producing poor mileage vehicles. Sort of because the bigger the vehicle, the greater the profit.

Absalom
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Gold
Re: Failed free market
Absalom   3/30/2012 1:35:27 PM
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I agree that we have failed policies in regulating the auto and energy industries but disagree with it being called a failure of the "free market". I call it the failed policies of greedy politicians making backroom deals with greedy industrialists with the "regulations" being used to squeeze out inovative competition.

JimT@Future-Product-Innovations
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Blogger
Its not just the Auto Execs killing Engineering
JimT@Future-Product-Innovations   3/30/2012 12:56:06 PM
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One particularly key statement, as the article concludes, is copied and re-pasted here: 

"In contrast, North American companies tend to appease stockholders who want short-term profits -- often at the expense of long-term reliability, he said. As a result, the focus shifts to cost-cutting, instead of to engineering and quality."

This statement applies to a bigger picture than automotive only.  It is the absolutely a myopic American view of the dollar. When, oh when, will the American Corporation ever learn TRUE value-?  The article speaks for itself.  Systems Engineering, for example.

jeffbiss
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Gold
42 mpg not as good as >45 mpg
jeffbiss   3/30/2012 11:17:41 AM
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My 1984 CRX still beats the ECO. So did my 1985 and 1991. We can do far better but choose not to.

jeffbiss
User Rank
Gold
Failed free market
jeffbiss   3/30/2012 11:14:05 AM
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Regulation is a double-edged sword, but when applied correctly produces better results than a free market, as the market is people and they don't care about consequences, until it's too late.

The fact is that free market theory is a failed theory is proven by the existence of financial crises and bubbles. This is simply fact. Then there's your point that free markets really don't and can't exist, except in small arenas, precisely because people use their clout to improve their situation. Real human nature refutes ideology about human nature.

From what I've heard there are designs for power plants providing far higher mileage, but they are not produced for a number of reasons, including the fact that the market is more concerned about power and speed and having the government supply them with cheap fuel. Ah, the delusion and ignorance of the market! Therefore, there's little impetus for manufacturers to produce high mileage vehicles, which results in pressures to extract more of a finite resource at ever increasing financial and environmental costs.

Absalom
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Gold
Re: Gas mileage still very poor
Absalom   3/30/2012 10:56:17 AM
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Failed free market? The auto industry hasn't operated in a free market in decades. If it did I might be driving a diesel car getting 100 mpg burning fuel made from garbage squeezings. Regulation stifles innovation.

EricMJones
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Well, Duh!!!?
EricMJones   3/30/2012 10:47:47 AM
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You can say what you want about how things "should be". But when you pay more money to lawyers and bean counters and less to engineers.

You get what you pay for.

jeffbiss
User Rank
Gold
Gas mileage still very poor
jeffbiss   3/30/2012 10:23:07 AM
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I know that this comment doesn't fit neatly under this article's topic, but I'm going to gripe anyway. My 1984 Honda CRX got better gas mileage than any cars built today. It got between 45 and 50 local and 58 to 61 on the highway and it had a kludge carburetor setup. We're past peak oil, and the car companies can't produce far better mileage with today's far more sophisticated technology? Come on!

Whining about "quality" continues to miss the bigger problem, that we are wasting resources that carry very heavy consequences. But as most Americans don't believe in anything other than failed free market ideology, I suppose the fact that today's cars are worse performers than a 1984 design doesn't matter in their minds. After all, CEOs drive teir engineers to meet customer demand and customers only complain about high gas prices because they're clueless.

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