by William Teach | April 23, 2016 7:31 am
Investopedia defines a free market as
A free market is a market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sellers are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.
Here we go
WEEKLY ADDRESS: Ensuring Our Free Market Works for Everyone
Hello, everybody. One of America’s greatest strengths is our free market. A thriving private sector is the lifeblood of our economy – it’s how we create jobs, expand opportunities, and give everybody a shot at success. It’s what has made America the strongest country on Earth.
The most essential ingredient in a healthy free market is competition. But right now, too many companies are engaging in behaviors that stifle competition – like blocking new competitors from entering the market or limiting the information and options that give consumers real choice. As a consequence, the rest of us pay higher prices for lower quality products and services. Workers receive lower wages than they otherwise would. Small businesses and entrepreneurs can get squeezed out of the market. And none of that is fair – or good for our economy.
And some of that “unhealthy” behavior arises from government instituting regulations that pick and choose winners and losers. Some of it arises, shockingly to Obama and other liberals, from competition which lets the consumers choose the winners and losers. For instance, I used to shop at Kroger for groceries and stuff. They closed down due to too much theft and low profits from high (required) acceptance of food stamps. Across the street is a super Walmart. I won’t shop anywhere else now. Great prices and immense selection. I like cherry tomatoes for salads. The nearest Food Lion and Lowe’s Foods have a small selection, and often not a good selection. Walmart typically has 5 different types. They’re produce and fruits selection is giant. If they drive competitors out of the market with great prices and incredible selection, that’s the free market.
Here’s how Obama’s free market strategy works
The deck should not be stacked in favor of the wealthiest individuals and the biggest corporations, against working Americans. That’s why my administration is doing everything we can to reverse this trend and promote more competition in the marketplace. In addition to enforcing the rules on the books, I’ve directed federal agencies to identify anti-competitive behavior in different industries, and find new and specific ways to promote competition.
Huh. That’s approaching a command economy, where the government dictates everything. Right now it’s stuck in a crony capitalism mode.
One industry that’s ripe for change is cable TV. Right now, 99 percent of cable and satellite TV customers rent set-top boxes from their providers. According to one survey, this costs households an average of more than $230 per year. We spend some $20 billion to rent these devices. While we have almost unlimited choice in what we watch on television, from traditional programming to online content, there’s next to no competition to build a better, user-friendly product that allows you to easily access all this content in one place. So most consumers just rent whatever the cable company offers. Because we have to. That means companies have little incentive to innovate. As a consequence, we need multiple devices and controllers to access content from different sources. That makes no sense.
So my administration has encouraged the FCC to remove the barriers to competition that prevent new players from offering innovative cable box options to consumers.
Interestingly, quite a bit, if not most, of the problem with set top boxes arose from government regulation and intervention. Now, government intervention and regulation is required to fix the problems that government regulation and intervention created.
Now, it’s not that I disagree with this “encouragement” from Team Obama. I’d love a set top box that allows me to limit the channels I see to only those I want, rather than having to scroll through a ton I don’t. And one that uses virtually no power when the power button is pressed (current boxes use a lot of what is called Vampire Electricity).
What I don’t want to read is a guy yammering on about the free economy while instituting more regulations.
We know this works. For years, Americans had to rent our telephones from the phone company. This was a while ago, but when the FCC finally unlocked competition for home phones, the marketplace was flooded with all kinds of phone options with new features, and at different price points. Consumers suddenly had many options. And the whole industry moved forward as a result. The same can happen with cable boxes, and in dozens of areas of our economy – all of which can make a difference in your everyday life.
The bottom line is, competition is good for consumers, workers, businesses, and our economy. So I’m going to keep doing everything I can to make sure that our free market works for everyone. Thanks, and have a great weekend.
He’s dead correct. When the regulations were removed, choice exploded. In the wired sector, this was more about long distance calling, and the ability to purchase your own phone, leading to cordless. Then to mobile phones, and people ditching the limited number of home phone providers, then the use of home and business phones over the Internet. This was more about removing regulation, rather than implementing more government regulation to override other government regulation. Competition is good. Government should get out of the way. And Obama should stick to talking about things he knows, like fundraising and golf.
Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.
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