Kimble :
LOL.
Matt just got Rand Spammed ©.

Rand Spammed is an AWESOME term – I’ll have to use it next time I’m debating with Austrian economists (which could well be tonight – if I end up drinking)

Matt just got Rand Spammed ©.

I agree with what you are saying. Competition issues are one issue where the government can help – although there does need to be some balance, when the CC action is reactive (responding to mergers) compared to proactive (where they are researching industries).

A larger CC that focuses more on proactive policy could be useful – if it is kept independent from political concerns.

“Agreed that is their role. Not sure if the checks and balances are in place within or without government and the cabinet process.”

Indeed. The is one of the useful things with the commerce commision though – it is “relatively” independent of government.

I’m not very happy with all the Jawboning the Brownlee is doing – I get the feeling there is going to be a lot of complaining on this blog about this sort of thing if it keeps on happening.

“You’ve seemed to have totally lost the plot on this: name a coercive monopoly that wasn’t government instituted.”

Huh? The whole concept of a commerce commision stemmed from the piles of anti-competitive behaviour recorded during the nineteenth centry to now.

I completely agree that there are substantial government failures – in some areas the government becomes a giant monopoly, one that doesn’t face any effective market pressure. Furthermore, I agree that the government can’t figure out where to invest unless they get information from the market.

However, competitive issues to exist in the private sector as well – especially in a small, distant, economy like New Zealand. Anti-competitive behaviour (including unions) throughtout the economy makes prices sticky – sticky prices are a huge problem any time of year, but especially during a recession.

Now I never said anything about Microsoft – this is an example of an industry where some degree of monopoly power is useful, as there is a lot of investment that was required that other firms could free ride off. However, over time there could still be a role to help reduce barriers to entry in the industyr (if we felt Microsoft was arbitrarily putting them up) – and a fall in microsofts market cap is not an indication of whther this is a good idea or not.

My concern is more with industries that experience some degree of price fixing (which is really just quantity limiting) and the such.

1) Brownlee immediately came out after the power cut in Auckland and said “Don’t blame Transpower it’s the regulators’ fault” even though it was Transpower’s equipment that failed, their decision making that led to the neighbouring equipment being out of service and no other way to carry the load if there was a failure, and their maintenance regime is known to be questionable according to their own expert reports.

2) Brownlee is using a basic factual error to drive part of his policy direction. He says individual grid upgrade projects costing more than $1.5 million must be approved by the Electricity Commission and this needs changing.

It’s untrue. So who is telling him this is true and why are his advisers not picking up the error?

Agreed that is their role. Not sure if the checks and balances are in place within or without government and the cabinet process.