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North American Video Game Crash of 1983

Mach

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While walking down nostaliga-lane, researching old classic video games, their programmers, and so forth, I came accross the NA Video Game Crash Wiki.

North American video game crash of 1983 - Wikipedia, the free encyclopedia

Free market forces in this case resulted in the console industry imploding, leaving Japan to swoop in with its heaviliy restrictive market-preserving regulations, and take over the market, which it dominates to this day. Is this yet another example of how pure free market is an absurd exercise that always ends in market collapse, and how regulation is always evidenced to be not just the answer, but the long term solution?

The North American video game crash of 1983 (sometimes known as the video game crash of 1984 because it was in that year that the full effects of the crash became apparent to consumers) was the crash of the US video game market in the early 1980s. It almost destroyed the then-fledgling industry and led to the bankruptcy of several companies producing home computers and video game consoles in North America. The crash brought an abrupt end to what is considered the second generation of console video gaming in the English-speaking world. It lasted for about two years and during that interval, many business analysts of the time expressed doubts about the long-term viability of video game consoles. The video game industry was revitalized a few years later, mostly due to the widespread success of the Nintendo Entertainment System (NES), which was released in North America in 1985 and became extremely popular by 1987.

There were several reasons for the crash, but the main cause was oversaturation of the market with dozens of consoles and hundreds of mostly low-quality games. Hundreds of games were in development for the 1983 release alone, and this overproduction resulted in a saturated market without the consumer interest it needed.
 
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Not exactly.

Notice ow it only took 2 years for the industry to bounce back in full force (and its been relatively strong since)

Arguably, the lack of regulation that allowed Japanese companies like Nintendo to enter the American market relatively cheaply is what saved the video game industry in the United States


Why would you want to regulate a good thing??
 
While walking down nostaliga-lane, researching old classic video games, their programmers, and so forth, I came accross the NA Video Game Crash Wiki.

North American video game crash of 1983 - Wikipedia, the free encyclopedia

Free market forces in this case resulted in the console industry imploding, leaving Japan to swoop in with its heaviliy restrictive market-preserving regulations, and take over the market, which it dominates to this day. Is this yet another example of how pure free market is an absurd exercise that always ends in market collapse, and how regulation is always evidenced to be not just the answer, but the long term solution?

The best of the best emerged how is that bad a bad example of free markets?

You do know that they will eventually flop and another best of the best will come about.
 
While walking down nostaliga-lane, researching old classic video games, their programmers, and so forth, I came accross the NA Video Game Crash Wiki.

North American video game crash of 1983 - Wikipedia, the free encyclopedia

Free market forces in this case resulted in the console industry imploding, leaving Japan to swoop in with its heaviliy restrictive market-preserving regulations, and take over the market, which it dominates to this day. Is this yet another example of how pure free market is an absurd exercise that always ends in market collapse, and how regulation is always evidenced to be not just the answer, but the long term solution?

The pure free market is an absurd exercise that always ends in market collapse???

Certainly not.

However, the term "regulation" is meaningless without reference to the basic framework in which companies operate. This is a point that is often overlooked by the more simplistic free-market advocates. They do not notice that the government has set up a framework which favors certain companies or types of companies and then they advocate de-regulation within that framework, which just makes things worse.

In spite of all their free-market rhetoric, what everybody else observes is that they have just given companies with long-standing government-backed monopolies free reign to exercise their monopolies in the most craven way possible. Then, apparently oblivious to what they have done, they lament the fact that so few people vote Libertarian. "Don't Americans believe in freedom?" they ask.

At my Critique of Austrian Economics I write:

"Another reason why Austrians seem naïve is their relentless call for deregulation, which often ignores fundamental inequities. This author writes:

"Decentralization is not the same thing as deregulation. The term 'regulation' is meaningless without reference to the basic framework in which banks operate. A stable system can be governed by the usual laws against criminality that apply to all businesses, while an unstable system requires a vast regulatory bureaucracy and is still plagued with corruption. It is naïve for people who dislike big government to advocate deregulation in the latter case, but it is also wrong to assume that the existence of a central bank is part of the regulations which attempt to prevent corruption. Central banks and regulatory bureaucracies are associated with one another, not because they both oppose an inherent instability in banking, but because the existence of a central bank creates an unstable system that requires constant policing (1999, p. xliii).

"In light of the recent [2004] scandals, we should point out that there is no invisible hand that prevents dishonest businessmen from cooking their books. For that we need government regulators. And we needed regulations like the Glass-Steagall Act, which prevented conflicts of interest."

Note: Whether any of this is relevant to the Video Game Crash of 1983, I don't know. I have not studied this episode. I do know that my brother, who graduated from high school in 1984, wanted to be a computer programmer, but had no luck finding work in that field. Why, I am not sure.
 
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The best of the best emerged. How is that a bad example of free markets?

Arguably, the lack of regulation that allowed Japanese companies like Nintendo to enter the American market relatively cheaply is what saved the video game industry in the United States

Why would you want to regulate a good thing??

Arguably, the Japanese are just smarter than Americans and, regardless of the regulatory climate, they would have kicked our butts in electronics one way or another.

Ricardo's Law says that every nation should specialize in what they do best, even if there are other nations that do it better. Sound wisdom.

Also, this is a classic line from the Clint Eastwood movie, The Eiger Sanction. Eastwood, a retired assassin employed as a college professor of literature, is asked why he is going on yet another assassination mission. He replies, "it is what I do best."

If you are one of those people - like me - who responds to every social situation by asking oneself, "what would Clint Eastwood do?" then you should be sure to apply Ricardo's Law whenever these tricky economics questions come up.
 
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Arguably, the Japanese are just smarter than Americans and, regardless of the regulatory climate, they would have kicked our butts in electronics one way or another.

Ricardo's Law says that every nation should specialize in what they do best, even if there are other nations that do it better. Sound wisdom.

Also, this is a classic line from the Clint Eastwood movie, The Eiger Sanction. Eastwood, a retired assassin employed as a college professor of literature, is asked why he is going on yet another assassination mission. He replies, "it is what I do best."

If you are one of those people - like me - who responds to every social situation by asking oneself, "what would Clint Eastwood do?" then you should be sure to apply Ricardo's Law whenever these tricky economics questions come up.

You and I are on the same page. Maybe with some minor philosophical differences.

I will agree that by and large the Japanese are smarter but that Ricardo's Law should apply to individuals more than nation states.
 
Video Game crash of 1983 had to do with several issues, non of them due to regulation. The biggest contributor was the introduction of new technology, namely the portable PC.

First, the gaming world took a hit when the video arcades declined as the economy was in a low point. Further decline occurred with home PC's and gaming consoles like the old Commodores, etc. Since technology was simple at the time and people were still captivated by games the came a flood of cheap generic games. Even the Chuck Wagon food corp put out their own crappy ass game. I mean it just wasn't hard to hack out a game like Pitfall. The flood crashed the gaming market at the time.

The results spurred the creation of quality games and hyper competitiveness. Many old companies went down the drain and rightly so. Much like our automotive industry now except we aren't allowing them to fail which is not healthy for the economy in letting them survive. Now, gaming companies have to put out some serious product of fail hard. The MMORPG market is cutthroat and we've seen several games that failed not because they were bad but because of bad market practices (Age of Conan, Everquest II, Star Wars Galaxies, etc.). Once again the market is being saturated with MMO's and we have several that will be debuting this year. Some look like they are destined for failure (Darkfall) due to bad market exec decisions instead of bad gameplay.

Regulating the gaming market would be a catastrofic failure. Regulating the US economy is much the same.
 
As Keorythe said regulation didnt kill the market. There was just too much crap put out at once and the market tanked. Since we are talking about the gaming industry though we are noticing already that the gaming industry (as all non-necessity industries) are taking hits. Midway (Famous for Mortal Kombat) has become a huge sinking ship as it has done as bad to warrant itself to being removed from the stock exchange.
 
Video Game crash of 1983 had to do with several issues, non of them due to regulation. The biggest contributor was the introduction of new technology, namely the portable PC.

You disagree in part later, and so does the Wiki quoted below:
There were several reasons for the crash, but the main cause was oversaturation of the market with dozens of consoles and hundreds of mostly low-quality games. Hundreds of games were in development for the 1983 release alone, and this overproduction resulted in a saturated market without the consumer interest it needed.

The flood crashed the gaming market at the time.
Yes, not just the PC, and not primarily the PC.

I sent off for the Atari Kool-Aid Man game using kool-aid upcs! :)

How did a flood occur? How did a flood of foreign money end up as a flood of loans/financial vehicles in the current economic situation? It's not a mystery.

In the game crash scenario, game companies did not self-regulate. Lots of competition, no regulation, lead specifically to LOWER quality games, and the eventual market COLLAPSE. It did not rebound. Another country came in, specifically WITH regulations (And now a near-monopoly), and showed the U.S. how to thrive using the market....and self-regulation.

Cause, no regulation. Solution, regulation.
If they do not self-regulate, you regulate them or let it collapse and be run by someone else, who will regulate. Really what you want? We can let Japan run our market, or China, but that's less relevant than the fact that to stay efficient and not collapse, they will regulate.

Regulating the gaming market would be a catastrofic failure. Regulating the US economy is much the same.

Precisely the opposite of what happened, even supported by your acknowledgment of how it happened. Nintendo did not have a flood of cheap games, why? They put restrictions on it solely to help the market thrive (and thus their business/profit).

It really seems cut and dry to me in terms of leading cause, leading solution. In fact, the lack of specific "regulation" is what cause the failures in both cases, and has always been the solution historically.
 
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The best of the best emerged how is that bad a bad example of free markets?
Free markets are never unregulated, to be a market they are necessarily regulated. How well they are regulated, and to what extent, are really the only thing to discuss I'm guessing.

The best of the best emerged, it was self-regulated, and then dominated in the aftermath of the collapses unregulated U.S. console industry. Whether that's good or bad is less relevant than the reality that it was no regulation resulting in a flood resulting in collapse, then was replaced by a regulated industry. If the best of the best is what took place.
 
Not exactly.
Notice ow it only took 2 years for the industry to bounce back in full force
(and its been relatively strong since)

The American console industry DID NOT bounce back.

Actually Japan pushed very hard to recover that market segment so it could dominate it, and it did (very well too). It was not recovering at that pace naturally from within the U.S. People have memories, and they were burned on video games at that time, it was radioactive, and only with significant effort did Japan push back in.

It was isolated to "video games", so necessarily the rest of the economy remained strong (I mean really, not the GW Bush version).

Arguably, the lack of regulation that allowed Japanese companies like Nintendo to enter the American market relatively cheaply is what saved the video game industry in the United States

Back to Onion's point, regulation is irrelevant, WHAT the regulation is, and in which market/framework IS what is relevant.
But necessarily we then have to accept that *some regulation is both necessary and good*.

Once we get beyond "regulation bad", people may have the wits to vote and understand the issues they vote on concerning industry and regulation.
 
The 1983 crash came from bad business practices at ATARI, who lead the market at the time, too many crappy games without a market for them...

1983 was pure greed, pure "quantity over quality".

In 1984, there was mostly the fall out of the market, Atari tried in vain to release a new console, but the brand had been sullied by the failures of the last year. In 1985 Nintendo released the NES in the spring, and the system was light years ahead of anything any American company had ready.

It was innovative, the games like no one had ever seen... it blew people away.

Nintendo fell from grace when Sony released the PS and chose CD over cartridges. That wasn't due to regulation, that was due to smart free market practices at work.

The PS2 smashed everyone later because it was backwards compatible and finally Nintendo got into the Disc market with the gamecube, but again Sony lead because they had a smarter business plan.

Jump ahead to today and we Sony teetering on the brink of failure because they SCREWED UP. Adn Nintendo and MS have gained heavy ground with innovative products, smart marketing and good products at the right price.

Sony believed their own hype and released an over priced console that had 1 thing going for it in this new era, Blue Ray. And not everyone was willing to drop the grip for that.


What does the Video Game history tell us? Smart companies succeed, bad ones do not. Remember the SEGA consoles, you could write an entire book on the problems with that, and most were due to poor management.

Regulation has never been an issue in the VG market.
 
You disagree in part later, and so does the Wiki quoted below:

First, never use wiki as your primary source of info.



In the game crash scenario, game companies did not self-regulate. Lots of competition, no regulation, lead specifically to LOWER quality games, and the eventual market COLLAPSE. It did not rebound. Another country came in, specifically WITH regulations (And now a near-monopoly), and showed the U.S. how to thrive using the market....and self-regulation.

You're confusing government regulation with market initiative. You don't regulate competition. The new technology had no real advertisement, no PC magazine, no Gamestops. Its relative "newness" took people by surprise and we gorged on it until it got boring. Everyone saw us gorge and everyone wanted to get in on this profitable new world of technology. Everyone, even Chuck Wagon. Even today, there are a flood of new games that get released that are crap. Open up a PC Gamer mag and check out the back section. Pure crap games listed. Some companies still give out small "micro-games" that are product advertisment heavy. The difference is that consumers are more savvy and frankly have a higher expectation for games. So we aren't going to buy them.

Cause, no regulation. Solution, regulation.
If they do not self-regulate, you regulate them or let it collapse and be run by someone else, who will regulate. Really what you want? We can let Japan run our market, or China, but that's less relevant than the fact that to stay efficient and not collapse, they will regulate.

If they don't regulate, then they fail. You let them fail. This is more attuned to the automotive industry issue, not a government market regulation issue.


Precisely the opposite of what happened, even supported by your acknowledgment of how it happened. Nintendo did not have a flood of cheap games, why? They put restrictions on it solely to help the market thrive (and thus their business/profit).

It really seems cut and dry to me in terms of leading cause, leading solution. In fact, the lack of specific "regulation" is what cause the failures in both cases, and has always been the solution historically.

Now you're getting hardware and software mixed up which seems to be the big problem for your entire arguement. Nintendo didn't put out its own games. It put out its own console and some games. But the majority of games have always been from outside developers. A large chunk are developed in france....blah. There was never a hardware flood. However, with the market as competitive as it is now, game developers face a tougher sink or swim type of market. No regulation has been applied. Just better product development which every company ends up doing in the end or they go bankrupt. That isn't close to what government regulation does.
 
The 1983 crash came from bad business practices at ATARI, who lead the market at the time, too many crappy games without a market for them...

1983 was pure greed, pure "quantity over quality".

In 1984, there was mostly the fall out of the market, Atari tried in vain to release a new console, but the brand had been sullied by the failures of the last year. In 1985 Nintendo released the NES in the spring, and the system was light years ahead of anything any American company had ready.

It was innovative, the games like no one had ever seen... it blew people away.

Nintendo fell from grace when Sony released the PS and chose CD over cartridges. That wasn't due to regulation, that was due to smart free market practices at work.

The PS2 smashed everyone later because it was backwards compatible and finally Nintendo got into the Disc market with the gamecube, but again Sony lead because they had a smarter business plan.

Jump ahead to today and we Sony teetering on the brink of failure because they SCREWED UP. Adn Nintendo and MS have gained heavy ground with innovative products, smart marketing and good products at the right price.

Sony believed their own hype and released an over priced console that had 1 thing going for it in this new era, Blue Ray. And not everyone was willing to drop the grip for that.


What does the Video Game history tell us? Smart companies succeed, bad ones do not. Remember the SEGA consoles, you could write an entire book on the problems with that, and most were due to poor management.

Regulation has never been an issue in the VG market.

I totally agree. It is innovation that spurs the most substantial growth in any industry, not "regulation".

Take polio for instance. Under that assumption, it was not the discovery of penicillin that saved millions, but the regulations in place when it happened:confused:
 
First, never use wiki as your primary source of info.
If we are not to use my view on the issue, nor yours, who's are we to use? It's another datapoint that backs what I stated, you are free to post similarly, and free not to. You will not find "proof" either way in economics, you should already know that. A good theory is the best you get.

You're confusing government regulation with market initiative. You don't regulate competition.
Competition is regulated every day, in every known market, in a variety of ways. When you write "you don't regulate competition", I'm not quite sure what you are referring to, it has no basis in reality.

If they don't regulate, then they fail. You let them fail. This is more attuned to the automotive industry issue, not a government market regulation issue.

IF AND ONLY IF you already have limited the power of such companies such that if they do fail, as you want to let them, that they do not drag every single other aspects of the economy down with them, in what has been in the past, catastrophic.

It was net more efficient to regulate banks. Was, has been, and based on all evidence always will be. We didn't, they collapsed. We regulated, they run smoothly and efficiently. When we let new financial institutions exist in our market, and they gamed the system to be outside of such regulation, the same, boring, predictable thing occurred. They got a flood of money into them because they were operating on a short-term lottery scam basically, and they profited, and collapses, and are dragging everything down with them.

If we let companies fail, individual companies will not then be allowed to be "too big to fail". Can't have it both ways, well you can, and countries fold. Ultimately nature does not have the same cares that humanity has.
While an unregulated market is pure fiction already, even if it were to exist in some meaningful way, it would similarly not care if it collapsed or caused our government to be overthrown, etc. Free does not imply "without any human influence whatsoever". Because all that ultimately means is a slave to nature, or a slave to the market.

There was never a hardware flood.
I clearly wrote it was a flood of games, numerous times.
 
The 1983 crash came from bad business practices at ATARI, who lead the market at the time, too many crappy games without a market for them...
1983 was pure greed, pure "quantity over quality".
What does the Video Game history tell us? Smart companies succeed, bad ones do not.

I'm with you, but see where that leads. Here is what I'm seeing:

To avoid ATARI having too many crappy games flooding the market, what do they do? (regulate the quantity/quality of games in their market space, at least to the point they control). They did not, it took another SMART company to come in and do that. And they did, and they succeeded. This worked well, as you noted, in this isolated market segment (video game/entertainment)

Let's say two cornerstone companies in industryX exist, and one is playing smart/conservative, and one is playing short-term greedy.

1. If one of these companies is stupid/short-term greedy, it should be allowed to fail (with all due haste). This is *ideal* market reaction.

2. It is possible tha the size of the companies and the particular space in the mareket they occupy, creates a different scenario however. One that we see time and time again.

The one stupid/short-term-greedy company DOES fail, but will cause an unavoidable collapse of the entire market segment, which is also tied to so many other industries that it will bring everything down with hit.

This is *not a ideal* market reaction. We want to ensure #1 happens. The stupid companies, FAIL MISERABLY and lose money. What we do NOT want happening, is a stupid miserable company in finance, to ruin your IT Consulting business. What sense would that make? You were efficient, had good forecasting, planned well, played by the book, were smart, offered a good service at a good price, and you collapse as a direct result of some other stupid company that you were NOT directly tied to?

We want to foster the first. We want companies to routinely try, and possibly even fail, and ultimately arrive at an efficient market for that time.

What we do not want to foster is companies to be incentivized to create companies that are enormously powerful, and allowed to run entirely irresponsibly if the net result is their failure affects each and every other person in the market in some catastrophic way.

We do not think Iran should have Nukes. Why?
Is the economy of the U.S. of such little importance that we incentivize people to build economic nukes that take down our markets? I don't believe it is.

I'm just noting that it goes hand in hand in any "good" market that promotes efficiency and good free market principles, that if companies are so unrestricted to be allowed to fail miserably, depending on their position in the market, should then necessarily not be allowed to take everyone else down with them. Achieved either by regulating their practice, or regulating their size. Either/or, but ignoring both = collapse, inefficiency, etc.

It's like wanting to go through hardships in order to come out stronger, vs wanting to get hit and killed by a train to come out stronger. The former is more ideal right?
 
I totally agree. It is innovation that spurs the most substantial growth in any industry, not "regulation".

Take polio for instance. Under that assumption, it was not the discovery of penicillin that saved millions, but the regulations in place when it happened:confused:

Regulation is not the opposition of innovation though.

Regulation can stifle innovation, or encourage innovation, all depends on the market, the industry in question, it's position in the market, size, etc. Markets in general ENCOURAGE innovation, and they are ALL regulated, necessarily some regulation has been instrumental in all modern innovation. That alone suffices to shut that line of reasoning down.

Same with parenting "rules". Some create problems, some help control them.
Same with laws. Some laws improve society, some tear it apart.

But a monopoly is "natural", it must therefore be good and innovative? Really? It encourages more innovation than a more competitive market segment? But if I had a monopoly, I would certainly argue a monopoly is the pinnacle of good and the driving force behind real innovation...well, depending on how damned my soul was at that time.
 
I'm with you, but see where that leads. Here is what I'm seeing:

To avoid ATARI having too many crappy games flooding the market, what do they do? (regulate the quantity/quality of games in their market space, at least to the point they control). They did not, it took another SMART company to come in and do that. And they did, and they succeeded. This worked well, as you noted, in this isolated market segment (video game/entertainment)
Yes, but regulation is a matter for companies, not governments in an arena like this. Video Games are NOT an isolated market, video games are bigger then hollywood.

Let's say two cornerstone companies in industryX exist, and one is playing smart/conservative, and one is playing short-term greedy.

1. If one of these companies is stupid/short-term greedy, it should be allowed to fail (with all due haste). This is *ideal* market reaction.

2. It is possible tha the size of the companies and the particular space in the mareket they occupy, creates a different scenario however. One that we see time and time again.

The one stupid/short-term-greedy company DOES fail, but will cause an unavoidable collapse of the entire market segment, which is also tied to so many other industries that it will bring everything down with hit.
That's life, sometimes ****e happens.

This is *not a ideal* market reaction. We want to ensure #1 happens. The stupid companies, FAIL MISERABLY and lose money. What we do NOT want happening, is a stupid miserable company in finance, to ruin your IT Consulting business. What sense would that make? You were efficient, had good forecasting, planned well, played by the book, were smart, offered a good service at a good price, and you collapse as a direct result of some other stupid company that you were NOT directly tied to?

Life is full of risks.
We want to foster the first. We want companies to routinely try, and possibly even fail, and ultimately arrive at an efficient market for that time.
Trying to centralize control of the markets is... utterly impossible and a dangerous mindset. History teaches this over and over again.
What we do not want to foster is companies to be incentivized to create companies that are enormously powerful, and allowed to run entirely irresponsibly if the net result is their failure affects each and every other person in the market in some catastrophic way.
It's unavoidable that things can go bad, it's worse when it's pushed and abetted by government (think Freddi and Fannie and the housing market)
We do not think Iran should have Nukes. Why?
Is the economy of the U.S. of such little importance that we incentivize people to build economic nukes that take down our markets? I don't believe it is.
Very silly argument, really.
I'm just noting that it goes hand in hand in any "good" market that promotes efficiency and good free market principles, that if companies are so unrestricted to be allowed to fail miserably, depending on their position in the market, should then necessarily not be allowed to take everyone else down with them. Achieved either by regulating their practice, or regulating their size. Either/or, but ignoring both = collapse, inefficiency, etc.
Government cannot run anything right, you want to trust the economy to it?
Seriously?
It's like wanting to go through hardships in order to come out stronger, vs wanting to get hit and killed by a train to come out stronger. The former is more ideal right?
I want the market to function without the meddling of government, which is like kryptonite to the system.
 
Trying to centralize control of the markets is... utterly impossible and a dangerous mindset. History teaches this over and over again.

No it doesn't. I keep showing you are wrong about such views and you keep pretending my posts don't exist.

Centralized control of markets is what allowed the Asian tigers to go from the periphery to the core. While they did engage in free market trade with the rest of the world, the government centralized planning as to what the economy would specialize in. South Korea has exceptionally strong electronics and ship building for this primary reason. Back under Dictator for Life, cough, I mean President Park, massive government intervention directed resources to electronics, cars, chemicals and ship building. And right now those are some of the strengths of the privatized South Korean market. The existence of the Chaebols as well as Zaibatsus in Japan are excellent examples where of centralized control of markets with integration in the free trade world has proven wildly successful as a method of development.

But you're just going to pretend that all government intervention and central planning is always bad rather then actually understand the concepts of which you constantly pretend to think you understand.

It's unavoidable that things can go bad, it's worse when it's pushed and abetted by government (think Freddi and Fannie and the housing market)

You do realize that Freddie and Fannie have been around for a long, long time and only the use of mortgages as social policy by the two parties within the past decade had caused their downfall no? Previously, when good conservative banking polices were practiced at F&F and when neither party used mortgages as social policy in any real way (CRA had a tiny amount of loans, around $20 billion total, virtually all profitable) there wasn't a problem.

Government cannot run anything right, you want to trust the economy to it?
Seriously?

Define "right." Or is right however you deem it to be? The government runs roads relatively well on average. It runs utilities relatively well in keeping them from gouging us. It in practice over the long term uses the military well. Private military is quite a dangerous concept. Does government run everything well? No. Does it run some things well? Yes.

I want the market to function without the meddling of government, which is like kryptonite to the system.

Except when you deem the meddling to be okay. :rofl
 
No it doesn't. I keep showing you are wrong about such views and you keep pretending my posts don't exist.

Centralized control of markets is what allowed the Asian tigers to go from the periphery to the core. While they did engage in free market trade with the rest of the world, the government centralized planning as to what the economy would specialize in. South Korea has exceptionally strong electronics and ship building for this primary reason. Back under Dictator for Life, cough, I mean President Park, massive government intervention directed resources to electronics, cars, chemicals and ship building. And right now those are some of the strengths of the privatized South Korean market. The existence of the Chaebols as well as Zaibatsus in Japan are excellent examples where of centralized control of markets with integration in the free trade world has proven wildly successful as a method of development.

But you're just going to pretend that all government intervention and central planning is always bad rather then actually understand the concepts of which you constantly pretend to think you understand.



You do realize that Freddie and Fannie have been around for a long, long time and only the use of mortgages as social policy by the two parties within the past decade had caused their downfall no? Previously, when good conservative banking polices were practiced at F&F and when neither party used mortgages as social policy in any real way (CRA had a tiny amount of loans, around $20 billion total, virtually all profitable) there wasn't a problem.



Define "right." Or is right however you deem it to be? The government runs roads relatively well on average. It runs utilities relatively well in keeping them from gouging us. It in practice over the long term uses the military well. Private military is quite a dangerous concept. Does government run everything well? No. Does it run some things well? Yes.



Except when you deem the meddling to be okay. :rofl
You have this belief that government should direct the economy.

Why?

You look at SK and see it's success. You don't understand that SK was able to expand and grow like that because of the situation at the time. The economic advantage of their currency vs. dollar made such enterprises HIGHLY profitable. The culture of SK, lot's of things played into their success, very very little of which translates to America today.

You also love to bring up roads, as if I have EVER said roads or other infrastructure issues are better off in private hands. Please, pull that post up, you can't cause it does not exist.

You do realize that Freddie and Fannie have been around for a long, long time and only the use of mortgages as social policy by the two parties within the past decade had caused their downfall no? Previously, when good conservative banking polices were practiced at F&F and when neither party used mortgages as social policy in any real way (CRA had a tiny amount of loans, around $20 billion total, virtually all profitable) there wasn't a problem.

And you do realize that Freddie and Fannie were central to the economic mess we're in right now SPECIFICALLY because of government "Meddling" in the free markets. "You banks, you must give loans so poor folk can buy houses! We don't care if they cannot afford them, do it or you will be breaking the law! Freddie, Fannie will back you up. Oh and Banks and investment firms, you guys can become one if you want too."

What happened was a brew for disaster, and that's what we're in. Huge risks became easy profits via the sub-prime market. When it became apparent this was a bad thing, red flags started going up, but the Republicans lacked the back bone to fight the Dems on their pet project and punted the issue.

THAT is what I am talking about when I mean government meddling in the free market.
 
Regulation is not the opposition of innovation though.

Regulation can stifle innovation, or encourage innovation, all depends on the market, the industry in question, it's position in the market, size, etc. Markets in general ENCOURAGE innovation, and they are ALL regulated, necessarily some regulation has been instrumental in all modern innovation. That alone suffices to shut that line of reasoning down.

Same with parenting "rules". Some create problems, some help control them.
Same with laws. Some laws improve society, some tear it apart.

But a monopoly is "natural", it must therefore be good and innovative? Really? It encourages more innovation than a more competitive market segment? But if I had a monopoly, I would certainly argue a monopoly is the pinnacle of good and the driving force behind real innovation...well, depending on how damned my soul was at that time.

I was responding to your statement about regulation being the reason Japanese firms won the consol wars up until 2006, which is false. It was industry innovation, regardless of the regulations allowed at the time (unless of course they would create a black market).
 
I was responding to your statement about regulation being the reason Japanese firms won the consol wars up until 2006, which is false. It was industry innovation, regardless of the regulations allowed at the time (unless of course they would create a black market).

Innovation and the fact the Yen Dollar difference made it extremely profitable. That always helps in understanding why Japan beat the crap out of the US Companies. They had the resources and profit gain to do it.

Actually it's also why Microsoft was the only American Console maker... they had the money to withstand the upfront cost and little to no profit of the console market to make it to the long term profit potential. Which is part of why Atari never recovered from the 1983 collapse as a console maker. They lacked the funds to be innovative, and by the time they reentered the market with their new console, it was too late.

Investors saw that investing in Nintendo, SEGA and later Sony would result in higher profits. Instead of investing money in a company developing a gmae for Atari, they invested in game makers catering to the Japanese products. Higher install bases, higher chances for profit. Market 101.
 
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You have this belief that government should direct the economy.

No, you just assume everything you wish to suit your poorly conceived arguments.

What I actually said and what you deliberately chosen to ignore to suit your poorly conceived arguments is that central planning is not always bad and in several cases has worked relatively well. One of the reason you lose so many arguments here is because you don't read what people write, you assume what you wish and then respond.

You look at SK and see it's success. You don't understand that SK was able to expand and grow like that because of the situation at the time.

Actually it was because of the situation that it grew so well. Again, if you bothered to read what I wrote instead of just making **** up to suit your piss arguments you would have noticed that. I specifically noted free trade as a key fundamental as to why the centrally planned economy of SK did so well. Did free trade exist prior to that in such amounts? No.

Learn to read what people write instead of making up **** you want to have exist.

The economic advantage of their currency vs. dollar made such enterprises HIGHLY profitable.

It wasn't their currency. It was their pick of industries and cheap labor. Again, if you noticed what I wrote instead of just making up **** you think I wrote, you wouldn't keep making asinine false statements.

The culture of SK, lot's of things played into their success, very very little of which translates to America today.

Culture, smulture. That argument is hash given how Scotland has replicated many of the same concepts. And now you are changing the argument by resorting to a fallacy. You derided central planning entirely. Now you are saying it won't work in the US. Never mind how central planning as form of government spending in WWII brought us out of the depression. I guess that doesn't count on your part.

You also love to bring up roads, as if I have EVER said roads or other infrastructure issues are better off in private hands. Please, pull that post up, you can't cause it does not exist.

This is exactly what I was talking about. You pick and choose what you want to define as central planning and government meddling. Instead of being honest about it and realizing that roads, highways and transportation infrastructure are part of central planning and government meddling you conveniently remove them despite being obvious examples of things you decry as government's failing.

I made a point to you earlier about not lumping all of it together. You clearly aren't taking the advice. It's all bad until someone points out flaws in your argument and then you change the argument by removing some and then next week declare it all bad again despite having someone already point out how your argument is flawed.

And you do realize that Freddie and Fannie were central to the economic mess we're in right now SPECIFICALLY because of government "Meddling" in the free markets. "You banks, you must give loans so poor folk can buy houses! We don't care if they cannot afford them, do it or you will be breaking the law! Freddie, Fannie will back you up. Oh and Banks and investment firms, you guys can become one if you want too."

Of course. Again, if you bothered to read what I wrote instead of just making **** up you would have seen that I specifically noted govenrment using mortgages as social policy. Again, your inability to read or at least comprehend what was written is a key reason you constantly lose arguments here.

but the Republicans lacked the back bone to fight the Dems on their pet project and punted the issue.

Still pretending that the GOP didn't repeal key parts of the GSA eh? I pointed that out in another thread and you abandoned it. Furthermore, the GOP and Bush was constantly hammering on down payments, one of the best ways to prevent the mess we're in now. Sure the Democrats are to blame, but one has to be truly insane to believe that the GOP wasn't to blame as well.

THAT is what I am talking about when I mean government meddling in the free market.

Thanks for proving my point. It's not meddling when you like the outcome, it is when you don't.

Cherry picking at its finest.
 
Thanks for proving my point. It's not meddling when you like the outcome, it is when you don't.

Cherry picking at its finest.

When the outcome is financial ruin and disaster because it's government pushing social programs and political agendas over smart market policies...

Yeah I think there is AMPLE evidence of this being bad. That's not cherry picking, that's using my brain and applying common sense.

You however... you don't seem to have a standard. You think all government intervention is good...
 
When the outcome is financial ruin and disaster because it's government pushing social programs and political agendas over smart market policies

Did I disagree anywhere in my post?

Oh wait. I specifically noted how the GOP and Dems using mortgages as social policy lead to this disaster. To be honest though, if the Investment Houses had merely purchased the securities with cash rather then leverage this mess wouldn't be anywhere near what it is today. Charge offs aren't so bad when you don't have to make future loan payments on the money you took out to buy the assets you are charging off.

Yeah I think there is AMPLE evidence of this being bad. That's not cherry picking, that's using my brain and applying common sense.

Incorrect. You are cherry picking meddling as to when government intervention fails rather then government intervention as a whole.

You however... you don't seem to have a standard. You think all government intervention is good...

Apparently outright lying isn't above you.

Let's see what I stated:

"Does government run everything well? No. Does it run some things well? Yes."

You accuse me of thinking "all government intervention is good"

Therefore either you failed to read what I wrote or you are lying. Which is it? Illiterate or a liar?
 
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