4 ms·

I hate to bring politics into this but I will: how is it some people moan about the "growth of government" while left and right we see merger after merger witho

I hate to bring politics into this but I will: how is it some people moan about the "growth of government" while left and right we see merger after merger without the government doing a thing to stop these mergers? Where is the over-regulation I keep hearing about?

grandalf 9y ago
Well, in this case what we are seeing is the growth of a regulatory state that exists mainly to help select firms generate profit. This is known as "regulatory capture" and infrastructure services that the government can justify regulating for any reason are vulnerable to it. I'd say that you are correct in the broader observation that both parties strongly favor big government that helps their pet industries avoid competition. And along similar lines, both parties are perfectly happy with mobile carrier consolidation, which is too bad, because the poor spend disproportionately on mobile services and are most likely to be victimized by misleading plans or deceptive sales tactics (which are extremely common).
Turing_Machine 9y ago
"Where is the over-regulation I keep hearing about?" It's baked into the cake, as grandalf noted. More regulations benefit larger players, who can afford the parasitic staff of lawyers, accountants, and other compliance people to deal with it. While the big guys don't like regulation, as such, as long as the regulation is applied evenly across the board it doesn't really affect them that much (they just raise prices). It does do a wizard job of discouraging upstart competition, though.
- ZenoArrow 9y ago
  > "While the big guys don't like regulation, as such, as long as the regulation is applied evenly across the board it doesn't really affect them that much (they just raise prices). It does do a wizard job of discouraging upstart competition, though." Regulation can exist for good reasons though. Take the pharmaceutical industry as an example, do we want to ensure the drugs that are on the market have gone through clinical trials, even if doing so limits the group of companies that can afford to pay for these trials?
  - Zach_the_Lizard 9y ago
    If by reducing regulations we increase drug deaths but also decrease deaths from newly treatable illness, not to speak of the benefits of cheaper drugs, it seems the calculus can come out against the regulations depending on how the numbers shake out. That is to say, the regulations should be subject to a cost-benefit analysis and only those with a positive ROI should remain in place. At the very least we should be allowing drugs to be sold that have been trialed and approved in other first world markets.
    - ZenoArrow 9y ago
      > " the regulations should be subject to a cost-benefit analysis" Not everything related to pharmaceuticals boils down to a cost-benefit analysis. If companies sell a drug with known side effects, but cover it up to make a profit, that might make business sense to its shareholders, but it's not something that benefits society at large. To give an example, Bayer knowingly sold products that were known to give people hepatitis C and HIV. https://en.wikipedia.org/wiki/Contaminated_haemophilia_blood_products https://en.wikipedia.org/wiki/Contaminated_haemophilia_blood... "Contaminated haemophilia blood products were a serious public health problem in the late 1970s up to 1985. These products caused large numbers of haemophiliacs to become infected with HIV and hepatitis C. The companies involved included Alpha Therapeutic Corporation, Institut Mérieux (which then became Rhone-Poulenc Rorer Inc., and is now part of Sanofi), Bayer Corporation and its Cutter Biological division, Baxter International and its Hyland Pharmaceutical division. Estimates range from 6,000 to 10,000 haemophiliacs in the United States becoming infected with HIV." https://articles.mercola.com/sites/articles/archive/2006/08/05/bayer-sells-aids-infected-drug-banned-in-us-in-europe-asia.aspx https://articles.mercola.com/sites/articles/archive/2006/08/... "Recently unearthed documents show that the drug company Bayer sold millions of dollars worth of an injectable blood-clotting medicine -- Factor VIII concentrate, intended for hemophiliacs -- to Asian, Latin American, and some European countries in the mid-1980s, although they knew that it was tainted with AIDS. The company stopped selling the drug in the United States in 1984, but continued to sell it overseas for an additional year." Reducing government regulation of drug companies increases the chances of similar underhand practices, as companies can claim they were following the laws they were intended to comply with. > "At the very least we should be allowing drugs to be sold that have been trialed and approved in other first world markets." That still limits the pool of companies that can afford it to a select few. It's very expensive to bring a new drug to market, even if you limit the trials to a single market. To give an idea of how much these clinical trials cost... http://journals.sagepub.com/doi/abs/10.1177/1740774515625964?journalCode=ctja http://journals.sagepub.com/doi/abs/10.1177/1740774515625964... "Therapeutic area was an important determinant of clinical trial costs by phase. The average cost of a Phase 1 study conducted at a US site ranged from US$1.4 million (pain and anesthesia) to US$6.6 million (immunomodulation), including estimated site overhead and monitoring costs of the sponsoring organization. A Phase 2 study cost from US$7.0 million (cardiovascular) to US$19.6 million (hematology), whereas a Phase 3 study cost ranged from US$11.5 million (dermatology) to US$52.9 (pain and anesthesia) on average. Across all study phases and excluding estimated site overhead costs and costs for sponsors to monitor the study, the top three cost drivers of clinical trial expenditures were clinical procedure costs (15%–22% of total), administrative staff costs (11%–29% of total), and site monitoring costs (9%–14% of total)."
convolvatron 9y ago
a market is broken. you can message 'we need to control this market' or 'its only broken because the stupid government has its fingers where they don't belong'. which story plays better with the incumbents? ignore any rational discussion of outcomes.

grandalf 9y ago

Well, in this case what we are seeing is the growth of a regulatory state that exists mainly to help select firms generate profit. This is known as "regulatory capture" and infrastructure services that the government can justify regulating for any reason are vulnerable to it. I'd say that you are correct in the broader observation that both parties strongly favor big government that helps their pet industries avoid competition. And along similar lines, both parties are perfectly happy with mobile carrier consolidation, which is too bad, because the poor spend disproportionately on mobile services and are most likely to be victimized by misleading plans or deceptive sales tactics (which are extremely common).

Turing_Machine 9y ago

"Where is the over-regulation I keep hearing about?" It's baked into the cake, as grandalf noted. More regulations benefit larger players, who can afford the parasitic staff of lawyers, accountants, and other compliance people to deal with it. While the big guys don't like regulation, as such, as long as the regulation is applied evenly across the board it doesn't really affect them that much (they just raise prices). It does do a wizard job of discouraging upstart competition, though.

ZenoArrow 9y ago
> "While the big guys don't like regulation, as such, as long as the regulation is applied evenly across the board it doesn't really affect them that much (they just raise prices). It does do a wizard job of discouraging upstart competition, though." Regulation can exist for good reasons though. Take the pharmaceutical industry as an example, do we want to ensure the drugs that are on the market have gone through clinical trials, even if doing so limits the group of companies that can afford to pay for these trials?
- Zach_the_Lizard 9y ago
  If by reducing regulations we increase drug deaths but also decrease deaths from newly treatable illness, not to speak of the benefits of cheaper drugs, it seems the calculus can come out against the regulations depending on how the numbers shake out. That is to say, the regulations should be subject to a cost-benefit analysis and only those with a positive ROI should remain in place. At the very least we should be allowing drugs to be sold that have been trialed and approved in other first world markets.
  - ZenoArrow 9y ago
    > " the regulations should be subject to a cost-benefit analysis" Not everything related to pharmaceuticals boils down to a cost-benefit analysis. If companies sell a drug with known side effects, but cover it up to make a profit, that might make business sense to its shareholders, but it's not something that benefits society at large. To give an example, Bayer knowingly sold products that were known to give people hepatitis C and HIV. https://en.wikipedia.org/wiki/Contaminated_haemophilia_blood_products https://en.wikipedia.org/wiki/Contaminated_haemophilia_blood... "Contaminated haemophilia blood products were a serious public health problem in the late 1970s up to 1985. These products caused large numbers of haemophiliacs to become infected with HIV and hepatitis C. The companies involved included Alpha Therapeutic Corporation, Institut Mérieux (which then became Rhone-Poulenc Rorer Inc., and is now part of Sanofi), Bayer Corporation and its Cutter Biological division, Baxter International and its Hyland Pharmaceutical division. Estimates range from 6,000 to 10,000 haemophiliacs in the United States becoming infected with HIV." https://articles.mercola.com/sites/articles/archive/2006/08/05/bayer-sells-aids-infected-drug-banned-in-us-in-europe-asia.aspx https://articles.mercola.com/sites/articles/archive/2006/08/... "Recently unearthed documents show that the drug company Bayer sold millions of dollars worth of an injectable blood-clotting medicine -- Factor VIII concentrate, intended for hemophiliacs -- to Asian, Latin American, and some European countries in the mid-1980s, although they knew that it was tainted with AIDS. The company stopped selling the drug in the United States in 1984, but continued to sell it overseas for an additional year." Reducing government regulation of drug companies increases the chances of similar underhand practices, as companies can claim they were following the laws they were intended to comply with. > "At the very least we should be allowing drugs to be sold that have been trialed and approved in other first world markets." That still limits the pool of companies that can afford it to a select few. It's very expensive to bring a new drug to market, even if you limit the trials to a single market. To give an idea of how much these clinical trials cost... http://journals.sagepub.com/doi/abs/10.1177/1740774515625964?journalCode=ctja http://journals.sagepub.com/doi/abs/10.1177/1740774515625964... "Therapeutic area was an important determinant of clinical trial costs by phase. The average cost of a Phase 1 study conducted at a US site ranged from US$1.4 million (pain and anesthesia) to US$6.6 million (immunomodulation), including estimated site overhead and monitoring costs of the sponsoring organization. A Phase 2 study cost from US$7.0 million (cardiovascular) to US$19.6 million (hematology), whereas a Phase 3 study cost ranged from US$11.5 million (dermatology) to US$52.9 (pain and anesthesia) on average. Across all study phases and excluding estimated site overhead costs and costs for sponsors to monitor the study, the top three cost drivers of clinical trial expenditures were clinical procedure costs (15%–22% of total), administrative staff costs (11%–29% of total), and site monitoring costs (9%–14% of total)."

convolvatron 9y ago

a market is broken. you can message 'we need to control this market' or 'its only broken because the stupid government has its fingers where they don't belong'. which story plays better with the incumbents? ignore any rational discussion of outcomes.