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How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real

How did the middlemen get so much power in the US economy ? So much of the economy is just middlemen doing bullshit work and seeking rent. Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. I don't think other countries have such a big problem with middlemen inserting themselves everywhere and seeking rent. Is there something unique about the US ?

deleted 2y ago
[deleted]
readthenotes1 2y ago
You have experience in other countries, or is this a grass must be greener on the other side of the fence type comment?
- eru 2y ago
  The grass is greener on some other lawns and less green on some. There are lots of countries run worse than the US, and quite a few run better.
xwolfi 2y ago
Middlemen are people who spent time specialising in a market and you pay them as guides. You never have to go through them, but you'll get your ass raped. There s nothing wrong about them, they work hard and are not rent seekers (a commission on successful deal is the exact opposite of a rent). Every countries has them (Im French, live in Hong Kong) and what you bemoaned is mundane in my experience.
- alvah 2y ago
  "a commission on successful deal is the exact opposite of a rent"? When the real estate lobby makes the whole industry a de facto closed shop, the real estate agencies themselves are full of middlemen picking each other's pockets, and the commission rate and total amount are far in excess of what you'd expect in a free market, and completely unrelated to any effort or expense on behalf of the agent? Sure, it's the exact opposite of rent seeking /sarc
- BobbyJo 2y ago
  Car salesmen are guides and we'd get raped without them? Wild take.
  - DebtDeflation 2y ago
    Salesmen in general tend to know very little about the products they sell but car salesmen are on entirely different plane - I think they get selected for knowing absolutely nothing about cars and get extra consideration for knowing things that are blatantly false.
  - eru 2y ago
    Other countries seem to do just fine without legally requiring them.
  - listenallyall 2y ago
    I agree with your objection to "ass raped" - but you have to agree that buying a car without any dealers would logistically be far more difficult, right?
    - BobbyJo 2y ago
      Not at all. An order form and direct delivery would be way easier.
      - listenallyall 2y ago
        What if you wanted, or needed, a car today, rather than wait 3-6 months? How would the car get from the factory to your home? Who would arrange financing? If there was a recall of your particular model, who would make the fix for free? Who would you send an "order form" to if buying a used car? You personally may prefer to handle each of the above on your own, but millions of people prefer one-stop shopping where everything is taken care of, along with services like title registration, having a person show you how to use the electronics, offering coverage for regular maintenance, etc.
        2y ago
deleted 2y ago
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shiroiushi 2y ago
>How did the middlemen get so much power in the US economy? I think it's always been this way. It takes a lot of work and resources to deal with individual customers at scale. >Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. Staffing firms, real estate agents, and attorneys are not unique to the US at all. Staffing firms are used by many companies because they don't want to hire full-time HR people to do "talent acquisition". (Personally, I haven't had good experiences when I've tried interviewing at these companies, and have always done better by going with companies that do their own recruiting and hiring.) People selling their house don't have the time or resources to sell it themselves usually, dealing with all the prospective buyers. And attorneys are pretty necessary if you have non-trivial legal issues anywhere. Health insurance isn't even unique to the US; lots of developed nations have systems that look sorta like ObamaCare. But they all do it MUCH better, with FAR lower costs. Someone's probably written a long book somewhere explaining why the US is so uniquely bad here. Car dealerships aren't unique to the US (how else are you going to buy a car?), but the requirement that they be independently owned is, and adds to the cost of cars in the US, and I think especially results in a lot of (less-than-savvy) customers being ripped off with unnecessary charges. The thing I see about the US is that it seems to be uniquely bad at actually fixing problems. Most of these middlemen services you list are natural outcomes of real-world constraints. A company that makes milk, for instance, can't realistically sell it individually to customers all over your city or state, so they sell it to distributors, who distribute it to their retail stores, where customers buy it to take home. Similarly, a small car manufacturer, like Studebaker, can't set up dealerships all across the US, so they partner with local dealerships that are probably selling other mfgrs' cars too. Back in the early days of cars, all the carmakers were small, remember. A century later, they're mostly big, but the US made laws long ago requiring independent dealers, and now they can't change. For whatever reason, as time goes on and things change, the US is uniquely bad it seems at adapting and fixing the problem. In better-run countries, they'd see this independent-dealership law is no longer necessary, and change it. In the US, it stays, because car dealers are politically connected to local politicians.
- bubblethink 2y ago
  >The thing I see about the US is that it seems to be uniquely bad at actually fixing problems. Yeah, this is the part I'm trying to understand. There is lobbying/corruption, but that can't be the whole story. Perhaps culturally and historically, the US has been a prosperous high-trust society that did not have to worry too much about people skimming a percentage off the top for providing a service. And over time, that has ballooned into the state we are in now. The other thing I see is that the executive branch of the government is egregiously bad at implementing any sane designs. There is soviet era levels of dysfunction in the federal government when it comes to employment based immigration.
listenallyall 2y ago
Why did you ask this question on the web site of a news middleman, rather than in the comment section of Bloomberg.com?
asta123 2y ago
In Australia few years back the highest paid CEO was not from industries you might expect like mining, banking... but a company doing international student placements, whatever that is - https://www.abc.net.au/news/2020-08-07/idp-education-ceo-andrew-barkla-tops-acsi-list-of-highest-paid/12531862 https://www.abc.net.au/news/2020-08-07/idp-education-ceo-and...
Rury 2y ago
It's not unique to the US at all, it's fundamentally just how power dynamics work. Power comes from controlling access over valuable resources (ie power = control). Being a middleman gives you some control over something, and therefore some power. The interesting part is how power tends to centralize into the hands of an elite few (ie oligarchies), rather than equalize or concentrate completely into the hands of one. And I think this tends to happen as to reflect the collective wills of society's members.

deleted 2y ago

[deleted]

readthenotes1 2y ago

You have experience in other countries, or is this a grass must be greener on the other side of the fence type comment?

eru 2y ago
The grass is greener on some other lawns and less green on some. There are lots of countries run worse than the US, and quite a few run better.

xwolfi 2y ago

Middlemen are people who spent time specialising in a market and you pay them as guides. You never have to go through them, but you'll get your ass raped. There s nothing wrong about them, they work hard and are not rent seekers (a commission on successful deal is the exact opposite of a rent). Every countries has them (Im French, live in Hong Kong) and what you bemoaned is mundane in my experience.

alvah 2y ago
"a commission on successful deal is the exact opposite of a rent"? When the real estate lobby makes the whole industry a de facto closed shop, the real estate agencies themselves are full of middlemen picking each other's pockets, and the commission rate and total amount are far in excess of what you'd expect in a free market, and completely unrelated to any effort or expense on behalf of the agent? Sure, it's the exact opposite of rent seeking /sarc
BobbyJo 2y ago
Car salesmen are guides and we'd get raped without them? Wild take.
- DebtDeflation 2y ago
  Salesmen in general tend to know very little about the products they sell but car salesmen are on entirely different plane - I think they get selected for knowing absolutely nothing about cars and get extra consideration for knowing things that are blatantly false.
- eru 2y ago
  Other countries seem to do just fine without legally requiring them.
- listenallyall 2y ago
  I agree with your objection to "ass raped" - but you have to agree that buying a car without any dealers would logistically be far more difficult, right?
  - BobbyJo 2y ago
    Not at all. An order form and direct delivery would be way easier.
    - listenallyall 2y ago
      What if you wanted, or needed, a car today, rather than wait 3-6 months? How would the car get from the factory to your home? Who would arrange financing? If there was a recall of your particular model, who would make the fix for free? Who would you send an "order form" to if buying a used car? You personally may prefer to handle each of the above on your own, but millions of people prefer one-stop shopping where everything is taken care of, along with services like title registration, having a person show you how to use the electronics, offering coverage for regular maintenance, etc.
      - 2y ago

deleted 2y ago

[deleted]

shiroiushi 2y ago

>How did the middlemen get so much power in the US economy? I think it's always been this way. It takes a lot of work and resources to deal with individual customers at scale. >Staffing firms, real estate agents, car dealerships, attorneys, healthcare, etc. Staffing firms, real estate agents, and attorneys are not unique to the US at all. Staffing firms are used by many companies because they don't want to hire full-time HR people to do "talent acquisition". (Personally, I haven't had good experiences when I've tried interviewing at these companies, and have always done better by going with companies that do their own recruiting and hiring.) People selling their house don't have the time or resources to sell it themselves usually, dealing with all the prospective buyers. And attorneys are pretty necessary if you have non-trivial legal issues anywhere. Health insurance isn't even unique to the US; lots of developed nations have systems that look sorta like ObamaCare. But they all do it MUCH better, with FAR lower costs. Someone's probably written a long book somewhere explaining why the US is so uniquely bad here. Car dealerships aren't unique to the US (how else are you going to buy a car?), but the requirement that they be independently owned is, and adds to the cost of cars in the US, and I think especially results in a lot of (less-than-savvy) customers being ripped off with unnecessary charges. The thing I see about the US is that it seems to be uniquely bad at actually fixing problems. Most of these middlemen services you list are natural outcomes of real-world constraints. A company that makes milk, for instance, can't realistically sell it individually to customers all over your city or state, so they sell it to distributors, who distribute it to their retail stores, where customers buy it to take home. Similarly, a small car manufacturer, like Studebaker, can't set up dealerships all across the US, so they partner with local dealerships that are probably selling other mfgrs' cars too. Back in the early days of cars, all the carmakers were small, remember. A century later, they're mostly big, but the US made laws long ago requiring independent dealers, and now they can't change. For whatever reason, as time goes on and things change, the US is uniquely bad it seems at adapting and fixing the problem. In better-run countries, they'd see this independent-dealership law is no longer necessary, and change it. In the US, it stays, because car dealers are politically connected to local politicians.

bubblethink 2y ago
>The thing I see about the US is that it seems to be uniquely bad at actually fixing problems. Yeah, this is the part I'm trying to understand. There is lobbying/corruption, but that can't be the whole story. Perhaps culturally and historically, the US has been a prosperous high-trust society that did not have to worry too much about people skimming a percentage off the top for providing a service. And over time, that has ballooned into the state we are in now. The other thing I see is that the executive branch of the government is egregiously bad at implementing any sane designs. There is soviet era levels of dysfunction in the federal government when it comes to employment based immigration.

listenallyall 2y ago

Why did you ask this question on the web site of a news middleman, rather than in the comment section of Bloomberg.com?

asta123 2y ago

In Australia few years back the highest paid CEO was not from industries you might expect like mining, banking... but a company doing international student placements, whatever that is - https://www.abc.net.au/news/2020-08-07/idp-education-ceo-andrew-barkla-tops-acsi-list-of-highest-paid/12531862 https://www.abc.net.au/news/2020-08-07/idp-education-ceo-and...

Rury 2y ago

It's not unique to the US at all, it's fundamentally just how power dynamics work. Power comes from controlling access over valuable resources (ie power = control). Being a middleman gives you some control over something, and therefore some power. The interesting part is how power tends to centralize into the hands of an elite few (ie oligarchies), rather than equalize or concentrate completely into the hands of one. And I think this tends to happen as to reflect the collective wills of society's members.