Beer Monopoly

On the beer-related side of this article, the author writes, "In 1988, Miller and Coors lowered prices on their flagship beers, which led Anheuser-Busch to slash the price of Bud and its other brands in key markets. At the time, August Busch III told Fortune, “We don’t want to start a blood bath, but whatever the competition wants to do, we’ll do.” Miller and Coors promptly abandoned their price cutting."  This is not an illegal practice, however--and continues to this day.

What was more interesting to me is this: "It’s quite possible that the true monopolistic battles of the 21st century will not be among massive corporations but among the self-interested governments. We can only hope that they don’t engage in a trigger strategy of their own."  Because national governments legislate the anti-monopoly law their intra-national companies must abide by, what protects us against global monopolies?  Other thoughts on the article? 

Continuing on the sequester...

http://foxnewsinsider.com/2013/02/24/sen-tom-coburn-i-didnt-support-the-sequester-because-its-a-stupid-way-to-cut-spending/

 

I found this interesting article and video on the sequester. “The crisis is made up, it’s been created” he said. “I didn’t support the sequester because that’s a stupid way to cut spending. And I didn’t support increasing the debt limit because there is no such thing as a debt limit in this country because we always raise it.”

 

Found it pretty interesting and since we didn't get to share our powerpoints in class I wanted you guys to have the change to watch it and respond to his claim...

Price Formula for Patented Drugs

The Department of Pharmaceutical in India has developed a formula that they would like to implement to control the prices of patented drugs. The formulaic pricing will help control the pricing of patented drugs and get rid of the discretion that the companies have about their drugs. Do you think that this is a good idea? Is a formulaic approach to drug pricing and eliminating the generic going to work? Should the government step in and help price drugs? Here is the article.

Affordable Care Act and Massachusetts

In this article, Dr. Mulligan claims that Massachusetts' model of healthcare does not provide an accurate picture of what the Affordable Care Act will look like on a national level.  Thoughts? 

Also interesting, the "reader picks" comments (at the time of this posting) are by Massachusettsian skeptics of their current state system noting that it does nothing to quell costs of procedures (money going from government/insurance companies to hospitals) and salaries of doctors.  I'm under the impression that both of these will take losses; however, I'm interested to see how this pans out. 

Do you believe the ACA to be a necessary, and beneficial program?  What pressures will the ACA have on the economy? 

"Italian Deadlock Rekindles Anxiety About Euro Zone"

This Article about Europe is interesting. Maybe the euro-zone crisis is not over and Italy is showing it because of this political election? What are your thoughts on how the Eurozone is looking like it has not recovered and may be stuck in the recession because of their austerity measures?

The importance of profits?

From Slate's Moneybox: 

The International Federation of the Phonographic Industry reports today that last year "global recorded music industry revenues rose by an estimated 0.3 per cent to US$16.5 billion in 2012, the first year of industry growth since 1999" with digital revenue growing 9 percent.

That's good news for the music industry, but also a sobering reminder of the extent of the collapse. But what I think is really important to remember is that this epic decline of the music industry has occurred during a period of time when it's never been easier for music fans to find new music to listen to. It's a great example of how the health of an industry as a generator of profits can become completely detached from actual human welfare.

 

Beware claims of free markets

Every business owner dreams of monopoly--barriers to entry and higher prices. But what if you can get massive subsidies at the same time?  A study by Bloomberg estimates that the largest US bankers have gotten $83 billion dollars from the US government since the crisis.  (see here for the story) .   Since they published their report, critics have attacked the methodology  but not the substance of their argument. 

Two policy issues seem most important to me.  First, the financial sector is not as profitable as commonly assumed.  Second, "Others may come up with different numbers, but the conclusion is the same: Banks get a very big subsidy from taxpayers. This subsidy distorts markets and encourages banks to become a threat to the economy."