Apologists love to complain that <insert problematic market outcome> isn't the product of a true market but that dog doesn't hunt. We have the economic system we have. We call it capitalism. It produces the above mentioned (and countless other) excerable outcomes. No excuses.
Cost disease induced by regulatory capture and a massive housing shortage induced by zoning regulations.
> Once you've cleared that hurdle your next task is justifying the current massively skewed (and worsening) income distribution in the US.
Poverty traps created by social assistance programs that put overlapping benefits phase outs on the lower middle class, causing them to incur oppressively high de facto marginal tax rates that in some cases exceed 100% of marginal income.
> Clear that bar and all that's left is justifying private equity eating everything from fast food franchises to the healthcare system.
This is regulatory capture again. Captured markets consolidate and then corporate raiders notice that the incumbents have a monopoly but aren't screwing their customers quite as hard as a monopolist can do. The underlying cause is government regulations insulating the incumbents from competition; private equity are the maggots that come to eat the corpse once the market is already dead.
Notice how there was "capitalism" in the 1950s but lower levels of corporate raiders or income inequality etc. So then you might wonder what has changed between then and now, and an interesting proxy is the number of pages in the US Code and Code of Federal Regulations.
> We have the economic system we have. We call it capitalism.
If you judge an economic system by what people call it, we called the thing that happened in 20th century Russia "Union of Soviet Socialist Republics" and the thing that happened in WWII Germany "National Socialism" and by this logic we shouldn't attempt anything called "Socialism" ever again.
But if socialism is the thing where you put the government in charge of the economy and capitalism is the thing where you limit the government from interfering with the market then socialism is the thing we've actually tried. How are you going to put e.g. the US healthcare system on "free markets" when it's the most regulated market in the US?
Ish. While regulatory capture is at the heart of most of the truly ass outcomes attributable to capitalism it's comical that an attempt would be made to assert less government oversight would in some way be beneficial. What, are we pretending the last several decades of blissfully ignored potential anti-trust cases, questionable mergers, etc. aren't the direct result of captured legislators being told to just sit on their hands?
Incidentally the "housing crisis" has nothing to do with zoning. Offshoring manufacturing and permitting AG conglomerates to bankrupt the majority of family farmers has resulted in rural communities being stripped of economic opportunities which caused a flood of economic refugees into high cost residential markets. Proof: pundits screech about a lack of affordable housing when ~8 million units sit unoccupied, many outright abandoned. In Other News: when zoning changes are made to permit the kind of multi-story mixed use structures that are hyped as a solution to the housing crisis what happens is they get built, the local market gets an influx of condos that nobody who lives in the area can afford and nearby housing increases in cost (a net reduction in affordable housing), literally the exact opposite of the effects advertised.
> How are you going to put e.g. the US healthcare system on "free markets" when it's the most regulated market in the US?
Most regulated...the what now? Private equity firms and healthcare megaconglomerates (oh I'm looking at you Duke Health) that are sweeping up private practices and hospitals all over the country. Without exception this leads to measurable decline in quality of care, and is the leading cause of rural hospital closure nationwide. This phenomenon is also driving up the cost of performing clinical trials as these outfits are savvy enough to intentionally target practices that perform trials. The resulting increase in fees to run a clinical trial are so steep they trigger fraud warnings in industry benchmarking software. Anyway, given we're the only industrialized nation who's healthcare system isn't entirely controlled by the government this claim seems pretty rich. One of several ironies here being freeish marketish healthcare produces some of the worst healthcare outcomes of any industrialized nation, at four times the cost. Wheee.
Put another way yeah the government is culpable only in the sense they decided to not actually govern, thus letting The Market run rampant.
Regulatory capture isn't just industry capturing the government so they can avoid regulations. They capture the government so they can control the regulations, and then use them to exclude competitors by increasing regulatory barriers to entry.
It's pretty hard to sustain a monopoly in a market with low barriers to entry because the entry cost is lower than the prevailing prices, and new entrants don't sell to the monopolist unless they're offered more than they could make from staying in the market, which is in turn more than the cost of entry. So entering the market stays profitable because you either make money by selling to customers or you make money by getting acquired. But the monopolist doesn't actually have an unlimited supply of money for acquisitions, so new competitors keep popping up until they run out of cash and then one of them sticks, or one of them is e.g. a co-op that isn't interested in selling.
To prevent this the monopolist needs the market to have higher barriers to entry. One way of doing this is to become so vertically integrated that new entrants would have to reproduce the entire supply chain to enter the market, and this is the case where you actually need antitrust enforcement, but it also isn't the common case. And it's hard for anyone to get a vertically integrated monopoly to begin with without the common case, because it's hard to monopolize the vertical before you have a monopoly in the original market.
The common case is the monopolist gets the government to pass laws making it more expensive to enter the market until new entrants are deterred.
> Offshoring manufacturing and permitting AG conglomerates to bankrupt the majority of family farmers has resulted in rural communities being stripped of economic opportunities which caused a flood of economic refugees into high cost residential markets. Proof: pundits screech about a lack of affordable housing when ~8 million units sit unoccupied, many outright abandoned.
This is just "demand is not always in the same place as it was before", it's only a problem if you constrain supply from increasing in the places where the demand has moved. This is the same reason you can have unoccupied units and a shortage at the same time, when the units aren't in the same location as the demand. The vacancy rate in e.g. Manhattan is at record lows.
Also, the shortage is by significantly more than 8 million units.
> when zoning changes are made to permit the kind of multi-story mixed use structures that are hyped as a solution to the housing crisis what happens is they get built, the local market gets an influx of condos that nobody who lives in the area can afford and nearby housing increases in cost (a net reduction in affordable housing), literally the exact opposite of the effects advertised.
This is the "induced demand" theory, which is rubbish. There is more demand for higher density areas than there is supply, so the price is high. If you increase the density of an area, you satisfy some of the demand, not only by creating that housing but by increasing the density of that area, which makes it more attractive because it can now sustain more local shops etc., so more people also want to move into the directly adjacent existing housing.
This does decrease the cost of housing, it's just that the housing that becomes more affordable isn't the housing directly adjacent to the new housing. It's in the place people left in order to move there.
What's happening is essentially this: Suppose you have areas with density levels 1, 2 and 3. Level 3 is the most dense, most desirable and most expensive. You increase the density of a level 2 area so it becomes a level 3 area by building more housing. The price of all three density levels goes down across the region, because there are now more level 3 areas available, so you don't have to bid as high to live in one, and some people move from level 1 and 2 areas to the new level 3 area, which makes more supply available there too. But that specific neighborhood used to be level 2 and is now level 3, so it, unlike the region as a whole, can increase in price, because the new level 3 price might still be more expensive than the old level 2 price.
And even that can be solved by building enough level 3 housing across the region so that the cost of level 3 housing falls below the previous cost of level 2 housing, but for that you have to build even more.
> This phenomenon is also driving up the cost of performing clinical trials as these outfits are savvy enough to intentionally target practices that perform trials. The resulting increase in fees to run a clinical trial are so steep they trigger fraud warnings in industry benchmarking software.
To take one example, the US requires separate clinical trials from the ones already done in Europe. There is no legitimate reason to even be doing them a second time, the European ones should be accepted for approval for sale in the US, but they're not. Because the incumbents like it that way, because it reduces competition and they own the regulators.
Another solid example is the entire concept of certificate of need laws. It's quite possibly the most naked example of anti-competition legislation in existence.
> Anyway, given we're the only industrialized nation who's healthcare system isn't entirely controlled by the government this claim seems pretty rich.
There are several industrialized countries with private healthcare systems that are all more efficient than the US system. The US system is notoriously corrupt and inefficient because the incumbents use regulation to inhibit competition.
