The Cartels

An interesting observation that I came across mentioned the great cartels. From Wikipedia, the definition of a cartel:

A cartel is a formal agreement among competing firms. It’s a formal organization where there is a small number of sellers and usually involve homogeneous products. Cartel members may agree on such matters as price fixing, total industry output, market shares, allocation of customers, allocation of territories, bid rigging, establishment of common sales agencies, and the division of profits or combination of these. The aim of such collusion (also called the cartel agreement) is to increase individual members’ profits by reducing competition.

It is a good point. It is easy to see that a substantial part of government spending goes to subsidize the major cartels:

  • Education. Price co-operation (collusion between universities on scholarships and other subsidies), government provided and favored student loans, etc. Unions with monopolies on primary and secondary education.
  • Healthcare. Obamacare – need one say more?
  • Defense. Well this one is pretty obvious too. Unnecessary wars, spending more than the rest of the world put together, massive waste and pork.
  • Financial services. Unrestricted guarantees and replacement of business losses at public expense, The Fed, FDIC, 2BTF, the useless SEC, CFTC, FINRA, etc. Price co-operation.
  • The War on Drugs. Terrorists, gangs, cops, courts, prisons, DEA, TSA, CBP all co-operating to maintain a system that involves massive government expenditures to support high prices for recreational drugs.

Antitrust is missing the whole point. I used to think the trial lawyers – plaintiff’s bar – were bad. Now I think they’re pikers.

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