What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating?

I'm all for market efficiency, but the real world works differently than text books.

I generally agree, and I'm very much in favor of market based economies. There is nothing wrong with France doing what is necessary toward production, during such an extreme event.

The US extending massive credit to businesses, bailing out the airlines (coming), bailing out Boeing (coming), and the 407 other bailouts yet to come, are all variations of immense state intervention into the economy, due to a force of nature event. They're also necessary, as the alternative is a much harder reboot with dramatically more damage. You can let a few companies fail in a normal recession, if we let everything go here, the unnecessary economic damage will be measured in the $10 trillion type range. And some of it we may never get back (eg letting Boeing fall down now, they might never get back up, given China is absolutely coming online in the next 10-20 years with competitive planes).

> What would France stand to gain if these companhias are forced to shut down due to a "force of nature" event, or worse be bought out by a foreign investor due to the restructuring you're advocating?

The economy restructures itself to be more resilient to such events? The coronavirus is not even close to the smallpox which has been circulating for much of humans history. Companies/Economy should be able to withstand such events.

> The economy restructures itself to be more resilient to such events?

That's the kind of stuff that only exists in textbooks. In the real world you just get important parts of your economy be controlled by foreign corporations.

> The coronavirus is not even close to the smallpox

That's entirely irrelevant. We're talking about a disruptive event to an economy. It makes absolutely no difference if you can imagine worse events or diseases if we're discussing stuff regarding the economy.

An American example is: A company outsourced all its production over the last few years to China. With the global pandemic production of the goods in China came to a halt. The company experiences a crash due to their inability to get the goods from China. In its place competitors who kept production domestic but who had higher production costs would now rise to the top. If you "bail out" every bad company you distort the market completely and reward non-efficient behavior.

But the competitors who kept production domestic went out of business several decades ago. So where does that leave us in practice?

Not all of the domestic businesses?

You need to ensure they now get their reward for that choice, otherwise you're rewarding taking the wrong decisions (for resilience) and then you're paying more to have a less optimal system. In a way, the companies making essentials that aren't struggling right now are the ones you should be supporting .. but we have to address the crises at hand first.

> Have you ever considered that you have terminal America Brain and that your particular economic theories haven't exactly proven robust or even helpful for the past century?

I certainly don't since America has bailed out companies many times in the past and is considering bailing them again this time.

Not GP, but banning short sales is known to be absurd by pretty much any economist or financial expert out there. Distorting true price always leads to negative effects.

Now people investing in french companies will pay unfairly high prices for their shares.

Switching to nationalization, it’s pretty clear that that removes the incentive to take on risk and found a company since you are always at risk of the government stealing your assets.

Sorry I didn’t include citations but I would really encourage you to read about rational pricing and healthy market dynamics. Those that think you can just artificially decide the price of a security rather than let the price discovery mechanism play out are doomed to repeat the same problem we see in communist countries: you can buy bread for a “fair” price, but there’s no bread to buy because the price was too low.

Government price fixing always leads to some combination of:

1. shortages

2. gluts

3. black markets

We have seen each of these in the past 2 weeks without any government price fixing needed!

We see shortages of hand sanitizer, and at least one person facing criminal charges for charging high prices for them. And those charges are because the government is fixing prices with anti-gouging laws.

To be fair, price gouging laws prevent companies from increasing prices of goods like, say, toiletpaper, such that they remain in supply. Thus the shortages.

In other words, we already have “soft” price-fixing.

Please stop spreading misinformation. The price gouging laws allow prices to increase without limit to pay for increased wages or costs: https://oag.ca.gov/consumers/pricegougingduringdisasters#8C

I’m not spreading misinformation. On the contrary, your link validates what I said.

Countering misinformation is good, but please don’t call it misinformation if you don’t understand what the text you link says.

Prices need to be able to increase beyond just any cost increases from the TP manufacturer. Without freedom to set prices as desired, we will continue to have shortages.

The prices can increase for any labor or material costs for both manufacturing and transit. If you can prove that your increased prices are due to increased costs you can raise prices as much as you wish. The only thing this prevents is increased profit in times of crises.

Preventing increased profit means no increase in supply.

> The price gouging laws allow prices to increase without limit to pay for increased wages or costs

Higher profits from gouging is what motivates people to increase the supply. Altruism only goes so far. Profit motive to provide needed supplies is far more effective.

Remove the profit motive, relying on the government and altruism, is a very poor substitute.

Hoarding toilet paper will not increase supply of it. The toilet paper manufacturers are not making any more of it, because this is a temporary blip on the demand side, and because they know that they aren't going to sell any more toilet paper in the long run.

Hoarding resources that we aren't globally in short of, actually makes the situation far worse. The demand spike is solely caused by hoarders and price gougers, to the detriment of everybody else.

Laws against gouging actually motivate people to hoard. Then come the laws against hoarding, which people do anyway, they just do it secretly.

Shortages motivate people to hoard. Gouging causes artificial shortages.

There are no shortages when gouging is allowed. Gouging disincentivizes hoarding. See my other posts in this thread.

Anti-gouging laws mean that you'll either do without or pay even higher prices for black market goods. The more you punish black marketeers, the higher go the prices you'll have to pay.

> There are no shortages when gouging is allowed.

There are when a bunch of people buy up the entire supply, and try to resell it at 5x the rate.

> Gouging disincentivizes hoarding.

Only after the gougers have hoarded everything they can.

The gougers in this case aren't making any more toilet paper appear in the world. The factories aren't making more of it, just because a few people bought it out, because the global demand for it is constant. They simply created an artificial shortage, and introduced themselves as a parasitic middleman.

> The gougers in this case aren't making any more toilet paper appear in the world.

Things don't happen in a vacuum. If the gougers create an artificial shortage, then there is money to be made by increasing the supply. In fact, there'll be plenty of money to be made selling to the would-be gougers. The supply is not fixed and gouging will increase the supply.

In a theoretical world, with instant market reactions, instant transportation, and perfect price and supply information, yes. In the real world, no.

1. The absolute supply of toilet paper on a long-term timescale will not increase.

2. The cost of increasing manufacturing capacity may not be worth the increased revenues from selling into a two-week shortage.

3. There's a lag time. By the time you increasing manufacturing capacity, and get paper into groceries, the demand curve would have flattened out.

4. There isn't an actual shortage, there are some very localized shortages, which will get smoothed out once supplies sitting in warehouses get to store shelves. Nobody in Mexico increases toilet paper manufacturing capacity because the corner store across my apartment is out. Nobody working in grocery logistics is going to be calling people in to work overtime to deal with this, either.

Your model still assumes that people will not change their behavior due to the price increase, despite having powerful incentives to.

The flip side is that in times of crisis, poor and vulnerable populations are literally priced out of essential goods.

No availability at all is worse than availability at a high price.

If you can't afford the price, there's no difference.

The availability is the same, though. If you manage to prevent reselling, then the choice is rather easy:

* 100 rolls of toilet paper sold to whoever comes first

* 100 rolls of toiler paper sold to whoever bids highest

> The availability is the same, though

The point is, gouging creates MORE availability. Remember those hurricanes? People outside the devastated zones promptly filled jerry cans with gas, drove into the disaster area, and sold gas out of the back of their pickup trucks for high prices.

That is, until the government made it illegal to do that. The next disaster meant people had no gas until the government got around (days later) to bringing some in and rationing it.

TP is not quite the inelastic situation you posit it is. For example, there's been a boom in sales of bidet toilet attachments. High prices for tp make it very attractive to switch, thus making tp available for others. High prices mean people who already have more tp than they need will be tempted to sell it. High prices mean TP makers will ramp up production as fast as possible. High prices mean people will be motivated to make & sell TP alternatives. High prices mean people have no reason to hoard TP.

Anti-gouge laws lead directly to hoarding and no TP available.

Toilet paper makers already make large amounts of it - the limiting factor is how often supermarkets can restock shelves.

Gouging overcomes whatever the limiting factor happens to be. The profit motive is very powerful at moving around obstacles.

Price regulation works effectively for water and car insurance and hasn’t led to black markets (at least that I’m aware of).

Price regulation of water has resulted in rationing and shortages. Car insurance prices aren't regulated around here.

It’s not perfect but it prevents a scenario where Fortune 500 companies buy up as much as possible and use their position as a source of profit growth.

What country do you live in?

If prices are allowed to float, Fortune 500 companies can only buy up supply if they will be willing to pay the market price.

What about a bimodal model, people have a right to a reasonable volume of water. Companies have to both pay for the water (at the price-fixed rate) and have to acquire a right (like a ration token) to have water. People then would always be able to afford to buy enough water to sate them, but companies need to buy their tokens in order to get water. Most people would probably sell their tokens back to the water company, who would sell them on at a profit. But equally you could save them for times of water crisis when the token price soars and pay off your own water bills.

Tell me why this is stupid.

That proposal is just a complicated and inefficient bureaucratic reinvention of a supply & demand marketplace. Just let S&D do its thing and take its course, and people will get water.

Some people will get water. And some will get priced out of the market.

Higher prices INCREASE the supply. I.e. MORE people get water.

Or same people get more water.

Car insurance is price regulated? In what country (or countries)? I'd be surprised if it is where I live...

All of the US, each state has a department of insurance

edit: wouldn’t let me reply, I know they regulate existing product prices and that new products need to be filed and that states have different laws regarding coverage limits and litigation details

Do they regulate prices? Or just coverages?

And it doesn't work for housing and about a million other goods and services that have been subject to price controls.

Just look at California's water shortage issues. Water prices are basically fixed so huge farms suck up all the water to irrigate a desert while ordinary people are told to stop bathing. Seems like an externality of price regulation, no?

You are seriously oversimplifying reality to fit it into your world views, here.

__blockcypher__ at least gave some reasoning behind the expressed position. A fact-free, argument-free rebuttal does little to refute such a post, even if the post is wrong.

Could you give some evidence or argument or both to explain why you think __blockcypher__ is wrong?

From HN’s guidelines:

> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.

In what way am I seriously oversimplifying reality?

Maybe I came off too hard, and lacking details didn't help either. My point is, this is a situation without precedent, unlikely to repeat very often, and not all private industry is being nationalised. Same goes for banning short sales. It won't last forever.

That is why I think you oversimplified. This is not a communist takeover of France.

Note: I did not, and wouldn't have downvoted you for your comment. Yours is a fair opinion to have.

While the GP might have been off base, there has got to be a better way to phrase this argument. The quality of discussion on HN has exponentially decreased in the past few days. It would be cool if we all started to add to these conversations instead of insult each other.

Meta: IMO part of the problem is the way the site handles opposition, passive-aggressively making unpopular opinions gradually near-impossible to read doesn't support the concept of high-brow, adult, conversation.

I think pg was wrong to endorse "down-vote for disagreement"; downvotes should be for poorly made arguments, ad hominems, memes [on this site] and other low value comments.

My ideal is something akin to what slashdot has, multi-axis voting that allows users to select to their preferences.

Wow, say what you will about whatever economic theories you're attacking, "America Brain" (with the obvious implication that you're calling the person stupid because they're American and hold some view you view as stereotypically American) is super racist.

I'm ashamed on behalf of HN that your comment hasn't been flagged or downvoted into oblivion on that characteristic alone.

> with the obvious implication that you're calling the person stupid because they're American and hold some view you view as stereotypically American

Actually I'm accusing them of having their brains poisoned by American free market dogma.

Why is "extreme poverty" the appropriate metric? I'd be curious to see the same graph but for the number of people living in "poverty".

It would look very similar - for more information, I suggest you go pick up "Enlightenment Now" by Steve Pinker and/or "Factfulness" by Rosling

https://www.amazon.com/dp/B073TJBYTB/ref=dp-kindle-redirect?...

https://www.amazon.com/Factfulness-Reasons-World-Things-Bett...

It does not look similar:

https://newint.org/sites/default/files/u354/LongreadFig2%2C3...

It's worth noting that the Our World in Data plot is misleading in the pre-1980 part. What it is actually showing is neither poverty, but some relationship of GDP to poverty, nor the population of the world, instead it is almost entirely the Western world.

The World Bank, UN and the IMF use extreme poverty as a measure and define it as having the purchasing power of $1.90 (in the US in 2011 for the OWiD plot) a day. But that's very low and pretty arbitrary. €6.70 a day is needed for decent nutrition, $7.40 for typical life expectancy, $8 a day to reduce infant mortality rate. The US poverty line in 2015 was $30 a day.

Pinkner has a lot to say about the reduction in violence that I agree we should be optimistic about. And there's much to be said about improvements in technology, access to education (especially for girls), increases in vaccination globally. But that OWiD plot is used to jump on the New Optimism bandwagon to say a lot more than anything you should conclude from a such an arbitrary set of data.

Why is extreme poverty still an issue to begin with?

Because its the natural state of all life on earth. Its the condition every living thing has to struggle against. It can be fought individually, it can be fought collectively, but it still has to be fought and even then you are not guaranteed success.

Think of all the people in conflict areas who could live a decent life were they allowed to simply be in peace. Think of all the people who have lived good lives and then been displaced by horrific natural disasters. Its not an issue of economics. Its just a fact of reality.

Le maire is a complete idiot who doesn't understand markets or economy, he simply doesn't have received the education for such.

Bruno Le Maire is the current minister of economy of a G8 country, a post he holds after a career in which he has been minister of agriculture, secretary of state for European Affairs and chief of staff of the prime minister. I will surmise than he has both an idea and hand on experience with how a market based economy works.

You might argue that he is mostly a good politican but considering it's pretty hard to do better as a student in France (ENS, received first at aggregation, ENA), I might hazard that he is probably not a complete idiot either.

And I'm telling you that despite completely disagreeing with the political opinion of the man.