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> is that it does very little to substantiate its core claim - that the reason the economy is broken are small monopolists-but-not-really-monopolists who are trying to fleece you

It's Matt Stoller [0].

He tends to write his substack (and formerly his blog at the OMI under New America) in a very pathos driven manner in order to change the conversation around anti-trust.

He also seems to be trying to become a Republican Rohit Chopra (assuming Hawley climbs the ladder) and is competing with Oren Cass on that front.

There is a need to rework antitrust to take into account digital platforms, but imo Matt Stoller's attempts only serve to undermine the conversation, given that these are very technical conversations that have a high legal bar to pass. Going all "bull in a China store" a la Lina Khan only leads to appeals and out of court settlements in favor of the defendants.

Based on second-hand experience, now's the best time for M&A on that front - you're almost guaranteed to have the FTC fumble a case and settle out of court.

[0] - https://www.politico.com/news/magazine/2023/04/21/matt-stoll...

The areas I might agree with this for construction would be something like lumbermills - where we have plenty of timber available but there’s a bottleneck of capital for mill capacity and they’ve been able to raise prices sharply in the past few years. Investors don’t want to pay to build enough capacity to bring prices down because then only older paid-off mills would win a pricing war if there were any excess capacity.

Economic theory asserts that where there is profit to be made you will find entrants. So unless something stops entrants for mills (ie funding availability) we should anticipate economic profits to decrease.

Eventually maybe but the Capitol investment is high and only a few firms are in the market place who are capable of playing. If they enter they expand they will decrease their own margins and that’s generally not desirable. Why take risks if you don’t have to and you can live out your tenure as ceo collect big bucks and Retire without any. Everyone wants to run their business slowly into the ground US steel and K-mart style

This here. We see this cycle quite often. Some economic crisis in a product hits and the price shoots up. Other entrants raise capital for the rather expensive factories required to make the product in its modern form. By the time the factories come on line, the entrenched interests fat with profits plunge prices very low and for some time driving out the new players and then you see prices rise back to higher levels and maintain that price.

It seems to many people don't realize it's not about making and selling the product. It's about the economic/money game. It's not about selling a car, it's about being a bank giving financing. It's not about selling a retail product, it's about credit cards. It's not about refining mined products, it's about controlling the willingness to invest in the sector.

Not saying it's wrong but that seems a strange. Around here there are still small mills - some with strange strategies where they will drive lumber large distances. Although they do specialize in this or that product. And seem profitable even though they are small. Meaning that the market can perhaps be entered with a small mill.

But in many economic fields there are unstable states where all producers can be worried but happy not to expand and just raise prices - as long as nobody else expands. "Eventually" can be a long time.

It's not about the size of the mill, but the capital cost to build a new one. No one is willing to invest the capital in building new mills because the old ones can always undercut their prices and kill them long before they turn a profit. It's the economic equivalent of a prisoner's dilemma.

That works against a large new entrant. No industry is going to lower their massive collective profit just to shoo away a small new entrant.

Lumbermills are a local industry since transportation is a very significant fraction of the final cost. No one is shipping wood from Oregon to a mill on the East coast to sell to a construction company in California, so every mill is very much sensitive to local competitors.

Ironically it's the larger mills that are insensitive to this dynamic, since they supply huge national customers like the big box stores or export to international markets. If Home Depot or Lowes decide their suppliers need a new mill, they finance it and it gets built.

This is what suprised me when I did a (very cursory) look in there. It seems some mills do ship back and forth quite a ways along the West Coast.

And I don't know that Home Depot and Lowes have that much of the market. They are not the ones that serve large construction projects. But if they did, it would be enough of a long term market that they could influence prices by funding new mills in exchange for more say into the price, a share of any profit, both, whatever. If they had this capacity, they could solve this funding issue.

Natural monopolies due to high capital costs are businesses like TSMC and ASML - you're not going to get a "small new entrant" with 4nm lithography for making high-end microchips.

TSMC, ASML are as extreme as it gets. You might as well ignore them completely in this thread.

There are local versions - a veterinary emergency hospital with veterinary oncologists and cardiologists in a smaller city without other metros for hundreds of miles, for example.

That’s an example where the market can only support one of there was ever a competitor it would be a question of who runs out of cash first.

Which is why no smart competitor would enter into that market - you'd never make back the profits from the price war.

Investment capital for large projects is why the stock market was invented.

Everyone knows that a good reimplementation of CUDA will make them trillions but despite 15 years, no one has made anything even close to it.

There’s profit to be made and no entrants. How can we explain this? If your answer is “AMD et al tried” you aren’t paying attention to just how pathetic and shallow their efforts have been and still are.

Every GPU vendor knows that actually supporting a reimplementation of CUDA for their hardware immediately signs them up for two problems:

1. Protracted lawsuits with the (now) second-most-valuable company in the world. 2. Any significant customers being loudly reminded by Nvidia that the EULA for CUDA tools prohibits their use on non-Nvidia hardware.

The problem is not the technical challenge of reimplementing the CUDA API or tools. The problem is the users want CUDA, not something that looks and behaves like CUDA but requires them to load a different set of libraries.

These days, you don't really need to support CUDA, just PyTorch gets you most of the way there.

You have Google TPUs, Amazon Inferon, a ton of smaller players that aren't quite getting traction - but there's a ton of investment there.

In addition to the other response (risks), the economy is not a stable homogeneous field. None of the economy is a stable homogeneous field. Instead it's a bunch of discrete individuals living their life and each focusing on just a few things.

And this goes both ways. For a competitor to form requires one small team of founders who are insane enough (in a good way) to believe they should try it, and a funding source that's ready to take the gamble on/with them. So you might get a fantastically successful company "out of nowhere" (Amazon, say). Or you might get a field where nobody is at the moment on hand to try it. Or several do try it and fail silently and you never hear of them. They are individuals, not some mathematical process.

See also, even "efficient market" does not refer to THAT.

Unless there is market power and exploitation by monopolists.

Which just so happens to be the overarching principal of Matt Stoller's life's work.

In the long run, sure.

But as the saying goes: in the long run we’re all dead.

Profits across many companies in construction have significantly increased post covid. Not only for construction companies, but also various supplier (e.g. building technology, construction products).

At best, that would be some sort cartel, multiple really. Which is quite different from a monopoly, which again is something from dominant market power...

>In fact, no serious study of the construction industry pins cost increases on stuff like that. There are far more powerful factors at play. The laborers you hire want to be paid more than before (and the government is rising minimum wages). Compliance is getting costlier due to ever-evolving building codes, environmental and energy regulations, and zoning. Customer expectations are increasing (higher finish, more sqft). To the extent the materials are getting expensive, it's usually not your lumber mill being greedy.

In general, you're probably seeing some increased disparity between the cost of things that require some significant levels of labor--especially if skills are involved to any great degree--and those that can be dealt with mostly by "just" throwing capital at the problem.

Over time I expect you'll see more automation, more self-service, and--yes--more just doing without of things that cost more to deliver than you can or want to pay for.

> the article falls for the classic trap of "rising prices are not inflation, it's <something else I don't like>".

Inflation is a general price increase caused by an increase in the supply of money relative to the value of goods and services in the economy. It's simple supply & demand - more money chasing the same number of goods => general price increases. Inflation prices never going down is a clear indicator that this is the cause.

A general price increase could be cause by something like supply chain disruptions. But when the disruption eases, the prices will go back down. (We see this in the cost of a gallon of gas over time.)

It’s not quite that simple.

If I give you a new £20 note and you put it in a drawer then that won’t cause prices to go up.

It’s not money supply that’s the issue, it’s money flow vs capacity to produce.

There isn’t a fixed amount of stuff and there certainly isn’t a fixed speed at which money can change hands.

> If I give you a new £20 note and you put it in a drawer then that won’t cause prices to go up.

Withdrawing money from circulation (or lighting your cigars with it) cause a reduction in the money supply, meaning each remaining dollar is worth more, which is deflation.

People withdraw money from circulation all the time. It's called 'saving'. That's what a 'deficit' is - people saving rather than spending. That's what money in a bank account is. It's what a government bond holding is.

That isn't reducing the money supply - burnt notes remain on the books of the note issuer and are included in the calculation. It reduces the overall velocity of money, not the amount of money.

That's because the velocity is variable. Not just in aggregate but in individual areas.

Dollars change hands at variable speed. That's why turnover is measured in dollars per month, not dollars.

Mixing up dollars per month and dollars is like mixing up miles per hour and miles.

Inflation should effect wages proportionally to prices. If it does not, its just a price imcrease, which is whats happening. Something, termites, something ...

Inflation does indeed cause wages to rise proportionately. But it takes time. Just like dropping a bucket of water in a bathtub does not immediately cause the entire surface to reach a new level.

There's a very simple reason why it does very little to substantiate its core claim: The claim is simply wrong and therefore can't be substantiated

so, you do not believe prices are inflating?

> Assa Abloy

> You can buy Schlage, Kwikset, ABUS...

"Kwikset is an American lock and lockset manufacturer owned by Assa Abloy"

I think another example could be Luxottica (glasses).

Each cut isn't much, and there's no point stressing about it, but accumulate enough of them and it's a problem.

Doesn't the fact that everything is increasing in price also affect these labourers? Who see the prices in their grocery stores, cars, housing costs increasing, and then have to demand higher wages to stay afloat themselves?

Can any one cause be tied to the whole effect? No. Would [much] more aggressive anti-greed/anti-monopoly/anti-corruption handling of the economy stabilise inflation? Without doubt.

I think the article is just "here are a few things I'm aware of that are more expensive than I think they should be". There isn't any analysis of the industries they are in or the dynamics that enable them to maintain those price points.

The Verisign case is the strongest one, but even granting that, those price increases over the years look very aligned with the aggregate rate of inflation to me. (I do personally think that things like Verisign would be good candidates for public administration, but there are potential drawbacks to that as well.)

One issue is that there are people who do these kinds of deep analyses of industries and how various players in them can maintain particular price points and margins, but none of those people are fundamentally skeptical of the whole system, they are mostly Wall Street analysts or adjacent kinds of people, who don't question capitalism for a moment (it is their "water"). So on the one side we have skeptics mostly without deep expertise and on the other side we have deep expertise mostly without skepticism. It's not surprising that we don't get a huge amount of well-researched criticism of the system.

yeah it's basically a longwinded way of saying "market power is a thing", and a clumsy one that kludges absolute monopoly rentiers like Verisign, companies reneging on partnerships and conventional market leaders tend to put their prices up when their product is much more useful than the alternatives all into the same bracket.

Market power obviously is a thing which affects pricing, but market power in BIM software doesn't have anywhere near as much to do with construction costs or everyday experience as fuel price increases or labour shortages.