Market Magic: Everyday Miracles
That's the biggest lesson I've learned in 35 years of consumer reporting: The market performs miracles so routinely that we take it for granted. Supermarkets provide 30,000 choices at rock-bottom prices. We take it for granted that when we stick a piece of plastic in a wall, cash will come out; that when we give the same plastic to a stranger, he will rent us a car, and the next month, VISA will have the accounting correct to the penny. By contrast, "experts" in government can't even count the vote accurately.
That's why I talk about market magic.
~John Stossel
6 Comments:
Once again, Mark, an excellent link and a very effective article there, along with your other posts the last few days. Almost alone in economic blogging, you put out posts that are always filled with hard data, presented with remarkably clear charts and other diagrams.
One query that occurs to me --- someone who respects markets, but isn't a libertarian: how, in the financial areas, can an individual consumer or investor make a reasoned choice without have clear, transparent information of an accurate sort about
1) balance sheets,
2) complex, hard-to-read contracts even for those of us with a Ph.D.,
3) the safety of products like medicine, and
4) the powerful monetary incentives for predatory operators to exploit new technologies that have continued to roil financial markets for two or three decades now?
Sooner or later, it's true, competitive market forces might solve most of these problems --- but only after some havoc, or even a great deal, has rippled and disrupted the larger national or global economies (the 1997 Asian meltdown, say, or a fair number of unsuspecting investors or consumers (say, house-buyers) have been hurt in the process.
Thanks again, a terrific site. I hope you continue to win one award after another way into the future.
-- Michael Gordon (AKA, the buggy professor: http://www.thebuggyprofessor.org
"but only after some havoc"
...as opposed to what alternative?
And the best part about it: the havoc you speak of is often one-off. Look at any new industry, be it aviation or automobiles. In the beginning there was havoc, 100's of companies and most of them going bust. But, after a few decades we had a handful of companies and consumers could be reasonably assured the planes and cars wouldn't blow-up regularly.
So, today, there is no one alive which remembers the period of havoc. All the young people of today know is Airbus and Boeing, Ford and Toyota. We now go years without a plane crash and we don't even bother considering the possiblity that our car will explode the next time we start it.
Indeed, order a pizza and call a cop. The pizza will get there first. (One of the reasons I favor allowing armed pizza delivery drivers.)
Stage a natural disaster and Walmart's supply chain will be running normally long before FEMA gets their pants on.
"no one alive which remembers"
should be:
no one alive who remembers
I am the Grammarian about whom your mother warned you.
"By contrast, 'experts' in government can't even count the vote accurately."
Not exactly a fair comparison. Visa doesn't always have the accounting correct to the penny (authorization calls, identity theft, etc.), and the stakes of someone manipulating an election are a little higher than being robbed of an identity once in a while, leading to fundamentally different technologies. We'd all love it if we just had electronic voting, but so might a few Nigerians I know.
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