Tim Karr’s You-Do Economics – Price Controls for Network Providers?

by Mike Wendy on January 24, 2011

Free Press’ Tim Karr has an interesting post on his personal website today.  Though it’s hard to tell what the figures actually represent, the overall theme is: Network provider profit = evilness.

Profitable companies in the cross-hairs?

Once again, it reveals Tim’s blind faith in “You-Do Economics.”  In this context it means, You, network providers, do the risk, investment, and innovation, and we, “public interest groups” and regulators, get to hamstring, misappropriate and undermine your public service efforts.

Good theory on how to grow an economy, eh?

Not.

By posting this un-explained graphic (a “cross-hairs” call to his followers?), Karr seemingly suggests that only price controls and confiscation of property properly befit network providers (Phoenix Center’s George Ford and Larry Spiwak reach the exact opposite conclusion in this thoughtful read, but I digress…). Thankfully – for Tim, that is – the FCC obliged him with its Net Neutrality regulations issued late this past December.

No matter that profit provides the incentive to invest, innovate and create jobs.  And “high profit” (is there such a thing?) – as seen in every other part of our economy – is a core tool in getting things of value to consumers.  It allows the average American to afford cars (i.e., via the high markup / cross-subsidy of Cadillac to Chevy), domestic and global travel (i.e., via the cross-subsidy of first class to coach), and mail delivery (i.e., via the cross-subsidy of express mail and federal taxes to normal delivery), among other things.

Moreover, “high profits” also provide an “economic call” for others to enter into any given marketplace, incentiving competition, which generally brings lower prices, better services and more innovation to consumers.

In short – profits are good for our economy (it’s amazing that one even needs to stress this, but…). Yet, in Tim’s world, it’s simply evil.  Such an assertion is not surprising, considering the company Karr keeps.  Free Press’ founder, Robert McChesney once quipped:

At the moment, the battle over network neutrality is not to completely eliminate the telephone and cable companies. We are not at that point yet. But the ultimate goal is to get rid of the media capitalists in the phone and cable companies and to divest them from control.

Post-capitalism, how groovy!

Tim and his comrades at Free Press know what You-Do Economics doesn’t do – it doesn’t promote good, honest, risk-and-reward capitalism.  More to the point – it doesn’t promote the American way. Which, sadly, is exactly what they want.

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