QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by TomDiehl QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by greyhounds No. No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return" Why on earth would any sane person do that? Your statements make no sense. Pharmaceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off. IBM did it with PCs for years. Venture capitalists do it for a living. Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point. In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them. So now you're comparing what a railroad charges two different customers for transportation service to what companies spend on R&D for new products. Couldn't get much more unrelated than that. You will have to talk to greyhounds about his generalization into all "business managers." I agree with you since railroad captive shippers are a unique situation, but he made the assertion, and the assertion was, as usual, demonstrably false.
QUOTE: Originally posted by TomDiehl QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by greyhounds No. No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return" Why on earth would any sane person do that? Your statements make no sense. Pharmaceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off. IBM did it with PCs for years. Venture capitalists do it for a living. Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point. In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them. So now you're comparing what a railroad charges two different customers for transportation service to what companies spend on R&D for new products. Couldn't get much more unrelated than that.
QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by greyhounds No. No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return" Why on earth would any sane person do that? Your statements make no sense. Pharmaceutical companies do it all the time with enormous R&D expenses, hoping that one in ten might pay off. IBM did it with PCs for years. Venture capitalists do it for a living. Boeing does it with every plane it develops, looking at overall losses for years on the product, until finally they hit (hopefully) the break even point. In the real world it is fairly common for a variety of reasons, some of them simply being mistakes and business makes a lot of them.
QUOTE: Originally posted by greyhounds No. No business manager in his/her right mind would cross subsidize business and '"divert their resources from productive traffice to traffic that does not generate a sufficient rate of return" Why on earth would any sane person do that? Your statements make no sense.
QUOTE: Originally posted by rrandb Market theory is that you charge for your service "as much as the market will bear". If you charge too much you will lose market share. Too little and you are losing income for your stock holders. Is this not what the railroads are doing. Companies chose to ship by rail because it is the most cost effective and efficent way to move their product. There complaint isn't that they are paying too much but that some one else is paying less.
QUOTE: Originally posted by rrandb What is destructive is the number of empty grain silo's with abandoned right of ways next to them. The tracks disappeared with the end of regulated rates that were artificialy low.
QUOTE: Originally posted by MichaelSol Pharmaceutical R&D is a business venture, because the company has to analyze the costs of development (startup costs) with the expected market and profit. The huge costs of R&D have to come from existing business, and is put into what may or may not be a profitable line of business. Why you might think the analogy is unrelated is, I am sure, based upon your extensive business experience.
QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by rrandb What is destructive is the number of empty grain silo's with abandoned right of ways next to them. The tracks disappeared with the end of regulated rates that were artificialy low. This is simply bizarre. General rates have dropped by about 50% since the "artificially low" rates of the regulated era. Rates must be really, really "artificially low" now.
QUOTE: Originally posted by rrandb QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by rrandb What is destructive is the number of empty grain silo's with abandoned right of ways next to them. The tracks disappeared with the end of regulated rates that were artificialy low. This is simply bizarre. General rates have dropped by about 50% since the "artificially low" rates of the regulated era. Rates must be really, really "artificially low" now. Do you really believe that immediatly before deregulation that they were artificially high and railroads wanted to lower the rates because they were too high.That's bizarre. Our market econoimy and improvements in efficency have resulted in today's rates. But then how could rates have gone down in a command and control econimy? [?]. SPIN
QUOTE: Originally posted by MichaelSol Because we, as an economy and a society, have already done the experiments that prove the theory. Fixed prices, captive prices, monopoly prices all result in inefficient use of resources, market distortions, and ultimately, harm to the company that practices them, and harm to the society that permits them.
Thanks to Chris / CopCarSS for my avatar.
QUOTE: Originally posted by Murphy Siding QUOTE: Originally posted by MichaelSol Because we, as an economy and a society, have already done the experiments that prove the theory. Fixed prices, captive prices, monopoly prices all result in inefficient use of resources, market distortions, and ultimately, harm to the company that practices them, and harm to the society that permits them. All quite possibly true. But nowhere does the above statement support your acertion that railroads take the *extra* made from captive shippers to use to *subsidize* non-captive shippers. That doesn't seem to be market theory, as you decribe it. That seems to be your opinion.
QUOTE: Originally posted by Murphy Siding But nowhere does the above statement support your acertion that railroads take the *extra* made from captive shippers to use to *subsidize* non-captive shippers. That doesn't seem to be market theory, as you decribe it.
QUOTE: Originally posted by rrandb Some rates were artificialy low. Most were not. What is obvoius was the number of miles of track that disappeared when the railroads no longer had to provide service to customers that were unable to afford these services based on the actual cost of rail service. How do you get permission to adandon a line if its making too much money? You can not. Can you abandon a line because it doesn't make enough money to operate it. YES The remarks were about grainger lines that after de-regulation became dirt paths. Was this because the railroads were making too much money NO
QUOTE: Originally posted by greyhounds QUOTE: Originally posted by Murphy Siding QUOTE: Originally posted by MichaelSol Because we, as an economy and a society, have already done the experiments that prove the theory. Fixed prices, captive prices, monopoly prices all result in inefficient use of resources, market distortions, and ultimately, harm to the company that practices them, and harm to the society that permits them. All quite possibly true. But nowhere does the above statement support your acertion that railroads take the *extra* made from captive shippers to use to *subsidize* non-captive shippers. That doesn't seem to be market theory, as you decribe it. That seems to be your opinion. It's not his opinion, it's his political agenda. Facts, reason, logic, honesty and integrity don't matter to him. He's got an ideology and he's going to follow it. Every fact is interprited by him to support what he already believes. He's a "True Believer". Eric Hoffer wrote a very good book about him.
QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by rrandb Some rates were artificialy low. Most were not. What is obvoius was the number of miles of track that disappeared when the railroads no longer had to provide service to customers that were unable to afford these services based on the actual cost of rail service. How do you get permission to adandon a line if its making too much money? You can not. Can you abandon a line because it doesn't make enough money to operate it. YES The remarks were about grainger lines that after de-regulation became dirt paths. Was this because the railroads were making too much money NO Well, your positions change faster than a speeding railroad locomotive. Can't keep up.
QUOTE: Originally posted by rrandb My position stays the same. I'm sitting.
QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by rrandb My position stays the same. I'm sitting. OK, 1) most shippers are captive, 2) there are 13 trains on day on the BNSF northern line, 3) regulated rates were "artificially low". Sit.
QUOTE: Originally posted by rrandb Whether you remove, add or misconstrue someone elses word its still just like lying.
QUOTE: Originally posted by narig01 Comment: If you think your prices are too high build your own f#%*#@’g RR!!!
QUOTE: Originally posted by rrandb How do you get permission to adandon a line if its making too much money? You can not.
QUOTE: Originally posted by MichaelSol That is precisely my contention. It is not market theory. However, if railroads are not taking the 250, 300 and 400% revenue to variable cost profits and not using them to subsidize other shippers, then that means other shippers are also contributing their fair share, right? And railroads are earning 250%, 300% or 400% of their variable costs, right? And VC/TC is the current estimated 50%, then railroads, not subsidizing, are not earning 10-15%, but really are earning 125%, 150% or 200% of their gross, right? !!??!! I am sorry, but the math does not work for any contention that there is not subsidized traffic, and if there is not subsidized traffic, then railroads must be earning profit in excess of their revenues. Can't buy it.
QUOTE: Originally posted by futuremodal QUOTE: Originally posted by rrandb Some rates were artificialy low. Most were not. What is obvoius was the number of miles of track that disappeared when the railroads no longer had to provide service to customers that were unable to afford these services based on the actual cost of rail service. How do you get permission to adandon a line if its making too much money? You can not. Can you abandon a line because it doesn't make enough money to operate it. YES The remarks were about grainger lines that after de-regulation became dirt paths. Was this because the railroads were making too much money NO "How do you get permission to abandon a line if it's making too much money?" The "too much money" statement aside (e.g how much is "too much"?), a line that was profitable pre-Staggers can end up in the scrap heap for any number of reasons. Mergers can make a profitable line redundant, and we all know what happened to the redundant lines post-Staggers, don't we? The seemingly sole purpose of mergers was to allow railroads to lop off assets to *reduce* costs, totally irrespective of whether those assets made money or not. The whole purpose of dereg seems to be to consolidate as much trackage as possible into the fewest corridors possible, to allow maximization of pricing power. Thus, it is probable that most of those lines being scrapped were profitable, but the proliferation of them repressed pricing maximization. Of course, the railroads turned around then and, instead of maximizing all profits on the few remaining lines, used captive rates to maximize profits on only captive US rail shippers, then cross subsidized the rates for non-captive shippers, including all overseas importers. Thus, minus imported oil and in spite of a relatively weak dollar, we still have a growing trade deficit, thanks in part to the market skewing activities of US railroads. Economic theory predicts such, and WHOOOMP there it is. The area of the country I reside in is full of abandoned ROW's that made money for their owners - The Milwaukee PCE, the ex-NP nee BN Palouse and Lewiston line, the SP&S from Spokane to Pasco, the 2nd and 4th subdivisions of the ex-Camas Prairie, the UP Yakima Valley line, et al. It's quixotic and bizzare, yet instead of returning some of those profits to the line in question for maintenance and/or upgrade, the Class I's siphoned off all those profits for other projects, possibly for the cross-subsidies given to the importers of Asian made products![V]
An "expensive model collector"
QUOTE: Originally posted by futuremodal Speaking of the pot calling the kettle black.......... (RE: The petrochemical industry complaining about captive rail rates) QUOTE: Originally posted by narig01 Comment: If you think your prices are too high build your own f#%*#@’g RR!!! Comment: If RR's think their diesel fuel prices are too high, then let them build their own f#%*#@'g refineries!!!![}:)]
QUOTE: Originally posted by futuremodal QUOTE: Originally posted by n012944 QUOTE: Originally posted by MichaelSol National Petrochemical and Refiners Association: Now if you are going on about price gouging in an industry, why on earth would you use oil companies as an example??? I get it, its the railroads fault that I paid $3.05 a gallon to fill up my car today. 1st it was Katrina, then Rita, then tensions in Iran, and now the railroads. Give me a break. Bert Bert, The reference to the petroleum industry was in the context of it being subjected to captive rates, aka roughly 50% of the industry is captive to one Class I railroad. Whether the oil industry itself also engages in captive pricing or not was not the issue. However, if you know of ANY locale that only has one oil company offering, please let us know. I know that there are scads of small towns (under 1000 population) that have only one local source of fuel, but of course they are not that far (10 to 15 miles) from larger towns that have several fuel sources. Unless you are walking down to the fuel pumps to fill your gas cans for your lawn mower, most small town residents have no problem filling their tanks at any number of fuel stations.
QUOTE: Originally posted by n012944 QUOTE: Originally posted by MichaelSol National Petrochemical and Refiners Association: Now if you are going on about price gouging in an industry, why on earth would you use oil companies as an example??? I get it, its the railroads fault that I paid $3.05 a gallon to fill up my car today. 1st it was Katrina, then Rita, then tensions in Iran, and now the railroads. Give me a break. Bert
QUOTE: Originally posted by MichaelSol National Petrochemical and Refiners Association:
QUOTE: Originally posted by MichaelSol The State of Montana spent $3.2 million on the litigation. However, high priced railroad lawyers, an unlimited litigation budget, and 14 years of constant litigation and appeals, replaced the original ICC implementation with an unwieldy, nearly impossible litigation standard, an impossibly vague standard of proof, and essentially rendered the original provision, as interpreted correctly by the ICC, unenforceable.
QUOTE: Originally posted by MichaelSol QUOTE: Originally posted by rrandb Whether you remove, add or misconstrue someone elses word its still just like lying. Then you need to stop doing it and get your facts straight.
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