Comments on: Price Controls at Work http://www.coyoteblog.com/coyote_blog/2006/05/price_controls_.html Dispatches from a Small Business Sun, 12 Feb 2012 09:39:47 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: Don Lloyd http://www.coyoteblog.com/coyote_blog/2006/05/price_controls_.html/comment-page-1#comment-2644 Don Lloyd Sat, 27 May 2006 20:25:23 +0000 http://coyote-blog.com/wordpress/2006/05/price_controls_.html#comment-2644 <p>Brad,</p> <p>Not so with insurance. There is no monopoly power involved. Insurance is highly fungible, and there are several willing providers throughout the state of California. To transfer insurance from one company to another basically takes a phone call or two. If there is a system in which a free market would be seen by just about everyone to work properly, this would be an ideal example.</p> <p>I don't live in California, but I would be shocked if the auto insurance system can be accurately described as a free market. If you could demonstrate that the regulations governing it are no larger than a typical IRS publication, I might change my mind. Is the market for widgets free if they must all have a left-handed thread, be blue, and weigh 2 pounds? My expectation is that California auto insurance policies are virtually all the same with the same limited set of options, and true competition is not allowed.</p> <p>Regards, Don</p> <p><br /> </p> Brad,

Not so with insurance. There is no monopoly power involved. Insurance is highly fungible, and there are several willing providers throughout the state of California. To transfer insurance from one company to another basically takes a phone call or two. If there is a system in which a free market would be seen by just about everyone to work properly, this would be an ideal example.

I don’t live in California, but I would be shocked if the auto insurance system can be accurately described as a free market. If you could demonstrate that the regulations governing it are no larger than a typical IRS publication, I might change my mind. Is the market for widgets free if they must all have a left-handed thread, be blue, and weigh 2 pounds? My expectation is that California auto insurance policies are virtually all the same with the same limited set of options, and true competition is not allowed.

Regards, Don

]]> By: BallotBrain http://www.coyoteblog.com/coyote_blog/2006/05/price_controls_.html/comment-page-1#comment-2643 BallotBrain Fri, 26 May 2006 23:58:39 +0000 http://coyote-blog.com/wordpress/2006/05/price_controls_.html#comment-2643 <p>Not only thefts and accidents, but insurance fraud, (deliberate collision, faked doctors claims) and litigation are much higher in California Cities.</p> Not only thefts and accidents, but insurance fraud, (deliberate collision, faked doctors claims) and litigation are much higher in California Cities.

]]> By: Brad Warbiany http://www.coyoteblog.com/coyote_blog/2006/05/price_controls_.html/comment-page-1#comment-2642 Brad Warbiany Fri, 26 May 2006 19:27:04 +0000 http://coyote-blog.com/wordpress/2006/05/price_controls_.html#comment-2642 <p>When you get into things like gas prices, at least people in favor of price controls have somewhat of an argument. You're dealing with scarcity of a physical good. As we all know, the argument is wrong, and leads to bad things, but there is at least some plausibility to the uninformed.</p> <p>Not so with insurance. There is no monopoly power involved. Insurance is highly fungible, and there are several willing providers throughout the state of California. To transfer insurance from one company to another basically takes a phone call or two. If there is a system in which a free market would be seen by just about everyone to work properly, this would be an ideal example.</p> <p>How exactly did California ever get into this mess?</p> When you get into things like gas prices, at least people in favor of price controls have somewhat of an argument. You’re dealing with scarcity of a physical good. As we all know, the argument is wrong, and leads to bad things, but there is at least some plausibility to the uninformed.

Not so with insurance. There is no monopoly power involved. Insurance is highly fungible, and there are several willing providers throughout the state of California. To transfer insurance from one company to another basically takes a phone call or two. If there is a system in which a free market would be seen by just about everyone to work properly, this would be an ideal example.

How exactly did California ever get into this mess?

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