Sen. Amy Klobuchar, and Lori Swanson.
 

Sen. Amy Klobuchar, and Lori Swanson.


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Good Day

Is this about the cell-phone thing?

While based on the reports I've read it is a waste of legislative time, I don't get the outrage.

MORE GOVERNMENT NOW! :(

By God.

It's stooopid because she wants to prorate early termination fees and a "cell phone bill of rights" for consumers. I'm sorry, did you not *read* the contract before you signed up for the service? If people took responsibility for their actions and read the contracts, they wouldn't have the financial messes that they do. All a bill like this does is make the service more expensive in the long haul.

So I take it you're not one of the bidders for this:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=260170172469

This Democrat controlled congress is really living up to their promise.

I've switched cell-phone companies twice since 2001. I've never paid an early termination fee.

My little sister has switched twice as well. She's paid over $500 in early termination fees. She gets a new cell phone every year, which automatically extends her contract for two years.

I get a new cell phone when my old one breaks.

The problem is that some people think they should be able to get unlimited free cell phones and be able to switch companies whenever they want. They have no concept that the contract (and startup fees) subsidizes the cell phone price.

Sometimes I think it would be better to go back to consumers paying the actual costs of the cell phone and contract. That will surely happen in Minnesota...

Free Enterprise is the solution. Compare regulated industries like electric power with unregulated industries like telecommunications and insurance. Everybody loves cell phone and insurance companies, but we're all angry with our power company. Right?

My staff economist once said "Each society has had its myths. The ancients had Mount Olympus at the Gods. The middle ages had the Earth-centered universe. And modern society has 'self-regulating markets.'"

You fundamentally misunderstand economics. Once again, you fail to see the difference between an efficient market (cell phones, insurance) and a monopoly (electic power). Compare apples with apples next time.

And yes, everyone in Illinois hates their power company...so do some in California. ;)

Not a true monopoly. It is a government protected service area.

And I do understand economics.

Efficiency is an overused word when it comes to service industries, whether regulated or not.

Teach me about economics, Chris. I'll dispense with the sarcasm and make my remarks directly. It seems hard for find someone who is happy with insurance companies in general and their cell phone company in particular. And while I suppose it's possible that folks whine about their electric power company (particularly in California where deregulation was recently attempted) but I have never heard this whining. Certainly not where I live.

Electric power is immensely capital-intensive and it is truly a commodity. Your power is not better than my power. Currently, except for some heavily regulated private utilities there is no part of our electric power bill that subsidizes investors. In other words, we the public have built the electric power system and we make our own electricity thank you very much. Now, I'd like you to tell me why I should support selling these (publicly owned) generation and transmission systems to a wide array of private companies so they can sell me back my electricity at a profit. I've asked everyone I know in the electric power industry (remember, I am in the public works construction industry) to show me a reason why this would be a good idea, and have not yet received anything. So....you would be the first.

Please do, though. Please tell me why this market would be more efficient if we sell our system to private companies that will sell us back the electricity we used to generate ourselves. And then tell me why those super-efficient cell phone and insurance companies seem to get this widespread unfair reputation. I do enjoy economics and it sounds like you think you know some stuff I don't know. Part of my fundamental misunderstanding? Monopolies are pretty darned fundamental. They are bad things when the company that dominates the market is unregulated, since they can engage in all sort of price gouging, etc. But when the company is a gubmit agency, there is nowhere for that money to go. No siphon. It is, essentially, impossible to gouge. Gouging requires a siphon. Gouger and a gougee. With public agencies they are one and the same. Help me with this very fundamental misunderstanding. And again, I want to hear why it's unfair that everyone seems to be unfairly disappointed with their cell phone company, and why they seem also to be unfairly disappointed and suspicious with insurance companies.

insurance is an "efficient" market?

Did you learn that from one of your über-liberal whack college professors? ;)

Publicly owned? As in everybody?
No.

Maybe where you live.
I'm an Ameren shareholder. They have become quarter-to-quarter performers.
And no, people are not happy with their service.

Insurance rates, for the most part, whether they be for health or housing are generally "take it or leave it", with no (or very little room) for negotiation. This is not an efficient system, except from the viewpoint of the service providers. When was the last time you talked your insurance provider into giving you a lower rate?

A few years ago, in Arizona, State Farm lost a huge mold case. My rate doubled. When I questioned it, I was told I could lower my rate by increasing my deductible. (I went with AARP/Hartford for both my cars and the house and reduced my combined bill by over $500 and got even better coverage including mold coverage)

There is a fallacy out there that, in all cases, private industry is superior to a government operation. While, in some cases, theis is true, it is not a general rule nor is it an absolute. This concept is simply a mindset of some who believe that smaller government is a goal while supporting an administration that has bloated the power of the federal government out of all recognition. Now THAT is also a generality and I freely admit it.

There is NO perfect economic system. Each system has its pluses and minuses, and none is totally evil. It is time for some of you to take off that cap of bias, start thinking for yourself and look at things a bt more objectively. That might be a struggle, but believe me, from a former idealogue, the journey is well worth the effort!!

Supe, you don't even know what I was arguing, do you?

Power companies are a natural monopoly. The distribution systems require a huge capital investment and cannot be easily duplicated. Your house has to be hard wired to the power generation facility. Electricity is a commodity and changing which facility you get power from requires mager re-work.

Insurance and cell phones are efficient markets. (That term has nothing to do with whether the companies themselvs are efficient. :rolleyes: ) There are many companies selling many levels of products. There are few barriers in switching from one provider to another.

To make a comparison between an efficient market and a natural monopoly is invalid. (That was my argument.) The environments in which power companies and insurance companies/cell phone providers operate in are fundamentally different in so many ways that any sort of comparison is completely meaningless.

No, I learned that from a closet-conservative economics professor. SmileWavy

Bob, that is an efficient market. You were free to go to a different provider without penalty or barrier.

And, BTW, you can't negotiate with your grocery store or your power company either...

When I switched from Verizon to Cingular, I walked into the store and asked what the early termination fee was. The lady said $175. So I signed up. Sure enough, the $175 was mention on the mile long receipt/contract they gave me. I didn't read the whole thing.

Fast forward a few mos. My new job required me to get Verizon and they said they'd pay my Cingular early termination fee, which they did. Then I got a bill for $400 from the Simply Wireless store when I had signed up with Cingular. Bill was due in two days or it would go to $500. Yup, that's the early termination fee they didn't tell me about when I asked. And I didn't notice it in the paperwork, as I had seen the $175 the lady mentioned and so I stopped reading. I have refused to pay this and they sent it to collections. Yes, technically I owe it. But it's outrageous, I already paid the early termination fee the lady told me about and I'm not paying another $500.

Efficient market?

Go to business school and study the insurance industry. If there is a less efficient market - I'm not sure what it is.

In my neck of the woods they have privatized power, public transport and telephones. All are are now inefficient and expensive - when the used to be efficient and cheap.

Watch CNN for an hour. Then switch to BBC for an hour. Then tell me about the virtues of privatization.

Huh?

Cingular hit you with the $175 (which sounds about standard). No suprise.

But the store you went through, this 'Simply Wireless' place had an additional $400 fee they charged on top of it? And this was in the contract? Did they have their own special contract different than what you would get if you went to a Cingular store?

I feel for you man, and if she told you $175, you WERE misled. Thing is, you signed the contract, and thats written record and all you have is recollection of a conversation (which I am SURE she's forgotten). I wish you the best of luck.

Moral of all this to me is that I don't sign anything anymore, and if I do I am going to read every last word of the contract. $400 tacked on is quite amazing.

Exactly. I didn't read any farther because I saw in the contract the dollar amount she mentioned. BUT, a few pages later there is a clause that if you cancel inside of 6 mos., you owe the store a $400 early term. fee. I had never heard of such a thing. My company wasn't gonna pay that for sure. I told them they would never ever get that money from me and to go ahead and sell it to collections or write it off. My credit score is good enough that it can take the hit and recover nicely before I need to buy another house. Every mortgage I've ever done has not even tried to make me pay old parking tickets in DC. Collections like that mean nothing, other than a short term hit to the FICO.

Not to hi jack but, I purchase cell phones for my employees and one time I needed to end a service early and the operator asked why. I said that the guy was no longer alive! Well, the phone was under my name, the employee was just using it, so there won't be a record of him being deceased. Anyhow, they waved the early termination fee of $200!SmileWavy Yeah!

This is consistent with my observations as well.

Chris, I get it. Pure competition, as a model. Sure, that's pretty basic. And yes, it makes those industries a poor comparison with each other. My comparison wasn't between industries. You won't get a lot of sympathy here or anywhere else, defending the cell phone or insurance industries.

I'm curious as to what complaints someone might have of their electric power vendor. It would seem to me that if power is continuously provided without interruption, then there would be nothing to complain about except price. Talk about a commodity. Even water can be differentiated. Try convincing someone that your power is better than the next power company.

Oh and by the way, while I agree with you that buildings are hard-wired to the grid and it all comes from the generation facilities through the same transmission lines, be aware that in your lifetime there will be privatization of this industry, and you will have a choice of power companies. I know, I know. It makes no sense. But that's the agenda. The reason? Guess.

Supe, believe it or not, I think the power industry should not be deregulated--for all of the reasons you have cited. Being a natural monopoly, the market cannot be efficient--and the only viable alternative is regulation.

However, when an efficient market is present (or can be created--which is an impossibility for electricity), I prefer an efficient market to regulation. Insurance, groceries, cell phones, etc. are all in efficient markets.

I don't understand why anyone gets a cell phone contract. I have used the T-mobile pay as you go method for years. If I want a new phone I go buy it and just switch out SIMS (thanks to help from this board for that). My phone as all the cool features and cost me $70 at Target. The more minutes you buy, the cheaper they are.

I do it because I don't even come close to using the smallest minute plan on my own, but added my lady to my account for $10 a month more and now we can talk airtime free to our hearts' content. We take turns paying the bill every other month and so it has cut my costs way down.

The legal community in Minnesota is pretty small. I know Klobuchar and Lori Swanson slightly. I am better acquainted with another Minnesota lawyer who gets some mention on this board, Member of Congress Keith Ellison.

I dislike Swanson and Klobuchar intensly. I have no idea why anyone likes them. They are the sharks of the sharks. As for Ellison, I merely dislike him.

It is tentatively comforting to hear your reasonable view of the electric power industry. And for that confession, you get this: In industries where it makes sense (the vast majority) I too prefer competition. Capitalism has its efficient mechanisms, and I'm all for using them.

I have a good friend who is currently negotiating with the Public Utilities folks in Seattle on this very issue.

It seems your local (largely hydroelectric) power generating capacity is highly variable. One years kilowatt production may be 50% less or more than the previous years production. Fluctuating income is apparently a bad thing when drawing up government budgets. They want consistency. They would like to sell the "risk" in return for a steady (although slightly lesser) income.

There's no reason the electrical industry can't be a regulated monopoly for its dealings with consumers, but still be free to buy and sell electricity to deliver the best price for its customers.

I like the mutualization of the industry. I grew up as a member of the local REA (Rural Electrical Agency,) which is one of the few good ideas Lyndon johnson ever had. Basically it is a mutual company or cooperative formed as a government agency for the sole purpose of delivering electricity to rural areas. The customers were the owners. I'd like to see all power companies run like that.

I disagree. The only stuff I finance are sometimes cars or my bike when the rate is just a giveaway like 2-4%, which I have gotten with no problem since this collections issue. My FICO was a 746 last I checked. If/when this collection hits, it may bring it down 50 pts. right away. But my FICO will climb back up every month, since I'm never late and not overextended. Anyone with a 700 FICO can pretty much get a signature loan for anything.

"Small world" would be an understatement. I met Klobuchar, (with her dad), during the campaign, Al Franken over the summer and exchange pleasantries with Walter and Joan Mondale on a daily basis as they walk their dog past my job site. My Dad and WM went to law school together at the "U" 50 years ago and still know all of the same people they knew then. He refers to my dad by a nick-name only used by people who've known him 40+ years.

The only thing that I know about AK is that she is Jim's daughter and is completely unqualified to be in the US senate other than her famous (in MN.) last name. AF is a funny guy, but the thought of him in a position of power is scary. Mondale is the son of a rural, southern MN. minister and if you looked up the word "gentleman" in the dictionary, his picture would probably appear. :cool:

Indeed. I think a friend of mine is Ellison's brother.

Moses, I got no problem with arrangements that make sense. Indeed, unfortunately, part of what makes sense is that this cheap, adjustable hydro power should arguably be shared with the rest of the country. we have very low power rates here. so again, I understand that some things make sense. what does not make sense to me is pretending there is "competition" just because three different companies want to sell me the power that comes from the transformer thirty feet from my house. That I paid for. Frankly, the residential customer is a PITA. Deregulation means sweet deals for aluminum rolling plants subsidized by higher residential rates. BS.

But I can verify that hydro power is adjustable. Spillway gates open and close second-by-second, according to the energy draw. I've watched them.