Bush's Supreme Court is churning out more fruit for corporate fat cats.

I fail to see the constitutionality of this decision. Retailers pay manufacturers a price they already set to purchase their inventories, so what business is it of manufacturers to tell retailers at what price they can sell to consumers?

That just doesn't sound constitutional, or like free trade, to me.

Gone are the days when you'll see "... below MSRP."

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Big Number of 2008
8,217,246
Obama's Margin of Victory

"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson

I work in the guitar industry, and can only an opinion from that perspective.

Some manufacturers employ what's known as "MAP", or "minimum advertised price". it's simply the lowest price a dealer can advertise the product for. He can, however, sell it for whatever he wants.

Of great concern to a manufacturer, though, is the perceived value of their brand, which is of monumental importance. If a dealer sells guitar "X" for $1,000.00, it's a $1,000.00 guitar if other dealers follow suit, despite what the actual retail price of it is. If a manufacturer puts a retail price of $2000.00 on that product, the manufacturer is seen as a company that "gouges", thereby helping to "cheapen" the brand. A dealer who puts a more reasonable price on that same product won't be able to sell it and, as a result, he doesn't reorder that product from the manifacturer.

Also, manufacturers want their dealers to realize as much profit as possible from selling their products. Often, dealers are just interested in beating the price of another dealer, and will damn near drop their pants to get the sale. Unfortunately, once they do that, the customer will expect the same type of deal every time he walks into that store. Manufacturers rely on good dealers who represent their products well. Selling for a few dollars over the dealer cost doesn't do that.

It's a discussion which has very valid points on both sides. I know this, as I've been on both sides, and it's difficult to determine, sometimes, which is the more valid argument...

once the product is sold from the manufacturer to the wholesaler or retailer that should be it...I don't see the purpose of this..

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No individual can plan his own existence in their view.

So the state planners must arrogate to themselves the right to manipulate any sector of the economic system if the good of “society” or the “general welfare” is paramount.

Ipso- if the rights of the individual get in the way, the rights of the individual must be sublimated.

The Road to Serfdom
FA Hayek (interpretation)


Mortgage Backed Security survivor

The argument for manufacturers just doesn't ring true for me. The value of a product is in the demand, and the demand is set by the perceived or actual value to the consumer.

Retailers are in business to make a profit, selling Sony televisions below wholesale--or their cost--is just bad business, and is counter-productive.

But now if the manufacturer can tell the retailer that they must set a retail price that is twice wholesale, the retailer no longer has bargaining power with the consumer in regards to price. I'd say most people buy from a particular retailer based on product, and price; that being the case, in order for retailers to compete based on price they will have to set a retail price above the mandated retail price, in order to have a discount or sale price.

I don't know, it just smacks of corporate favoritism to me.

__________________
Big Number of 2008
8,217,246
Obama's Margin of Victory

"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson

That's exactly one of the points I made...

Agreed...

And, in actuality, he wouldn't need it.

If someone is going to buy a camera, for instance, right now they can shop around and get the best deal. With consistent pricing, the consumer can't shop around, because everyone's selling it at the same price. That notwithstanding, the average consumer is still going to buy the camera.

Like I said, I've been on both sides of this debate, and both sides have very, very solid and valid arguments...

The only purpose of this is to maximize profits for some, and to drive out business for others.

Price fixing - another "benefit" brought to you by the Bush Administration.

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When they come a wull staun ma groon
Staun ma groon al nae be afraid
Thoughts awe hame tak awa ma fear
Sweat an bluid hide ma veil awe tears

The government has no business in private industry.

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"Bring the boys back home!"--Pink Floyd

NFA JJG 42-95

Free People/Free Markets

Following the Path of the Beam

As a consumer this really pisses me off. So much Roberts respecting precedent and leaving a small footprint.

__________________
"Give me your tired, your poor,
Your huddled masses yearning to breathe free,
The wretched refuse of your teeming shore.
Send these, the homeless, tempest-tost to me,
I lift my lamp beside the golden door!"

Well now that camera is going to cost more.

And I'm not convinced that manufacturers have a solid, and valid argument. I just don't buy it that a discounted price cheapens a manufacturer's brand, especially an established one.

I'd have to read how this new law is worded, but if it in fact is restricted to the actual manufacturers, then China might actually be the one who sets our retail pricing, since they manufacture just about every product sold in this country.

I'd love to see that debated in court.

__________________
Big Number of 2008
8,217,246
Obama's Margin of Victory

"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson

Yep.

But people will still buy it...

A discounted price won't do that, necessarily. A deeply disounted one will...

I'm sure the pricing would be determined by the actual company. Plenty of US companies have their products built overseas, and I would imagine that it's the US company that wets the pricing...

I admit, it would be interesting to hear the arguments from both sides...

And before more people would buy it. For the people its worth it for the higher price but not worth it to shop around or wait for the next sale, they'll pay the higher price. For the people who want it at a lower value they'll shop around, wait for the sale, and buy it at the lower price. Its known as price discrimination and is a largely valid concept.

But what this does allow is anti-competitive price fixing, on a poor claim that sometimes, somewhere, somehow it'll promote competitive price fixing, which is a ludicrous concept.

This is a pure payback to big business ruling, they bought and paid for this court and now it's going to rule in their favor.

Minimum Retail Pricing is all about profits for the manufacturer.
It results in higher margins for retailers, and higher margins for manufacturers.
All paid for by the consumer.
This hurts the retailer who discounts, and the result is a marketplace that has more retailers, but smaller retailers, allowing the manufacturer more control of the market. The minimum retail price, coupled with minimum order amounts, limit the number of competing products a retailer can stock.
This is just the beginning of the bad decisions that this Supreme Court will start to churn out and with the older justices being the pro-consumer liberals, it's important that the Democrats occupy the White House in 2009.

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“ The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.”

Adam Smith , The Wealth of Nations 1776

"We have always known that heedless self-interest was bad morals; we know now that it is bad economics"
FDR's second Inaugural Address

I wonder if it will be possible to set up some sort of retail buy-back scheme, similar to France's short term car leases. Where they lease cars primarily to foreign tourists for anywhere from three weeks to six months tax free. Then the French auto makers re-sell the cars to the French public--minus a large portion of the initial sales tax not associated with pre-owned cars (that's my interpretation, I'm not fully versed in the details.)

So maybe retailers could take back recent purchases from customers, and then give them a store credit, which they could then use to purchase the same, or different, product. They wouldn't be able to buy the product they returned as it would be in escrow for 30 days, while it was reconditioned.

Manufacturers could also do this to compete on price.

That's just a quick thought on how price fixing might be subverted, but I haven't seen how this law/regulation is written, nor how it will be enforced.

How do manufacturers intend to police price fixing? Word of mouth?

There are an awful lot of deals to be had, which aren't advertised, or published. Those deals are private transactions between the store and the customer. Would it be done in year-end receipts, thus enforced by a new arm of the IRS?

This is more government regulation, and effectively adds a tax to the American consumer, and restricts free trade in the distribution chain.

This will certainly increase the cost of living by several percentage points, which will put additional strain on wages that already fail to keep pace with the cost of living.

If manufacturers don't adjust their mandated retail price with fluctuations in demand, the economy will slow, and the manufacturer who can adjust prices most effectively may hold a competitive edge.

Blah, blah, blah ... this is killing my beautiful Sunday, gotta go out and fire up the grill now.

__________________
Big Number of 2008
8,217,246
Obama's Margin of Victory

"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson

Perhaps, I'm a little confused, but how is this unconstitutional?
What section of the constitution is violated here?

As best I can tell, this ruling decreases government control of the market. I have trouble figuring out why a manufacturer would want to set a minimum retail sales price (it's not like it affects the price the manufacturer sales are at). But I'm not sure I see how it could be unconstitutional to allow them to include that in a contract if they wanted to.

Yea, probably nothing in the constitution would apply to this; just wishin' there was I guess.

How is this decreased government control of the market? Now the government has to enforce price-fixing agreements; which the government now condones.

__________________
Big Number of 2008
8,217,246
Obama's Margin of Victory

"Shake off all the fears of servile prejudices, under which weak minds are servilely crouched. Fix reason firmly in her seat, and call on her tribunal for every fact, every opinion. Question with boldness even the existence of a God; because, if there be one, he must more approve of the homage of reason than that of blindfolded fear."

-Thomas Jefferson