Economists question Bettmans math

[nedved93]

You're welcome. I'm sorry, there are lies, damn lies, statistics and economists. You can get any 'expert' out there to say what you want them to say. I don't take some guy's opinion as valid just because he has a degre in economics, especially when most, if not all, university-trained economists are Keynesians, which, as an economic system, is complete nonsense. Most economists, by extension, are pro-labor, pro anti-trust, anti-free market and it clouds their analysis. My opinion is that the statements made by those economists quoted in that article smacks of this.

The refutation of Keynesianism is far beyond the scope of this forum, but it exists and, in my opinion, perfectly valid.

Ta,

as a supply-side monetarist, i completely agree!

 

[mooseOAK*]

OK as a business owner how in the lords name could an employee force you to spend money??? Sorry I have yet to see a comprehensive plan from the owners on how they intend to fix there problems, I have only seen them try and blame the players for all there mistakes. And force the players to fix problems they themselves have created.

I am sure that arbitration and the NHLPA's system of setting the price for free agents has been explained ad nauseum in here so I won't do it again.

Nowhere did I see the owners blame the players for the mess other than to say that the NHLPA used the old CBA to get as much for their players as possible.

The only way that they can fix their problems is with cooperation from the players, which they didn't get.

 

[Lionel Hutz]

OK as a business owner how in the lords name could an employee force you to spend money??? Sorry I have yet to see a comprehensive plan from the owners on how they intend to fix there problems, I have only seen them try and blame the players for all there mistakes. And force the players to fix problems they themselves have created.

Isn't the comprehensive plan having a salary cap?

It is not a free market place, there are limited buyers who are competing for unique goods. The NHL fact scenario has nothing to do with a free-market and is not analgous to whatever business you run.

Without a cap Nash's games theory comes into play and everyone who can afford to will inevitably ante up until the league is in financial trouble.

Speaking as someone who has an MBA, I am still waiting for the media or economist who wishes to foray into this debate to discuss this issue and quell Goodenow's "free market" crap.

 

[joechip]

Andrew Zimbalist is the world authority on economics in pro sports, heck even the US senate trusts him.

Thank you for proving my point. The US government is run by Keynesian principles (Monetarists are just Keynesians in Austrian Clothing) and has been since the 1930's.... so, that's not much of an endorsement of Mr. Zimbalist. Especially, considering that the historical role of the economist has been the token-expert trotted out to convince the populace that the government's latest boondoggle makes good sense.

Only a Keynesian can see a broken window as an opportunity for economic grotwth as opposed to the waste of resources it truly is.

The fight we are caught in the middle of was caused by a bad law, The Sherman Anti-Trust Act, and propgated down through the years. The NHL owners are simply trying to apply what little leverage they have under said bad law, after the players have taken advantage of it to everyone's detriment.

I'm not saying the owners are right or wrong, and I'm not saying the players are right or wrong. As much as I disagree with the framework of their relationship (as dictated by Anti-Trust law) both are acting like free-marketeers within that system. To trot out the academic version of a court-jester to vilify the owners for acting like free-marketeers while lauding the concessions of the players smacks of disenginuity to me.

Ta,

 

[mooseOAK*]

An economist of all people should know that if salaries are escalating and revenues aren't then a business isn't healthy.

 

[futurcorerock]

OK explain to me how taking a 24% paycut shows players want to grow there salaries??

Minor setback to appease the owners - they'd earn it all back in due time.

 

[joechip]

as a supply-side monetarist, i completely agree!

nedved93, as an Austrian I'm glad you agree with me, but I hope you'll give me the opportunity to lead you away from the devil-in-sheep's-clothing that is the Chicago School.

Monetarist thinking on the money supply and it's applicability to supply and demand is dangerous...

Ta,

 

[Lionel Hutz]

Thank you for proving my point. The US government is run by Keynesian principles (Monetarists are just Keynesians in Austrian Clothing) and has been since the 1930's.... so, that's not much of an endorsement of Mr. Zimbalist. Especially, considering that the historical role of the economist has been the token-expert trotted out to convince the populace that the government's latest boondoggle makes good sense.

Only a Keynesian can see a broken window as an opportunity for economic grotwth as opposed to the waste of resources it truly is.

The fight we are caught in the middle of was caused by a bad law, The Sherman Anti-Trust Act, and propgated down through the years. The NHL owners are simply trying to apply what little leverage they have under said bad law, after the players have taken advantage of it to everyone's detriment.

I'm not saying the owners are right or wrong, and I'm not saying the players are right or wrong. As much as I disagree with the framework of their relationship (as dictated by Anti-Trust law) both are acting like free-marketeers within that system. To trot out the academic version of a court-jester to vilify the owners for acting like free-marketeers while lauding the concessions of the players smacks of disenginuity to me.

Ta,

I think that's a pretty nice post.

 

[kings13]

OK as a business owner how in the lords name could an employee force you to spend money??? .

It's called free agency. Bidding wars with fan and media pressure have a way of forcing an owners hand. This isn't a normal business.

 

[joechip]

An economist of all people should know that if salaries are escalating and revenues aren't then a business isn't healthy.

Yet another refutation of Mr. Zimbalist's credentials.

thanks.

Ta,

 

[futurcorerock]

OK as a business owner how in the lords name could an employee force you to spend money??? Sorry I have yet to see a comprehensive plan from the owners on how they intend to fix there problems, I have only seen them try and blame the players for all there mistakes. And force the players to fix problems they themselves have created.

Its not a direct influence, it's indirect.

If owner a pays a third line grinder 2.1 million, every thrid line grinder in the league who can somehow put up better numbers than said grinder, the price rises, forcing other owners to pay more for their services.

I'm surprised you still post here - you've always made a fool of yourself whenever these CBA threads come up.

 

[nedved93]

nedved93, as an Austrian I'm glad you agree with me, but I hope you'll give me the opportunity to lead you away from the devil-in-sheep's-clothing that is the Chicago School.

Monetarist thinking on the money supply and it's applicability to supply and demand is dangerous...

Ta,

perhaps, but empirically (at least here in the united states) i believe the theory has been validated since the early 1980s.

i have also grown quite fond of the austrian theory of the business cycle, particularly in helping to explain the state of the US economy since 2000-1...

 

[joechip]

And all you supply sided cr ap has done is built a debt that will never be paid off.

No, that was done without the help of the monetarists. That was the Keynesians in congress. Debt happens when you spend more than you take in. Supply-side monetarists said, rightly, that you can grow tax revenues by reducing the marginal tax rate.... which happened. But, if revenue grows by 20% and you increase spending by 50% then you will have debt.... Sound familiar?

Of course, if we were on a gold standard, ths could not happen.

The Federal Government and the Federal Reserve are responsible for the debt. We are responsible for not tearing that system down.

The monetarists had nothing to do with that.

Ta,

 

[SuperUnknown]

OK as a business owner how in the lords name could an employee force you to spend money??? Sorry I have yet to see a comprehensive plan from the owners on how they intend to fix there problems, I have only seen them try and blame the players for all there mistakes. And force the players to fix problems they themselves have created.

So you're a business owner and you don't understand how the salary market works? If the cost of an employee was 200k but you couldn't afford it, you would close down. In the case of the NHL, the salary market is a bit bent. No other leagues in the world pays anything close (consistently and to a large number of players) to what the NHL pays. In other words, they pay more than the global market price. Now, because of the CBA and how the NHL works, there's an NHL salary market. Well it happens that the price for the labour is too much for what the teams can afford. A 24% rollback on existing contracts won't affect the players that haven't signed (especially UFAs) and won't change their price point. Even worse, some teams will have more money to spend due to the way they work and will screw every other team by driving the price point for the UFAs higher than it was BEFORE the 24% rollback. As for RFAs, well they should get nothing more than a 10% increase qualifying offer. But the RFAs will sit out and there are a few teams that will give the RFAs the same salary they were worth before the 24% rollback, raising the bar for other teams and putting the market right back where it was before the 24% rollback.

If the 24% rollback was so foolproof, then why can't the PA guarantee it? No, they can't...

Also, there's something that people seem to forget. Why would the owners give more than what they're willing to offer or to pay? That's what they are doing right now and everyone is on their back. The owners would rather not play for 2-3-5 years than signing something that is above what they think they can pay as a whole. Like I've said countless times, to the owners, it doesn't really matter whether they can make $5M out of a $500M industry or out of a $2B industry. The problem for the players is that what they earn matters on the size of the industry. As such, the pressure is on them to meet the offer, else they lose more and more and eventually they either sign a worse deal or fold the league and play for 1/10th of their NHL salaries. Which means it's in their best interest to get the best deal they can as soon as they can. As well, if the players don't give a deal good enough to the owners, this situation (long lockout situation) will reproduce every CBA, making them lose salaries again and again. In other words, their position is not sustainable, while the owners position is. In a negociation setting, that means the owners stand everything to gain while the players stand everything to lose, the longer the conflict stays.

 

[joechip]

perhaps, but empirically (at least here in the united states) i believe the theory has been validated since the early 1980s.

i have also grown quite fond of the austrian theory of the business cycle, particularly in helping to explain the state of the US economy since 2000-1...

That's very cool!! A mostly kindred spirit.

The problem with the monetarist vision of the money supply is that it doesn't trust the law of supply and demand to regulate the amount of money needed by an economy, and, by extension, validates the need for external (read: governmental) regulation of it thereof. I distrust that aguement as I distrust any and all systems of power, especially when it comes to something as fundamentally important as money.

BTW, we are waaaay off-topic here and should prolly carry this out in PM.

Ta,

 

[PhillyNucksFan]

OK as a business owner how in the lords name could an employee force you to spend money??? Sorry I have yet to see a comprehensive plan from the owners on how they intend to fix there problems, I have only seen them try and blame the players for all there mistakes. And force the players to fix problems they themselves have created.

Watching the terms here.

Players are not forcing, but they are simply providing the inevitable option to the owners that if they want the certain player on their team, this is what u have to pay.

Now, the players didnt force them nor did they leave much option for the owners.

Both sides are at the fault here, and you cant just all of sudden, pick a side, and say, owners are at fault and players are not just for your weak argument sake.

 

[nedved93]

That's very cool!! A mostly kindred spirit.

The problem with the monetarist vision of the money supply is that it doesn't trust the law of supply and demand to regulate the amount of money needed by an economy, and, by extension, validates the need for external (read: governmental) regulation of it thereof. I distrust that aguement as I distrust any and all systems of power, especially when it comes to something as fundamentally important as money.

BTW, we are waaaay off-topic here and should prolly carry this out in PM.

Ta,

i too share your distrust of concentrated systems of power, hence my admiration and appreciation of the elegance of the free-market. its that admiration that fuels my opposition to the remedies proposed the owners (and now the players) in solving the NHL's labor crisis. however, i've recently arrived at a paradox of sorts: can the NHL be viewed through free-market spectacles? what of the notion that all clubs, despite competing on the ice, must cooperate off the ice to ensure league stability and growth?

 

[AM]

You see

why must the payrolls be close? the empirical data simply doesn't support that assertion!

Sports are based on competition.... no competition, then its not a sport.

 

[crossxcheck]

I'm not exactly sure Knoxville, TN news is very credible when it comes to hockey or hockey economics for that matter.

 

[nedved93]

Sports are based on competition.... no competition, then its not a sport.

no doubt.

so, i'd like for you to explain the following: how did tampa bay (payroll $34,065,379) beat philadelphia (payroll $68,175,247) in a 7 games series last year?

 

[vanlady]

Watching the terms here.

Players are not forcing, but they are simply providing the inevitable option to the owners that if they want the certain player on their team, this is what u have to pay.

Now, the players didnt force them nor did they leave much option for the owners.

Both sides are at the fault here, and you cant just all of sudden, pick a side, and say, owners are at fault and players are not just for your weak argument sake.

I somewhat agree with you here. However this happens in business all the time. I have an employee that endeared himself with one of my biggest clients, the employee then came to me with unreasonable salary demands, I said sorry. That employee moved to another company and stole that client. So now I am out one of my best employees but also one of my biggest clients. Did I whine, no I went out and developed more clients and diversified that client base so I could withstand the loss.

Sorry but I have never laid the blame for my business mistakes at anyone elses door, unlike the NHL owners

 

[vanlady]

Minor setback to appease the owners - they'd earn it all back in due time.

But by the time they earned it back, would the revenues have grown to a level to support it? Or would the NHL have lived in a financial vaccuum

 

[GirardIsStupid]

Bettman was the only one trying for a deal

i have my doubts. bettman issued an ultimatum that he knew would anger the players. he begrudgingly made an offer he hoped the NHLPA wouldn't accept. similarly, goodenow used the ultimatum as the excuse why a deal wasn't manifested. these two leaders wanted to see this lockout extend. and they both probably have the balls to do a lot more damage.

im guessing if impasse is successful, we'll see replacement players for a very long time. but, if i was bettman, i'd be afraid the union might utter this word: DECERTIFICATION. dercertification of the union would mean that every player becomes a free agent. imposing a cap on all of them would be thus considered collusion and that would subject to the owners to hundreds of lawsuits. both sides lose then as the union is broken and the owners lose a sh1t load of more money.

with the season being called off, i believe the fun stuff is yet to come. there will be some good drama for the first time.

 

[Morbo]

You're welcome. I'm sorry, there are lies, damn lies, statistics and economists. You can get any 'expert' out there to say what you want them to say. I don't take some guy's opinion as valid just because he has a degre in economics, especially when most, if not all, university-trained economists are Keynesians, which, as an economic system, is complete nonsense. Most economists, by extension, are pro-labor, pro anti-trust, anti-free market and it clouds their analysis. My opinion is that the statements made by those economists quoted in that article smacks of this.

The refutation of Keynesianism is far beyond the scope of this forum, but it exists and, in my opinion, perfectly valid.

Ta,

I think it's hilarious that you dismiss the credentials of REAL economists, as opposed to "self-taught" ones such as you.

 

[davemess]

I somewhat agree with you here. However this happens in business all the time. I have an employee that endeared himself with one of my biggest clients, the employee then came to me with unreasonable salary demands, I said sorry. That employee moved to another company and stole that client. So now I am out one of my best employees but also one of my biggest clients. Did I whine, no I went out and developed more clients and diversified that client base so I could withstand the loss.

Sorry but I have never laid the blame for my business mistakes at anyone elses door, unlike the NHL owners

See the guy/girl you hired to replace the person that just left did they know exactly how much the other person just left for? and did his/her union make sure that they asked for that same figure?

You cant compare the NHL system to the real world, in the same way you wouldnt compare the NHL to the NFL. They are all totally different.