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Friday, April 01, 2011

The iPad Gap: Pure Speculation

I find myself wondering how long it will be before someone starts complaining that the poor in America don’t have access to iPads and that iPads are somehow key to their future opportunities for success. How long will it be before some government agency is asking tablet manufacturers to make special programs for the poor and carriers are bullied into some kind of subsidized plan for 3G network access?

What I find most intriguing is that if the government can’t pay for something it deems desirable, it will search for opportunities to make companies pay for them. Those companies are often quite willing to acquiesce, but the cost of providing a good or service at below its actual value isn’t a cost that the company will pay. It’s a cost that we, who aren’t subsidized, will pay.

Of course, all of this is done in the name of helping. Which is why so many of us wish the government would, maybe, help less.

Consider credit card reform. The changes made to protect consumers from the card companies had what I would consider to be an entirely predictable set of results: prior to implementation, cardholders saw rate increases and credit lines lowered. People on the lower end of the spectrum will have a harder time getting any credit (even though these are the folks that most needed “protection” and it will probably end up benefiting the high-cost payday lending outfits) and more cards will charge you an annual fee. So your over limit fees are capped at what the government considers a reasonable amount, but you’ll pay the difference in some other fee or in those interest rate hikes that the card companies pushed out before the new protections went into effect.

I’m sure that there will be a few more rounds of government protection to card holders that are meant to deal with those nasty side-effects of the reform--and that there will be more surprises in store for consumers.

Which, again, is why so many of us wish the government would, maybe, help less.

Making it harder or more expensive for a company to do business isn’t always the best way to protect a consumer. Ultimately, if that company wants to stay in business, it will simply pass on new costs to consumers. When Comcast is forced to provide services below cost, it won’t just sit there dumbly wondering why the bottom line doesn’t look as good as it used to; it will raise rates where it can to compensate. Some small percentage of their customers will get a service below its real value and the rest of its customers will pay more than they should.

So, when will we first see the call for free or cheap tablet computers for the poor? It will probably come from an education advocacy group and it will probably provide yet another distortion on what I wish were a much freer market.

What’s my point? My point is that I am tired of a government that has such an overwhelming need to protect and help me. All those protections and all that help comes at yet another cost--and I’m already feeling overburdened.

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