[tylerdurden]

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Not producing enough product to meet supply while promoting an artificially low price point in order to drive demand way up. It's obvious consumer psychology. I don't have any problems with the practice (other than I wish I had my Xbox360 now). I certainly don't think there should be any regulation of the practice. But they are doing it.

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OK, I guess we're basically in agreement. Sure, they're setting conditions on their trade. There's really nothing wrong with this.

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Actually, I don't think that wholesalers should be able to control retail channel pricing. That does get in the way of a functioning free market. I believe that at some level this is actually illegal but that they get around it by offering promotions and incentives that are unavailable to retailers who sell below the MSRP. For example, it's legal to sell xbox at a premium on ebay, even though MSFT could cut the balls off a Best Buy for selling it a different price. I think that gives MSFT too much power.

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They're not going to "cut the balls off" anyone, but they might decline to distribute product to best buy in the future. What's wrong with that?

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My only point is that it's irrational to believe that markets operate free of intervention or manipulation by producers. In many if not most cases, that manipulation does not cause significant harm to warrant any government intervention, but in some cases it does.

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I have no concern over "intervention or manipulation by producers", as this is so vague that it could include ever transaction ever conducted. Any time a producer asks a price that someone else might like to see lowered, the producer is in a way manipulating the market. The thing is that the producer has a *right* to this manipulation, since he owns the resource.

Government intervention, on the other hand, is unjust because the government has no legitimate right to the property in the transaction. In fact, we can show that government can never have a legitimate right to *any* property, but that's another ball of wax.

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But if you look at what some drug manufacturers, or insurance providers, or gas producers are doing, you have to wonder if they cross the line that Porsche and MSFT stay on the right side of.

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Most of the abuses you're alluding to are specifically enabled by government coercion, not in spite of it.