But we have “smarter people” in charge this time ...
As an economist, I am always stunned when any economist wants to drag out wage and price controls as the answer to an inflation problem. Venezuela’s Maduro can tell you how well they work. Here’s a better idea: Lets fill a steel pot with some water, weld the lid shut, and put it over a fire. Taa-daa! We’ve solved the problem of creating steam when you heat water.
It’s pretty much the same thing with wage and price controls. You twits in DC need to take an Into To Econ course.
In times of inflation there are two options.
1. Don’t institute price controls. In this case, products will be expensive, but available. And over time the economy will probably right itself.
2. Institute price controls. In this case, products will be cheap, but completely unavailable. This could continue forever.
Oops. I forgot. There is a third option.
3. Throw out the Democrats, and put some adults in charge.
Note the “pseudo-academic” wording which serve as positive indication that the writer just is not very bright:
“Political Scientist Todd Tucker, for example, recently wrote in The Washington Post that, “there are normative reasons for not wanting pure markets to exist, because necessary products could be priced out of reach for poor and middle-class consumers.” He concludes, “To ensure that the wealthy do not bid up prices for essential items, the time is now to begin destigmatizing greater democratic control over price levels.”
In contrast, note the relatively simple wording and much stronger logic in the reply:
Unusually high prices mean there isn’t enough of something to go around and capping its price all but guarantees shortages. Units are quickly bought up, allocated by corruption or random chance, or moved to more lucrative underground markets. Over time, fewer goods are made because none of these methods inspire legitimate producers to invest in them. Among the many negative consequences of shortages are disproportionate harm to the poor.
The “journalist” exposes it’s (intended use here) lack of mind power, and the response so wonderfully blows it out of the water
Good show, WaPo.
https://finance.yahoo.com/video/aoc-capitalism-not-redeemable-system-110000599.html
....says the person making far more money than what she is worth....
If you’re gonna do price controls, you’re gonna have to have everyone wearing WIN buttons also.
I remember Rush telling a story about Nixon’s price controls from the 70’s - he said he worked in a supermarket at the time and certain meat items were under price control but others were not - so the manager asked him to re-name all the price-controlled items to those that weren’t under price control dictats.
There are always “get-arounds” on these government mandates.
I was working in a unionized foundry for the whole time of Nixon’s wage freeze. When it ended we got retroactive pay for the whole period, including all missed scheduled raises.
In addition, the union tried to get the same deal for non union office workers, the company negotiator told the union reps to “mind their own business” and refused to grant the office workers a cent of back pay. The remark was widely reported and confirmed.
It took the office workers 18 months to form their own union but form it they did.