Joe Biden has no idea what to do about inflation. It’s engulfing the country. It’s torching the budgets of millions of Americans. It’s a tax increase on working families. Plain and simple. Besides seeing their paychecks being eaten alive, the supply chain crisis compounds the issue as grocery stores are now suffering from bare shelves syndrome. Bare shelves Biden is here. It’s a double-tap. You can’t buy anything at the store, but even if you could—you can’t afford it. So, what to do, Joe. Well, CNN has an idea that ripped right from the communist’s playbook (via CNN):
oh well not like inflation is skyrocketing, crime is out of control, and his domestic agenda is collapsing... oh wait. https://t.co/R6s5bpSIke— Abigail Marone ???? (@abigailmarone) January 18, 2022
Pretty much. pic.twitter.com/i2Id0Njh1N— Mark Hemingway (@Heminator) January 18, 2022
People are paying a lot more for food, gas, cars and services, and inflation isn't over yet as the pandemic continues to distort the economy. So should governments consider setting the price of essential goods?
It's been done before, typically during times of crisis, but for most mainstream economists, the answer to this question is a resounding "no." Limiting how much companies can charge will distort markets, they argue, causing shortages and exacerbating supply chain problems while only temporarily reducing inflation.
"Price controls can of course control prices — but they're a terrible idea," David Autor, a professor of economics at the Massachusetts Institute of Technology, remarked in a survey published earlier this month by the University of Chicago.
Asked whether price controls similar to those used in the United States during the 1970s could reduce inflation over the next year, less than a quarter of economists surveyed said they agree while nearly 60% said they disagree or strongly disagree.
"Just stop. Seriously," Austan Goolsbee, a professor at the University of Chicago, said in response to the question. Goolsbee previously served as chairman of the Council of Economics Advisers under former President Barack Obama.
Economists who are skeptical of price controls often point to basic economic concepts.
They argue that capping prices encourages companies to produce less of a product, while making it more attractive to consumers. Supply goes down, and demand goes up, with shortages being the inevitable result.
There is plenty of precedent for price controls in the United States, but you have to look a few decades back.
They were last deployed at the federal level during the 1970s, when former President Richard Nixon established a Cost of Living Council in the summer of 1971 and blocked most wage and price increases for 90 days. The policy was popular with the American public, and inflation slowed temporarily after reaching 5.8% in 1970.
But Nixon's subsequent efforts to cap prices were much less successful.
Yeah, when Obama’s economic folks are saying this shouldn’t even consider this trash—you know it’s a bad idea. Also, who cares about the precedent if the results were still garbage? After all that, the piece ends with this line: “Price controls, it seems, are still a bridge too far.”
Liberals don’t know what they’re talking about, and Democrats can’t govern. Expect more economic pain, folks.