Talk about idiotic. How do these people get economic degrees, let alone a professorship in the subject, when they have nonsense ideas like price controls.
Today, there is once more a choice between tolerating the ongoing explosion of profits that drives up prices or tailored controls on carefully selected prices. Price controls would buy time to deal with bottlenecks that will continue as long as the pandemic prevails. Strategic price controls could also contribute to the monetary stability needed to mobilize public investments towards economic resilience, climate change mitigation and carbon-neutrality. The cost of waiting for inflation to go away is high. Senator Manchin’s withdrawal from the Build Back Better Act demonstrates the threat of a shrinking policy space at a time when large scale government action is in order. Austerity would be even worse: it risks manufacturing stagflation.
We need a systematic consideration of strategic price controls as a tool in the broader policy response to the enormous macroeconomic challenges instead of pretending there is no alternative beyond wait-and-see or austerity.We have a powerful weapon to fight inflation: price controls. It’s time we consider it | Isabella Weber | The Guardian
Price controls never work. Never.
Just look at 2020 as a prime example for why price controls don’t work. The country had de-facto price controls in effect on toilet paper. The toilet paper fiasco was created by idiots who thought they would never be able to wipe their asses again. They were able to practically buy out all the toilet paper. The reason they were able to was because retailers were afraid to raise prices to meet demand. They were worried about the government coming after them for price gouging. A de-facto price control.
Price gouging is actually a misnomer. Rising prices, in the context of balancing supply and demand, are actually a good thing. If toilet paper in 2020 would have tripled or quadrupled in price how many idiots would have filled multiple shopping carts with toilet paper? Only the ones with more money than sense would have continued the madness. Higher prices mean fewer sales and more conservation. It would have ensured almost everyone could get a package of toilet paper. Then as demand wanes and supplies rise prices would naturally go back down and reach an equilibrium.
We live with price controls now with farm subsidies and import tariffs. These policies mess with what is grown on our farms and the price of goods at your local grocery stores. We don’t know the true cost of wheat, corn, or other farm commodities when the government pays some farmers not to grow the crops. We don’t know the true price of sugar when imported sugar is taxed to make it competitive with domestic sugar. Our economy is managed enough. We don’t need further meddling.
Price controls short circuit microeconomic processes. It places artificial controls between producers and consumers keeping prices down while doing nothing for demand. This action will ensure we will have shortages and lines. Bread was cheap in the old Soviet Union… if you could get it.