Some people believe that price-controls could never happen in the United States.
However, Kamala Harris made enacting Federal Law to eliminate "price-gouging" a significant part of her campaign for President. The words she chose were slightly different, but she did that to "spin" the message into the most favorable, emotional light.
One of the enormous failings of the Soviet economy was the lack of a mechanism to address dire shortages. Suppose it is the start of planting season and an employee at the warehouse failed to put air and oil filters into the delivery for the tractors. In a market-economy, the maintenance boss would call around to other farms to see who had extra filters. Then he would hand a trusted mechanic whatever amount of money it took to buy the filters and the keys to a truck.
24 hours later, the tractors would be out in the fields planting...even if the maintenance boss had to pay a three-hundred percent mark-up.
The same thing happens in every ice-storm in Michigan. Ice-storms might be 300 miles long but they are rarely much more than 50 miles wide due to the narrow temperatures which allow them to happen.
All of the generators at the big-box stores sell out in a heart-beat due to power-outages.
Enterprising people hop into their pickup trucks and drive 75 miles to Indiana or Ohio and buy as many generators as will fit in the bed of their truck. Then they go back home and put an ad in Facebook Marketplace "GENERATORS, New in Box" and list them for twice the normal selling price.
If any are left, they drive them back to where they bought them and return them for a refund.
So, if you basement is flooding because your sump-pump isn't pumping, or if you have an emotionally fragile kid going bananas...you cheerfully pay an extra $600 to have a generator delivered to your door while you calm your kid and keep humping buckets of water up the stairs and dumping it outside.
Let me offer a third example: Suppose there was a petroleum tank-fire on the west coast. Allowing the price of fuel to free-float would price "marginal uses" out of economic reach. Manuel cannot afford to drive to his landscaping job and more business gets done via Zoom. If legislation and legal entanglement cripple the price mechanism, Manuel and Vern drive until the remaining tanks are empty and then ambulances and emergency generators fall silent for lack of fuel.
A disaster in one area can be helped with those "enterprising souls" that run needed supplies at a price there.
ReplyDeleteWhen the disaster becomes country wide there is less "extra" here to sell elsewhere.
The strength of a society is tested in those times. The Great Depression springs to mind. The "fix it, make it do, or do without" mindset was popularized by the news while they blamed Hoover for everything (Shanty towns called Hoovervilles, hot dogs called Hoover Steaks, etc.).
Most of our Great Depression stories are prettied up sanitized "History". Plenty of anger at "the MAN" as exampled at the glorifying of murderers like Bonnie and Clyde as failure to pay DEBTS and TAXES put many folks out of their homes and farms.
Bankers protected by the Sherriff on the courthouse steps divvying up fore closured homes-farms for pennies on the dollar.
Do we have the social strength to withstand a national economic disaster?
In the failing Roman Empire, they used Bread and Circuses to keep the mob's content. The DEBASEMENT of the silver Denari from a trusted worldwide trade coin to a silver-plated copper slug resulted as welfare and foolish warfare drained the treasury.
Today it's Mass Media, social media, EBT, and The Federal; Reserve "printing dollars" so they can BUY our US Treasury Bills so on as well as Epstein's Fury war (soon to add Cuba it seems).
Sadly, I expect Populist EBT EMERGENCY extra Funding (further raising prices and putting fixed income seniors out of luck) "price controls" blaming the GREEDY Farmers and Grocery Stores and anything that transfers the failures of the Governmental foolish actions to others.
And again Bankers (Blackrock etc.) will again buy up foreclosures for pennies on the dollar as more folks find themselves homeless.
The failure of EBT a year or two back resulted in mass stealing of loaded grocery carts as the Government just reimbursed the stores for. The "I can't breathe" riots show that simmering violence needs little trigger to show up as weak police responses encouraged them and Liberal Judges just release them almost before the paperwork is done.
Lack of fuel also equals lack of grid power as so much is fueled by Natty Gas, Oil and so on, also equals lack of food in the grocery stores as diesel runs the trucks and such.
Might be a really "interesting" summer-fall-winter folks.
What does Proverbs 27:12 say?
You are regurgitating the standard pseudohistory of the Great Depression created by FDR apologists. The worst lie here is the bankers/foreclosures trope. Banks failed not due to Wall Street tycoons or greedy investors, rather they failed due to unit banking laws. Bank investors were entitled to sell pledged property after the mortgages failed. The failure to recoup investments set off a cascade of economic failure.
DeleteStudy the Great Depression in Canada and Great Britain and you will immediately recognize the fallacy of the FDR apologists. Unit banking, an anticapitalist project of the progressives, destroyed the rural economies in the 1930's.
Hoover does deserve considerable blame for the severity of the Great Depression. He spent three years trying to enforce informal wage and price floors which stifled economic activity. FDR was Hoover on steroids, and New Deal I and II crushed remaining economic activity in the USA long after foreign economies had recovered..
Buddy I have FAMILY HISTORY and that of diaries of that era.
DeleteOne question sir, are you doing anything to protect your family when the situation gets real.
Michael the anonymous
Plomo y Plata. Sin Deudas
DeleteI have family photos, movies, diaries, and a trove of memorabilia from that era. Interviewed CCC's and many other economically displaced into the 1980's, when thay all started to pass.
You need to read 'The Forgotten Man: A New History of the Great Depression' by Hillsdale alumna Amity Shlaes.
I wholeheartedly agree with the recommendation for 'The Forgotten Man: A New History of the Great Depression' by Amity Shlaes.
DeleteIronically (perhaps) Trump's personality has some similarities to FDR's. FDR was notorious for "flailing", for launching three or four initiatives with the same objective. He got joy out of tweaking the nose of the British, sending Joe Kennedy to be the ambassador (Kennedy was a gangster and hated the British Monarchy).
That is, FDR loved creating chaos and was energized by it. He loved attention.
+1 for "The Forgotten Man". It is very well written and definitely gives a different view of The Great Depression.
Delete"Some people believe that price-controls could never happen in the United States."
ReplyDeleteOn Aug. 15, 1971, in a nationally televised address, Nixon announced, "I am today ordering a freeze on all prices and wages throughout the United States."
The Nixon price controls were only one of the six price control campaigns during Century XX in the United States. The only price controls which worked to any degree were the OPA efforts during WW II, and that was due to coincidental rationing.
DeletePrice controls cannot work without rationing due to pervasive hoarding.
And the people who are smart, and pre stock the oil and air filters are unaffected, and those who have fuel in tanks are somewhat less affected for a time. (And they already have a working generator)
ReplyDeletePrice controls work well in a free market, as the scarcer a thing is, the higher the price, and therefore the cost of using it also goes up.
In your fuel scenario, joyriding would stop first, then people would carpool, then unessential trips would stop, then unessential work, then less essential work, and so on. Everything has a cost.
B with respect as I work at a food bank and notice how many working poor folks are already living in cars or couch surfing there isn't a lot of "joy riding " going on.
DeleteI agree folks that can afford to stock up filters and oil as well as food should be prudent.
But economic hardship generates social discord and I pointed that out.
Michael the anonymous
I rub elbows with working-poor 30 year olds and the parents of those working-poor.
DeleteWhat is it about that generation's obsession with tattoos and cosmetic surgery? A kid with "fresh ink" crying that he is going to miss a car payment or that he cannot afford to get his car fixed. Oh, and he smells like weed.
Not every one of them...but more than half.
Suppressing the system did nothing to the root cause.
ReplyDeletehttps://www.cato.org/commentary/remembering-nixons-wage-price-controls
Another potential outcome (unanticipated of course) of price controls is that things that could be available are not, simply because folks know they can get more money for them on the black market.
ReplyDeleteHopefully we don't have to go back to eating "Hoover Hogs" again, although they are said to taste close to Pork.
ReplyDelete