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Thursday, January 20, 2022

Obamanaut on price controls: "Just stop. Seriously"

The University of Chicago asked a bunch of economists about inflation and I do not think the university received the answers it was looking for.

Question A asked if they agreed with the statement, "A significant factor behind today’s higher US inflation is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins."

67% disagreed. 7% agreed. The rest punted.

58% disagreed with the statement: "Price controls as deployed in the 1970s could successfully reduce US inflation over the next 12 months."

That 58% included Austan Goolsbee, a professor at the University of Chicago, who was chairman of the Council of Economics Advisers under Obama.

Goolsbee went Nancy Reagan as he said in comments on price controls, "Just stop. Seriously."

He was not alone in pooh-poohing the idea.

Nobel laureate William Nordhaus said, "Perhaps it could reduce inflation in short run as 1970s. Would only cause more shortages and a terrible idea."

Even those who agreed that it could work disagreed with the idea. Daron Acemoglu of MIT said, "Effective price controls, by definition, would reduce price increases, but they would most probably create other huge distortions."

Richard Schmalensee of MIT also agreed it would work but said, "Over 12 months, probably, but with significant costs."

The lessons of Truman and Nixon, both of whom imposed price controls, have finally been learned.

The only way out of inflation is a recession. Ronald Reagan did that in 1981 and 1982 by having the Fed raise interest rates. Biden lacks the guts. Instead he will fumble along and try to increase government spending, a move that would feed even higher inflation.

Workers will be hit hardest.

On January 4, the Wall Street Journal gushed, "With employers gearing up to boost spending on pay in 2022, there has rarely been a better time to go after a raise.

"Companies are setting aside an average 3.9% of total payroll for wage increases in 2022, the largest increase since 2008, according to a new report from the Conference Board, a private research group."

Just stop. Seriously.

Inflation hit 7% last month.

17 comments:

  1. Fantastic work-from-home opportunity for everyone…Work for three to eight hours a day and start getting paid in the range of 13,000 to 19,000 dollars a month…Weekly payments…And best thing is...It’s so Easy…follow details on this website......www.salarypay1.com

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  2. That whole health insurance, Obamacare mess happened because of WW II era price controls on wages

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  3. I am shocked that even the radical Keynesian economists are against what Zhou Xiden is for. The rats are scrambling away from the sinking ship as fast as they can.

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  4. When I was an undergrad economics student, we looked to the University of Chicago and Milton Friedman for sanity in a world plagued by Ivy League economists. It could be there's still a trace of sanity in the halls at the Chicago school.

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  5. Real World Inflation is upwards of 15%. Only a TOTAL LIBCOMMIE GLOBALIST TOOL will deny that.

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    1. Z is absolutely correct, knucklehead. When our government figures inflation numbers, they omit energy and food costs. That's exactly where most daily spending goes.

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    2. Epstein is correct. P.S. Do you believe anything FJB's regime releases?

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  6. Leftists can learn.

    There may be hope yet.

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    Replies
    1. They learn no better than you do, eductard.

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  7. I was of voting age and paying attention in the 1970's. It doesn't take an economist or even a very smart person to know price controls are a HORRIBLE idea.

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  8. What a laugher! Price fixed on Prod A. Next day no more Prod A, just a new improved! Prod A at a higher price. Job A wage fixed. Next day Job A is Job B with "more responsibility" and a higher wage and/or benefit package. What economist can't see this shell game. Do they think business owners and managers are as simple minded as they are? Jerks ...

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  9. If price controls are absolutely the worst thing to do right now, then the bite me team will absolutely do it. They may be the dumbest bunch of clucks to ever inhabit an administration. Remember this is the group that told Joe bite me that calling everybody that disagreed with him on the voting steal bull Connor and geo Wallace was a great idea

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  10. The Romans tried it and it failed then too.

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  11. Back in the Truman/Nixon/Reagan days we didn't have a $30 trillion debt, so higher interest rates were manageable at least for a short period. We experienced a little disintermediation, but one can arguably say it was for a good cause.

    Today a 5% rate on a $30 trillion debt is $1.5 trillion a year--and that has to be paid before anything else in an $8 trillion budget. Something's gotta give, and my advice would be to get out of the way when the SHTF.

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    Replies
    1. Why stop with the 70's? Take it back to the 40's when we had price controls plus rationing on most consumer items including food, shelter, tires and gasoline. Just think how many new government jobs can be created if every community has its own rationing board deciding who gets how man rationing stamps for meat, butter, gasoline and so on. Stupid? INeffective? Expensive? Sure, that's the appeal.

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