As an economist who passed Econ 101 with an A before most readers of Substack were born, I will certainly not defend either maximum on minimum prices. Rent controls, minimum wages, anti-price gouging laws, tariffs: all proudly wrongheaded.
But ... (you knew there was going to be a but, no? :)), price controls have an innocent transparency that almost makes them innocuous compared to direct quantitative controls of housing and commercial development, environmental regulations, and immigration.
"The real cause [of inflation] is either a scarcity of goods or a surplus of money…"
That is the same thing when we have an institution with a congressional mandate to produce the amount of inflation it thinks best satisfies "stable prices and maximum employment." But since the Fed is a bit cowardly and never says about inflation, "We did it and we are proud of it" or "We did it and we are sorry," politician think they have to "do something" to keep people from being mad at them.
As an economist who passed Econ 101 with an A before most readers of Substack were born, I will certainly not defend either maximum on minimum prices. Rent controls, minimum wages, anti-price gouging laws, tariffs: all proudly wrongheaded.
But ... (you knew there was going to be a but, no? :)), price controls have an innocent transparency that almost makes them innocuous compared to direct quantitative controls of housing and commercial development, environmental regulations, and immigration.
"The real cause [of inflation] is either a scarcity of goods or a surplus of money…"
That is the same thing when we have an institution with a congressional mandate to produce the amount of inflation it thinks best satisfies "stable prices and maximum employment." But since the Fed is a bit cowardly and never says about inflation, "We did it and we are proud of it" or "We did it and we are sorry," politician think they have to "do something" to keep people from being mad at them.
https://thomaslhutcheson.substack.com/p/improving-fed-decisions