Tag: price controls

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free trade & free markets political economy

Unconscionable Greed!

Bernie Sanders, Elizabeth Warren, price gouging, inflation

It’s easy to blame others for greed. And when prices rise, I suppose I can imagine being so upset that … well, if not my mind, Bernie Sanders’ mind … would become unhinged:

“Greed. Greed. Greed. While Americans are struggling at the pump,” the senator tweeted on Friday the 13th, “in the first three months of this year, oil and gas companies made over $41 billion in profits, more than double their profits from last year. The problem is not inflation. The problem is corporate greed.”

That’s Bernie Sanders for you. It’s not government profligacy or Federal Reserve monetary policy or the Biden Administration’s anti-​fossil fuels agenda … or supply-​line problems, persisting COVID-​lockdown effects, or anything else.

Just greed.

But is greed somehow cyclical? Why were greedy corporations providing cheap gas a year ago and then able to raise it only under Democrats’ rule?

Alas, Bernie isn’t the only low-​brow demagogue in the Senate. There’s Senator Elizabeth Warren pushing a new “price gouging” bill.

So, just as Bernie never answers “why is greed so successful at gouging now?,” how does Liz answer the burning question “how can we objectively define ‘price-​gouging’?”

As journalist Catherine Rampell observes on Twitter, the senator’s definition in the bill is less than enlightening: “price-​gouging” is “just pricing that is ‘unconscionably excessive.’”

Now that, Senator Warren, is unconscionably vague.

And incidentally, aren’t both senators on the record as demanding higher gas prices to usher in “green energy” to “save the planet”? This all seems unconscionably … deceptive.

This is Common Sense. I’m Paul Jacob.

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Photo credits: Warren/​Bernie/​money

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folly general freedom national politics & policies too much government

Non-​neutral Net Neutrality

Worried about its costs, Netflix has asked millions of customers to support so-​called “net neutrality” policies to curtail the freedom of action of broadband companies like Comcast. Netflix, a huge suck of bandwidth, doesn’t want to have to make deals with ISPs like Comcast to deliver service to its customers.

One goal of “net neutrality” is to prevent Internet providers from affecting Internet access via such nefarious practices as charging different rates for different levels of service (a ubiquitous form of “discrimination” without which markets cannot function). Mises Institute writer Ryan McMaken wants to know what problem the new regulations are supposed to solve: “Who is being denied access to the web?”

Since the Internet first became generally available, it has become only more widespread, service only faster.

Any problems caused by existing government barriers to entry should be solved by dismantling those barriers. But according to FCC commissioner Ajit Pai, the voluminous new regulations go in the opposite direction, giving the agency “power to micromanage virtually every aspect of how the Internet works.”

The FCC has voted to proceed with the regulations. The result will likely throttle the quality of broadband service. 

Netflix and other advocates of the regime have also foot-​shootingly increased the chances of intrusive new regulations of their own net-​based businesses.

Any sweeping assault on our liberty is hardly “neutral.” Regulations like those proposed always favor some over others, the essence of partiality. What we need from government is not “neutrality” with respect to our freedom, but consistent upholding of our right to it. 

This is Common Sense. I’m Paul Jacob.

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free trade & free markets

Fear of Falling

The fear of falling is innate. Newborns have it.

The fear of falling prices is different.

What? Who fears falling prices?

Politicians and investors and the big boys in big business, that’s who. When all sorts of prices fall, it means that their plans for ever-​upward growth hit the hard rocks of economic reality. And these downturns sure can hurt. A lot.

Yet there’s an awful lot of evidence that you just have to weather these periods. You shouldn’t panic. And you definitely should not try to “prop things up.”

But that is exactly what politicians generally try to do in an economic downturn — they try to prevent some set of prices from falling.

Post-​Great War depression in Britain, and America’s own beginning of the Great Depression … in both downturns there were huge political forces at work, trying to prevent a sector of prices from hitting their natural floors. In those cases, it was mainly wages that got propped up.

The effect? Massive unemployment.

I’m no economic historian, so I hate to tread these waters. But I’m not going to play Santayana’s fool, forgetting history and then forced to repeat it like Sisyphus’s rock-​and-​roll classic on permanent skip-​repeat/​skip-​repeat.

So remember: Propping up prices in the past didn’t work. They won’t work now with housing.

This is Common Sense. I’m Paul Jacob.