This is the third time we've seen this topic come up in the last week.
First there was the White House press briefing:
"U.S. grocery shortages deepen as pandemic dries supplies"
Today I learned White House Reporters Don't Preface Their Questions With "Great Quarter"
I
was checking the transcript of the January 12 White House press
briefing where they trotted out the head of the National Economic
Council, Brian Deese to see what he had to say about inflation and
shortages, the reporters seemed to be pushing for government action
(price controls?) and he wanted Congress to pass Build Back Better, and
frankly the reporters scared me more than the BlackRock alum (Global
Head of Sustainable Investing) political advisor. Here's the transcript if you are so inclined....
The reporters really did seem fired up for the government to take action, any action.
Then the New York Times, January 16:
"Price Controls Set Off Heated Debate as History Gets a Second Look"
And now CNN, January 18:
People are paying a lot more for food, gas, cars and services, and inflation isn't over yet as the pandemic continues to distort the economy. So should governments consider setting the price of essential goods?
It's been done before, typically during times of crisis, but for most mainstream economists, the answer to this question is a resounding "no." Limiting how much companies can charge will distort markets, they argue, causing shortages and exacerbating supply chain problems while only temporarily reducing inflation."Price controls can of course control prices — but they're a terrible idea," David Autor, a professor of economics at the Massachusetts Institute of Technology, remarked in a survey published earlier this month by the University of Chicago.Asked whether price controls similar to those used in the United States during the 1970s could reduce inflation over the next year, less than a quarter of economists surveyed said they agree while nearly 60% said they disagree or strongly disagree."Just stop. Seriously," Austan Goolsbee, a professor at the University of Chicago, said in response to the question. Goolsbee previously served as chairman of the Council of Economics Advisers under former President Barack Obama.The attitude toward price controls appears to be similar in Washington, where policymakers have shown little enthusiasm for even targeted or temporary measures despite growing pressure on middle class families that feel the pain of price increases more than the rich.Still, with annual inflation running at a four-decade high of 7% and midterm elections approaching, price controls could feature in future debates about how to reduce prices, particularly if actions taken this year by the Federal Reserve fail to tame inflation....
