Are Wage and Price controls next?

SOCIALISTS ALWAYS DO THE SAME THING

ALL SOLUTIONS REQUIRE GOVERNMENT FORCE 

Yesterday, the Biden administration announced that the FBI and the Department of Justice will be investigating price gouging by business. Elizabeth Warren and Bernie Sanders have stated that inflation is a result of greed by American companies. Not one word about the policies of this administration that were put in motion on the first day of their reign. The attack on the ability of the energy companies to produce energy was the impetus for the beginning of this inflation cycle. Rising prices on everything is a result of  increased costs of production and transportation. 

Socialists are either so out of touch with the realities of basic economics or they just want an excuse to exert more government control of everything. Will they go down the road of wage and price controls, the pattern that is often used when totalitarian governments policies have negative effects? The answer is never to make conditions better for more economic production, but rather the bayonet.

It is doubtful that they will target wage increases as they may very likely tout this as some positive result of their policies. Wage increases, which have been substantial, even though they still do not offset the increase costs of all basic necessities. Wage increases that are the result of their policies that discourage work in favor of dependence on government benefits.

So it seems they have decided to target business and they will become the arbiter of what is a reasonable price or profit. Does anyone doubt that they will focus on any business that is considered not a political ally of this administration? The end result of every attempt at government price controls is always massive shortages. While they may be able to demand that prices stay at a level they approve of, they cannot make production happen if there is no profit motive. It will most likely just increase and accelerate the cost of most goods.

They will have little effect on imported goods, they cannot control the price of imported goods. They have little ability to control the price of services. They will be left attempting to control the price of domestic production thereby decreasing the incentive to produce more goods or energy. 

It is likely that this is just a strategy to damage their political enemies. Will you see any attempt to limit Union pay raises? We can expect that the target is going to be energy and food producers, the two sectors that this government lusts to have more control over. They will be the villain and we may even hear calls for government takeover to solve their self created problem. Of course, they will get support from their media allies.

In one year we have seen a stable and reliable economic situation turn into chaos. While there were disruptions in the first year of the pandemic it did not translate into the labor crisis until the massive increase of government subsides and huge increase in spending. Business, particularly small business has been severally damaged by closures, masks etc and now they are going to be the target of more government. It likely that more government will make a bad situation worse.

Originally published 2/18/2022