UMass Professor: Biden needs to implement price controls to curb inflation
| DrakeMallard | 12/31/21 | | bowlcut autist | 12/31/21 | | evan39 | 12/31/21 | | DrakeMallard | 12/31/21 | | kylebeckersted | 12/31/21 | | "men" | 12/31/21 | | kylebeckersted | 12/31/21 | | ,.,.,.,.,.,.,., | 12/31/21 | | DrakeMallard | 12/31/21 | | evan39 | 12/31/21 | | penile harmonics | 12/31/21 | | kylebeckersted | 12/31/21 | | HATP | 12/31/21 | | Adolf Anderssen | 12/31/21 | | lsd | 12/31/21 | | 88 admirals | 12/31/21 | | DrakeMallard | 12/31/21 | | DrakeMallard | 12/31/21 | | Adolf Anderssen | 12/31/21 |
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Date: December 31st, 2021 11:20 AM
Author: DrakeMallard (🦆)
https://www.theguardian.com/business/commentisfree/2021/dec/29/inflation-price-controls-time-we-use-it
We have a powerful weapon to fight inflation: price controls. It’s time we consider it | Isabella Weber
Inflation is near a 40-year high. Central banks around the world
just promised to intervene. However, a critical factor that is driving
up prices remains largely overlooked: an explosion in profits. In 2021,
US non-financial profit margins have reached levels not seen since the
aftermath of the second world war. This is no coincidence. The end of
the war required a sudden restructuring of production which created
bottlenecks similar to those caused by the pandemic. Then and now large
corporations with market power have used supply problems as an
opportunity to increase prices and scoop windfall profits. The Federal
Reserve has taken a hawkish turn this month. But cutting monetary
stimulus will not fix supply chains. What we need instead is a serious
conversation about strategic price controls – just like after the war.
Today economists are divided into two camps on the inflation
question: team Transitory argues we ought not to worry about inflation
since it will soon go away. Team Stagflation urges for fiscal restraint
and a raise in interest rates. But there is a third option: the
government could target the specific prices that drive inflation instead
of moving to austerity which risks a recession.
To use a metaphor: if your house is on fire, you would not want
to wait until the fire eventually dies out. Neither do you wish to
destroy the house by flooding it. A skillful firefighter extinguishes
the fire where it is burning to prevent contagion and save the house.
History teaches us that such a targeted approach is also possible for
price increases.
The White House Council of Economic Advisers suggests that the
best historical analogy for today’s inflation is the aftermath of the
second world war. Then and now there was pent up demand thanks to high
household savings. During the war this was a result of rising incomes
and rationing; during Covid-19 that of stimulus checks and shutdowns. At
both times supply chains were disrupted. This is as far as the White
House advisers’ interpretation of the parallel between the two episodes
goes. What they do not tell us is that the inflation after the war was
not without an alternative.
During the second world war the Roosevelt administration imposed
strict price controls and instituted the Office of Price
Administration. In comparison with the first world war, price rises were
low, while the increase in output was almost beyond imagination. After
the war, the question was what to do with the price controls. Should
they be released in one big bang as southern Democrats, Republicans and
big business were urging? Or did price controls have a role to play in
the transition to a postwar economy?
Some of the most distinguished American economists of the 20th
century called for a continuation of price controls in the New York
Times. This included the likes of Paul Samuelson, Irving Fisher, Frank
Knight, Simon Kuznets, Paul Sweezy and Wesley Mitchell, as well as 11
former presidents of the American Economic Association. The reasons they
presented for price controls also apply to our present situation.
They argued that as long as bottlenecks made it impossible for
supply to meet demand, price controls for important goods should be
continued to prevent prices from shooting up. The tsar of wartime price
controls, John Kenneth Galbraith, joined these calls. He explained “the
role of price controls” would be “strategic”. “No more than the
economist ever supposed will it stop inflation,” he added. “But it both
establishes the base and gains the time for the measures that do.”
President Truman was aware of the risks of ending price
controls. On 30 October 1945, he warned that after the first world war,
the US had “simply pulled off the few controls that had been
established, and let nature take its course”. And he urged, “The result
should stand as a lesson to all of us. A dizzy upward spiral of wages
and the cost of living ended in the crash of 1920 – a crash that spread
bankruptcy and foreclosure and unemployment throughout the Nation.”
Nevertheless, price controls were pulled in 1946, again triggering
inflation and a boom-bust cycle.
Today, there is once more a choice between tolerating the
ongoing explosion of profits that drives up prices or tailored controls
on carefully selected prices. Price controls would buy time to deal with
bottlenecks that will continue as long as the pandemic prevails.
Strategic price controls could also contribute to the monetary stability
needed to mobilize public investments towards economic resilience,
climate change mitigation and carbon-neutrality. The cost of waiting for
inflation to go away is high. Senator Manchin’s withdrawal from the
Build Back Better Act demonstrates the threat of a shrinking policy
space at a time when large scale government action is in order.
Austerity would be even worse: it risks manufacturing stagflation.
We need a systematic consideration of strategic price controls
as a tool in the broader policy response to the enormous macroeconomic
challenges instead of pretending there is no alternative beyond
wait-and-see or austerity.
Isabella Weber is an assistant professor of economics at the
University of Massachusetts Amherst and the author of How China Escaped
Shock Therapy
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704674) |
Date: December 31st, 2021 11:21 AM
Author: bowlcut autist
lmao
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704687) |
Date: December 31st, 2021 11:22 AM
Author: evan39
Holy shit
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704702) |
 |
Date: December 31st, 2021 11:24 AM
Author: DrakeMallard (🦆)
They’re freaking out
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704720) |
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Date: December 31st, 2021 12:01 PM
Author: kylebeckersted
they're gigafuckt.
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705042) |
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Date: December 31st, 2021 12:44 PM
Author: "men"
i'm
dumb when it comes to shit like this, can u unpack how this article
leads to that conclusion? (who is gigafuckt/freaking out and why)
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705362) |
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Date: December 31st, 2021 12:50 PM
Author: kylebeckersted
nah...you're
not dumb. just think about it in context: we know that our fed cannot
undo the damage of easing and flooding the market with dollars. the
amount of interest rate hikes required to make that work would destroy
the economy and our status as the global reserve currency. so...how do
you combat inflation on the ground? price controls or, as some may call
it, communism. which, we know, always works out.
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705401) |
Date: December 31st, 2021 11:33 AM
Author: ,.,.,.,.,.,.,.,
they
went pretty quickly from inflation doesn't exist, to inflation is
transitory, to complete economic control by government is necessary.
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704791) |
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Date: December 31st, 2021 11:35 AM
Author: DrakeMallard (🦆)
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704801) |
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Date: December 31st, 2021 11:36 AM
Author: evan39
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704812) |
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Date: December 31st, 2021 11:55 AM
Author: penile harmonics
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704983) |
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Date: December 31st, 2021 12:00 PM
Author: kylebeckersted
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705038) |
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Date: December 31st, 2021 12:40 PM
Author: HATP (Retired)
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705349) |
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Date: December 31st, 2021 12:50 PM
Author: Adolf Anderssen
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705403) |
Date: December 31st, 2021 11:37 AM
Author: 88 admirals
HE JUST CAME ALL OVER THE WALL
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43704825) |
Date: December 31st, 2021 12:06 PM
Author: DrakeMallard (🦆)
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705098) |
Date: December 31st, 2021 12:39 PM
Author: DrakeMallard (🦆)
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705338) |
Date: December 31st, 2021 12:41 PM
Author: Adolf Anderssen
Nixon called, he wants his economic policies back.
(http://www.autoadmit.com/thread.php?thread_id=4997210&forum_id=2#43705356) |
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Date: December 30th, 2021 10:38 AM
Author: KamalaSexyFineCleverChocolate
(http://www.autoadmit.com/thread.php?thread_id=4996466&forum_id=2#43699106)
(http://www.autoadmit.com/thread.php?thread_id=1883689&forum_id=4#43584102)
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Date: December 28th, 2021 2:58 PM
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