Catholic Candle note: Below is an article concerning the U.S. economy in particular, and, by analogy, pertaining to the economies of other Western countries.
Catholic Candle usually writes on topics more directly related to the Catholic Faith, as well as Catholic philosophy and Catholic practice. But there is an ongoing cultural and political revolution all around us, and this revolution has other aspects too. That is why we also write on topics that could be called “political”, in order to shine a light on current evils in government and society. Here are examples of such Catholic Candle articles:
Ø The COVID-19 “Vaccine’s” Harms Continue to Be Further Revealed: https://catholiccandle.org/2024/02/20/in-case-you-missed-it-february-2024/
Ø Glacier-Melting Alarmism: https://catholiccandle.org/2024/01/23/glacier-melting-alarmism/
Ø The Leftist Attack on the Moral Fiber of Society: https://catholiccandle.org/2023/10/29/the-leftist-attack-on-the-moral-fiber-of-society/
Ø The “Deadly Heat” Alarmism: https://catholiccandle.org/2023/08/24/the-deadly-heat-alarmism/
Ø The False Principle of “Diversity and Inclusion”: https://catholiccandle.org/2022/01/05/the-false-principle-of-diversity-and-inclusion/
Ø “Big Data” – a New Version of an Old Danger of Manipulation and Deception: https://catholiccandle.org/2021/12/11/h/
Ø Black Lives Matter is Showing its “True Colors” – and They are Red: https://catholiccandle.org/2021/10/03/black-lives-matter-is-showing-its-true-colors/
Ø The Evil & Dangers of Yoga: https://catholiccandle.org/2021/09/05/the-evil-dangers-of-yoga/
Ø Wikipedia – a Deceptive Tool of the Leftists: https://catholiccandle.org/2021/08/02/wikipedia-a-deceptive-tool-of-the-leftists/
Ø The Current Leftists Follow the Usual “Tyrant’s Playbook”: https://catholiccandle.org/2021/05/03/the-current-leftists-follow-the-usual-tyrants-playbook/
Ø Empathy – a Tool for Good or for Evil: https://catholiccandle.org/2021/04/02/empathy-a-tool-for-good-or-for-evil/
Ø Reject the COVID Vaccines! https://catholiccandle.org/2021/01/01/reject-the-covid-vaccines/
Ø Face masks present grave health risks & are to control people, not a virus: https://catholiccandle.org/2020/12/01/856/
Catholic Candle holds that the globalists are positioning the U.S. economy and other economies in the Western World to be pushed into collapse if and as needed, to compel people to accept a future globalist tyranny.
Thus, we have an eye on the economy in order to monitor (in a general way) its condition and its readiness for use as a weapon compelling acceptance of a globalist tyranny.
Government-Set Price Controls Don’t Work
In the United States, the Democrats have revived the idea of the government mandating price controls. It is worth considering the wisdom (or lack thereof) of this idea. Are price controls good or bad?
After the bloated federal spending of the last 4½ years, foolishly begun by Trump in 2020 and then made even worse (even greater spending) in the Biden years, the United States is experiencing price inflation which was completely inevitable (“as sure as gravity”, one might say, or “as sure as death comes to us all”).
This price inflation is worse than the official numbers say it is, as anyone can tell by going to the grocery store, etc., because the government has politicized the inflation rate and is using some “tools” it has available in order to dishonestly hide as much of the inflation as it can by “adjusting” the numbers. Perhaps some readers are unaware of those “tools” but, in any case, that is a topic for some other time.
The voters were upset (as it appears from their subsequent votes), and the rosy government inflation numbers could not keep people from believing their own “lying” eyes and the “lightness” of their wallets. So, Harris tried to get the voters on her side in the last months before the election, by proposing that, if elected, she would implement government price controls to (supposedly) punish the “price gougers”. She and the White House, in effect, were telling people that the problem they could plainly see (high inflation) was caused by sellers in the private sector somehow “taking advantage of people”, rather than the true cause, which was Federal spending and the increase of the money supply.
Key to a correct understanding of inflation is to understand that dollars are a commodity which is valued in relation to other goods. For example, if a country suddenly has 10 million extra pounds of apples, it is inevitable that the price of apples would go down. Similarly, if there are suddenly $6 trillion extra dollars added to the economy (as there was), the value (price) of a dollar goes down, meaning what a person can buy with a dollar also goes down.
Suppose we were to want the price of apples to go down. What should we do? The answer is obvious: we increase the supply of apples. The extra 10 million pounds of apples (in the example above) does that. Suppose instead that the government tries to decrease the cost of apples by passing a law declaring that no person can sell an apple for more than 10¢ per apple. Would that reduce the price of apples? Well, the answer is that it would decrease the price of an apple for only a comparatively small number of apples right after the law takes effect, e.g., for the apples which are already in the store. But a seller who has apples to sell would try to find something else to use them for, rather than sell them at a loss.
When the government declares that a seller can only charge one dime per apple, this actually has the effect of decreasing the number of apples for sale and creating a shortage. To avoid the price controls, some sellers would, perhaps, export their apples to a different market which is not affected by the law. Other sellers might sell their apples for other uses – even animal food. There certainly would not be any new orchards planted. Some of the orchards already planted might be plowed up and used to grow something else or perhaps be used for a housing development, etc. (Isn’t this what anyone of us would do if we could and if we were in that business?)
By contrast, if the price of apples were to rise in the Free Market, what would happen? The sellers would see that selling apples was profitable and would try to obtain more apples to sell. Perhaps the sellers would import apples. Perhaps the sellers (or other persons) would plant more apple orchards. Perhaps fewer apples would be used for juice and pear juice would be sold as a substitute for apple juice instead.
Similarly, if our goal were to decrease the value of the dollar (i.e., worsen inflation), what would we do? We would increase the supply of dollars which are available. Dumping an extra $6 trillion dollars into the economy (as the government did) foreseeably caused the value of the dollar (i.e., what it can buy) to decrease. This is inflation.
So, when the government “runs the money printing presses on ‘overdrive’”, the result is inevitably that inflation will spike up (as happened).
The same things happen when the government passes other types of laws which control the price of goods. When one of the Catholic Candle Team was in school in a leftist university town, this town had implemented rent controls over its rental housing stock. This means that no new housing was built which could meet the student demand for housing. This meant that students had to commute from farther away, where there was no rent control and the landlords could receive a fair rent.
After initially attempting (without success) to find an apartment in the university town, this Catholic Candle Team member ended up commuting every day from a non-rent-controlled area where Republicans had a majority (where housing was available).
By contrast, if landlords in the university town had been allowed to rent at fair value, they might not only build more housing stock but they might also remodel existing houses to make them into multiple apartment units, etc.
These government rent controls work in the same way as price controls. They make matters worse and create shortages. The government’s pumping huge extra amounts of money into the economy inevitably creates inflation. Kamala Harris’ price controls would just make matters worse by adding shortages to the already-existing problem of inflation.
Fairly recent history shows this: government mandated price controls were tried back during President Nixon’s failed government policies (and they didn’t fix anything but made things worse). If Harris had not lost (thanks be to God that she did!) that issue of price controls would be much more an issue of practical, immediate importance, since the leftists would presumably attempt to force our nation further into a socialist “command economy” in this way.
But, as it is, with Harris having lost, the topic of price controls has lost its practical urgency for now. Nonetheless, this Democrat policy proposal could easily come back in the foreseeable future.