Difference is was that we were in a the middle of a global war.
I’m not an economist so I don’t know how to make the economy and money just “work” but I would say that a wartime economy is different from a peacetime economy.
This stuff continued after the war, but there were also costs. Corn syrup and caves full of cheese are a result of agricultural business interventionism in this same period. If you keep going, eventually you become Japan.
I’m a firm believer that there is an answer that results in neither hyper-accumulation of wealth nor red-tape dysfunction, but solutions that sound good to wonks don’t always do well in public politics.
What happens when you have price caps is that there is nothing to scare people away from buying something. Normally, if supply is running low then price will go up, which sees some people start to look for alternatives, reliving pressure on the supply. But if the price is fixed there is no reason to change course, even as the supply dwindles. This is formally known as a shortage.
We already do impose price caps during times of distress, known as price gouging laws. Toilet paper during early COVID is a recent example of what happens when those price caps come into force. That’s what a shortage looks like, and applying price caps more broadly would see that play out across many more goods and services.
What the original text missed is that the US also implemented rationing alongside those price caps to ensure that the shelves weren’t left bare. That is how they were able to manage the shortage. We could do the same, but I think you have a point that the wartime made it easy to claim it is a necessity: “There is a war, so we need to ration” is digestable. “Everything is going well, so we need to ration” is going to raise eyebrows and no doubt see a lot of pushback.
Difference is was that we were in a the middle of a global war. I’m not an economist so I don’t know how to make the economy and money just “work” but I would say that a wartime economy is different from a peacetime economy.
Look at the tax setup in the late '40s and early '50s. I think that’s when the max bracket was like 93% for the 1%.
That’s how we get an interstate.
It will all just trickle down…
Any day now… you just wait…
This stuff continued after the war, but there were also costs. Corn syrup and caves full of cheese are a result of agricultural business interventionism in this same period. If you keep going, eventually you become Japan.
I’m a firm believer that there is an answer that results in neither hyper-accumulation of wealth nor red-tape dysfunction, but solutions that sound good to wonks don’t always do well in public politics.
What happens when you have price caps is that there is nothing to scare people away from buying something. Normally, if supply is running low then price will go up, which sees some people start to look for alternatives, reliving pressure on the supply. But if the price is fixed there is no reason to change course, even as the supply dwindles. This is formally known as a shortage.
We already do impose price caps during times of distress, known as price gouging laws. Toilet paper during early COVID is a recent example of what happens when those price caps come into force. That’s what a shortage looks like, and applying price caps more broadly would see that play out across many more goods and services.
What the original text missed is that the US also implemented rationing alongside those price caps to ensure that the shelves weren’t left bare. That is how they were able to manage the shortage. We could do the same, but I think you have a point that the wartime made it easy to claim it is a necessity: “There is a war, so we need to ration” is digestable. “Everything is going well, so we need to ration” is going to raise eyebrows and no doubt see a lot of pushback.
It’s really not that different from a worldwide global pandemic.