By: Mark Glennon*
It’s a remarkable replay of history ignored, now for a second time. The Washington Post wrote this in 1979, which couldn’t apply better today: “Remember the Beefsteak Election of 1946? The current maneuvering over the gasoline shortages is beginning to resemble the political mistakes that led to debacle for an earlier Democratic administration.”
The Post was referring to anger about shortages that resulted from price controls imposed by Democrats during and after World War II, particularly for beef. That led to a Republican landslide in 1946. House Speaker Sam Rayburn called it The Beefsteak Election.
The 1979 Post column warned that President Jimmy Carter was risking the same fate thanks to gasoline shortages that resulted from price controls at the time. Sure enough, Republicans made huge gains in the 1980 election that followed and Ronald Reagan soundly defeated Carter.
But what did House Democrats do this past week? They passed, mostly on party lines, the Price Gouging Prevention Act of 2022. The bill is actually just authorization for the federal government to to impose price controls, as we explained earlier, as have Reason and others. Price gouging isn’t even defined in the bill. Instead, the bill would give wide-open discretion to the Federal Trade Commission to set prices, not just on gasoline but most anything.
Just four House Democrats voted against the bill, along with all Republicans. All Illinois Congressional Democrats support it, including Sen. Dick Durbin and Tammy Duckworth, who co-sponsored it in the Senate. Illinois Congresswmen Jan Schakowsky and Marie Newsman were among sponsors it in the House.
No less than Larry Summers, among the nation’s leading Democratic economists, called the bill “dangerous nonsense.” He added, “There is no material prospect that, in any enduring way, gouging legislation can have any substantial effect on inflationary pressure. But it can cause and contrive all kinds of shortages – as well as undermine moves by companies to boost supply as prices climb.”
Summers is spot on. The new price gouging bill should be called the More Shortages Act.
Are today’s Congressional Democrats that ignorant about price controls and their own party’s sad political history with them?
Yes, probably, but there’s an additional explanation — that they’re just trying to show that they are “doing something,” and never mind whether it’s sensible. Politico reported last week that House Speaker Nancy Pelosi’s new strategy is to just “pass everything, even if it is doomed.” That’s the case with the price gouging bill which the Senate is expected to reject. Pelosi “has started employing a spaghetti-at-the-wall strategy: Pass everything — even if it won’t go anywhere in the Senate — and have her members return home to tell voters that at least they tried.”
Some strategy.
*Mark Glennon is founder of Wirepoints.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
While we’re on the topic of price gouging, anyone looking into Illinois property taxes? Durbin, Duckworth, apply your zany legislative idea to a good cause.
Mark, I believe you are exactly right. The liberal/progressive nitwits have to do something, so they end up promoting stupid ideas like price controls. So many programs, policies and regulations are created under this premise. For example, the Federal government runs 47 programs for job training. Are any of them successful? Who cares! We’re doing something! And without accountability, performance doesn’t matter, so much money is wasted and unintended consequences amplify the very problem they are trying to solve.
Always beware of legislation bearing a goofy name, such as Build Better Back [huh?] or this, the Price Gouging Prevention Act. If you can get past the title, you’ll find the contents are a mass of confusion meant to deceive. The House or the Senate may pass it, but you’ll find the legislature has abjured its Constitutional responsibilities by farming the details and enforcement off to an administrative arm of the executive. In Pelosi-speak, “we’ve done something for you all but don’t blame us if it doesn’t work.”
Congress is concerned about rising gas prices and possible gouging but where were they for decades now (both Republican and Democrats) with the gouging going on with prescription drug? The drug companies have made obscene amounts of money like with Harvoni or insulin and almost all other drugs. Take Stelara for Crohns or UC. One syringe at GoodRX costs $25,500 with coupon and without over $43K taken every 2 months for who knows how long but never cures the disease. Stelara is about $5,300 in Canada without insurance and much less in India. Where are the politicians when it comes… Read more »
Is it any surprise that people who believe that they can change men into women, stop an airborne respiratory virus from spreading, and control the climate also think their powers extend to controlling prices? They do not recognize any limits, and are immune to rational thought.
What ever happened to all the woke MMT-er economist that was all in vogue just 8 months ago with university econ depts explaining how debt didn’t matter? A lot of those let-them-eat-cake/ equity hustlers are gigged-up w their gaurenteeted not to be diminished deals at U of I–Inst for Illinois Public Finance on the taxpayers dime as my 401k has tanked 20% ytd
Where’s are buddy ralphie martire explaining away inflation as a Republican plot?
Idiots. Prices are discovered, not “set”. Higher prices in todays world are due to Biden making our money valueless on one end and products in short supply on the other end. And to boot both of these forces were implemented quite intentionally. By printing money and closing down petroleum production. That is the recipe for inflation. Price gouging is a figment of their imagination, its the boogeyman they need at this time so they have someone to blame besides themselves.
Shortages are the intention, Mark.
It should be beyond question the globalist/communist influences that own this administration are trying to reduce/weaken the US.