Inflation is absolutely devastating to the economy.  It could be halted by not printing money.  That won’t happen.  Inflation will be explained in a number of ways—likely not correct.  Then, ideas will float around how to control inflation.  The idea that never goes away is price controls.  I find it hard to believe they don’t know its never worked.  It just leads to: shortages, decline in quality, black markets, and eventually rationing.

Price controls is an idea straight out of the lunatic asylum.  It’s been tried in: Rome, China, USSR, and the US. That’s not an exhaustive list, but its not like they worked in other places.  Maybe they don’t know anything about history.  Anyone who knows anything about economics knows price controls are a disaster.  It won’t address inflation in the slightest.  They will just make everything worse.

Let’s say price controls worked at controlling prices and reducing inflation.  Impossible as that is.  What good is the price being low if the product isn’t available?  The product won’t be available so that’ll be blamed on hoarders—which is just saving.  That’s ridiculous too.  The state will propose sending in the goons to deal with the savers.  The product isn’t available, the state will figure this out eventually.  They’ll say punishing savers is impractical to save face.

Price controls will start with one product and gradually expand to others.  Rather than learn the lesson from the first product they’ll ignore it and try to move to other products.  This will create shortages economy wide.  That will lead to rationing.  This won’t fix the problem.  It will make the problem worse.  They must be aware of this.  It must be the feeling of power they get by continuing to push these half-baked ideas.

Prices rise from printing more money.  In the states infinite wisdom, they come to the conclusion price controls will work this time.  They don’t and this is blamed on savers.  The controls are expanded.  This makes the problem worse.  So, they decide the best idea to do is ration products.  This again makes things worse.  So, a problem is caused by the state, more problems are caused, expands those problems, then makes the problems worse.

Reference

Murray Rothbard; Making Economic Sense