Price Controls – American Conservative Movement https://americanconservativemovement.com American exceptionalism isn't dead. It just needs to be embraced. Fri, 04 Oct 2024 11:18:38 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://americanconservativemovement.com/wp-content/uploads/2022/06/cropped-America-First-Favicon-32x32.png Price Controls – American Conservative Movement https://americanconservativemovement.com 32 32 135597105 A War Economy Means Price Controls, Rationing, and Loss of Freedom https://americanconservativemovement.com/a-war-economy-means-price-controls-rationing-and-loss-of-freedom/ https://americanconservativemovement.com/a-war-economy-means-price-controls-rationing-and-loss-of-freedom/#respond Fri, 04 Oct 2024 11:18:38 +0000 https://americanconservativemovement.com/a-war-economy-means-price-controls-rationing-and-loss-of-freedom/ Long before the beginning of the war in Ukraine I have been warning about the inevitability of global conflict between the East and the West, specifically in terms of the economic consequences that will arise should war break out. Of course, what you and I might see as consequences, others might see as an opportunity.

Without a doubt there is a contingent of power brokers within our society that would benefit greatly from such an event. Large scale wars, even when they are fought through regional proxy states (like Ukraine or Israel), lead to chaotic financial conditions that in turn lead to tighter government controls on everything.

During WWII the US spent over 40% of its GDP on defense; compare that to only 4% today. Americans in 2024 have no concept of the resource bottleneck that occurs during periods of large scale industrial warfare. I’m not talking about sending 100,000 troops along with naval contingent to fight low tech guerrillas in country like Afghanistan; I’m talking about 15 million troops or more (most of them drafted) and a massive scramble for resources on a scale not seen in a century. Very few people alive in the west today know what this means.

Consider for a moment the disaster that would befall the global supply chain. A large percentage of commodities and manufacturing come from the East and from the Middle East. American manufacturing has all but disappeared compared to the last world war. The amount of capital needed to revamp that kind of industry is immense. The time to train enough Americans for manufacturing work during wartime is considerable.

But beyond the lack of an industrial base to feed the vast military machine needed to sustain a global conflagration, there are a host of resource issues that no one thinks about. For example:

  • Millions of young men being sent off to fight means far fewer potential workers across the board. Numerous sectors of the market would be desperate for skilled labor.
  • Businesses dealing in vital resources and components will be pressured to forgo consumer markets and focus on government contracts in the name of national security.
  • National spending would skyrocket creating more inflation, and this would be on top of supply shortages. Price controls would be the result, destroying all profit incentive and leading to many smaller businesses shutting down.
  • It’s likely that most vital industries would be nationalized and managed by the government under the rationale that they might collapse otherwise. This would include agriculture (food).

Rationing would be pervasive, as it has been during every major war. The majority of goods would go to the war effort and consumers at home would be stuck with ration cards (digital versions) greatly limiting their ability to stockpile necessities for the future. Prepping would essentially die out at this point, except for those with access to black markets, and all preppers would have to shift into pure survival mode.

Rationing and price controls create a culture of government dependency, which is the last thing you want if you hope to keep your society free. Once a population is dependent on rations or some form of Universal Basic Income (UBI), the downhill slide into full tyranny begins.

The final stage of a long term war economy is usually resource confiscation. In other words, the government may try to implement imminent domain over land, crops, arms and even food stockpiles. This is not done because they necessarily need these goods. This is done to ensure that there’s no resources available that the public can use to rebel.

At this point, the only choice is to fight back or starve to death like peasants in a Soviet-style famine. This is why organization among patriots and preppers is so important – NEVER let yourself end up in a position where you have to give up your preps.

Currently, the war in Ukraine is balancing precariously on the edge of escalation. In the Middle East the powederkeg has already exploded (as I warned it would) between Israel and Lebanon, and it’s only a matter of time before a ground war with Iran erupts. The Biden Administration has clearly indicated that it will move to support Israel, especially if Iran enters the fray.

Meaning, world war has already started. There’s a reason why so many western government have been talking openly about conscription in the past year – They have been preparing the public mentally for a draft. There is no way the US, for example, would be able to fight across Lebanon, Syria and Iran without a draft. There is no way the EU and the US would be able to fight a war with Russia (or China) without a draft. It’s that simple.

By my observations there is a large percentage of American men who will not comply with conscription. There will be attempts to force them to do so. As we saw during the pandemic mandates, officials will try to create economic punishments for those that refuse to accept a draft. The government will try to prevent them from holding a job, deny them access to certain places, or even try to deny them ration cards.

The non-compliant will have to be self sufficient and prepared, and those who are prepared will be labeled treasonous. None of that matters.

Unless you actually believe that another world war is a noble and righteous endeavor, what matters most is that we have the ability to say no. And, the more resources we have at our disposal the easier it will be to say no. The insidious control that comes with multinational war is rooted in fear; fear of resource denial, fear of social ostracism and fear of legal repercussions.

Having the ability to rebel if necessary means having no fear. This all begins with a lifestyle of self sufficiency and community for mutual security.

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From Price Controls to Mass Starvation https://americanconservativemovement.com/from-price-controls-to-mass-starvation/ https://americanconservativemovement.com/from-price-controls-to-mass-starvation/#respond Sat, 31 Aug 2024 06:13:58 +0000 https://americanconservativemovement.com/from-price-controls-to-mass-starvation/ (Money Metals)—From taxes to spending, Kamala is the most left-wing major party candidate since George McGovern — who proposed a Universal Basic Income in 1972 and went on to win a single state.

But her most hare-brained scheme — so far — has been price controls, where she’s to the left of McGovern, threatening to punish grocery stores for daring to charge more than their costs.

In fact, grocery stores make 1 to 2 pennies on the dollar. Meaning they have to pass along costs that come straight from the Washington money printer.

That means price controls would, in short, break food.

Price Controls Always Fail

In a recent video I mentioned how price controls have been tried many times, and each time they failed so spectacularly they were repealed. After much pain, suffering, and empty shelves.

When France tried, they got a black market that actually did price gouge. Even Venezuela repealed price controls in 2016 after food shortages and nationwide riots.

But what do price controls look like in reality? For that I go to a great thread by Robert Sterling, a former M&A executive at one of the biggest food producers in America.

Robert walks us through a thirteen step process from grocery price controls to widespread food shortages — something we haven’t seen in this country since the Great Depression, when FDR also imposed price controls.

Stage One: Bankrupt Grocers

So, first, the government announces grocery stores can’t raise prices even though inflation continues — courtesy of the Fed and Wall Street. That means their costs keep going up, so those pennies of profit turn into losses.

Like any business that’s losing money, they shut down.

Of course, not all grocery stores are created equal — small ones lack economies of scale, and while rich people buy high-margin vegetables and expensive cuts, the poor buy low-margin packaged foods.

So the small stores and the low-income stores go first.

You get food deserts, as people in urban centers or rural areas have to drive miles — or take multiple buses — to find food. And, ironically, you get more concentration, as the little guys drop out.

The survivors increasingly aren’t even selling food. They shift shelf-space to things that aren’t price-controlled. Clothing, furniture, supplements.

Grocery stores start to look more like a Dollar Store, with a little food and a lot of junk.

As cities clear of food, you’d need police patrolling parking lots and armed escorts on delivery trucks — perhaps you could even have government-run groceries like Chicago just announced.

Stage Two: Bankrupt Food Producers

The only way to save any grocery stores is to price-control their costs. Meaning food producers like Kraft, Heinz, Tyson, Hormel.

Of course, again, Kraft’s costs aren’t being controlled — their ingredients, wages, parts and electricity. So now they’re losing money.

Like groceries, they wind down, closing marginal factories and running out equipment then not replacing it.

As food producers downsize or go under, now you start getting actual shortages. And the only solution — once again — is price control the next level down. Farmers.

Stage Three: Bankrupt Farmers

Which brings us to the final stage. Because remember Farmers, too, are now forced to sell at a low price, yet their inputs like fertilizer or tractors are still going up.

They, too, go under.

You are now full Venezuela, with the only alternative to starvation a complete government takeover of the food supply, centrally planned from farmer to grocer.

As Sterling puts it, “The government will struggle to operate one of the most complex industries on the planet. The entire food supply chain starts imploding.”

“Imploding” as in starvation.

What’s Next

It’s very unlikely we’ll get to the point of starvation. For the simple reason that at some point the frog boils and the voters — or rioters — share their thoughts with policymakers.

That’s exactly why price controls fail, from France to Venezuela.

Having said, we managed it before under FDR.

And, unfortunately, if the morons running Kamala’s brain trust are dumb enough for price controls, they’re dumb enough for a whole lot more.

(Article image is Florence Thompson “Migrant Mother,” a migrant pea farmer family by Dorothea Lange in March 1936)

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Desperate Democrats Scramble to Walk Back Comrade Harris’ Price Control Scheme https://americanconservativemovement.com/desperate-democrats-scramble-to-walk-back-comrade-harris-price-control-scheme/ https://americanconservativemovement.com/desperate-democrats-scramble-to-walk-back-comrade-harris-price-control-scheme/#respond Sun, 25 Aug 2024 18:28:19 +0000 https://americanconservativemovement.com/desperate-democrats-scramble-to-walk-back-comrade-harris-price-control-scheme/ (Zero Hedge)—Facing pressure to defend the plan, Democratic lawmakers are downplaying it as a pipe dream that has no chance of passing Congress, Politico reports.

The plan, unveiled as part of Harris’ first big economic policy speech, has become a focal talking point for Donald Trump and allies, who continue to frame it as “communist price controls.” Meanwhile, food industry officials and some left-of-center economists have warned that price controls could be detrimental, according to the report.

Central to the plan is a call for congress to pass the first-ever federal price gouging ban on food and grocery stores – mirroring legislation reintroduced by Sen. Elizabeth Warren (D-MA) earlier this year, for which Warren was taken to task by CNBC‘s Joe Kernen.

Now, six Congressional Democrats and five Democratic aides tell Politico that they’ve been privately telling critics that the plan isn’t viable – and is instead a messaging tactic to to divert blame over inflation from the Biden-Harris administration.

Even many Democrats remain skeptical, or at least uncertain about how Harris would carry out her proposal, if elected. They’re still working on getting details, but many have left that for after the DNC. -Politico

It’s clear to me these are very general, very lofty goals,” said one of the Democratic lawmakers.

I honestly still don’t know how this would work,” said a second Democratic lawmaker.

According to Michigan Gov. Gretchen Whitmer, “I think people are reading too much into what has been put out there,” adding that the proposal was intended to address the issue in “broad strokes.”

Harris has been under pressure to provide more detail on her policy priorities, after four years largely toeing the line set by President Joe Biden and his aides. The rollout of her plan to combat food inflation, however, has sparked concerns among business leaders over which economic advisers are driving her policy decisions. Pieces of her plan, like increasing competition in the meat sector, are straight from the Biden playbook under his former top economic adviser Brian Deese — who is now advising Harris’ campaign. But the broad price gouging language that’s triggered so much backlash signals a more progressive agenda.

That backlash has tempered Harris allies’ initial push to paint the proposal as a bold, progressive idea. Since introducing the price gouging plan, her advisers have sought to soften criticism of the proposal by downplaying its overall impact on the market — and emphasizing that the goal is simply to target a small cohort of potential “bad actors,” rather than generate the kind of sweeping overhaul suggested by the plan’s initial rollout. -Politico

Harris’ plan does have its defenders, including Sen. Tammy Duckworth (D-IL) and Progressive Caucus Chair Rep. Pramila Jayapal (D-WA).

Top Harris economic adviser Brian Nelson told reporters at the DNC in Chicago that the plan was ‘simply’ aimed at matching federal standards with so-called price gouging guardrails that already exist in 37 states – something Warren attempted to argue with Kernen.

That said, the existing rules only apply during emergencies such as the COVID pandemic.

“She’s going to work with Congress to ensure that it is directed at bad actors, bad activity,” said Nelson. “It’s not meant to set prices or price levels or anything like that. And that is not the way current state laws around price gouging are.”

When pressed during a Bloomberg News roundtable to elaborate, Nelson failed to provide any specific examples of price gouging – and deflected by describing Harris as simply trying to outline her own principles on the issue.

“One of the principles is really to make sure that the federal legislation aligns with those state laws,” he said.

Meanwhile, the National Grocers Association – an industry group that represents the independent supermarket sector, called Harris’ plans “a solution in search of a problem.”

“Rather than proposing new legislation far-off in the future,” the government should focus on enforcing antitrust laws already on the books, the group said.

“I’m sure it polls well,” said one food industry official granted anonymity. “But it’s an obvious effort to deflect blame from her administration on inflation.”

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Panicked Democrats Are Trying to Explain Away Comrade Kamala’s “Price Controls” Proposal Following Backlash https://americanconservativemovement.com/panicked-democrats-are-trying-to-explain-away-comrade-kamalas-price-controls-proposal-following-backlash/ https://americanconservativemovement.com/panicked-democrats-are-trying-to-explain-away-comrade-kamalas-price-controls-proposal-following-backlash/#respond Sat, 24 Aug 2024 06:35:05 +0000 https://americanconservativemovement.com/panicked-democrats-are-trying-to-explain-away-comrade-kamalas-price-controls-proposal-following-backlash/ DCNF(DCNF)—Vice President Kamala Harris’ proposed “price gouging” ban has been panned as a radical policy, and some Democrats and members of the press are working to clean up the fallout.

During an Aug. 16 speech in North Carolina laying out some of her economic ideas, Harris proposed to impose a federal ban on “price gouging” to bring down prices of food and groceries, an idea that critics from across the political spectrum derided as collectivist price controls, extreme and unlikely to work. In the week since Harris announced her idea, numerous Democrats and some prominent media personalities and outlets have mobilized to redefine or explain away Harris’ proposal as more nuanced and less radical than the GOP is making it out to be.

After Harris’ proposal received sharp criticisms from economists and pundits, unnamed sources familiar with the vice president’s thinking told The New York Times that the “price gouging” ban would likely only take effect in emergencies, such as a pandemic or in the wake of a natural disaster. However, since America is currently not facing such circumstances, those unnamed sources implied that it “might actually not do anything to bring down grocery prices right now” if enacted.

Nevertheless, Democrats and some in the media have attempted essentially to defend the proposal by suggesting it isn’t so simple.

Axios ran a Tuesday story under the headline “How price gouging bans really work.” The article states that policies like the one Harris proposed are “oft-hated by economists, but they’ve been around for a long time” and that “most Americans intuitively understand the rationale behind them, and Harris is trying to appeal to voters — not academics or newspaper columnists.”

The Axios story cites Zephyr Teachout, a professor at Fordham Law School, for color; Teachout wrote her own Thursday piece for The Atlantic with the headline “Sometimes You Just Have to Ignore the Economists.” In her column, Teachout writes that “Kamala Harris’s proposed price-gouging ban might irritate academics, but it makes sense to everyone else,” simultaneously defending the policy as neither radical nor novel while conceding that its exact parameters are unclear.

Paul Krugman, an economist and columnist for The New York Times, described Harris’ economic ideas, including the price gouging ban, as “a solid center-left agenda” in a Monday column.

“I’ve been amazed at how many credulous commentators, and not just on the right, have asserted that Harris is calling for price controls, making her out to be the second coming of Richard Nixon if not the next Nicolas Maduro,” Krugman wrote in his column. “What she has actually called for is legislation banning price gouging on groceries. Obviously, this is a populist political gesture — a way to offer something to voters upset about high food prices. But just because something is popular doesn’t mean that it’s a bad idea.”

The Trump campaign’s assertion that Harris has embraced communist-style price controls is simply “a new line of false attack” against the vice president, CBS anchor Margaret Brennan said on “Face the Nation” on Sunday. CBS also brought Democratic Kentucky Gov. Andy Beshear onto the program to discuss why Harris’ proposal is more nuanced than outright socialist price controls.

“It’s definitely clear that at least a few corporate journalists are trying to defend Kamala’s proposal. But it’s a very unenviable task,” Bill Da’Agostino, a senior research analyst for the Media Research Center, a conservative media watchdog organization, told the DCNF. “She proposed price controls, so now they’re going to bat for price controls. Moments like these are when the real hacks expose themselves.”

Commerce Secretary Gina Raimondo, who recently said that she does not believe a new government report showing that 818,000 jobs purportedly created under the Biden administration never actually existed, also stepped in to deflect criticism of Harris’ plan. She described the notion that Harris’ proposal amounts to price controls as “a Republican talking point,” during a Wednesday appearance on CNBC.

Democratic Govs. J.B. Pritzker of Illinois and Gretchen Whitmer of Michigan have also attempted to downplay or contextualize Harris’ proposal as more nuanced than outright price controls, according to The Washington Post. Some of the criticisms of Harris’ “price gouging” ban have been made in good faith by some observers, but there are other criticisms of the policy that are “just malicious attacks from the other side trying to characterize her as a socialist,” Ben Harris, a former senior official at the Biden Treasury Department, told the outlet.

“Her idea flopped badly. They can’t just withdraw it, so they have to ‘contextualize’ it, hence the references to a pandemic or national emergency,” J.D. Foster, the former chief economist at the Office of Management and Budget and a former vice president of the Chamber of Commerce, told the Daily Caller News Foundation. “It was a dumb idea and they are stuck with it as an example of Harris’ extreme ignorance about how the economy works.”

Ryan Young, senior economist at the Competitive Enterprise Institute, agreed that Harris’ proposed federal “price gouging” ban is effectively an endorsement of price controls.

“Most voters are too young to remember Richard Nixon’s price and wage controls, but they still have the right intuition—you don’t want politicians setting prices,” Young told the DCNF. “That is why Harris’s price gouging proposals have gotten a cold reception. That is also why her partisans are trying to claim that price gouging bans aren’t really price controls. Which they are, just under a different name.”

The Harris campaign did not respond immediately to a request for comment.

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].
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Kamala Harris’ Proposed Price Controls May Lead to “Communism, Mass Starvation, and End of America” https://americanconservativemovement.com/kamala-harris-proposed-price-controls-may-lead-to-communism-mass-starvation-and-end-of-america/ https://americanconservativemovement.com/kamala-harris-proposed-price-controls-may-lead-to-communism-mass-starvation-and-end-of-america/#respond Sun, 18 Aug 2024 16:55:16 +0000 https://americanconservativemovement.com/?p=210529 (Zero Hedge)—At a rally in North Carolina on Friday, Vice President Kamala Harris, the Democratic nominee for president, unveiled her communist-style economic plan of ‘price controls.’ Her argument has been evil capitalism and corporations for rampant inflation, despite the reality that reckless government spending under her and President Biden is the primary driver of sky-high prices, particularly in the grocery store.

What’s hilarious is that even Washington Post columnist Catherine Rampell criticized VP Harris’ economic plan to implement price controls to stop “price gouging” on groceries.

“It’s hard to exaggerate how bad this policy is,” Rampell wrote. She titled the op-ed, “When your opponent calls you ‘communist,’ maybe don’t propose price controls?” 

On Saturday morning, Elon Musk reposted one food industry insider’s step-by-step summary of what would happen if Harris’ economic price control plan was implemented. Musk wrote, “Accurate conclusion (read the whole post).”

“I worked in M&A in the food industry,” Robert Sterling wrote on X. He provided readers with a detailed step-by-step summary of what would happen:

  1. The government announces that grocery retailers aren’t allowed to raise prices.
  2. Grocery stores, which operate on 1-2% net margins, can’t survive if their suppliers raise prices. So the government announces that food producers (Kraft Heinz, ConAgra, Tyson, Hormel, et. al.) also aren’t allowed to raise prices.
  3. Not all grocery stores are created equal. Stores in lower-income areas make less money than those in higher-income areas, as the former disproportionately sell lower-margin prepackaged foods (“center of the store”) instead of higher-margin fresh products like meat (“perimeter of the store”). Because stores in lower-income areas aren’t able to cover overhead (remember, even if their wholesale costs are fixed, their labor, utilities, insurance, and other operating expenses aren’t fixed… yet), grocery chains start to shut them down. Food deserts in rural areas and in low-income urban areas alike become worse.
  4. Meanwhile, margins for food producers are also quickly eroding. Their primary costs (ingredients, energy, and labor) aren’t fixed, and their shrinking gross profits leave less cash flow available to cover overhead, maintain facilities, and reinvest in additional production capacity.
  5. Grocery chains, which have finite shelf space, start to repurpose their stores (those they didn’t have to shut down, I should say) to sell more non-price-controlled items—everything from nutrition supplements to kitchenware to apparel—and less price-controlled food products. Your local Kroger or Safeway starts to look and feel more like a Walmart.
  6. Food producers stop making products with lower margins. Grocery chain start competing with each other to secure inventory. Since they can’t compete by offering stronger prices (remember, producers aren’t allowed to raise prices here, and, even if they could, grocery chains no longer have the gross profit to bear price increases), they compete on things like payment terms.
  7. Small grocery chains start to shut down entirely, or get sold to larger chains like Kroger. In addition to not being able to cover fixed costs, a major reason for this is because they can no longer reliably secure delivery of products, due to producers prioritizing sales to larger customers, which are able to leverage their stronger balance sheets to offer superior payment terms.
  8. Smaller food producers—which typically sell via distributors, rather than directly to grocery chains—start to go out of business. Because these producers have an additional step their value chains, and because they have lower volumes over which to spread their fixed costs, their cost structure is inherently disadvantaged compared to major food producers. When grocery stores aren’t able to raise prices, cutting product costs becomes all the more important, and deprioritizing purchases from smaller producers is an easy way to do so.
  9. As supply chains break down, lines start to form outside grocery stores every morning. Cities assign police officers to patrol store parking lots, and food producers draft contingency plans to assign armed escorts to delivery trucks.
  10. The federal government announces a program to issue block grants for states to purchase and operate shuttered grocery stores. The USDA also seizes closed-down production facilities.
  11. The government announces that prices for all key food costs—corn, wheat, cattle, energy, etc.—are also now fixed, to stop “profiteers” from gouging the now-government-operated food industry.
  12. Shockingly, the government struggles to operate one of the most complex industries on the planet. The entire food supply chain starts imploding.
  13. Communism, mass starvation, and the end of America quickly ensue.

In a separate post, Sterling noted, “The impact on small rural communities would be terrible. I hate driving through small towns in the Midwest and seeing a DG next to a closed-down grocery store that operated from 1900 to 2018.”

“Inflation is experienced at the grocery store, but always manufactured by the government. It’s the same story every time. The politicians who create it by printing money, villainize and blame companies that have nothing to do with it — to distract from their reckless spending,” Cameron Winklevoss wrote on X.

Hmm.

Yeah.

We’re glad Americans just woke up in a big way – in recent days – to understand finally far-left radical VP Harris is nothing more than a communist-pusher.

Trending on X.

Which way, Western man?

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Governments Start Calling for Price Controls – Rationing and CBDCs Come Next https://americanconservativemovement.com/governments-start-calling-for-price-controls-rationing-and-cbdcs-come-next/ https://americanconservativemovement.com/governments-start-calling-for-price-controls-rationing-and-cbdcs-come-next/#respond Fri, 22 Sep 2023 04:46:31 +0000 https://americanconservativemovement.com/?p=196973 (Alt-Market)—Last month in the middle of the surreal “Bidenomics” hype I published an article titled ‘Nothing Is Over: Inflation Is About To Come Back With A Vengeance.’  I outlined the misconceptions surrounding CPI and how it is not an accurate model for the effects of inflation.  I also noted that the index had been manipulated downwards by Joe Biden as he flooded the market with oil from the strategic reserves.  Because so many elements of the CPI are connected to energy, Biden had created an artificial drop in CPI using this strategy.

I argued that as the strategic reserves ran out and Biden lost his leverage, CPI would rise again and prices on a number of necessities would climb.  This is happening now, with the biggest jump in CPI in 14 months and gas prices clawing back towards all-time highs.

Inflation is not going away anytime soon, but the bigger issue at hand is who benefits most from inflation and rising prices? The answer might be obvious to some but many people are oblivious to the root cause of inflationary dysfunction and often see it as a consequence of random economic chaos rather than a product of clever engineering. The truth is, banking oligarchs and political authorities revel in the inflationary tidal wave because it is a perfect opportunity to institute far reaching socialist controls over resources.

In most cases central bankers are the primary culprits behind the creation of an inflationary event, and the word “creation” best applies because it is nearly impossible for overt inflation to occur without them. While money supply is not the only factor when dealing with inflation (sorry purists, but there are indeed other causes), it is the most important. More money chasing less resources triggers supply-side instability and prices go up. Central banks have a number of excuses as to why they “need” to conjure up more dollars or pesos or pounds or marks, but there is no doubt that they know what the ultimate end result will be.

It’s happened too many times for them not to know…

These inflation events trigger a predictable set of dominoes in society as well as in economy and finance. Price spikes, diminished savings, rising poverty, rising crime, and rising interest rates – This is then followed in most cases by failed rate hikes, more inflation, then more hikes, diminishing foreign investment in debt, foreign currency dumps (causing more inflation), plunging consumer spending and job losses.

This same pattern has been witnessed from 1920s Weimar Germany to 1970s America to 1990s Yugoslavia to 2000s Argentina and Venezuela and beyond. But what happens next? In each case the trend leads first to price controls on producers and distributors, which ultimately fail. Then comes government rationing and the complete takeover of necessities including the food supply.

Think it can’t happen in the US? It already has. In 1971 Richard Nixon issued Executive Order 11615, (under the Economic Stabilization Act which was established in 1970); the order demanded a 90 day freeze on wages and prices in order to counter inflation. It was an exceedingly rare action outside of a world war and conveniently took place during the election cycle. Keep in mind, the real inflationary crisis had not happened yet, but the price controls gave markets a short term boost and gave Nixon an election win.

In 1973, controls returned during the Arab Oil Embargo. They failed and resulted in long term gas price inflation. Gerald Ford then called for American businesses to institute price controls under his “Whip Inflation Now” campaign; it was the subject of ridicule and was even made fun of by a young Joe Biden (who now falsely claims to have solved his own inflation problem with his useless Inflation Reduction Act).

Finally, Jimmy Carter introduced price and wage “guidelines” (controls) which rewarded businesses that raised prices below a set percentage. Any businesses that raised prices above the percentage and made a pre-tax profit above the previous two years would be penalized. In no case could a firm increase its dollar profit by more than 6.5 percent unless the excess was attributable to increased unit sales volume. This plan, of course, also failed to stop inflation.

Ultimately, the Fed had to jack rates up to around 20% in 1980-1981 to stop exponential inflation, which led to considerable business losses and high unemployment.

The problem is simple, price controls lead to lost profit incentive which leads to less production. Less production leads to less supply and less supply leads to rising prices. This is on top of the root cancer that is fiat money creation. Politicians will rarely if ever address the actual cause of an inflationary crisis:  The government and the central banks. Instead, they try to blame free markets, “greedy” businesses and profit taking in times of distress.

Sadly, the pattern is repeating again today as it is now becoming clear to the public that central bank interest rate hikes are not having a significant effect and the public is still paying between 25%-50% more on the majority of goods they purchase compared to three years ago. As inflation grinds forward, multiple leftist governments are now openly discussing price controls.

Recently, Canada’s Justin Trudeau ordered top grocery chains in the country to cut prices while admonishing them for making higher profits, insinuating that they are the cause of inflation.  In Canada, profit margins among grocers are actually flat due to rising costs. If one looks only at raw profits without taking into account inflation in producer costs as well as transportation, distribution and wages, then it might look like these companies are pulling in the cash. There is zero evidence to support this claim.

What Trudeau is doing is pretending to be stupid while engaging in a very clever strategy of scapegoating. It’s the government and the central bankers that are the foundational cause of inflation, but by blaming individual business sectors he sets the stage for government enforced price controls. When these fail and create a crisis in supply he will then introduce rationing, and once the government has conditioned the public to accept rationing the elites then control the entire population’s access to food and necessities.

Some people may say “Well that’s Canada, what about the US?” The same agenda is in progress in America, but is being pursued at a city and state level. For example, the socialist Mayor of Chicago, Brandon Johnson, just announced a plan for the city (using state and federal tax funds) to build government run grocery stores in “food deserts.” These are places where a combination of inflation and shoplifting has forced grocers to leave certain areas of the city.

The Chicago program would include price control measures and there’s ample opportunity for these institutions to use rationing in the future. Similar projects are also being considered in other cities across the country. In other words, leftist cities are scaring away businesses while planning to replace “essential services” with government run operations.

I wrote about the inevitability of government rationing after price controls last year in my article ‘The Stagflation Trap Will Lead To Universal Basic Income And Food Rationing.’  Rationing generally comes when price controls fail. It’s been a long time since the US has faced these kinds of conditions but we are likely to in the near future. This time around, I believe that if the establishment is given rationing power they will never let go again.

Rationing could also be used to lure the public into accepting Universal Basic Income (UBI) and Central Bank Digital Currencies (CBDCs).  Government run food centers can easily restrict purchases of goods to a limited list of items, and also demand payment using specific methods (like digital currencies).  In a short period of time, cash would be removed because retailers, pressured by government, will refuse to accept it.

It’s hard to say what the future will bring in terms of politics, given that the next presidential campaign is looking like a complete circus. Historically speaking, though, both Democrat and Republican presidents have tried price controls in the past. Public pressure must be applied (at the state level at minimum) to stop this from happening. As convenient as it might seem to blame producers and distributors, the real threat is coming from governments and banks. We cannot let the people who caused the crisis also benefit from it by giving them even more power.

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