The exciting “Vibe Campaign” of Vice President Kamala Harris was best outed by the popular author and columnist Mark Steyn when he identified it as the “Vibe as Veil Campaign” because it did not seem to have anything behind it. All of her speeches centered around the dangerous, no-good, very bad former President Donald Trump. But on August 16th, she finally pushed the pause button on that mantra and actually spelled out her first policy position. If elected President, she will call for federal control of food and product prices, which she promised to launch within the first 100 days of office.
The critic in me suspects that this proposal might have something to do with the latest Consumer Price Index data that day, highlighting the pain Americans feel every time they buy groceries and pretty much everything else. In 2021, the inflation rate was 1.2 percent when the Biden-Harris administration took office, and in the next few years, it kept going up, eventually hitting 9.1 percent, the highest level in forty years. Real average weekly earnings fell in July. Unemployment is up. Median household income is down. Credit card debt has hit a record high. All this begged a response of some sort.
It is good that the Vice President recognizes how inflation needs to be dealt with. However, she could not have picked a more unpopular idea than government price controls. In the history of bad ideas, this one is right up there. Even the New York Times and Washington Post, which generally carry water for the Democratic Party, came out against this idea. The American Institute for Economic Research provided the most comprehensive “Oh NO” in their article, “4,000 Years of Failed Price Controls,” which showed how rulers in Mesopotamia, Athens, Rome, and elsewhere attempted to control prices with utterly ruinous results.
In recent years, it has been tried worldwide: Cuba, Venezuela, Argentina, Brazil, France, South Korea, Israel, Australia, the United Kingdom, Canada, and yes, even the United States of America. In 1971, President Nixon implemented wage and price controls to combat inflation. In every instance, price controls were initially helpful in preventing inflation from growing higher, yet they very quickly disrupted the system, leading to market distortions. Nixon held on too long (like a gambler who keeps thinking the next hand will be a winner), and after three years, he finally gave in because of his impeachment problems. Countries such as Israel and the United Kingdom followed the US in wage and price controls in the 1980s and were able to find that sweet spot to make it work by getting in and out quickly.
But we had a dry run with the COVID shutdowns to show how intoxicating this control can be to elected officials such as Vice Presidental candidate Governor Tim Walz, who issued an executive order on March 25, 2020, that did not just shut down almost all commerce in the state but also prohibited any resident of Minnesota from leaving his or her house without cause. The “two weeks to flatten the curve” propaganda turned Governor Walz into ruling by decree for the following 15 months. And for extra measure, he set up a snitch line so that Minnesotans could phone in anonymously and rat out their neighbors if they violated Walz’s “stay at home” order.
Restrictions are part and parcel of government control. My wife and I saw this vividly when we were living in the USSR as missionaries. The Soviet Union controlled every aspect of life. We did not live as foreigners who had special places where they could live and shop for items. Instead, we wanted to live like the locals. This meant we traveled by public transportation as cars were ridiculously expensive and poorly designed, and gasoline was over $8.00 per gallon. That is if you could get it at all, as gasoline and almost everything else was rationed. We traded our alcohol, cigarette, and gasoline coupons for flour, sugar, oatmeal, and other food items. Ironically, actual money was not as valuable as these ration coupons.
It was also especially important to have connections. If we wanted to get a nice cut of beef, we would have to start by bartering our alcohol and cigarette coupons from the past two months to a clothing store manager who happened to be good friends with the store manager of a large appliance store who would help us acquire a radio that the butcher at the farmers’ market wanted for his oldest son’s birthday, who would then get us our nice cut of beef.
The United States has prospered through free enterprise, an economic system in which private business operates in competition and free of state control as much as possible. Of course, it is not a perfect system, and throughout our history, there have been ‘robber barons’ and monopolies that needed to be reined in, but by and large, free enterprise has brought prosperity to our country.
No one said it better than Nobel Laureate economist Milton Friedman, who stated, “The society that puts equality before freedom will end up with neither. The society that puts freedom before equality will end up with a great measure of both.”
