The sense to let things settle.  Especially when the public, or the private, sea is most turbulent.  There come whirlwinds into human traffic, storms of passion, when it is wise to seek a safe harbor with smoother waters: many times is an evil made worse by the remedies used.  Gracian #138

George Rebane

As we sit in wait for the election of our lifetime, many of us are in a cold sweat as to what may be our country’s fate if the neo-Marxist Left prevails this upcoming Tuesday.  Our Left’s not so hidden agenda is to remove the United States as the main impediment to global governance.  It does this by fostering drastically flawed policies for conducting the country’s economy, education, and foreign policy (to include blatantly porous borders).  The Left’s inventory of governance deficits is large and continues to grow, immune to ongoing appeals of reason and historical evidence of their failures wherever these have been implemented.

Today I will focus my screed on the Left’s successful attempts to put in play a malformed economy that is accepted by an alarmingly large share of the country’s (lightly read) electorate as having fixed the Trump legacy, if we are to believe the polls.  And specifically I want to highlight the entire notion of the Left’s goal to implement wage/price controls (“price gouging”) across the land should they also dominate Congress.  They have convinced a large contingent of us that Kamala’s economic plan (what plan? where?) is backed over Trump’s by scores of economists from sea to shining sea.

Longtime RR readers know my assessment of economics as a field of study and informer of policy.  Most certainly there is nothing scientific about economics when it comes to quantitative models designed to predict the future – i.e. contain equations with time as the independent variable.  Wherever such models have been applied, they have shown themselves to be woefully inadequate for the job for reasons I have detailed many times.  Yet they persist, perhaps serving the economists’ ongoing desire to be accepted into the more respectable community of science. 

In this regard I offer the celebrated British macro-economist Lord John Maynard Keynes as an example of one who did not understand the impact of wage/price controls and gave us his ‘demand side’ model of an economy which continues to infect the thinking of government planners all over the world.  His economics began to fray in the 60s and 70s when governments’ demand infusion policies did nothing to mitigate stagflation.  However, leftwingers like Barack Obama gave Keynesianism another chance after the 2008-09 recession, and demonstrated to the world how such demand based economic policies gave rise to the most impeded and slowest recovery in the history of US recessions.

Getting back to wage/price controls.  It is easy to show that anyone who continues to believe that wage/price controls will increase the quality of life in an economy is way past those who still believe in a flat earth.  At least the flat earthers can stand on a hill and point to the surrounding horizons to demonstrate that the earth is always flat from here to there.  The true believers in w/p controls have never had such a hill to stand on.  Theirs is a pabulum-based body of evidence that crumbles under any serious examination.

The more successful economists have been those who interpret economic behaviors in terms of very apparent and recorded behaviors of individuals when presented with economic choices and decisions.  Successful economists of this stripe have been men like Smith, Bastiat, von Mises, Hayek, Hazlitt, and Freedman.

Henry Hazlitt contributed to a widespread understanding of economics with the publication of Economics in One Lesson (1946), a paperback translated into over ten languages with which he intended to attract readers put off by Friedrich Hayek’s more dense and massive classic, Road to Serfdom (1944).  (The highly recommended Hazlitt tome is now in the public domain and available here along with a chapters summary here.)

This September’s issue of the Hillsdale College Imprimis (here) features an updated reprise of the Hazlitt essay ‘The Dangers of Price Controls’ which also appeared in the very first issue of Imprimis in 1972.  (Imprimis is a monthly pamphlet on governance and cultural issues that is subscribed by 6.6M people worldwide.)  The essay opens with –

The first thing to be said about price and wage fixing is that it is harmful at any time and under any conditions. It is a giant step toward a dictated, regimented, and authoritarian economy. It makes impossible arrangements that both sides are willing to agree to. It sets aside contracts that have already been made in good faith. If an employer wishes to give a man a raise in pay, and the man deserves it, he is nonetheless forbidden to do it under the new regulations. This is a grave abridgment of individual liberty. … Price and wage fixing does harm even if there is no inflation. In a free economy prices are constantly changing. They are changing to reflect changes in supply and demand, in costs, and in a hundred other conditions. Some prices are going up, other prices are going down. If an effort is made to freeze prices and wages exactly where they are, it immediately disturbs the relationship of prices and comparative profit margins, which decides what things will be made and what quantities they will be made in. It upsets the process by which the free market decides how thousands of different commodities and services are to be made in the proportions in which people want them.

So now I and those of my persuasion sit here holding our breaths for Tuesday night when we may receive a hint of the kind of future that awaits us all.