One of the school subjects that ought to be required of all American citizens (starting in, say, the third grade) would concern the inevitable and universal failure of price controls.
One of the earliest attempts at price controls was made by the Roman Emperor Diocletian in 284 A.D. Complaining of “raging and boundless avarice,” (i.e., price gouging) he decreed that “maximum [prices] be fixed” for a remarkably broad range of goods and services, but starting with the groceries of the time: white, corn, olives, fish and wine.
Rome’s farmers, quickly learning they would not even be able to recover their own costs, immediately quit selling grain on the open market. Likewise vinters and fishermen. Folks in Rome and Naples suddenly had a hard time buying food. An energetic black market sprang up, along with hoarding, riots and economic collapse. Within four years, Diocletian, a mighty soldier but a political peawit, became the first Roman emperor to abdicate.
Lenin tried the same thing. So did Hitler and, more recently, two American presidents who, likewise, couldn’t learn from history: Richard Nixon and Jimmy Carter. The former abdicated and the later disappeared in a landslide.
All price controls, starting with Diocletian’s, have failed to achieve their purpose while causing greater problems than they attempted to solve.
The most recent example is given us by California Gov. Gray Davis, who for months resisted every effort to uncap prices paid by electrical consumers. Thus, the electricity generating companies could not pass along the very high prices which they, in turn, had to pay because the legislature in its wisdom mandated that they buy electricity in the worst possible place, the high-demand, high-price spot market.
In less than a year, Davis’s policies bankrupted the energy companies. Then, keeping consumer price caps in place, he began buying electricity with the funds in the public treasury. He quickly discovered, however, that the state’s deep pockets weren’t all that deep, either. Now, locked by contract into high long-term prices, Sacramento finally bit the political bullet by passing along the costs to consumers. They are hurting and furious.
And now, with his own presidential aspirations having evaporated, Davis is badmouthing President George W. Bush because he, Bush, refuses to employ at the federal level Davis’s own failed policies which contributed so much to California’s energy chaos.
Now one of two things seem to be true.
First, Gov. Davis is irretrievably stupid.
Second, Gov. Davis believes average voters to be so irretrievably stupid that a media attack on Dubya will save Davis from, shall we say going into the same dustbin as Diocletian, Carter, Nixon, Lenin et. al.