Tag Archives: price controls

The Joys Of Communism

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On Monday, Yahoo News reported that Cuba has cut the size of its daily breat ration because of a shortage of ingredients.

The article reports:

The bread, one of a handful of still subsidized basic food products in Cuba, will be reduced from 80 grams to 60 grams (2.1 oz), or approximately the weight of an average cookie or a small bar of soap. Its price, too, was slightly reduced, to just under 1 peso, or 1/3 of a cent.

Still, many Cubans, who earn around 4648 pesos a month, or around $15, can scarcely afford to shop for more expensive bread on the private market, leaving them with few alternatives.

“We have to accept it, what else can we do?” Havana-resident Dolores Fernandez told Reuters while she stood outside a bakery on Monday. “There’s no choice.”

Cuba last week said it had run short of the wheat flour it needs to produce the bread, a predicament the government blames on the U.S. trade embargo, a complex web of restrictions that complicates Cuba’s global financial transactions.

The Caribbean island nation is suffering from extreme shortages of food, fuel and medicine, shortfalls that have primed a record-breaking exodus of its citizens to the nearby United States.

Cuba’s ration book, or “libreta,” as it is known among island residents, was once considered a hallmark of Fidel Castro’s 1959 revolution, providing a range of deeply-discounted products to all Cubans, including bread, fish, meat, milk, and cleaning and toiletry supplies.

This is one example of what happens when the government controls the price of food. Price controls create scarcity.

Robert F. Kennedy, Jr., Has Specific Issues He Wants To Target

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Robert F. Kennedy, Jr., is an interesting addition to the Trump team. I am sure there are places where the two seriously disagree, but I suspect there are also places where they strongly agree. Robert F. Kennedy, Jr., has said for years that he distrusts the pharmaceutical companies who push vaccines and that is concerned about the chemicals being put into our food supply. While I don’t agree with all of his ideas on either subject, he does have some good ideas.

On Saturday, Zero Hedge posted an article about one of the good ideas.

The article reports:

Robert F. Kennedy Jr. spent decades as an environmental lawyer fighting polluters and supported ‘green’ organizations for environmental justice. He is now setting his crosshairs on the pharmaceutical industry and cleaning up the nation’s food supply chain of ultra-processed foods and seed oils that poison consumers. He has determined that suspending his presidential campaign to team up with former President Trump will be necessary for the strongest success rate in making Americans healthier again, not through big pharma’s Ozempic shots but instead revitalizing small farms and shaking up corrupted federal agencies.

Lifelong liberals like RFK Jr. backing Trump is one of the strongest indicators of just how extreme the ticket, unoriginal Vice President Kamala Harris and Democrats have become. Harris’ team recently announced their first proposed economic policy, which was rooted in communism and included disastrous price controls. It appears the far-left ticket is being advised and heavily influenced by Marxists. 

The article concludes:

Mega corporations, some of which are part of the ‘green’ cult, want greater and greater control over the nation’s food supply chain. Some are even pushing insect-based diets.

The big takeaway from RFK Jr.’s support of Trump is that he believes the correct path to restoring America’s health is not Ozempic shots but revitalizing the nation’s local food supply chains by making small farms great again. He wants to reset the food supply chain system and purge it of ultra-processed foods and seed oils that are killing consumers. He also proposed shaking up federal agencies in health and food that have close ties with ultra-processed food companies. 

For years, we have told readers that it’s critical to support local farmers and put the food supply chain back into the hands of the people—not corrupt mega-corps that flood store shelves with cancer-causing junk food.

Henry Kissinger famously said, “Who controls the food supply controls the people; who controls the energy can control whole continents; who controls money can control the world.”

It’s time for Americans to regain control of the nation’s food supply chains by making small farms great again. Also, boycotting the processed food industry and buying local food is critical.

If Trump wins, RFK Jr. will likely provide tailwinds for small farmers. And Europe will take note as corp/gov’ts have also waged war on small farms. 

Please follow the link above to read the entire article. This would be very good for all Americans.

Those Who Fail To Learn The Lessons Of History Are Doomed To Repeat Them

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Presidential candidate Kamala Harris has announced her economic plan to stem inflation. She has stated that her goal is to make life in America more affordable for everyone. Her intentions may be noble, but her knowledge of economics and human nature leaves a lot to be desired.

On Friday, Fox News reported:

A liberal economic columnist criticized Vice President Kamala Harris’ proposal to control prices on food and groceries as “totally unworkable” and compared it to failed efforts by communist governments.

“It‘s not going to be markets, it‘s not going to be supply and demand that’s determining how much your grocery store charges you for milk or for eggs, it‘s going to be some bureaucrat in D.C., which seems like totally unworkable,” Catherine Rampell said on CNN on Friday.

Rampell, a columnist for the Washington Post and a CNN economics and political commentator, argued the plan was “bad” for various reasons, from practicality to effectiveness.

“Well, first of all, nobody can explain what price gouging means,” she said on CNN, saying the idea of “excessive” prices or profit margins is subjective and thus “very hard to pin down what this would actually mean.”

The article also notes:

“We’ve seen this kind of thing tried in lots of other countries before; Venezuela, Argentina, the Soviet Union, et cetera. It leads to shortages, it leads to black markets, you know, plenty of uncertainty,” she said.

“And beyond that, the specific way this bill is written might actually increase prices because of some of the other language in it, things like requiring companies — public companies to disclose in their quarterly reports, their quarterly earnings reports, how they’re setting prices, which is a great way to help them collude, which normally we don’t want them to do,” she explained.

If you want to bring down inflation, the first thing you need to do is cut government spending and regulation. After that is done, open up America’s energy resources and loose the free market on all areas of our economy. The return to the free market will make economic success available to anyone who is willing to work for it. That should be everyone’s goal.

Milton Friedman is credited with saying, “If you put the federal government in charge of the Sahara Desert, in five years there’d be a shortage of sand.” Kamala Harris needs to consider that quote when planning her economic program.

Prepare For Gas Lines

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In the 1970’s we had gas lines. Part of the problem was our reliance on oil from the Middle East and part of the problem was the government’s efforts to keep the cost of gasoline down. Those efforts together created the perfect storm. To put things in perspective, in 1969 a gallon of gas cost $.35 or $2.75 in today’s dollars (according to dollartimes.com). In 1978, a gallon of gas cost $.65 a gallon or $2.99 inflation adjusted (according to CNBC). By 1981, the cost was $1.35 a gallon or $4.46 inflation adjusted (CNBC). With the exception of 2011-2014, gasoline has generally stayed between $2 and $3 a gallon. Right now the price is over $4 a gallon, and obviously that impacts everything Americans buy. The Biden administration desperately wants to lower the price of gasoline before the mid-terms. However, there is some disagreement as to how to do that. The easiest way would be to open up drilling in America and bring back our energy independence, but considering who the Biden administration is beholden to, that is highly unlikely. So we are left with more risky solutions.

On Monday, The Daily Caller posted an article about one suggested solution.

The article reports:

Several economists slammed a Democratic proposal making its way through Congress that would enable energy price controls amid record high fuel costs.

Such a policy, which prohibits private companies from increasing prices regardless of market conditions, would have catastrophic consequences including energy supply shortages and increased inflation, the economists argued in a series of interviews with The Daily Caller News Foundation. Democrats have alleged in recent weeks that inflation is being driven by corporate price gouging and that Big Oil is using the Ukraine crisis as cover to raise prices and boost profits.

Oil is a commodity. It is subject to supply and demand. When America drastically decreased the amount of oil it was producing (under the Biden administration) and the amount of fossil fuel it was exporting, the supply shrank and the cost went up. The war in Ukraine did not help, but the problem was there before the war.

The article continues:

“I just can’t believe they’re dumb enough to do this,” Benjamin Zycher, an economist and senior fellow at the American Enterprise Institute, told TheDCNF in an interview.

“If prices are controlled at below-market clearing levels, then you get shortages because the quantity demanded is greater than the quantity supplied at the legal maximum price,” he continued. “And that’s why you get gasoline lines and allocation controls.”

The House Rules Committee announced that it would review the Consumer Fuel Price Gouging Prevention Act — a bill that enables the president to issue an emergency declaration banning energy prices issued in an “excessive or exploitative manner,” according to its sponsors — on Monday before reporting it to the floor. House Speaker Nancy Pelosi, who told reporters last week that oil and gas companies were exploiting consumers, promised that there would be a floor vote on the legislation this week.

The article concludes:

Economists, meanwhile, have also rebuked the argument that oil companies are price gouging amid the Ukraine crisis.

“[Retail gas stations] don’t necessarily drop their price as rapidly as what wholesale prices and oil prices are doing,” Garrett Golding, a business economist tasked with analyzing energy markets at the Federal Reserve Bank of Dallas, told TheDCNF in an interview. “Some people want to call that price gouging because it’s not in lockstep with where wholesale prices are. But the fact of the matter is, what they’re doing is making back the money that they were losing on the way up and that’s how they stay in business.”

Golding and fellow Dallas Fed economist Lutz Kilian published a May 10 paper laying out why gasoline prices haven’t risen and fallen in lockstep with oil prices over the last few months. They said pump prices are also affected by operating expenses such as rent, delivery charges and credit card fees, and that prices are set by retail gas stations, not oil drillers.

Democratic Reps. Kim Schrier and Katie Porter, the sponsors of the Sponsors of the Consumer Fuel Price Gouging Prevention Act, and Pelosi didn’t immediately respond to requests for comment from TheDCNF.

Democratic Massachusetts Sen. Elizabeth Warren introduced similar legislation Thursday that would implement a federal ban on “unconscionably excessive price increases.” House Democrats, led by Illinois Rep. Jan Schakowsky, unveiled a companion to Warren’s legislation.

Democrats are not likely to let facts get in the way of increasing federal control over our lives.