| Biden has attempted to put price controls on many products to try to stop inflation, including most recently on prescription drugs and credit and debit card fees.
We’ve shown the evidence over and over that price controls almost always have two effects: reduced production and then shortages. Then, when the price controls are lifted, prices initially rise but then the increased production ends the shortages and eventually prices fall. We’ve seen this with financial services, trucking, airlines, energy, and many other industries. Our co-founder Arthur Laffer just published this chart, showing the remarkable success of deregulating the oil and gas industry when Reagan came into office in 1981. Prices initially rose but then when the higher production kicked in, prices went on a decade-long decline – falling by more than 60%. |
Our old friend and mentor Dick Armey used to put it simply: markets are smart and government is dumb.