72 sats \ 14 replies \ @kepford 15 Aug \ parent \ on: Kamala Harris First Economic Plan Proposes Price Controls To "Combat Inflation" econ
This really exposes the economic ignorance of the public. Many republicans do not see the problems with price controls. Don't believe me? Think about how many complain about price gouging when prices spike for gas or some other item during a storm/disaster. Most see no issue with the minimum wage either. I admit that the min wage is harder to get your head around but in general the public is pretty clueless.
Even my dad falls for price gouging propaganda and he's read more Thomas Sowell books than I have.
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This is why they use this trope. Understanding it requires the application of game theory... and we know how hard that is for people to do. We humans have a very hard time putting ourselves in the position of someone we aren't happy with in the moment.
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I don't think game theory is required. We need to be better at spreading easy to understand messages.
In these cases, the easy to understand message is "You aren't helping anyone when you take away their best available option."
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Trying to think like a normie. That statement doesn't make sense to me. Has it worked for you?
I have tried to explain to people that prices help equalize supply based on the need of the buyer. If an outside party arbitrarily sets prices, demand and supply are taken out of the equation.
If there is a hurricane in an area and price controls (either by the corporation due to social pressure or the state) it is likely that the supply is going to run out(shortages). Also the incentive for other companies including individuals to bring in new supply is reduced. That is if there are laws against price gouging.
If price controls are not in place the price can be increased and then people that can defer their purchase will do so. They could also broaden their search. Those that need the materials right now can buy it, all be at a higher price.
We saw this during covid without the state putting price controls in place. Due to the public's disdain for "price gouging" Costco didn't hike their prices on toilet paper even though it would have made sense. Instead they tried to limit how many people could buy. That's there choice but it shows the social side of the market and how ignorance can cause damage even without the state.
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That statement doesn't make sense to me. Has it worked for you?
Not really. People nod their heads, but I don't sense that they get it. Why doesn't it make sense? It seemed pretty obvious to me, when I first read it.
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It makes sense to me because I get what it points to. But its a dense statement.
If someone doesn't ask a question after this statement
"You aren't helping anyone when you take away their best available option."
they either get it or don't care to get it. That's what makes it hard I think.
If I didn't get it and wanted to get it I would ask. How are price controls taking away an option? I don't think it is obvious how price controls cause harm. Once you see it, it is obvious.
That's what I'm getting at. Maybe I'm wrong though.
Edit:
In my experience most people just go on feelings and huge price jumps don't feel good. It is easy to think this is just greed.
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Yeah, I agree with that. You'd have to explain what it means to people, initially. My point is that it's a widely applicable principle and would be easy enough to remember.
The value would be that once someone gets it, they can remember it more easily than several steps of logic about prices and incentives.
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