How Federal "Bans", "Freezes", and "Price Controls" Spread Economic Chaos
I have always been a believer in free market economics. Whenever a government tries to "fix" things, it often makes things worse, and more often than not, the law of Unintended Consequences is engaged. Prohibition of alcohol early in the last century is often cited, but some of the worst cases of Federal government intervention have taken place since the 1960s. Here are a few examples:
Roosevelt and Nixon Administration Wage and Price Controls
History has shown that wage and price controls (also called "incomes policies") are an exercise in futility. In the United States, wage and price controls were first instituted with marginal results by the Roosevelt administration during World War II, as administered by the Office of Price Administration. Eventually, employers and consumers find ways to work their way around these laws. In his book Government by Emergency, Dr. Gary North described the wage and price controls instituted by the Nixon Administration. North showed that the law was entirely ineffective at "fighting inflation." The only sure way to stop inflation is to stop the government printing presses and do away with fractional reserve banking. But still, governments all over the world have resorted to wage and price controls, usually with no real effect. Just two weeks ago, the outrageously inept government of Zimbabwe declared that it would jail anyone that raises wages or prices. Given the country's current inflation rate of more than 1,200 percent per annum, I seriously doubt that the law will be a success. But knowing how Comrade Mugabe and his henchmen operate, the law may result in a few "disappearances" or perhaps even a few executions.
