Wage and/or Price Controls

[LBJ Revivalist]

What do you guys think of the idea of wage or price controls? I was thinking that in times of a recession, wages could be raised and prices could be frozen at current levels--While this would have a positive effect and spur consumerism, it might well have a negative effect in terms of company revenues. Or perhaps setting caps or yearly limits on the rise of prices in a ratio to the rise of wages. These price controls could perhaps only be implemented in vital areas--Such as food, gas, etc. 
 Perhaps a better would be simply freezing both or setting caps.

[Franzl]

Very Very Very bad idea.

If you limit the prices of things, they simply won't be available to purchase anymore. It's not as if you simply tell people they have to sell gas for $3 a gallon and they comply.

[Free Trade is managed by the invisible hand.]

What do you guys think of the idea of wage or price controls? I was thinking that in times of a recession, wages could be raised and prices could be frozen at current levels--While this would have a positive effect and spur consumerism, it might well have a negative effect in terms of company revenues. Or perhaps setting caps or yearly limits on the rise of prices in a ratio to the rise of wages. These price controls could perhaps only be implemented in vital areas--Such as food, gas, etc. 
 Perhaps a better would be simply freezing both or setting caps.

quick economic facts
1) minimum wages are wage controls,but they do not have an effect on All real wages.

2) we had price controls during world war two and the private sector barely grew, but when those price controls were lifted we had the housing boom and good growth.
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//While this would have a positive effect and spur consumerism, it might well have a negative effect in terms of company revenues.//
Thus companies will decide to cut back spending on wages, and they will decide fire workers in order to account for the loss in profit. In any event wage controls do not boost demand when the labor market is depressed, and this is because the unemployed are not earning a wage and thus they are not spending.

[opebo]

Wage controls in the sense of mandating higher wages is an excellent idea.

[Franzl]

Wage controls in the sense of mandating higher wages is an excellent idea.

I love unemployment!

[phk]

Prices act as signals; the operation of the price mechanism is a better guide to resource allocation than central planning.

[Free Trade is managed by the invisible hand.]

if you want wages to be higher than one should simply be more supportive of unions, but the government does not need to introduce wage controls because the market already does a pretty efficient job of controlling wages.

[opebo]

Wage controls in the sense of mandating higher wages is an excellent idea.

I love unemployment!

Generous dole takes care of that.

[MK]

if you want wages to be higher than one should simply be more supportive of unions, but the government does not need to introduce wage controls because the market already does a pretty efficient job of controlling wages.

Exactly.

[k-onmmunist]

Only non-economists like them.

Apart from Marxist economists, but that is nearly an oxymoron.

[opebo]

if you want wages to be higher than one should simply be more supportive of unions, but the government does not need to introduce wage controls because the market already does a pretty efficient job of controlling wages.

I would prefer that the State mandate higher wages - unions were just a very weak and easily defeated way of doing this.  Unions should have always gone for a control of the political apparatus - by failing to wrest it from Capital they utterly doomed themselves and the working class.  (Of course to be fair they would only have been slaughtered had they tried an actual take-over.. 1917 was a bizarre aberration).

[Southern Senator North Carolina Yankee]

Wage controls in the sense of mandating higher wages is an excellent idea.

I love unemployment!

Generous dole takes care of that.

You do realize that the size of the gov't dole you propose is so large and to have 25% of the working populace on it, there would be no way to fund that all. Even with 90% taxes on the highest class and I don't think the economy is strong enough fundamentally to support the high taxes that it did in the past.

[Torie]

This is one idea that has been totally discredited on both sides of the aisle, and is therefore not even discussed anymore.

[Free Trade is managed by the invisible hand.]

This is one idea that has been totally discredited on both sides of the aisle, and is therefore not even discussed anymore.

it is still worthy to entertain in my opinion. Instead of out right disagreeing one should try and find pleasure discussing it with the intent of providing thoughtful feedback.

[Torie]

This is one idea that has been totally discredited on both sides of the aisle, and is therefore not even discussed anymore.

it is still worthy to entertain in my opinion. Instead of out right disagreeing one should try and find pleasure discussing it with the intent of providing thoughtful feedback.

Well I will leave it to others to go over the economic fundamentals as to why this just doesn't work no matter what your ideology, because I am tired.

[Free Trade is managed by the invisible hand.]

This is one idea that has been totally discredited on both sides of the aisle, and is therefore not even discussed anymore.

it is still worthy to entertain in my opinion. Instead of out right disagreeing one should try and find pleasure discussing it with the intent of providing thoughtful feedback.

Well I will leave it to others to go over the economic fundamentals as to why this just doesn't work no matter what your ideology, because I am tired.

Price controls work when it comes to preventing inflation, and this is what they have been generally intended for. Thus they do work in that sense!

[Southern Senator North Carolina Yankee]

This is one idea that has been totally discredited on both sides of the aisle, and is therefore not even discussed anymore.

it is still worthy to entertain in my opinion. Instead of out right disagreeing one should try and find pleasure discussing it with the intent of providing thoughtful feedback.

Well I will leave it to others to go over the economic fundamentals as to why this just doesn't work no matter what your ideology, because I am tired.

Price controls work when it comes to preventing inflation, and this is what they have been generally intended for. Thus they do work in that sense!

I think Torie would know better about Price Controls not working. They were pretty useless at controlling inflation in the 1970's.

[LBJ Revivalist]

Wage controls in the sense of mandating higher wages is an excellent idea.

I love unemployment!

Well at the same time as increasing wages, one could also lower capital/corporate gains tax rates.

[Free Trade is managed by the invisible hand.]

This is one idea that has been totally discredited on both sides of the aisle, and is therefore not even discussed anymore.

it is still worthy to entertain in my opinion. Instead of out right disagreeing one should try and find pleasure discussing it with the intent of providing thoughtful feedback.

Well I will leave it to others to go over the economic fundamentals as to why this just doesn't work no matter what your ideology, because I am tired.

Price controls work when it comes to preventing inflation, and this is what they have been generally intended for. Thus they do work in that sense!

I think Torie would know better about Price Controls not working. They were pretty useless at controlling inflation in the 1970's.

Price controls were mainly effective during world war two because rationing was also involved. It all depends how it is run, and I think the Price administration showed that price controls can indeed control inflation.