Comment
It is interesting in the extreme that Jeff Bezos, the second richest man in the world, the founder of Amazon, a self-propelled astronaut and an avowed liberal who gave the Obama Foundation $100 million and bought (probably at a cost) the Washington Post, which then became a leading digital media innovator, he is now an unlikely foe of the Biden administration.
Amazon employees gave $2.2 million to Joe Biden’s presidential campaign, and Bezos called Biden’s 2020 election a victory for “unity, empathy and decency.” But that didn’t stop the White House from biting the hand that brought it so much money after Bezos called out the president for peddling misinformation about the causes of the current record inflation.
Earlier this month, America’s toughest 79-year-old once again falsely accused oil companies of ripping off consumers, demanding they: “Reduce the price you charge at the pump to reflect the cost you pay for the product. And do it now.”
In response, Bezos posted on Twitter: “Ouch. Inflation is too important an issue for the White House to continue making statements like this.” He accused Biden and his executives of “either outright misdirection or a profound misunderstanding of basic market dynamics.”
Bezos knows full well how the policies of the party he supports lead to high gas costs at the pump. A few years ago, there were 1,600 oil rigs in this country. Only a fraction of that number exists today, as big-government environmentalists wage war on fossil fuels.
Apparently, in Bezos we actually have a Democrat donor embarrassed by the lies he helped fund.
It didn’t take long for White House press secretary Karine Jean-Pierre to jump into the fray, responding to Bezos on Twitter: “I guess it’s no surprise that you think oil and gas companies using market power to make record profits at the expense of the American people is a way of which our economy should be doing.”
If President Biden and those around him really feel that way, if they really believe that companies should not “use market power,” then why not, for the sake of the American consumer, impose price controls? After all, price controls in the early 1970s were bipartisan, and Richard Nixon signed the Economic Stabilization Act into law in 1991.st Congress with overwhelming Democratic majorities in the House and Senate, establishing a federal pricing commission to which Nixon appointed government bureaucrats to dictate how much retailers would charge for their goods.
A few years later, another president would insist that “state wage and price controls have never worked in peacetime. They create unfair economic distortions and harm productivity. These inevitable results have always forced governments to eventually loosen price controls and then abolish them as inflation rages ahead.
“Controls create inequality, and the greatest inequality is their effect on the average American family. As even the most ardent proponents of mandatory wage and price controls will admit, the costs of vital necessities – such as food and fuel – would be passed on to those living on frozen wages and fixed incomes.”
You can imagine Ronald Reagan saying this. In fact, Jimmy Carter made the statement in the midst of the meltdown of his presidency in the spring of 1980. But, as if playing the lead role in some black comedy, right after Carter lamented the failure of price controls, he went on to announce an increase in the federal Wage and Price Stability Council—which is the successor to Republican President Gerald Ford’s Price Commission – to shame businesses into “voluntarily” setting prices, following the advice of federal bureaucrats.
“We simply cannot outlaw inflation with a huge federal bureaucracy or wish it away with a magic formula,” Carter assured us. “On the other hand, voluntary wage and price caps offer the flexibility we need to deal with our complex economy” with prices set by “a tripartite advisory board, with members from business, labor and the public.” He announced that “the current number of Council members of 80 people will be more than tripled”.
“The Council will then establish teams of experts to monitor wage and price developments in each major industry,” and then “meet with leaders from specific industries to secure their cooperation in this fight against inflation.” Where necessary, we will ask large firms to give advance notice of significant price increases. We will investigate wage and price increases that appear to be substandard. I want to apply these standards vigorously and firmly both in business and at work.” Voluntary, huh?
So, even though “controls never worked”, government designed “standards” backed by political pressure surely will?
A few years earlier, President Gerald Ford had put up a “WIN” (Whip Inflation Now) button and encouraged Americans to adorn their lapels with it, after signing a “very simple application form” that appeared in newspapers “to join this massive mobilization and stick to it until we win as a nation and as a people.” Ford appeared before Congress in October 1974 to advise Americans to choose “carpooling, riding the bus, riding a bicycle or simply walking.”
The principle for both Carter, a Democrat, and Ford, a Republican, was the same: the cause of inflation is excess freedom in a market that lacks government control—if not expressly by law, then by intimidation.
Sen. Bernie Sanders (I-Vt.) earlier this year called “reasonable” price controls in the oil industry – the need for “reasonable” is a reference to the fact that even most politicians and economists on the left know that the experience of the 1970s has shown that controls cause shortages that destroy consumers.
Sanders’ single-payer health reform is, of course, built on price controls. Sen. Elizabeth Warren (D-Mass.) recently introduced a bill that would impose penalties for selling a “good or service at an unconscionable overpricing during an extraordinary market shock,” but did not say how “unconscionable overpricing” would be determined.
The first major decision Jeff Bezos made after buying The Washington Post newspaper group was to end the online paywall for subscribers to the Dallas Morning News, Honolulu Star-Advertiser, Minneapolis Star-Tribune and other publications under its control. Guess what – businesses know that customers who make money are happy customers, customers who don’t feel cheated.
Does anyone really believe that Bezos’ creation, Amazon, has attracted tens of millions of consumers by mining them? And does anyone really think that Amazon would do better by following the price recommendations of some Price Stability Council in Washington?
Making incredible profits for the benefit of those who shop freely is “the way our economy should work”. It is really “market power”, which is to say freedom.
The views expressed in this article are those of the author and do not necessarily reflect the views of The Epoch Times.
Follow
Thomas McArdle was a White House speechwriter for President George W. Bush and writes for IssuesInsights.com
