Idiot Newspaper Headline of the Day
THE worst headline of the day. From the New York Times:
With Venezuelan Food Shortages, Some Blame Price Controls
It’s one of the most basic concepts in economics. Cut the price of something to below the market clearing price and supply of it will fall and demand for it will rise.
Thus there will be shortages.
This isn’t a mystery: it’s as inevitable as the Sun rising each morning as the Earth spins.
Why does anyone think there’s a couple of million people waiting for council houses? We’ve not got, as you may have noticed, a couple of million people living on the streets. So they’re already housed these people. So why are they on housing association waiting lists? Beause they’re queuing for something that is on offer at lower than market prices.
It may or may not be a good idea to have these below market prices for the poor: that’s something quite diferent. But once you’ve got them queues and shortages are inevitable. Beause that’s what the market price actually bloody well is, the price at which there are no queues, the price at which the market clears.