Indeed, wage and price controls
are often lumped together by policymakers--because they are in fact the same thing.
ON 14 OCTOBER 1976 more than a million Canadian workers struck for one day to protest the Trudeau government's wage and price controls
which, as Trudeau had warned when Tory leader Robert Stanfield had campaigned for controls in 1974, controlled wages but did not control prices.
Milton tells of visiting the White House in September 1971, a month after Nixon imposed comprehensive wage and price controls
. His friend and former colleague George Shultz was in charge of administering the controls.
The evidence against such government controls is persuasive: The Great Depression was created in part by precisely the kind of tariffs that Greider is advocating; the stagflation of the 1970s was created in part by wage and price controls
; the capital flight that, until recently, was endemic in countries like Brazil and Argentina was caused in part by those governments' attempts to control capital.
Three additional terms--a dummy for wage and price controls
, [D.sub.wpc], the rate of growth of employer social insurance taxes, [Delta] [S.sub.tax], and the rate of increase of the real minimum wage, [Delta] log [P.sub.lminr]--capture the rapid pass-through of changes in these variables to actual wages.
In September 1993, President Clinton said that mandatory wage and price controls are not necessary to control costs.
Before ESP, President Nixon steadfastly refused to consider wage and price controls as inflation control policy (Dornbusch and Fischer, 1981).
Wage and price controls are about as effective in stopping inflation as is wearing earmuffs to fix your car's screeching brakes.
Not only do wage and price controls fail to stop inflation, they make matters worse: The quality of available goods begins to decline; shortages develop; black markets appear; rationing is then often instituted.
A free-market bias that discourages any intervention in the economy can have exactly the same negative effect that wage and price controls
can have: freezing inequities and inefficiencies into place.
The regulations on the price and supply of petroleum products that spawned the overcharge cases originated with Richard Nixon's temporary wage and price controls. Although controls were soon lifted on most other goods and services, they became an all-but-permanent part of the nation's energy policy after the Arab oil embargo.
Federal appellate courts are often the last stop for clashes between government and business, but, to keep wage and price control cases from clogging the judiciary, Congress had established a special court to handle such disputes.