{"id":1511773,"date":"2022-06-12T00:35:12","date_gmt":"2022-06-12T04:35:12","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1511773"},"modified":"2022-06-12T00:35:17","modified_gmt":"2022-06-12T04:35:17","slug":"85-of-top-economists-reject-elizabeth-warrens-latest-proposal","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/85-of-top-economists-reject-elizabeth-warrens-latest-proposal\/","title":{"rendered":"85% of Top Economists Reject Elizabeth Warren&#039;s Latest Proposal"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">18<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2F85-of-top-economists-reject-elizabeth-warrens-latest-proposal%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1511773&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><span>Senator Elizabeth Warren made a name for herself in 2020 as the progressive Democrat who \u201chas a plan\u201d for everything. But her plans are often not very well thought through, and the Massachusetts Senator\u2019s latest \u201cprice-gouging\u201d initiative is a similarly bad idea.\u00a0<\/span><\/p>\n<h2>The Context\u00a0<\/h2>\n<p><span>Warren is one of the many progressive politicians who has pushed the bogus narrative that \u201ccorporate greed\u201d is to blame for our ongoing surge in inflation. (As I explain <\/span><a href=\"https:\/\/fee.org\/articles\/elizabeth-warren-just-blamed-high-gas-prices-on-corporate-greed-here-s-why-that-doesn-t-make-any-sense\/\"><span>here<\/span><\/a><span>, this isn\u2019t the case). In response, she <\/span><a href=\"https:\/\/www.washingtonexaminer.com\/opinion\/why-elizabeth-warrens-new-anti-inflation-plan-would-fail-miserably\"><span>proposed an anti-\u201cprice-gouging\u201d law<\/span><\/a><span> that would outlaw <\/span><span>\u201cunconscionably excessive price increases\u201d at large companies \u201cduring all abnormal market disruptions.\u201d<\/span><\/p>\n<blockquote class=\"twitter-tweet\">\n<p dir=\"ltr\">Corporations are bragging about jacking up prices. And they get away with it because our markets lack competition. My Price Gouging Prevention Act would give the <a href=\"https:\/\/twitter.com\/FTC?ref_src=twsrc%5Etfw\">@FTC<\/a> more power to go after price-gougers so we can lower costs for families.<a href=\"https:\/\/t.co\/b5YHNOj02I\">https:\/\/t.co\/b5YHNOj02I<\/a><\/p>\n<p>\u2014 Elizabeth Warren (@SenWarren) <a href=\"https:\/\/twitter.com\/SenWarren\/status\/1525947232331128832?ref_src=twsrc%5Etfw\">May 15, 2022<\/a><\/p><\/blockquote>\n<p><span>What\u2019s an \u201cunconscionable excessive\u201d price increase? What constitutes an \u201cabnormal market disruption?\u201d And how could federal bureaucrats huddled in an office in Washington, DC possibly make these determinations for all the different industries in America and the literal millions of factors that influence market prices?\u00a0<\/span><\/p>\n<p><span>Warren\u2019s legislation offers no satisfying answers to these simple questions, which may be why an overwhelming majority of prominent economists just rejected a very similar concept out of hand.\u00a0<\/span><\/p>\n<h2>What Economists Think\u00a0<\/h2>\n<p><span>IGM Chicago recently <\/span><a href=\"https:\/\/www.igmchicago.org\/surveys\/price-gouging-2\/\"><span>surveyed<\/span><\/a><span> a group of top economists, including many from the Ivy League, and asked them whether \u201cit would serve the US economy well to make it unlawful for companies with revenues over $1 billion to offer goods or services for sale at an \u2018unconscionably excessive price\u2019 during an exceptional market shock.\u201d<\/span><\/p>\n<p><span>(Notice the language is very similar to Warren\u2019s proposal).\u00a0<\/span><\/p>\n<p><img decoding=\"async\" src=\"https:\/\/fee.org\/media\/41773\/screen-shot-2022-06-09-at-125659-pm.png?width=600&#038;height=335.0877192982456\" alt=\"\" data-udi=\"umb:\/\/media\/b47c67a282694155bb04f94cb5338c3b\" \/><\/p>\n<p><span>Weighted for confidence, an astounding 84 percent disagreed with the notion that such a plan would be good for the economy. As anyone who has spent time around economists can tell you, they\u2019re a fickle bunch with a wide range of ideological influences, so this kind of consensus on an issue is quite unusual.\u00a0<\/span><\/p>\n<p><span>The specific feedback individual economists offered was also illuminating.\u00a0<\/span><\/p>\n<p><span>\u201cThis just seems unenforceable at every level,\u201d said MIT economist David Autor. \u201cWhat is unconscionable? Why only companies above $1 [billion]?\u201d<\/span><\/p>\n<p><span>\u201cTotally impractical!\u201d responded Stanford\u2019s Robert Hall.<\/span><\/p>\n<p><span>In my personal favorite, University of Chicago economist Austan Goolsbee, who previously served under President Obama, simply responded, \u201cHow are we back on this again?\u201d<\/span><\/p>\n<h2>Why is Banning High Prices Such an Economically Foolish Idea?\u00a0<\/h2>\n<p><span>Of course, appealing to expertise alone is not much of an argument. We also need to understand <\/span><span>why<\/span><span> economists so resoundingly rejected this proposal and why banning \u201cprice gouging\u201d runs afoul of basic economic principles.\u00a0<\/span><\/p>\n<p><span>Well, high prices, even\u2014no, <\/span><span>especially<\/span><span>\u2014during times of crisis, actually serve several important economic functions.<\/span><\/p>\n<p><span>As I\u2019ve <\/span><a href=\"https:\/\/www.washingtonexaminer.com\/opinion\/why-elizabeth-warrens-new-anti-inflation-plan-would-fail-miserably\"><span>previously explained<\/span><\/a><span>:\u00a0<\/span><\/p>\n<blockquote>\n<p><span>\u201cWhen resources are scarce and demand is outstripping supply, companies naturally raise prices. This encourages those who don\u2019t truly need the resource or have an easy alternative not to buy it all up, reserving the resources for those who need them the most.<\/span><\/p>\n<p><span>Think of gas prices, for example. When we\u2019re experiencing serious fuel shortages \u2014 like we are right now \u2014 gas prices might rise as high as $4. With prices that high, people who could bike to work but prefer to drive might still bike to save money. But those who <\/span><span>have<\/span><span> to drive to work and have no other option will pay the higher price. This is an imperfect mechanism, to be sure, but it\u2019s still one that mostly ensures the scarce fuel ends up with those who need it most.<\/span><\/p>\n<p><span>Yet if \u2018anti-price-gouging\u2019 laws keep the price set at $2 because $4 is deemed \u2018unconscionably excessive,\u2019 gas stations will quickly run out of it. Who gets it versus who doesn\u2019t will simply be a matter of chance.<\/span><\/p>\n<p><span>What\u2019s more, high prices during periods of high demand for a product are the force that attracts more businesses to come in and provide more of the good or service, which eventually alleviates the shortage and lowers the price again over time. But if the price is kept capped low, there\u2019s no market force naturally bringing in more investment to boost the supply to keep up with increased demand.\u201d<\/span><\/p>\n<\/blockquote>\n<p><span>So, it\u2019s not just experts telling us that anti-\u201cprice-gouging\u201d laws are such a bad idea\u2014basic economists and common sense alike confirm this reality.\u00a0<\/span><\/p>\n<p><span>Here\u2019s hoping policymakers in Washington heed these warnings. If they don\u2019t, everyday Americans will suffer the economic consequences.<\/span><\/p>\n<h2><strong>WATCH<\/strong><span>:\u00a0<\/span><\/h2>\n[embedded content]\n","protected":false},"excerpt":{"rendered":"<p>Senator Elizabeth Warren made a name for herself in 2020 as the progressive Democrat who \u201chas a plan\u201d for everything. But her plans are often not very well thought through,<\/p>\n","protected":false},"author":1,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1511773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1511773","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1511773"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1511773\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1511773"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1511773"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1511773"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}