I'm looking for a concise, easy argument about why price controls, particular price floors always fail. We all know the consequences of setting price control, but these kids don't have a lot (or in some cases any economic background). I'm getting ready to teach on the New Deal, and I want to tell them about the "Roosevelt Recession" of 37-38. I want to break the notion that the New Deal was an unqualified success. Anyone have any good sources that the kids can go to?
The concise answer is because they don't allow economic equilibrium to stabilize. In the case of a price floor (or price support), if the equilibrium drops below the floor, then prices are set too high. This results in a surplus. There's no other way around it.
If it's about price controls, just crack open any microeconomics textbook. Look up 'surplus', 'shortage', 'price floor', and 'price ceiling'. It might help to xerox a few pages out of said book, but I'm not sure about the legality of that.
IANAL, but it's fair use as long as it's not a significant amount. There's no specific amount specified in the law, but 10% is generally a good maximum to use.
IANAL?
Because URETHRAL would be too painful.
Quote from: Gumba Masta on February 12, 2010, 05:33:47 PM
Because URETHRAL would be too painful.
There aren't enough rimshots in the world to make that funny.
Quote from: Virgil0211 on February 12, 2010, 05:23:44 PM
IANAL?
http://www.google.com/search?hl=en&client=firefox-a&rls=org.mozilla%3Aen-US%3Aofficial&hs=HpP&q=define%3A+IANAL&aq=f&aqi=&oq=
It means "I Am Not A Lawyer".
A good example is the time the US tried to impose price controls on gasoline. It was a total disaster. It created a shortage of gasoline that resulted in long lineups for gas and some stations just plain dried up.
Nothing irks me more than people who think the evil gas companies can just jack prices up whenever they want to. If that were true, gas would cost 50 billion a gallon. There'd be nothing to stop it. Obviously it's not that simple.
Why don't they teach this stuff in school? I know I wasn't taught it. I had to find out myself.
Quote from: Virgil0211 on February 12, 2010, 05:57:16 PM
There aren't enough rimshots in the world to make that funny.
Have you tried this yet? http://www.instantrimshot.com/