"What time is it?" as James Taranto used to mockingly ask in his Best of the Web newsletter for the Wall Street Journal editorial page. "The time is now to begin destigmatizing greater democratic control over price levels," the director of governance studies at the Roosevelt Institute, Todd Tucker, writes in the Washington Post.
Tucker helpfully notes:
at the peak of price control efforts in World War II, the government employed 160,000 price regulators. While widespread use of digital payments could make enforcement easier, the economy has grown substantially, and it is likely many more officials would need to be hired. That capacity won't be developed overnight, so if we think future crises might merit price controls, expanding governments' abilities now to track prices throughout supply chains is a must.
It's not clear if Tucker means "many more" than there are now, or "many more" than the 160,000 supposedly employed during World War II.
Either way, it's funny on two levels. First, the government created the inflation by fiscal stimulus (government deficit spending) and monetary stimulus (low interest rates and expanding the money supply). Now the same government that caused the problem is going to hire another 160,000 people to solve the problem? As if wages aren't climbing already in the tight labor market, the federal government is going to be able to hire 160,000 people without driving up wages by competing for talent with private sector employers?
Second, the claim published by the Washington Post that "the government employed 160,000 price regulators" is false. Hugh Rockoff, in his article "Wage and Price Controls in Four Wartime Periods," published in the June 1981 Journal of Economic History, reports:
"For World War II a survey of the hours worked by volunteers is available. This survey, moreover, probably overstates hours worked because of the natural human tendency to overstate one's sacrifices for others. The survey shows that in the month preceding July 23, 1945, approximately 107,806 volunteers for the Office of Price Administration worked an estimated 1,067,812 hours. Allowing 160 hours per month per full-time equivalent (4 weeks at 40 hours per week) means that the volunteer services were the equivalent of approximately 6,674 full-time workers. Since the average number of workers at the Office of Price Administration in 1945 was 64,517, it follows that the volunteers increased the strength of the Office of Price Administration by only a bit more than 10 percent."
Tucker seems to have arrived at the "government employed 160,000 price regulators" claim by adding the part-time volunteers and the paid workers, falsely conflating and eradicating the distinction between the two groups.
We're still coping with the consequences of the World War II-era wage and price controls. Employer-provided health insurance is a relic of those controls. It's not clear to me why anyone would be nostalgic for them. I guess maybe it's a backdoor way to achieve the Schumer goal of universal student loan forgiveness—employ the entire population as wage-and-price controllers, then grant them loan forgiveness under the existing "public service" loan forgiveness provisions that apply to government employees.
Anyway, one keeps hearing that no one seriously advocates the return of wage and price controls to fight inflation, then one reads articles such as the Tucker one in the Washington Post. Jeremy Horpedahl noticed that it was approvingly tweeted out ("Nice piece") by Heather Boushey, a member of President Biden's Council of Economic Advisers.
One other point. The phrase "democratic control of price levels" is itself pretty comical. What could be more democratic than prices being set freely by hundreds of millions of potential buyers and sellers interacting in a market? What Tucker means by "democratic control of price levels" is really "politician and bureaucrat control of price levels," which is what brought us the soaring price levels we have now. Rather than de-stigmatizing politician and bureaucrat control of price levels, the present inflation should re-stigmatize it and encourage a return to genuinely democratic setting of price levels, by a free market.
