tag:blogger.com,1999:blog-16834274.post4353292700201829474..comments2023-10-23T08:46:31.146-07:00Comments on Desert of the Real Economic Analysis: ANOTHER “ON THIS DAY IN HISTORY POST”.FOXP2http://www.blogger.com/profile/08457839518227249242noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-16834274.post-31508467751299980322007-11-18T09:13:00.000-08:002007-11-18T09:13:00.000-08:00I always wonder about the sanity of people wishing...I always wonder about the sanity of people wishing for rationing for the war in Afghanistan and Iraq. I personally view rationing as a very pricey short term fix to a solvable problem. It introduces economic calculation problems, by no means trivial. Had we no rationing and price controls after the Great Depression, then WWII - I doubt we would have had many shortages in WWII. I also doubt the Great Depression would have been, well, Great.roopsaghttps://www.blogger.com/profile/16899115921046148484noreply@blogger.comtag:blogger.com,1999:blog-16834274.post-47499204087556749582007-11-11T10:43:00.000-08:002007-11-11T10:43:00.000-08:00Thanks for the comment. The statement that the pri...Thanks for the comment. The statement that the price controls were left in place to reduce inflation and ease shortages was the consensu view at the time. Perhaps a better way to have stated it would be to say it the controls were left in place to "manage" shortages, in effect to contiue rationing without allowing the price to rise to an equilibrim price. <BR/><BR/>In fact, when price controls were lifted in post-war reconstruction Germany the result was obvious and instantaneous. The shelves again filled with goods. <BR/><BR/>But there are two subtexts to the post, one stated, one implied. First, I am a vegetarian and oppose the slaughter of animals to feed humans when easy and cheap plant substitutes are available. So the thought of housewives rioting because the cannot get hamburger (at an admittedly below-market price) while Eurupeans were going hungry and millions of people were prematurely dead is comical to me. And also consider the fact that the housewives could have gone out to the black market and paid the market price.<BR/><BR/> The unstated subtext is that the nation was tired of war and ready to move on. And people were chafing under war time restrictions long before the end of the war. They believe that when the war was over and the boys came home, things would return to an uber-normalcy. They were asking for the impossible. Below market prices and bountiful supply. Later today I am going to the classic post-WWII film "The Best Years of Our Lives" at the local art theatre. It addresses some of the post war-economic issues, as well as the post-war human costs on returning soldiers and their families. My post and your comments will add a new dimension to the film.FOXP2https://www.blogger.com/profile/08457839518227249242noreply@blogger.comtag:blogger.com,1999:blog-16834274.post-475697889180667742007-11-11T08:56:00.000-08:002007-11-11T08:56:00.000-08:00"After the war ended in 1945, many controls remain..."After the war ended in 1945, many controls remained in place to reduce inflation and ease shortages."<BR/><BR/>the resulting big surprise:<BR/><BR/>"In 1947, meat was in short supply in America."<BR/><BR/>"If every family will reduce voluntarily its consumption of meat" - that has never happened in a rationed and price-controlled economy. It can only happen when price is allowed to reflect all costs (including futures cost plus profit). Notice that because we are paying higher prices at the pump - there are no gas lines. Which is worse, high prices (which many of Roosevelt's "New Deal" programs tried to attain) or shortage (which was the result of rationing and price controls).roopsaghttps://www.blogger.com/profile/16899115921046148484noreply@blogger.com