The best thing about Kamala Harris’ policy debut last week was the reaction.
I don’t mean political backlash; Harris’ attack on “price-gouging” probably smart politically. It amplified her campaign message that she “fight for the people.” Economists underestimate the tools that will be used in the war as probably not important.
However, it is guaranteed most economists rolling eyes on government price controls. Few lessons from economic history are clearer than the futility of that approach, as Robert L. Schuettinger and Eamonn F. Butler put it in their 1979 book “Forty Centuries of Wage and Price Control: How Not to Fight Inflation.”
Amidst the brief debate about the private sector’s “greed” that Harris’s proposal provoked, we heard almost nothing about the public sector’s enthusiasm.
With almost any size, egg and others staples has become much, much cheaper over the last century. Today’s spike in food prices is just a statistical blip in a broader trend with well-known causes: the COVID-19 pandemic, supply chain snarls, bird flu and general inflation.
Meanwhile, goods and services whose value is blocked by government control or intervention become more expensive. The cost of college, health care, housing and other goods and services that are highly regulated by state and local governments have outpaced inflation, while cars, computers, clothing and other less regulated goods and services have generally increased. affordable.
The average inflation-adjusted tuition has been increase 130% since 1990. The cost of K-12 public education has jump also. National health expenditures to increase from $435 billion in 1970 to $4.5 trillion in 2022 (in for 2022 US Dollars). While the US population grew by 64% during that time, healthcare spending increased by 934%.
The left rarely portrays the rise as price-gouging or attributing it to greed. Of course, insurance companies are often blamed – usually for trying to cut costs – while pharmaceutical companies are often called bogeyman. And for-profit universities occasionally draw progressive ire. But the affordability crisis generated by the public sector more often gets a different response: consumer or provider subsidies, or debt cancellation at taxpayer expense.
Taxpayers who want to keep more money are called greedy, while those who want to take from them are called compassionate.
There is no punishment from the university that has spent a large amount on the administrator expense from the professor. Since the 1970s, the number of full-time administrators and other non-teaching professionals in higher education has exploded. Paul Weinstein Jr. of the Progressive Policy Institute meet that Caltech, UC San Diego and Duke have more non-faculty employees than students. The student to faculty ratio at Georgia Tech is 37 to 1, while the student to non-faculty employee ratio is 11 to 1, according to Weinstein; MIT has nearly nine times more non-faculty than faculty employees.
K-12 public schools are perform worse while spending more. Math, civics and reading scores among 13-year-olds have down. But all we hear from the Democrats is that we need to give more money to schools.
This is because the education sector is an important part of the Democratic coalition, which has become a political ATM for the party. decades. In every election cycle since 1990, teachers unions have given at least 93 cents of every dollar in political contributions to Democrats. Contributions from higher education and public sector unions in general follow a equal pattern. This does not include extras political activities boost the Democrats.
But I don’t think crass donor capture is the whole explanation – in the same way I don’t think conservatives defend the private sector just because it’s bought and paid for by the rich. Back at least to the philosopher John Dewey, education has been seen as a kind of secular, democratic, religious rite – and right. Like other rights according to progressives, health, education is considered something that the state should provide for the well-being of everyone. Concerns about cost are seen as heartless or heretical.
I obviously have philosophical disagreements with this worldview, but it is not a sinister or indefensible perspective. But so myopically obsessed with well-intentioned ends that its adherents are blind to means. Denizens of the public and non-profit sectors have become a breed new class who thinks it is or should be immune to market forces that tend to make almost everything outside the public sector more affordable over time.
The value of accurate prices is that they force the need for trade-offs. The Progressives’ approach is to start with the ends – what they think an accurate price (or wage) should be – and reverse-engineer the means to fit them. That has not been possible for 40 centuries.
