The Return of Price Controls

Daniel Gross notices that price controls have gotten more popular recently, even in non "anti-market" states like Russia, China, and Argentina. Gross' conclusion:

Price controls, food subsidies, greater state control of the economy, a governor named Romney running for president. It seems like 1967, not 2007. And of course, price controls create powerful disincentives for people and companies to invest in the sort of production capacity that could, in time, create the sort of competition that would help bring prices under control. This isn't a good time to invest in a cattle farm in Argentina, a cheese plant in Russia, or a gasoline refinery in China. If the price controls continue much longer, these economies could see the revival of another distressing factor that defined socialist economies in the 20^th century: rationing.

Price controls are always enacted by desperate politicians trying to save their own skin. They are never enacted for economic reasons. For very short periods of time, they can (sort of) work, but this success is always very short-lived. Politicians don't care, because they are usually out of office by the time things get really screwed up. But citizens should care very much, because they always have to live with the aftermath.

It's a shame that these lessons will have to be re-learned. But it appears that that's what's going to happen.