Economic theory is useful because it helps explain what’s happening in the real world, which is complex and opaque. Last week, in the course of a conversation on the federal price controls on products related to the current emergency (When Free Market Prices Are Banned, April 1, 2020), I wrote:
The next step, if history is any guide, is to try and correct the failure of previous interventions with another one (until the next one): forbid exportations.
Today’s Wall Street Journal writes (“Faulty N95 Masks Hamper Hospitals on Coronavirus Front Lime,” April 9):
The Trump administration said Wednesday that it would restrict the export of certain masks and gloves for four months.
The story is interesting because it further illustrates the continuation of the humongous government failure we are witnessing: a government adding one control after another, in raging disorder, with a view to correcting the failure of its previous interventions.
READER COMMENTS
Jon Murphy
Apr 9 2020 at 6:01pm
Indeed so. And what’s worse is when these interventions fail or fall short, their proponents act like there’s a completely free market. They ignore all the current interventions.
Matthias Görgens
Apr 11 2020 at 8:40am
Indeed. See another recent post, that mentions the supposed failures of neoliberalism in France of all places.
SaveyourSelf
Apr 11 2020 at 2:29pm
Yep. Nice work on that prediction btw.
Pierre Lemieux
Apr 13 2020 at 8:56pm
Thanks, SaveyourSelf. But that was not difficult, even if there is always a risk that other factors will intervene. All cases I have come across of governments that controlled the price of a given good ended up forbidden its export.
Comments are closed.