The Fed and Its Price Controls: Gov Is Consumed With This Stupidity

The Latest from Seton Motley | Less Government | LessGovernment.org
The Latest from Seton Motley | Less Government | LessGovernment.org
Four More Poor Years

We very recently noted that government fails to grasp some very rudimentary things.

Like: Stuff costs money.

Like: Price controls are exceedingly stupid.

The way a functioning economy works is: People provide goods and services – and trade them for money.

Production of goods – and provision of services – costs the producers and providers money.  The idea is: To sell them for more than they cost you.  In order to continue your existence – and make it worth your while.

Except the federal government remains steadfastly impervious to these realities.The federal government spent the last three-plus years mass-printing money.  Which – shocker – created massive inflation.

We’re now in Phase II of that stupidity: The Feds blame the private sector – for what they just did to it.

The Feds inflate the currency – then blame the private sector for increasing prices to reflect the inflated currency.

And then come the idiotic government price controls.  Which ignore glaringly obvious facts like: Stuff costs money.

Vice President Kamala Harris – Madame Inflation herself – is running for a promotion.  By, in part, screeching at grocery stores about “price gouging.”

Food prices have increased by 20% on her watch – because money was mass-inflated on her watch.

Oh: And grocery stores have a profit margin of between 1% and 3%.  So Harris picked perhaps the worst of all bogus boogyman to disingenuously attack.

But wait – it gets dumber: “Vice President Kamala Harris said she has a solution: a federal ban on price gouging across the food industry.”

Except an industry with 1%-3% profits?  Will no longer exist – with ANY price controls imposed.  Because duh.

But who needs food, really?

This price control idiocy – is not just for Harris campaign purposes.  It is already rampant in the Joe Biden-Kamala Harris mis-Administration.

The exceedingly awful Federal Communications Commission (FCC) – is looking at imposing price controls on the Internet.

And then there’s the exceedingly awful Federal Reserve.  Which is now looking at imposing price controls on debit card fee rates.

Except: Stuff costs money.  If The Fed imposes mandated caps on debit card prices?  Banks will have to either increase the prices of other services – or lose money.

And that’s even more terrible news for small banks. Because small banks can’t afford over-regulation the way Big Banks can.

The exceedingly awful 2010 Dodd-Frank bank law has thoroughly demonstrated that.

Dodd-Frank has spent the last decade-plus mass-over-regulating the banking sector.  And in the process – murdering thousands of small banks.

Which has been great for the Big Banks.  Their small bank competitors die – and they buy up the carcasses for pennies on the inflated dollar.

But thousands of small banks dying – is awful for average Americans.  Less banking options – means less banking opportunities.

As their competitors ate murdered, the Big Banks can afford to be more and more choosy about with whom they do business.  And average Americans – are the first ones thrown overboard.

The Fed’s debit card price control imposition – would be the latest step in a long government march to de-banking average Americans.

The Fed claims its alleged authority to impose its price controls – is derived from Dodd-Frank.

Except Dodd-Frank doesn’t expressly empower the Fed to impose its price controls.  And in our post-“Chevron” world?  The government’s power must be expressly granted by law – not simply grabbed at will by government.

What’s Chevron?  Glad you asked.

“Chevron” refers to an exceedingly awful 1984 Supreme Court ruling – Chevron v Natural Resources Defense Council.

Which bizarrely gave the federal government’s millions of unelected bureaucrats the ability to set their own power limits – totally unconstrained by actual law.

Shocker – no bureacrat ever found any limit to his/her power.

This past June, the Court reversed its 40-year-old idiotic ruling – and restored some semblance of law to our order.

Which means the law has to expressly empower the bureaucracy – for the bureaucracy to wield the power.

The Fed has cited Dodd-Frank as the font for its debit card price control authority.  Except Dodd-Frank grants no such authority.  So The Fed does not have the authority.

Which is a good thing – for at least two reasons.

It should constrain The Fed.  And constrained bureaucracies are always a good thing.

And it should constrain The Fed – from imposing really stupid price controls.

And not imposing price controls – is always a good thing.

Editor’s Note: This first appeared in The Economic Standard.