Ford for President Townhall Thread

[bullmoose88]

What are your thoughts on price ceilings and price floors and their possible positive and/or negative effects on the national economy?

[bullmoose88]

What are your thoughts on price ceilings and price floors and their possible positive and/or negative effects on the national economy?

Easy question.  Price controls=bad.

If you oppose price controls, why, then, do you support a price floor on labor?

[bullmoose88]

Wages are prices (obviously). Why make the Atlasian worker less competitive against those abroad? I ask again, are you for or against price controls?

[bullmoose88]

Wages are prices (obviously). Why make the Atlasian worker less competitive against those abroad? I ask again, are you for or against price controls?

No, wages are not the same as prices.  They involve a great deal many more factors than the prices of goods and services.  And there has to be a social minimum for wages.

Yes, wages are, simply put, the price of labor. Why Mr. Ford or anyone else can trust the market to set the price of other inputs, and not labor, boggles me.


So either Mr. Ford will be consistent to his principle of no price controls and toss out this silly notion of a minimum wage, or state plainly that he does not trust the market to set all prices.

[bullmoose88]

Wages are prices (obviously). Why make the Atlasian worker less competitive against those abroad? I ask again, are you for or against price controls?

No, wages are not the same as prices.  They involve a great deal many more factors than the prices of goods and services.  And there has to be a social minimum for wages.

Yes, wages are, simply put, the price of labor. Why Mr. Ford or anyone else can trust the market to set the price of other inputs, and not labor, boggles me.


So either Mr. Ford will be consistent to his principle of no price controls and toss out this silly notion of a minimum wage, or state plainly that he does not trust the market to set all prices.

Like in other areas of the economics, I take the old Reagan mantra: Trust but verify.

Trust the market, but make sure there are safeguards in place to prevent market failures.  I'm a pragmatic person, not an ideological one, and if my answers appeat to be inconsistent, its that consistency isn't the goal, efficacy is.

Let us examine, in practical terms, why floors on wages are effective, but caps on wages aren't and neither floors nor caps on prices are effective.

The effect of a wage floor is to bring up the wages of those at the bottom of the pay scale.  This results in more spending by these people, who have a very low savings rate, and more spending creates jobs and wealth and yada yada yada.  Minimum wages also create incentive to work.  If the living you can earn with a minimum wage job is greater than the living you can earn on welfare, people will choose to work instead of going on welfare.  I'd prefer people have a job, even a low paying job, than just sit around on their couch doing nothing, which is what they'd be incetivised to do if we got rid of minimum wages and you were getting $2 an hour to clean the fry grill at McDonald's.  Maybe you are excited at the possibility of the government seeing the cost of welfare programs skyrocket, but I'm not.  This kind of "price" control has a positive effect on the economy.

The effect of a floor on prices is to make it harder for people at the bottom fo the apy scale tog et by.  The New England Dairy Compact is a good example of a price floor.  This price floor increases the price of milk, and ultimately hurts the poor and hurts any ther industries that the poor would patronize.  This kind of control has a negative effect on the economy.

The effect of a price cap is to reduce supply and create shortages.  We tried price caps on gasoline in the 1970s, and the result was disaster, and everyone was hurt by the shortage.  Again, this kind of control has a negative effect on the economy.

Part of it is being able to distinguish which kind of economic regulations work for people and which end up hurting most people.  You can't be worried about consistency, because we're running an economy not a philosophy class.  This isn't an intellectual excercise, it effects real people.

I oppose controls on retail prices because they don't work.  That's why i said I don't support price controls.  However, wage floors do work (and I think we'll see that when the GM releases his economic data from the last 12 months, the regions that didn't adopt a decent minimum wage quickly have theweakest economies).

I appreciate the thoughtout response, while it may seem that I am playing the role of the heckler, I really just want detailed answers. For that, thanks.

But I do have another question, it seems to me, at least after glancing at your response...

First do you agree, that while the minimum wage will be beneficial for some (namely those now finding work or being employed at the floor rate) but not others?
Do you agree that a minimum wage will force some firms (granted not all, but at least some) to fire some workers, or not hire new workers because of the floor? What happens to those people (the recently unemployed or those who cannot find those entry level jobs), if you agree that they exist, under a Ford Administration?

It also seems that there will be some inflationary effects to this policy (unless firms fire enough people to be spending the same amount of money on labor, just on less workers), in that since more people can spend more money, driving prices upward, would you agree?

Finally, would you agree or disagree that such an inflationary result would decrease the real wages of anyone not seeing a similar or greater raise in wages/salary as those going from the lowest market price, to the government mandated floor?

I am appreciative of your candor and the depth to which you have responded thus far. Much respect.

[bullmoose88]

Fair enough Mr. Ford,

We'll agree to disagree about the big issue, but I liked the reasoned approach to it. If all of your decisions are as well thought out, you'll be a damn fine president.