How did the Conservatives get the idea that price controls encourage whip inflation?

The way to lower prices, always and everywhere, is to divide production among as many hands and machines as possible. The latter explains why today's poor have access to technologies that the richest of the rich had no access to even ten years ago, and why those same poor have ample access to clothing in a wide variety of styles and sizes that the rich could not have even imagined throughout much of ancient and modern history. It is surprising that something so basic needs explaining, but it is needed.

To understand why this is so, one must remember the indelible belief among conservatives that the path to lower prices is paved by the Federal Reserve's so-called “toughness” in the form of higher interest rates. Price controls to drive up prices? Can the right be serious?

Moreover, governments have no resources. The idea that the Fed can “tighten” access to credit originated in the private sector at any time and in any place is pure fantasy.

Yet conservative Fed watchers continue to cling to the fiction that the Fed is the keeper of so-called “price stability.” A recent conservative editorial bizarrely claimed, “Falling inflation shows that the Federal Reserve's monetary medicine has worked.” Really? How?

The puzzling thing about conservatives is that they nod smugly in agreement when you say that artificially cheap (through government regulation) housing, bananas, and Ferraris will cause all three to disappear from the market. But when the Fed tries to control market prices, the government can not only make money and credit “easier,” it can also make money and credit “tighter” when necessary. When it comes to the Fed, all the sacrosanct laws of the market disappear from the minds of conservatives.

This is found in conservative thinkers who supposedly associate falling prices with interest rate controls. However, the Fed cannot “restrict” access to money or credit. Those who are productive will always have plenty of money and credit.

This is especially true in a global economy where the US dollar is the primary currency. Dollars circulate in enormous quantities around the world, and yet we are to believe that the Fed's attempts to reduce the so-called “money supply” will overwhelm a globalized dollar market?

The same editorial that attributed the lower prices to the Fed and Jerome Powell also suggested: “Markets seem to think inflation is stoked and the Fed should be worried that it is too late in cutting rates.” Aside from the Fed’s alleged price controls, no marketslowered prices. And now we are to believe that the markets are not just stupid once, but in fact twice; that they have been tricked by price controls in the form of high interest rates, which will soon be followed by further market interventions in the form of lower interest rates?

More realistically, stock prices rose impressively and in line with the Fed Interest rate increases. One of the catalysts for rising markets when the Fed was targeting higher interest rates was AI leader Nvidia. Its rising valuation and increasing realization of AI's potential led to a surge in investment in the epicenter of AI (Northern California). In short, real market forces greatly overwhelmed the Fed's interventions in the form of rising investment in a new technology and rising valuations of the corporate pioneers of that technology.

Back to the actual prices of goods, services and labor, the conservatives disappoint once again. They don't just attribute falling prices to price controls, but they suggest that the frenzied production that comes from global cooperation doesn't matter. Governments around the world could shut down production for weeks and months in response to a virus that has politicians (and too many conservative pundits) panicking, without fundamentally changing the prices of anything in the short and long term.

And that's the really sad thing. It's not just that conservatives situationally confuse price controls with inflation, but that they insult the genius of globalized trade by arrogantly assuming that once the panic has given freedom back to producers, they should quickly return to the levels they were at before they were given freedom back.