Price Controls Are Popular Again

Price controls have traditionally been a policy that economists love to use as an example of unintended consequences, but new survey data suggests voters across the political spectrum increasingly support them. We dig into why both Republicans and Democrats are warming to the idea after years of frustration with higher prices. We also walk through what economic theory and history tell us about shortages, production incentives, and the longer-run effects of price ceilings. Finally, we wrestle with a harder question for economics teachers: if students understand the model but still support the policy, what exactly should we be trying to teach?

In this episode, we talk about:

* Why support for price controls now crosses party lines

* How years of higher grocery, housing, and energy prices may be creating “inflation fatigue”

* Why price ceilings can create shortages and change producers’ behavior over time

* Why understanding the economics of price controls doesn’t necessarily mean opposing them

* What economics teachers can do when students understand the model but reach a different policy conclusion

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This Week’s Drinks 🍻

Jadrian typically joins with a beer, but this time he’s gone with a Cuba Libre Zero. He’s finally taking advantage of the bar cart he was inspired to assemble by friend-of-the-show Brian O’Rourke. Matt went with a Trash Talk IPA from Yards Brewing, served in some appropriately celebratory business-school glassware.

Name That Stat 📊

In what may be a first for the show, we somehow both managed to get our stats this week! Matt shared the stat that drove our episode: the share of Republicans who now say they support government price controls. Jadrian went with a back-to-school theme and shared the percentage of college students who say they have changed their major or concentration because of job market worries.