Financial Cents ( Blog )

History, Venezuela and Boston

History is replete with examples of various countries, including the US, implementing price controls and its debilitating effects. The end result is always the same. Shortages. This only makes sense. If you limit what producers can charge and/or profit from a particular product, good or service, less of it will be produced or provided. Governments often resort to this to placate citizens reeling from the effects of inflation caused by governments in the first place.   Fortunately there has been numerous books and studies done by prominent economists over the centuries documenting the disastrous results of price controls. But we need not look back in history to see the examples of debilitating price controls. Simply look south to Venezuela. The economic crisis in Venezuela is from years of price controls, government subsidies and socialist policies that have distorted market forces for years. Venezuela is the perfect example of the consequences of anti-market, governmental policies.   So why then is Boston via the Boston City Council on the verge of voting for and implementing price controls on rental properties throughout the city? Boston has rebounded more robustly than most cities across the country from the great recession of […]