New Inflation Numbers Show Folly of Price Controls
Today’s release of inflation numbers by the Bureau of Labor Statistics confirms that the loudest voices in favor of price controls are usually the least informed. Health care critics never tire of complaining about rising prescription drug costs and greedy doctors. But the facts tell a different story.
The Consumer Price Index (CPI) for all items rose 1.3 percent last month and at the highest annual inflation rate in 40 years, 8.5 percent. If you wanted a new car, it cost you 12.6 percent more than last year. And the higher prices to fill it are not your imagination—gasoline is up 48 percent for the year, 19.8 in the past month, indicating that while the war has certainly had an impact, the rising price per gallon is not all Putin’s fault. Food to eat at home was 10 percent higher. And if you wanted a pet to ease your anxiety about rising prices, it cost you 8.1 percent more than a year ago.
Now compare the much-maligned prices of prescription drugs. They were down 0.2 percent last month and only up 2.2 percent for the year. Avaricious physicians only got 0.7 percent more for their services than last year.
So, the next time Bernie Sanders, Elizabeth Warren, and their fellow travelers ask for health care price controls and government “negotiation” (a.k.a. price setting), make sure to refer them to the latest BLS Economic News Release, Consumer Price Index Summary. It makes fascinating, informative reading.