In response to spiraling energy prices that threaten to plunge their economies into a deep recession, European governments are embracing controls on prices and subsidies to energy users.
This is economic snake oil, and will only make already precarious conditions much worse. As Bloomberg's Javier Blas writes:
In the UK, incoming Prime Minister Liz Truss is drafting a plan to freeze utility bills, rather than allow the 80% increase proposed by the energy regulator. Other European countries are mulling a similar approach, or offering energy rebates and subsidies that will have much the same impact.
In replacing the market as leveler of supply and demand, policy makers will have to roll up their sleeves and decide who gets what energy, and when. If they don't, they'll resolve the price problem but exacerbate the supply crunch, dooming their plans to failure.
In other words, caps will result in shortages. And no amount of price controls can make more of any product appear on shelves, cupboards or gas storage facilities.
Shortages will lead to social unrest – exactly the sort of thing the price caps are intended to avoid.
And let's not forget that once governments start rolling out price subsidies, it's nearly impossible to end them (never mind the corruption, distortions and perverse incentives subsidies create).
And remember: The UK has an allegedly “conservative” government (or at least conservative by European standards). Publicly embracing policies that will destroy mark discipline – the old saying that the only cure for high prices is high prices – is in no way “conservative,” by any continent's standard.
But it seems to be the preferred policy of governments that fear not for the health and safety of the people, but for the health and safety of their hold on political power.
The opinions expressed in this article are those of the author and do not necessarily reflect the positions of American Liberty News.
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Liberals never learn.
Maybe it’s because they never do anything wrong, at least in their minds they don’t. That’s why they don’t understand why the people complain about what they do to the country. Everyone in the country thinks the economy is the number 1 problem they are facing, yet Biden and his administration think that the economy is doing great. They seem to be more worried about gender bending and handing out trillions of dollars for things that will not improve the plight of the average citizen. We need to purge them all from our government because they are going to bankrupt our country and then destroy our constitutional republic replacing it with their form of socialism.
If Biden was not so engaged in becoming the king of the world, he could open, the gas and oil production, in, the USA and release a little of the EU oil and gas burdens, even if he just sold it to the EU, and refused to let his own people have some relief, at lease the people we depend on in a time of a crises
would have some relief. But I am afraid, We The People of The United States will have to take care of Biden and his “Damn Democrats”, when we take them out of office when we elect real Americans, to run this great country, vote for the Trump.
Once the radical,liberal,socialists,get done spending everybody else’s money,there is no money left to spend. But they still don’t get it.
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Really, EU?
Price controls on energy
Bad scene
Dread your coming winter
Subsidies – raise taxes to give
back to the taxpayer.
It’s coming,biden fly’s to Detroit find out how many Ford plants will be moving back to Mexico, promises, Ford all the cheap illegal labor force that can handle but Ford replies it’s not the labor cost most of our plant operations they are automated it’s your tax programs, Oh. I see well then will get you 900 million for charging stations tax payer funded of course. Then
Democrat Gov. gretchen whitmer who is worried about the upcoming elections asked biden, all those people who died in my nursing home
nonsense can we keep them on the voting rolls, I’m sure they would have voted democrat biden answered immediately OK.Now we are funding with tax payers dollars what charging stations to get votes that should be paying for on their own, First the midterms then impeachements then jail.
If the Gov is going to provide taxpayer provided charging stations and free “fill ups”, then I demand they provide me with free gas.
FREEZE utility bills? You mean FREEZE the subjects of His Serene Majesty Charles III. That’s what ultimately will happen! Unless of course the Brits can find a way to assemble enough unicorn farts to burn. Solar and wind just won’t cut it, mates!
These Governments never, ever learn, no matter how much history shows them that Government subsidies and controls do not work.
Every time Government provides some subsidy, the target raises the price of goods/services by that amount. It is a net zero reduction and the consumer is caught in the middle paying more and more as Government subsidizes more and more and providers raise the prices accordingly.