There is probably no bad idea in economics that has been more thoroughly debunked than price and wage controls. Many in our population have caught on to the fact that price controls are a bad idea. This attitude was expressed by Carol McDermott at Ruthie’s restaurant when she was asked if she favored price controls. Her response: "Do you want to turn to socialism?"
There is more than 4,000 years of recorded history of governments the world over trying to reduce prices with price controls. Hundreds of cases of price and wage control show a flawless record of failure. The results have always been the same. The market has always responded with shortages, shoddy goods or services, and sometimes complete elimination of the product or service in question.
Never in recorded history has there been a satisfactory result of the customers getting a quality good at a reduced price due to price controls.
Yet, in the face of this mountain of evidence American politicians still try to install price controls in selected situations. We have rent control in places like New York City. This has caused people to quit creating rental property and caused the existing stock of rental housing to deteriorate as landlords try to compensate for rent control by spending less on maintenance.
In the 1970s, we had price controls on gasoline which resulted in very long lines at each gas pump. The minute these controls were lifted the lines went away. This experience has stuck with the American people so much that no one has seriously considered controlling the price of gas since then.
Another case of price controls involves the payment to doctors for Medicare patients. This is resulting in the doctors limiting the number of Medicare patients they will see. As a result of this price controlling plus burdensome regulations doctors are shortening their careers by early retirement and many potential doctors not going into medicine in the first place. In the case of medicine the destruction caused by price controls has been slow because existing doctors have so much invested in their careers and are slow to give them up.
Florida has been limiting what insurance companies can charge. The result has been a mass exodus of insurance companies from Florida .
The answer to reducing prices is mainly to introduce competition and eliminate regulation. There are two things that will lower all types of insurance costs in Florida: Let people sell insurance from out of state and quit mandating that people buy coverage they don’t need or want.