What happens when the price ceiling = $0?

Public toilets disappear. (John Cochrane, March 2021)

Evidence for UBI

Several studies of pilot programs show that giving people small amounts of money each month really helps them. (The Best Welfare Reform: Give Poor People Cash - The Atlantic, Do the Poor Waste Transfers on Booze and Cigarettes? No) One concern about giving people money is that they will "waste" it. The studies report little evidence of waste. Instead, recipients tend to make good decisions and the money helps them pay for unexpected expenses, improves their mental health, and gives them time and security to search for and take better jobs. 

The Editorial Board of the WSJ thinks that the study in Stockton is flawed and does not contain evidence that the UBI is a success. (WSJ, March 2021)

UBI stands for Universal Basic Income. UBI is the proposal that the government pay everyone a basic income. This basic income would be a guaranteed minimum for everyone and everyone would pay taxes on income greater than the guaranteed minimum.

Milton Friedman advocated for a Negative Income Tax (NIT) in the 1960s. The NIT would also guarantee a guaranteed minimum income.

Most observers agree that UBI or NIT addresses poverty more effectively and efficiently than the minimum wage. 

How do producers respond to higher prices?

Farmers are planting more row crops in response to higher prices. (WSJ, March 2020) The reaction illustrates that the quantity supplied increases when price increases, all else constant.

Has discrimination created a profitable business opportunity for Shaq?

Shaquille O'Neal is co-founding an ad agency that promises to be "strive for a talent pool that’s 75% “black, brown, women and LGBTQ." (WSJ, March 2021) Perhaps he is has found a competitive advantage. If discriminatory employment practices by other firms make the wages of black, brown, female, and LGBTQ employees less than the wages of white, cis-gendered, straight males, Shaq's firm would have lower costs than its rivals. His statement that most firms struggle to hit a 25% target makes me wonder if discrimination is reducing wages for the employees he seeks. One way to increase the employment of minority workers is to increase the wages paid to them. I also wonder if clever lawyers are preparing to sue the firm for discrimination against white, cis-gendered, straight males. 

What happens to price when demand increases and supply may decrease?

"The fresh leg in the energy market’s recovery from the coronavirus shock came as a blast of cold weather boosted demand for power and fuel, while threatening to knock oil production in Texas" (WSJ, Feb. 2021).

Why has the price of oil increased?

"Behind oil’s rally: Huge stockpiles that accumulated in the early stages of the pandemic have winnowed down faster than many people expected (WSJ, Feb. 2021).

What happens with the government rations a good

People complete to obtain the good when government determines who receives it first.

1. They lobby to move up the priority list (WSJ, Feb. 2021).
2. They use influence and connections to "cut" in line (WSJ, Feb. 2021).