The Great Toilet Shortage of 1973

My family has been in retail hardware for over 40 years, so I remember well the toilet shortage of 1973. Nixon had imposed wage and price controls because the inflation rate was an intolerable 4%, about what it is today. When you impose price controls you inevitably cause shortages. You cannot blame the manufacturers. If it costs you $1 to build a toilet seat, and you can only get $.95, then you stop your production line.

Of course there will be an illegal market. Or a partially illegal market where you buy a high margin product and get the toilet seats in the same order. This is illegal of course, but if you have hundreds of houses for which you cannot get occupancy certificates because you cannot get toilet seats, you do what you have to do. Henry Liu remembers it too: "the most bizarre example manifested itself in a shortage of toilet seats for new homes."

Often the powers that be want you to break the law. They want something to hold over you. This is what happened to Russian billionaire Mikhail Khodorkovsky.  Losing control of your serfs, even the wealthy ones, cannot be tolerated by Babylon the Great. So the advice I give to all us serfs is to obey, but keep a low profile.

Of course the lesson was learned from the toilet shortage of 1973. Wasn’t it?

MINSK, May 27 (Reuters) - Belarussian President Alexander Lukashenko said on Friday all price increases for consumer goods in the ex-Soviet republic must be agreed with the government, state news agency BelTA reported. 'Any price increases must be stopped,' Lukashenko told a government meeting, adding that only local governors and the prime minister could sanction price adjustments. Belarus devalued its rouble by 36 percent this week and Deputy Economy Minister Andrei Tur said on Friday consumer prices could rise by up to 39 percent this year. 

I guess not. There will be shortages in Belarus. The people knew something like this would happen and the shelves are already empty. I cannot see the US Government instituting price controls. But then again I did not foresee the 1.5 trillion dollar a year deficit either. It is not like Obama is instituting price controls over a large part of the economy.  Wait, hasn't Obama instituted price controls on insurance companies? Hasn't Obama proposed price control on Medicare payments to doctors far below the cost of providing that service?

I will blog soon about the great toilet paper shortage of 1973.