WEBVTT - Biden's Price Controls BACKFIRE: Why They Always Fail! 0:00:00.160 --> 0:00:02.920 Hello, and welcome to another episode of the Mark Maas Show, 0:00:03.040 --> 0:00:06.680 where we're always talking about the decentralized revolution deglobalization. 0:00:06.800 --> 0:00:08.920 If you don't know what that means. The world is. 0:00:08.960 --> 0:00:11.560 Changing and we can see it changing everywhere. And I 0:00:11.680 --> 0:00:13.880 have a big show for you today so you can 0:00:14.040 --> 0:00:17.239 understand what's going on and more importantly, where we're going. 0:00:17.760 --> 0:00:22.320 And I want to talk about something that every government, 0:00:22.400 --> 0:00:26.760 every empire makes a mistake, they make at the end 0:00:26.880 --> 0:00:28.960 every single time. I want to break this down so 0:00:29.040 --> 0:00:32.279 you know what's coming, the dangers of this, and of 0:00:32.280 --> 0:00:34.400 course what we can do to counteract this. And so 0:00:34.440 --> 0:00:38.440 I want to talk about Biden's price controls backfiring and 0:00:38.520 --> 0:00:41.400 why they always fail. So we're going to cover the 0:00:41.400 --> 0:00:44.120 Biden administration's latest attempt at price controls. We're going to 0:00:44.120 --> 0:00:47.000 look back at failed attempts by governments to set price controls. 0:00:47.960 --> 0:00:50.440 I want to dive down deep into a moment in 0:00:50.520 --> 0:00:53.520 recent history when another country attempted the very same price 0:00:53.560 --> 0:00:57.520 controls that the Biden administration is imposing. And then I'm 0:00:57.560 --> 0:01:01.560 going to help set expectations in our current market environment 0:01:01.800 --> 0:01:04.000 to let you know what I think is about to 0:01:04.000 --> 0:01:05.240 happen and what we're gonna do about it. So We've 0:01:05.240 --> 0:01:09.440 got a lot to cover in this episode. I'm excited 0:01:09.440 --> 0:01:11.240 about this one, so make sure you. 0:01:11.200 --> 0:01:12.760 Tune in the whole time. Now, if you have to 0:01:12.880 --> 0:01:14.440 leave early, don't worry. I got your back. 0:01:14.560 --> 0:01:16.880 Just check me out on the podcast. Just search the 0:01:16.920 --> 0:01:19.880 Mark Mall Show on your favorite podcast player, or you 0:01:19.920 --> 0:01:23.000 can go to YouTube and go to the Market Disruptors 0:01:23.040 --> 0:01:25.000 YouTube channel where you can watch me and listen to 0:01:25.040 --> 0:01:27.759 me at the same time. Now, one thing, just real quick, please, 0:01:27.760 --> 0:01:29.640 if I can ask a small favor if you're listening 0:01:29.720 --> 0:01:32.360 on the podcast app, if you can just like and 0:01:32.440 --> 0:01:34.480 review the show, that means the world to me. 0:01:34.680 --> 0:01:35.480 More people would. 0:01:35.280 --> 0:01:37.960 See the show and I'd be much appreciated there. All right, 0:01:38.000 --> 0:01:42.399 So we're talking about, like I said, the inevitable, and 0:01:42.440 --> 0:01:48.080 it's inevitable because all throughout history, every government basically runs 0:01:48.160 --> 0:01:52.080 the same pattern. It's been documented a couple of times. 0:01:52.880 --> 0:01:58.400 There's uh, there's research on the average empire and the 0:01:58.520 --> 0:02:02.400 average democracy, which both interestingly run about a two hundred 0:02:02.440 --> 0:02:06.360 and fifty year time span. On the empires, they run 0:02:06.400 --> 0:02:09.760 it through like a six cycles. Democracy runs at eight cycles. 0:02:10.200 --> 0:02:12.360 But they're both about the same and it's something sort 0:02:12.360 --> 0:02:15.520 of like in the first stage, you have the eruption 0:02:15.800 --> 0:02:19.320 or the frenzy, and so you know, after a revolution 0:02:19.800 --> 0:02:23.200 comes this eruption, this frenzy. There's this new energy, this excitement. 0:02:23.200 --> 0:02:27.280 There's this birth of this new country or civilization or 0:02:27.360 --> 0:02:29.760 whatever it is at the time. So you have that 0:02:30.280 --> 0:02:34.639 next after that eruption, that frenzy, that excitement happens, then 0:02:34.680 --> 0:02:37.000 we start to have the growth. So then we start 0:02:37.040 --> 0:02:39.320 to have sort of the commercial growth happening there. So 0:02:39.320 --> 0:02:42.720 we're starting to see businesses sprouting up, growing, We're starting 0:02:42.720 --> 0:02:46.400 to see productivity things like that. Then that leads to 0:02:46.919 --> 0:02:50.560 wealth and influence because now we're creating, we're producing, we're 0:02:50.560 --> 0:02:54.880 providing value, we're exchanging, we have specialization of trade, and 0:02:54.919 --> 0:02:59.560 we have prosperity. But after that then we go to 0:02:59.800 --> 0:03:04.200 the age of like intellectualism. And so after you've taken 0:03:04.240 --> 0:03:07.200 care of your base needs, you have the money, you 0:03:07.320 --> 0:03:11.240 turn towards other things that are non economically driven. And 0:03:11.280 --> 0:03:14.680 so those typically go into like I said, you know, education, 0:03:15.360 --> 0:03:17.840 arts and things like that. And so we can certainly 0:03:18.280 --> 0:03:20.320 if you're listening along, if you're playing along, you can 0:03:20.600 --> 0:03:21.880 just see how the United. 0:03:21.680 --> 0:03:23.200 States has kind of fallen through this. 0:03:23.560 --> 0:03:25.480 And so then you kind of this age of intellectualism 0:03:25.560 --> 0:03:29.400 and this rise of these this technocrossy, which is, you know, 0:03:29.440 --> 0:03:31.040 these experts that want to tell you what to do. 0:03:31.760 --> 0:03:35.240 And then we go into what's known as the age 0:03:35.400 --> 0:03:42.880 of like speculation and sort of waste and gambling. Right, 0:03:42.920 --> 0:03:46.000 and so when you saw last year, about two years ago, 0:03:46.120 --> 0:03:49.280 there was you know, sixty eight million dollars for a 0:03:49.360 --> 0:03:52.040 JPEG piece of art from people, or there was an 0:03:52.120 --> 0:03:56.040 eighteen million dollar piece of invisible art. I don't even 0:03:56.080 --> 0:03:57.760 know if they got they got delivery of it or not. 0:03:57.800 --> 0:03:59.600 Maybe they got scammed because it's invisible. 0:03:59.600 --> 0:04:02.760 They don't know. You know, you see you know, three hundred. 0:04:02.520 --> 0:04:05.520 Five hundred million dollar yachts, five hundred million dollars houses 0:04:05.560 --> 0:04:08.400 and condos. I mean, it's insane we have that. Then 0:04:08.480 --> 0:04:12.600 we go into this age of dependence where people then 0:04:12.720 --> 0:04:16.960 become dependent on the government because they just can't afford 0:04:17.000 --> 0:04:19.640 to live on their own for whatever reason. Again, this 0:04:19.680 --> 0:04:21.440 traces back through all of history. You can see in 0:04:21.560 --> 0:04:24.200 the Roman Empire we had like the bread and circuses 0:04:24.240 --> 0:04:25.520 where the government had to kind of take care of 0:04:25.520 --> 0:04:27.840 the people so they wouldn't revolt. Of course you see this, 0:04:28.360 --> 0:04:31.040 yes in the United States today, where more and more 0:04:31.080 --> 0:04:32.760 people are depending on the government. As a matter of fact, 0:04:32.760 --> 0:04:35.720 we have more people dependent on the government today for 0:04:36.240 --> 0:04:38.920 housing and food than we did during the Great Depression, 0:04:40.120 --> 0:04:41.839 and so we have this high level dependence. You know, 0:04:41.880 --> 0:04:44.839 all this talk today of UBI universal basic income that 0:04:44.880 --> 0:04:45.440 we need to produce. 0:04:46.160 --> 0:04:49.920 And after dependence comes. 0:04:51.000 --> 0:04:56.320 Well, like slavery, after you become so dependent you can't leave. 0:04:56.720 --> 0:04:59.280 Then comes what they actually call bondage. And then you 0:04:59.360 --> 0:05:01.680 have this period of bondage, which is now the government 0:05:01.720 --> 0:05:04.440 has total control because you've given them everything, they have 0:05:04.480 --> 0:05:08.839 total control everything. And after bondage, we finally then have 0:05:09.000 --> 0:05:12.160 revolution again. All right, So this has been documented very 0:05:12.160 --> 0:05:15.239 well through thousands of years of history, and it typically 0:05:15.240 --> 0:05:16.760 follow about a twohun fifty yar time frame. Now if 0:05:16.760 --> 0:05:19.400 you're playing along, Yes, the United States was founded about 0:05:19.400 --> 0:05:21.599 two hundred and fifty years ago, and not just the United. 0:05:21.400 --> 0:05:23.279 States, but really even sort of Europe. 0:05:23.320 --> 0:05:25.240 I mean we had the French Revolution as well about 0:05:25.240 --> 0:05:27.240 two hund fifty years ago, and so we're starting to 0:05:27.240 --> 0:05:30.560 see this developed world starting to go down this path. 0:05:30.600 --> 0:05:30.800 Now. 0:05:30.920 --> 0:05:32.919 One of the things that's also part of this is 0:05:32.960 --> 0:05:35.680 as we kind of go from this period of abundance 0:05:35.720 --> 0:05:38.920 to dependence and then into bondage. Is one of the 0:05:39.040 --> 0:05:42.200 last things that the governments do in this bondage period, 0:05:42.279 --> 0:05:46.120 which is having control of everything, is trying to control 0:05:46.200 --> 0:05:47.360 the flow of money or what. 0:05:47.320 --> 0:05:48.640 We call capital controls. 0:05:48.920 --> 0:05:51.760 So they want to control how much money is moving 0:05:51.960 --> 0:05:53.880 in the economy, moving between people. 0:05:54.160 --> 0:05:56.800 More specifically, though, they want to control money moving in 0:05:57.279 --> 0:05:59.000 and out of the economy. 0:05:59.160 --> 0:06:01.039 So you can look at China for example, they don't 0:06:01.040 --> 0:06:03.560 have open capital markets. As a matter of fact, most 0:06:03.560 --> 0:06:06.440 countries in the world don't. You can hear obviously many 0:06:06.480 --> 0:06:08.280 stories and maybe you know them if you've been a 0:06:08.279 --> 0:06:13.440 migrant or immigrant. You know people escaping Russia or Iran 0:06:13.720 --> 0:06:17.360 or South Africa and having to basically leave all their 0:06:17.400 --> 0:06:21.560 assets with them. I've done an interview with yan Jan Pittzer. 0:06:21.600 --> 0:06:25.400 He's the co founder of swan Bitcoin. My good friends 0:06:25.400 --> 0:06:26.839 at swan biccoin. If you want to pick up bitcoin, 0:06:26.920 --> 0:06:29.600 go check them out. But he talks about how his 0:06:29.680 --> 0:06:32.920 family had to leave Russia and when they had to leave, 0:06:33.040 --> 0:06:35.719 I want to say, they were only allowed to bring 0:06:35.839 --> 0:06:37.440 like four hundred dollars was like. 0:06:37.440 --> 0:06:39.240 The max they could get out of their bank account. 0:06:40.240 --> 0:06:42.240 Don't fact fact check me on that it was something 0:06:42.279 --> 0:06:43.680 to that effect, but they could only bring a little 0:06:43.680 --> 0:06:45.680 bit of money. Growing up as a kid, one of 0:06:45.680 --> 0:06:48.200 my best friends family had come from South Africa, and 0:06:48.240 --> 0:06:50.560 coming from South Africa, they had to leave their money 0:06:50.560 --> 0:06:51.479 in South Africa too. 0:06:52.160 --> 0:06:52.680 I did an. 0:06:52.680 --> 0:06:57.280 Interview about two weeks ago with Rand Owner on a 0:06:57.279 --> 0:06:59.880 show called Crypto Banter, and he was talking about how 0:07:00.000 --> 0:07:01.920 his family he grew up in South Africa, but his 0:07:01.960 --> 0:07:05.520 family had to leave Iran and when they left, they 0:07:05.520 --> 0:07:08.479 had to flee for their lives. They were pretty affluent 0:07:08.520 --> 0:07:11.920 there and they had to they had to flee for 0:07:11.960 --> 0:07:13.600 their lives. And so they got all the gold that 0:07:13.600 --> 0:07:15.960 they owned and they melted it down and it went 0:07:16.000 --> 0:07:19.800 into like a barrel, and they went to the evacuation 0:07:19.880 --> 0:07:22.040 site to get on the plane to fly out. And 0:07:22.240 --> 0:07:24.160 they get to go to the point to get on 0:07:24.160 --> 0:07:26.640 the plane and the guy you know loading him says, 0:07:26.680 --> 0:07:29.080 hang on a second, like, you can't bring that barrel 0:07:29.120 --> 0:07:31.720 of gold. That's not going to go on the airplane. 0:07:32.320 --> 0:07:34.440 You got two choices. You can either leave it here 0:07:34.600 --> 0:07:36.720 or you can stay here. 0:07:37.000 --> 0:07:38.600 And so they left it there. They had to go. 0:07:38.640 --> 0:07:40.840 They d going to South Africa fleeing for their lives 0:07:40.840 --> 0:07:44.480 where they lived six years in tense. But the point 0:07:44.600 --> 0:07:47.840 is is that nations will always control the flow of capital, 0:07:49.120 --> 0:07:51.000 and like I said, and how those thing interact and 0:07:51.120 --> 0:07:53.800 what we're talking about today is a part of. 0:07:53.720 --> 0:07:54.960 This capital controls. 0:07:55.000 --> 0:07:58.440 But it's specifically about price controls, all right, So that's 0:07:58.640 --> 0:08:01.600 specifically what we're talking about, the price control aspect of things. 0:08:02.440 --> 0:08:05.240 And you can see how it's always there. Now, I 0:08:05.280 --> 0:08:07.280 want to tell you a story first so you can 0:08:07.320 --> 0:08:11.560 start to understand how all of these things come about, right, 0:08:11.600 --> 0:08:15.360 And really it's all summed up in one mental model, 0:08:15.400 --> 0:08:20.160 and that is the mental model of unintended consequences. Now, 0:08:20.240 --> 0:08:23.280 unintended consequences are when you do one thing trying to 0:08:23.280 --> 0:08:26.880 get one result or affect one outcome, but you get 0:08:26.920 --> 0:08:28.120 a whole bunch. 0:08:27.880 --> 0:08:29.320 Of other variables that popped up. 0:08:29.920 --> 0:08:33.080 It's sort of like if you watch mainstream TV, which 0:08:33.120 --> 0:08:35.080 probably none of you guys are, but if you watch 0:08:35.080 --> 0:08:38.080 mainstream TV's it's sort of like this dumpster fire of 0:08:38.320 --> 0:08:43.000 pharmaceutical commercials where especially if you're like watching ESPN or something, 0:08:43.040 --> 0:08:45.720 it's just like one like prescription med after another. It 0:08:45.760 --> 0:08:49.520 seems like, and at the end they tell you all 0:08:49.559 --> 0:08:52.760 the side effects that they could have. So you have heartburn, 0:08:52.800 --> 0:08:55.040 you could take this pill for heartburn, but you know 0:08:55.120 --> 0:08:57.480 it might give you headaches and fevers and sweats and 0:08:57.640 --> 0:09:00.680 you might die, right, And so those are unin tending consequences. 0:09:00.679 --> 0:09:03.840 They're trying to fix one thing, like heartburn, but instead 0:09:03.880 --> 0:09:05.520 they have to warn you that all. 0:09:05.360 --> 0:09:06.439 These other things could happen. 0:09:07.040 --> 0:09:09.400 But what was interesting about that is, if you remember, 0:09:10.040 --> 0:09:13.120 I'm sure you do, during the pandemic, you weren't allowed 0:09:13.160 --> 0:09:14.760 to talk about the vaccine at all. 0:09:14.800 --> 0:09:19.240 You could never talk that there could even potentially ever 0:09:19.360 --> 0:09:22.200 be one side effect of it. Never one. 0:09:22.800 --> 0:09:25.240 The reason why this is important is because in a 0:09:25.360 --> 0:09:28.760 complex system, when you affect, when you try to change 0:09:28.760 --> 0:09:30.520 one thing, you affect others. Now, I'm going to tell 0:09:30.520 --> 0:09:31.880 you a story about how this works, and I'm going 0:09:31.880 --> 0:09:34.160 to talk about price controls, capital controls, and what we're 0:09:34.200 --> 0:09:35.880 expecting and what we can do about them. But I 0:09:35.880 --> 0:09:37.600 gotta take a quick break. If you're just tune in, 0:09:37.600 --> 0:09:40.080 you're listening to the Mark Mass Show. We're talking about 0:09:40.120 --> 0:09:43.120 how price controls are at the end of every empire 0:09:43.360 --> 0:09:45.520 and democracy, and we're seeing the same things and what 0:09:45.559 --> 0:09:46.880 to do about it. I'll be back with more a minute. 0:09:46.880 --> 0:09:48.800 Don't go away, all right, Welcome back. If you just 0:09:48.840 --> 0:09:50.800 tune in, you're listening to the Mark Maas Show. We're 0:09:50.840 --> 0:09:55.280 talking about price controls, what happens at the end of 0:09:55.280 --> 0:09:57.680 an empire, at the end of a country, capital controls, 0:09:57.679 --> 0:10:02.360 price controls, and how the Biden administration price controls are backfiring, 0:10:03.480 --> 0:10:05.680 why they always fail, and what we can do about them. 0:10:05.800 --> 0:10:07.360 I want to just tell you a story real quick. 0:10:08.200 --> 0:10:11.080 Like I said, it was about the law of unintended consequences, 0:10:11.160 --> 0:10:13.559 and so when we try to change one thing and 0:10:13.600 --> 0:10:15.760 it has all these other outcomes and effects that we 0:10:15.840 --> 0:10:16.880 didn't intend on. 0:10:17.000 --> 0:10:19.960 So there's a story. It's called the cobra effect. 0:10:20.600 --> 0:10:23.760 Now, the cobra effect is a story from India, which 0:10:23.920 --> 0:10:26.800 has a problem with king cobra snakes and as you're 0:10:26.800 --> 0:10:31.000 probably aware, king koba snakes are very poisonous. Now, there 0:10:31.040 --> 0:10:34.160 was a problem and that there was too many of 0:10:34.160 --> 0:10:37.280 these king cobras and they were affecting the population. It 0:10:37.320 --> 0:10:39.640 wasn't safe, people were dying, etc. Things like that were happening. 0:10:39.720 --> 0:10:42.559 So the Indian government decided they would come up with 0:10:42.600 --> 0:10:45.640 a plan the plan would be is that what we'll 0:10:45.640 --> 0:10:48.679 do is we'll incentivize and it always starts with incentives. 0:10:48.960 --> 0:10:52.640 Will incentivize people to go kill these cobra snakes and 0:10:52.679 --> 0:10:54.160 bring them to us, and for every snake they turn 0:10:54.200 --> 0:10:56.360 in that we'll pay them for them. 0:10:56.600 --> 0:10:57.160 And so they did. 0:10:57.360 --> 0:10:59.520 And so people started, you know, going and killing snakes 0:10:59.559 --> 0:11:02.040 and bring them. And some people that were a little 0:11:02.040 --> 0:11:04.520 bit smarter and more ambitious than others decided, hey, here's 0:11:04.559 --> 0:11:07.280 a good idea. What we'll do is we'll start raising 0:11:07.320 --> 0:11:09.320 the snakes on our own. We'll start breeding them. So 0:11:09.360 --> 0:11:11.760 we'll just start set up our cages and we'll raise them. 0:11:11.800 --> 0:11:14.040 And they did, and they started raising them by the 0:11:14.080 --> 0:11:16.440 dozens and the hundreds or however many they were, and 0:11:16.480 --> 0:11:19.200 then they would bring in boxes at a time and 0:11:19.320 --> 0:11:21.240 just dump them on the counter and get paid out 0:11:21.240 --> 0:11:23.920 for it. It didn't take very long for the government 0:11:23.960 --> 0:11:27.600 to realize that this wasn't exactly what they had intended 0:11:27.960 --> 0:11:31.320 to happen, and so they said, hey, we're canceling this 0:11:31.360 --> 0:11:32.120 program altogether. 0:11:32.120 --> 0:11:34.080 We're no longer going to pay you for the king cobras. 0:11:34.360 --> 0:11:37.880 Well, then all these farms, all these people that were 0:11:37.920 --> 0:11:39.720 growing the cobras just to sell them to the government 0:11:39.760 --> 0:11:40.760 are like, well, what the heck are we to do with 0:11:40.760 --> 0:11:44.280 all these snakes? Then the answer was obviously nothing, so 0:11:44.320 --> 0:11:47.280 they let them all go. After the program was ended, 0:11:47.480 --> 0:11:50.720 India ended up with more snakes than they had originally 0:11:50.760 --> 0:11:53.160 had in the beginning. And that is the law of 0:11:53.200 --> 0:11:55.760 on intended consequences. Specifically, when you're working in a complex 0:11:55.760 --> 0:11:58.520 system like a society and you're creating incentives, people are 0:11:58.520 --> 0:12:01.400 always going to optimize for those incentives. 0:12:01.679 --> 0:12:03.439 Now we can see the same thing. 0:12:03.400 --> 0:12:07.800 Happening with price controls because it affects incentives and the 0:12:07.880 --> 0:12:11.520 law of unintended consequences. And so, as I said, we 0:12:12.160 --> 0:12:14.880 know that all throughout history it's always this last stage 0:12:14.880 --> 0:12:17.000 that the government's going to go to is trying to 0:12:17.000 --> 0:12:20.120 do that. Now we know we have dozens of examples 0:12:20.160 --> 0:12:21.480 I want to run through with you, but one of 0:12:21.520 --> 0:12:25.480 them might be, for example, like rent control. Now I 0:12:25.520 --> 0:12:28.840 live in southern California. I've been investing in southern southern 0:12:28.840 --> 0:12:31.840 California real estate for decades. I owned apartment buildings in 0:12:31.840 --> 0:12:35.040 Los Angeles, and Los Angeles has rent control, so I've 0:12:35.040 --> 0:12:37.280 had to deal with this before. Now, basically, what they 0:12:37.280 --> 0:12:40.600 say is that you can't raise your rent anymore. So 0:12:40.760 --> 0:12:42.720 me as an owner of a building, as a landlord, 0:12:42.720 --> 0:12:44.720 I can no longer raise my rent, which on the 0:12:44.760 --> 0:12:46.760 surface sounds pretty good if you think about it only 0:12:46.800 --> 0:12:51.200 from a first order effect. Unfortunately for most well unfortunately 0:12:51.240 --> 0:12:53.920 for us, all of us, and for the world, most 0:12:54.000 --> 0:12:58.360 people only think through first order effects, but didn't think 0:12:58.679 --> 0:13:01.520 through what happens to the second order and the third 0:13:01.640 --> 0:13:04.360 order and the fourth order effects. What we do know 0:13:04.679 --> 0:13:08.040 is that when they have imposed things like rent control, 0:13:08.480 --> 0:13:11.559 what we see is that we actually have a shortage 0:13:11.840 --> 0:13:14.880 of housing. As a matter of fact, every single time 0:13:14.960 --> 0:13:18.560 we see something like price controls, it leads to shortage 0:13:18.679 --> 0:13:23.440 of housing. Now why would that happen, Well, it's pretty simple. 0:13:24.440 --> 0:13:27.400 There's a couple of things. One, if I move into 0:13:27.480 --> 0:13:30.280 this cool apartment and I love my location and it's 0:13:30.320 --> 0:13:33.040 in this trendy area whatever, and I get my rent 0:13:33.080 --> 0:13:35.520 locked in, I no longer have to worry about the 0:13:35.559 --> 0:13:38.560 price of inflation. My rents locked in now. Once I'm 0:13:38.640 --> 0:13:40.679 in there, I don't ever want to let that go. 0:13:41.040 --> 0:13:43.200 As a matter of fact, as we can see after 0:13:43.200 --> 0:13:46.000 study after study after study that once somebody moves into 0:13:46.040 --> 0:13:49.280 a rent control apartment, they are very unlikely to ever leave, 0:13:49.440 --> 0:13:51.280 and a lot of times we'll pass that to a 0:13:51.320 --> 0:13:53.840 friend or a family member if they do want to leave, 0:13:54.520 --> 0:13:56.760 And so right off the bat, it takes all of 0:13:56.760 --> 0:13:59.920 this inventory off the market. Typically, in like lower income housing, 0:14:00.080 --> 0:14:02.480 there's a lot of turnovers, there's always opportunities to move, 0:14:02.760 --> 0:14:04.480 but in this type of a scenario, it takes all 0:14:04.520 --> 0:14:08.040 of that off the market. Another problem with this is 0:14:08.080 --> 0:14:11.240 that me, being an owner of a building there, I 0:14:11.280 --> 0:14:13.760 want to keep up with the maintenance on it. If 0:14:13.840 --> 0:14:15.440 you let the building get too far away, it can 0:14:15.480 --> 0:14:20.880 become very expensive. So, being the greedy landlord that I am, 0:14:21.520 --> 0:14:24.560 I want to maximize my profits. In order to maximize 0:14:24.560 --> 0:14:26.640 my profits because I'm so greedy, I want to keep 0:14:26.680 --> 0:14:29.640 the building up to date. Now, I would imagine you, 0:14:29.720 --> 0:14:31.240 if you were a renter, would like to be in 0:14:31.280 --> 0:14:33.720 a building that maintenance was up to date. I would 0:14:33.760 --> 0:14:37.200 imagine that you probably wouldn't want the roof leaking, right, 0:14:37.280 --> 0:14:39.040 probably wouldn't want the sidewalks crack. 0:14:39.120 --> 0:14:40.320 You wouldn't want that. 0:14:40.760 --> 0:14:43.320 But see, I wouldn't want that either as an owner, 0:14:43.520 --> 0:14:46.760 because if I let the ceilings leak, that's going to 0:14:46.840 --> 0:14:50.040 cause all kinds of other problems that it's going to cost. 0:14:49.800 --> 0:14:50.960 Me way more money. 0:14:51.000 --> 0:14:53.040 I'm much better off just to fix the roof right 0:14:53.080 --> 0:14:55.520 now instead of having to deal with the consequence later. 0:14:55.560 --> 0:14:59.440 But the problem is, if they cap the amount of 0:14:59.560 --> 0:15:02.920 price I could charge for the rent, I don't have 0:15:03.040 --> 0:15:07.880 the money to put into the maintenance. And if you 0:15:07.920 --> 0:15:09.440 know typically what I'd want to do is I'd want 0:15:09.440 --> 0:15:11.680 to fix it up. I'd want to Hey, let's paint it, 0:15:11.760 --> 0:15:14.120 Let's give it a new facelift, let's put a new 0:15:14.200 --> 0:15:15.720 roof on it, let's. 0:15:15.520 --> 0:15:16.240 Add a pool. 0:15:16.560 --> 0:15:19.160 But in order to add those things, it costs me 0:15:19.200 --> 0:15:21.440 more money, and so I might need to raise the 0:15:21.480 --> 0:15:25.120 rent in order to offset that. But if I can't 0:15:25.200 --> 0:15:26.160 raise the rent, then guess what. 0:15:26.560 --> 0:15:27.120 No maintenance. 0:15:27.160 --> 0:15:30.400 So now I'm forced to be a slumlord and you're 0:15:30.440 --> 0:15:31.840 forced to live in squalor. 0:15:32.200 --> 0:15:32.840 That's no good. 0:15:32.960 --> 0:15:36.360 So one, it takes away inventory. Two it forces things 0:15:36.400 --> 0:15:39.720 to fall into deterioration. The law of entropy takes over 0:15:39.800 --> 0:15:41.920 things that are left on their own fall to disorder. 0:15:42.200 --> 0:15:45.320 Now it's easy to maybe see that in the light 0:15:45.440 --> 0:15:48.200 of real estate, for example, but one of the things 0:15:48.200 --> 0:15:50.400 that I was looking at is what the Biden administration 0:15:50.440 --> 0:15:54.240 put through in what they call the Inflation Reduction Act 0:15:54.280 --> 0:15:56.080 the IRA. Of course, you know, you hear me talk 0:15:56.080 --> 0:15:58.320 about this all the time. How insane it is they 0:15:58.360 --> 0:16:00.640 call these things. They label these things is like almost 0:16:00.640 --> 0:16:04.040 the opposite of what they really are. And so somehow, 0:16:04.240 --> 0:16:06.760 by printing trillions of dollars, we got this massive amount 0:16:06.800 --> 0:16:09.520 of inflation. And so they create this Inflation Reduction Act, 0:16:10.960 --> 0:16:14.880 which is supposed to reduce inflation, hence the name, and 0:16:14.920 --> 0:16:17.200 they're going to do that by, yes, printing trillions of 0:16:17.200 --> 0:16:21.720 more dollars. Now, a logical person might go, well, wait 0:16:21.720 --> 0:16:23.400 a minute. Wasn't it the trillions of dollars that cause 0:16:23.440 --> 0:16:25.400 the inflation in the first place, So how could printing 0:16:25.400 --> 0:16:28.520 more trillions of dollars actually reduce the inflation? And if 0:16:28.560 --> 0:16:30.920 you ask that question then you would be right, but 0:16:30.960 --> 0:16:32.760 they would call you an idiot, So don't ask that question. 0:16:32.880 --> 0:16:36.280 But they have a better plan what they'll do, because, 0:16:36.320 --> 0:16:38.360 of course, yes, you're right, the trillions of dollars will 0:16:38.360 --> 0:16:44.200 add towards more inflation, but not if they cap the prices. 0:16:45.080 --> 0:16:47.760 M that sounds like a pretty good plan. So one 0:16:47.840 --> 0:16:49.080 of the things that we're going to do, and it 0:16:49.120 --> 0:16:50.400 was in this Inflation Production Act. 0:16:50.400 --> 0:16:51.680 By campaign on this. 0:16:51.720 --> 0:16:56.000 Hard is he is going to make drugs more affordable. 0:16:56.120 --> 0:16:59.120 Not the drugs on your street, but healthcare drugs, right, pharmaceuticals. 0:16:59.120 --> 0:17:02.840 He wants to make them more affordable. And so through 0:17:02.840 --> 0:17:06.120 the HAHS, they want to negotiate prices for the drugs 0:17:06.280 --> 0:17:09.199 to be cheaper. They want manufacturers of these drugs to 0:17:09.320 --> 0:17:12.320 sell them for cheaper. They want to tell them how 0:17:12.400 --> 0:17:16.600 much they can sell them for. Okay, Well, that sounds 0:17:16.640 --> 0:17:19.120 good on the surface. Again, that's a first order effect. 0:17:19.560 --> 0:17:23.560 But what if it costs more to make the drug 0:17:24.040 --> 0:17:27.879 than what I can sell it for. Well, then I 0:17:27.880 --> 0:17:30.560 guess I won't make it, because businesses are in the 0:17:30.600 --> 0:17:35.880 business of making money. Right, But what else happens? Could 0:17:35.880 --> 0:17:39.439 it possibly lead to higher rates of death? Could it 0:17:39.560 --> 0:17:43.280 possibly lead to lower quality of living? Well, these are 0:17:43.280 --> 0:17:45.040 some questions that we're gonna dig into. And I have 0:17:45.160 --> 0:17:46.480 the facts. I got the receipts, I. 0:17:46.480 --> 0:17:47.080 Got the data. 0:17:47.200 --> 0:17:48.639 We're gonna dig into this. I'm gonna break this down. 0:17:48.680 --> 0:17:51.920 We're gonna look at some other examples throughout history. We're 0:17:51.920 --> 0:17:54.200 gonna look at other countries that are doing the same thing. 0:17:54.400 --> 0:17:57.000 And then I'm gonna tell you, unfortunately what's inevitable. But 0:17:57.040 --> 0:17:59.680 the best part is what we can do about this. 0:18:00.000 --> 0:18:01.600 So I got a lot to cover. I gotta take 0:18:01.600 --> 0:18:02.479 a very quick break though. 0:18:02.520 --> 0:18:04.040 If you're just tuned in, you're listening to the Mark 0:18:04.080 --> 0:18:08.080 Moss Show, we're talking about the unintended consequences of price 0:18:08.160 --> 0:18:10.000 caps and what the Bide administration is doing. 0:18:10.160 --> 0:18:12.119 We be back with more in a minute. Don't go away, 0:18:12.240 --> 0:18:14.239 I've we hear back all right, welcome back. 0:18:14.280 --> 0:18:15.760 If you're just tune in, you're listening to the Mark 0:18:15.800 --> 0:18:19.439 Moss Show, We're talking about how price controls are always 0:18:19.440 --> 0:18:22.240 at the end of every empire, and I'm giving you 0:18:22.400 --> 0:18:24.400 exactly the play by play of what's happening now. We're 0:18:24.400 --> 0:18:26.880 talking about how the Biden administration put forward this IRA 0:18:27.240 --> 0:18:29.840 Inflation Reduction Act, and one of the first things they 0:18:29.880 --> 0:18:33.040 want to attack is the prices of drugs, prescription drugs, 0:18:33.359 --> 0:18:36.600 and we can already see how IRA drug price controls 0:18:36.800 --> 0:18:42.760 are already impacting its members research and development decisions. Specifically, 0:18:43.080 --> 0:18:47.480 seventy eight percent are expected to cancel early stage pipeline projects, 0:18:47.640 --> 0:18:50.439 sixty three percent plan to shift research and development away 0:18:51.280 --> 0:18:55.040 from certain medicines. Ninety five percent are expected to develop 0:18:55.280 --> 0:18:57.920 fewer new uses for medicines because of the limited time 0:18:57.960 --> 0:19:02.200 available before being subject to government price setting. So because 0:19:02.240 --> 0:19:05.200