In his November 2025 column, Bob Knakal delivers a direct warning to Mayor-Elect Zohran Mamdani: price-fixing has failed in every era, in every country, and under every political ideology. Drawing on personal experience from the 1970s and decades of analyzing markets, Knakal illustrates how policies intended to “help” consumers often create shortages, black markets, and long-term economic damage. His case study of President Richard Nixon’s wage and price controls underscores why artificially capping prices will backfire in New York just as it did nationwide.
Key Points from Bob Knakal’s Price-Fixing Analysis
Historic Failure of Price Controls – Knakal emphasizes that no civilization has ever made price-fixing work. Every attempt has produced shortages, cheating, misallocation of goods, and black markets—hurting exactly the people policymakers intended to help.
A Personal Memory of Economic Breakdown – As a child, Knakal spent entire Saturdays in gas lines during the 1970s—direct evidence of how Nixon’s policies created severe shortages and daily hardship for American families.
Nixon’s New Economic Policy Was Politically Popular… but Economically Disastrous – The 1971 wage and price freeze temporarily reduced inflation and boosted Nixon’s approval, but failed to address the real causes of rising prices: deficits, global instability, loose monetary policy, and collapsing productivity.
Controls Destroyed Market Signals – Businesses couldn’t raise prices to cover costs, so they reduced production. That created scarcity of everyday essentials—meat, gasoline, and consumer goods—while fueling black markets across the country.
The Rebound Effect Magnified Inflation – Once controls were lifted, prices snapped back violently. Inflation surged into double digits by 1974, compounded by the OPEC oil embargo, pushing the U.S. into deep recession.
The Ultimate Lesson for Modern Policymakers – Price controls mask inflation but never cure it. They distort supply, destroy incentives, and create political optics at the expense of long-term stability. Knakal argues that Mayor-Elect Mamdani is on track to repeat these same historic mistakes in New York City.
Frequently Asked Questions (FAQ)
Q1: What is Bob Knakal’s main argument against price-fixing?
He argues that price-fixing has never succeeded. It creates shortages, reduces supply, distorts markets, and ultimately results in higher inflation once controls are removed.
Q2: Why does Knakal focus on the Nixon era?
Because Nixon’s 1971–74 wage and price controls are one of the most significant and well-documented examples of nationwide price-fixing failure, culminating in stagflation and recession.
Q3: What real-world impact did Knakal personally experience?
As a boy, he spent hours in gas lines during the 1970s, a direct result of government-imposed price caps that discouraged production and created scarcity.
Q4: Did Nixon’s policy work at first?
Only cosmetically. Inflation slowed temporarily, but structural problems remained. Once controls loosened, prices surged dramatically.
Q5: How does this relate to New York today?
Knakal believes Mayor-Elect Mamdani’s push for aggressive price-fixing policies will replicate the same failures—reducing supply, harming consumers, and destabilizing the local economy.
Q6: What is Knakal’s larger economic message?
Real inflation is a monetary issue, not a “price” issue. Trying to legislate prices ignores fundamental economics and guarantees long-term harm.
