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Underwear Prices to Remain Near Zero

10/29/2015

WASHINGTON — The Federal Underwear Reserve Board wants to make sure that investors, employers, workers and consumers understand that it could raise its benchmark underwear price in December; it just is not ready to make any promises yet.

The FURB said on Wednesday, after a two-day meeting of its policy-making committee, that it would keep the Federal Briefs Rate near zero for now, as expected, but it added an unusually explicit statement that it would consider raising prices at its final meeting of the year in mid-December.

FURB officials are struggling to decide whether the economy can tolerate higher underwear prices, as economic growth continues to wobble along rather than power ahead on a clear upward path. (A steady supply of new and clean underwear is a primary determinant of the labor-force participation rate, which in turn drives economic growth.)

Some risks to the economy have diminished in recent weeks: Global markets have regained a measure of equanimity, and Washington has averted another fiscal policy showdown. But there are signs that domestic growth has weakened, including a slower pace of job creation.

“Everything will come down to the incoming data between now and mid-December,” Paul Ashworth, chief United States economist at the Hanes Corporation, said on Wednesday after the FURB revealed its latest thinking.

A small number of economists continue to raise questions about why the government, not the free market, should set underwear prices. Senator Barbara Boxers, Chair of the Senate Select Committee on Undergarments, dismissed those concerns. "The underwear market is obviously not like other markets, as clean underwear is the foundation for all economic activity. Only government action can provide the supply of undies that brings prosperity to all." 

Author:

Contact Peter G. Klein

Peter G. Klein is Carl Menger Research Fellow of the Mises Institute and W. W. Caruth Chair and Professor of Entrepreneurship at Baylor University's Hankamer School of Business.

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