Problems are for Solving

Dry-Cleaning Economics in One Lesson| The Foundation for Economic Education: The Freeman, Ideas on Liberty
Another day, another news story about economic wackiness. Gas prices rise, the dollar sinks, and stores are limiting rice sales. What could be next? Clothes hangers.

Yes, clothes hangers. Marie Sledge, co-owner of Rome (Georgia) Cleaners, states, “Hangers last year at this time were $28 a box, where now they are $56.” News reports indicate that cleaners in Springfield, Missouri; Birmingham, Alabama; and Harlem are also encountering doubling hanger prices. In response, many cleaners are posting signs in their shops encouraging customers to return used hangers.

Hangers can’t, even if combined with government subsidies, be converted into biofuels. So what is causing the rapid increase in hanger prices? Government, of course, though in this case it’s the trade bureaucrats at the Department of Commerce rather than the folks behind other debacles in the news these days.

In a March 19 news release the Department of Commerce “announced its affirmative preliminary determination in the antidumping duty investigation on imports of steel wire garment hangers from the People’s Republic of China.” Translation: The government will now impose tariffs on hangers imported from China. The tariffs vary by supplier, ranging from a lightly starched 33 percent to a truly stiff 221 percent. With hanger prices potentially tripling because of tariffs, it’s easy to understand the disruption facing dry cleaners.

As one who uses dry-cleaners a lot, I found this examination of how unintended consequences of government action affects our day to day out-of-pocket outlays. Enjoy!

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