A bit of breaking news came across the wire on Wednesday night. You may want to sit down for this, but Kamala Harris finally has an official policy proposal. Given that she’s been in the race for nearly a month, did she cook up some brilliant, novel approach to the issues Americans care about the most?
Nah, she just microwaved some communism and proposed price controls.
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Harris will propose, what her campaign bills as “the first-ever federal ban on price gouging on food and groceries—setting clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive corporate profits on food and groceries.”
— Philip Melanchthon Wegmann (@PhilipWegmann) August 15, 2024
Of course, the press lapped it up, with several journalists on social media treating it like Harris had just stepped down from upon high to present the Ten Commandments. Nothing matters on that front. If the Harris campaign says it, it’s going to be spun as “joy” and “optimism” wrapped in abject brilliance.
For normal Americans, though, these policies have consequences, and price controls would be an economic disaster. One only needs to look at the history of the Soviet Union to understand that, or if you’d like a modern day analogue, Venezuela. When government is used to cap the prices, from groceries to rent, it inevitabily leads to stagnation or even regression in the market.
Whatever lower prices exist in the short-term are nothing compared to scarcity that is caused in the long-term. Who cares if bread is “cheaper” if there’s none available because production is quashed with price controls? And who cares if rent is “lower” if you end up with a massive shortage because no one will invest in new housing?
With that said, it’s worth asking if that’s the real issue here. Here’s another theory as to why Harris is announcing this.
Price controls are terrible policy, but their purpose here is political not economic. Harris is trying to rewrite the history of the Biden-Harris years, and to charge that anyone who opposes her idea on the merits wants to keep prices high. It’s grotesque. https://t.co/CeeJ4oWuuj
— Charles C. W. Cooke (@charlescwcooke) August 15, 2024
Proposing a policy and following through with it are two different things. Harris clearly wants the talking point of claiming Republicans don’t want to take action to bring down prices, and the press are absolutely going to play along.
It’s worth nothing how contradictory that is. On the one hand, the Biden-Harris administration is claiming that inflation has been solved. On the other hand, they are saying Republicans want to do nothing to solve inflation. In a saner media environment, such an idiotic inconsistency would be lambasted as unserious. Unfortunately, we do not live in that environment.
In short, the best case here is Harris is pumping out communist drivel to win the election without any intent of actually enforcing whatever executive order she’d release. The worst case is she’s serious and the entire US economy ends up looking like something that would make Nicolas Maduro blush. Neither is a good option.
