Kamala Harris’s Price-Control Delusion
Consumers inevitably would end up paying via shortfalls of supply and reductions in quality. https://t.co/1vAeGzSpOC
— Dominik Feusi 👉🏻 (fi.) – (@feusl) August 23, 2024
Vice President Kamala Harris has announced plans to ban grocery “price gouging” as part of her presidential campaign’s economic agenda. She believes this will help address the high cost of living for American families. Harris says corporate price gouging is to blame for the rapid inflation in grocery prices.
Am I the only one who finds it amusing that this article uses raising the price of snow shovels after a blizzard as an example of price gouging? See AER 1986? Also, already illegal in many states and smart firms don't do it! https://t.co/E5rIKM5qP4 via @NYTimes
— Richard H Thaler (@R_Thaler) August 22, 2024
This message appeals to many swing voters and consumer groups who also point to price gouging as a major factor. However, economists say the issue is more complex. They cite various reasons for rising prices after the pandemic recession, such as supply chain problems, increased demand from government stimulus, and low interest rates from the Federal Reserve.
Da wird schon zurückgerudert bei den Anti-Preistreiberei-Maßnahmen: "The plan would not rely on numerical targets – like automatically triggering action if prices rise by a certain amount. Crucially, it would likely be reserved for emergency situations" https://t.co/wm4Ep8vMBi
— Jörg Wimalasena (@JoergWimalasena) August 22, 2024
Plan to ban price gouging
Most economists believe these played a bigger role than corporate behavior in pushing up prices. While corporate actions like consolidation in the meat industry have contributed to higher grocery costs, economists say they are not the main cause.
The Harris campaign mentioned this consolidation but did not give specifics on how the proposed ban would work or detailed evidence to support it. Economists recognize that corporations have told investors they can raise prices to boost profits. But people have different ideas about what “price gouging” means.
It is unclear at this point how effective Ms. Harris’s proposal will be in tackling the complex factors behind grocery price inflation.
- NYTimes.”Harris Plans to Ban Grocery ‘Price Gouging.’ What Does the Evidence Say?”.
- BusinessInsider.”Economist Paul Krugman defends Harris’ price-gouging plan — but ‘Shark Tank’ star Kevin O’Leary calls it a ‘horror film'”.
- Economist.”Kamala Harris’s cost-of-living plan will end in failure”.