A former top official for President Joe Biden has trashed Vice President Kamala Harris’ plan to impose price controls on food makers and grocers as her solution to inflation, implying that the socialistic policy would not solve the problem but would actually make the situation worse for Americans.
Harris unveiled a proposal that would enable the Federal Trade Commission (FTC) and state attorneys general to impose substantial fines on grocers and suppliers if their prices are deemed excessively high. The Biden-Harris Administration has consistently attributed the nation’s inflationary pressures to “corporate price gouging” rather than their economic policies of high spending during times of disrupted supply chains.
Onetime Biden White House Chief of Staff Ron Klain told CNBC’s “Squawk Box” hosts on Saturday that “inflation came from a lot of places.” He added: “And I think having a federal price gouging law was not going to solve inflation. But consumers deserve not to be gouged. That’s just fair.”
“But where’s the evidence of gouging, Ron? When supply goes down, demand goes up — we’ve seen this movie before. I was around for Nixon’s price controls,” co-host Joe Kernen pushed back. “It’s the worst thing you can do. If you artificially control a price and keep it low, then competitors don’t come in to increase the supply and it just exacerbates the situation.”
Klain responded by claiming that former President Trump’s economic plans would be worse for the country, even though his policies kept inflation low, raised wages for most American earners, and grew the economy.
“But I agree, I think what we really need to do is to further smooth out supply chains…fix the supply chain problems we did in the Biden-Harris administration with improving the efficiency of our western ports to make them operate more efficiently and get goods into our country more quickly and avoid things like the freight rail strike that President Biden prevented,” Klain said.
“And so, I think you’re going to see an administration devoted to bringing down costs and also putting a little more money in middle-class families’ pockets,” he added.
Other leftist voices have lashed out at Harris’ plan.
“Food prices have surged by more than 20% under the Biden-Harris administration, leaving many voters eager to stretch their dollars further at the grocery store. On Friday, Vice President Kamala Harris said she has a solution: a federal ban on price gouging across the food industry,” CNN economics reporter Elisabeth Buchwald wrote.
“There’s just one issue: Harris’ proposal could create more problems than the one it’s trying to solve, some economists say. Gavin Roberts studied anti-price gouging laws some states passed during the pandemic. One of the biggest effects he observed, especially at grocery stores, was that these laws motivated people ‘to go buy goods more than they would if prices had risen,’” she said.
“When prices are high, in most cases, the best policy action in response is actually taking no action, Roberts, the chair of Weber State University’s economics department, told CNN. That would cause consumers who are deterred by, say, high prices of beef, to instead purchase another type of meat or protein. That helps keep beef on the grocery store shelves for people who want it enough to pay the higher prices,” the reporter said.
“And while Harris claims her proposal ‘will help the food industry become more competitive,’ Roberts said it would do just the opposite,” Buchwald noted.
The Washington Post Editorial Board was not any kinder.
“Vice President Kamala Harris’s speech Friday was an opportunity to get specific with voters about how a Harris presidency would manage an economy that many feel is not working well for them,” the board said on Friday. “Unfortunately, instead of delivering a substantial plan, she squandered the moment on populist gimmicks.”
“One way to handle it might be to level with voters, telling them that inflation spiked in 2021 mainly because the pandemic snarled supply chains, and that the Federal Reserve’s policies, which the Biden-Harris administration supported, are working to slow it,” the editorial board said. “The vice president instead opted for a less forthright route: Blaming big business.”
