WaPo Columnist Tells CNN Costs ‘Might Actually Increase’ If Harris Installs ‘Soviet Union’ Style Price Controls: ‘Totally Unworkable’
Washington Post columnist Catherine Rampell cautioned that a proposal by Vice President Kamala Harris to regulate prices could backfire and likened it to policies previously seen enacted by authoritarian governments.
Harris rolled out an economic agenda in North Carolina on Friday afternoon in which she vowed to ban “price gouging” on groceries if she becomes president. Before the speech, Harris was attacked by Donald Trump for alleged policies viewed as “communist.”
Prior to Harris’s speech in Raleigh, Rampell told CNN News Central that one facet of the pitch to voters could have been lifted from the former Soviet Union.
In the Post on Friday, Rampell commented that Harris would likely use a bill introduced by Sen. Elizabeth Warren (D-MA) that would seek to ban raising prices during market disruptions.
“If your opponent claims you’re a ‘communist,’ maybe don’t start with an economic agenda that can (accurately) be labeled as federal price controls,” Rampell wrote. “We already have plenty of economic gibberish coming from the Republican presidential ticket. Do we really need more from the other side, too?”
CNN anchor Jessica Dean cited Rampell’s Friday column and asked its author why she was so skeptical of Harris’s proposal to fix prices after years of rising inflation.
“Well, first of all, nobody can explain what price gouging means,” Rampell said. “It’s like that old line about pornography, I know it when I see it in the sense that what does it mean to have an excessive price or an excessive profit margin?” Rampell responded. “That seems to be shorthand for a price or profit margin that bugs me. That seems too high. So, you know, it’s very hard to pin down what this would actually mean. She continued:
The particular way that this [bill] is written, which is likely to be the template for any proposal that Harris would eventually embrace, is especially bad in that it just bans excessive prices. Grossly excessive prices, grossly excessive profit margins, and says that the Federal Trade Commission can use any metric it deems appropriate to decide what that would mean. Which basically says, like, it’s not going to be markets, it’s not going to be supply and demand that’s determining how much your grocery store charges you for milk or dor eggs. It’s going to be some bureaucrat in DC, which seems like totally unworkable first of all, for the FTC to be deciding how much Kroger charges for eggs in Michigan.
But it also would be very bad for markets. We’ve seen this kind of thing tried in lots of other countries before – Venezuela, Argentina, the Soviet Union, et cetera – it leads to shortages, it leads to black markets, plenty of uncertainty. Beyond that, the specific way this bill is written might actually increase prices because of some of the other language in it. Things like requiring companies – public companies – to disclose in their quarterly earnings reports how they’re setting prices, which is a great way to help them collude which normally we don’t want them to do.
The devil’s in the details, I guess for that bill. But it’s really hard for me to imagine any form of legislation that preserves the spirit of what she’s proposing that would at best do nothing and at worst cause a lot of harm.
Watch above via CNN.
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