Joe Biden (left) and Kamala Harris (right). New York Post/Shutterstock.
Kamala Harris has suggested price controls for groceries raising major concerns. New York Post. The plan would ban what the Harris campaign describes as "price gouging" though price gouging is already illegal and is not the cause of higher grocery prices, according to Senator Tim Scott. Grocery stores generally have low profit margins anyways and price controls would hurt them. Government policy is responsible for much of the prices increase. An economist Samuel Gregg said price controls were "economic lunacy" and only cause "shortages and misery".
Republican Candidate Donald Trump blasted the policy.
As a full disclosure I do currently work in the food industry and as such I am not unbiased on this issue. Kamala Harris and the Democrats are currently very hostile to my industry, despite the support they get from our unions and this action would hurt me directly besides the obvious economic problems it could cause. I could lose my job because of the actions of a potential Harris presidency. I am considering donated to both Donald Trump's candidacy and my company's SuperPAC just because of this policy.
I am not an expert on economics but I do understand that price controls are absolutely terrible. Price controls often cause shortages as they increase demand for products beyond what can be produced. This is what happened during the 1973 oil shock. Prices were kept artificially low and it lead to long lines and empty gas stations. It was a disaster and not something we should ever try again.
They also lead to black markets. Indeed, I would suggest buying a large amount of food if such a policy is ever created as you could easily turn a major profit by selling your food under the table. When prices are low and demand is insane, anyone that owns the commodity in question can make a mint buy charging what the market demand can handle. That would be fine but black markets always lead to violence and danger.
What is crazy about this is how unnecessary this is. Prices are not high due to price gouging. They are high due to economic policy, inflation and, in some cases, environmental conditions. Indeed, egg and chicken prices spiked for awhile due to bird flu and beef prices are a product of a smaller herd and the impact of droughts a couple years ago.
But the main cause is the inflation caused by government policies. When you print billions of dollars it causes the value of the dollar to plummet and that's the main reason why grocery prices are high. It's not price gouging, it's because the dollar is worthless now because they printed so much of it. Price controls are a solution for a problem that the government caused themselves and will only make the problem worse.
They are picking the absolute worst commodity to do this with. When they tried to do it with oil back in the 1970's it caused shortages but people were able to survive. If they do that with food? My suggestion again, is to buy food. Because otherwise there is a chance you will starve. It's that bad.
I understand why Harris is doing this. She understands that inflation is the biggest problem for her and she really can't avoid blame for it. So she wants to distract against it by blaming grocery stores and proposing this horrible policy. It's all terribly cynical.
The good news is that anyone with an even basic knowledge of economics will now no longer be voting for Kamala Harris. The bad news is that most people don't actually have any knowledge of economics at all. But I do think this will damage her. There are going to be a lot of corporate interests that will be opposed to this and they will do what they can to defeat Harris now.
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