Kamalanomics: Price Controls?

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Runaway inflation in the United States is directly attributable to excessive post-Covid money printing. And as I’ve repeatedly pointed out in my coverage of this issue, the administration of former president Donald Trump bears its fair share of the blame for that.

Most of the blame, though, falls on the administration of Joe Biden and Kamala Harris – along with uni-party congressional leaders in Washington, D.C. who have escalated our nation’s unsustainable fiscal profligacy well after the merciful conclusion of their manufactured Covid “emergency.”

News flash: You cannot perpetually monetize ever-escalating levels of debt and expect the center to hold.

Well, you can… it just results in the collapse of your Republic sooner rather than later.

Fear not, though. Harris – who has been freshly installed by party leaders as the Democrats’ 2024 standard-bearer – has a solution for the inflationary disaster her administration helped create.

Her big idea? Price controls… a command economic concept which dates back to the Roman emperor Diocletian in the late third century A.D. And while the idea didn’t work then (and hasn’t worked since), Harris is seizing on it as part of her populist progressive rebranding.

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“There’s a big difference between fair pricing in competitive markets, and excessive prices unrelated to the costs of doing business,” Harris’ campaign noted in a release previewing a major economic address in North Carolina. “Americans can see that difference in their grocery bills.”

Accordingly, Harris has proposed “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.”

Is this what’s happening, though?

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Here's your "price gouging" narrative: average costs paid by businesses have risen just as much as costs charged to consumers – if businesses are being "greedy," they're doing it all wrong… pic.twitter.com/ALiw72MXSf

— E.J. Antoni, Ph.D. (@RealEJAntoni) August 14, 2024

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“If you buy the idea that our increasing living costs reflect profit-puffing from companies with market power, then capping specific prices has a certain logic to it,” author Ryan Bourne wrote earlier this year for the Cato Institute. “The problem is that this explanation for inflation is a myth.”

Inaccuracies regarding their stated rationale notwithstanding, do price controls work?

No, they do not.

“They create widespread inefficiencies, diminish the quality of products and encourage black markets,” Bourne added. “There’s a reason economists consistently oppose price controls.”

On their most elemental level, price controls distort the free market – not unlike crony capitalist incentives, ideologically driven subsidies, unchecked entitlement or the aforementioned money printing.

“The main problem with price controls is that they prevent prices from rising when demand increases or supply falls,” economist David R. Henderson of The Hoover Institute noted last February. “If the government doesn’t allow prices to rise in such circumstances, we get shortages and line-ups. That’s what happened in the gasoline market with Nixon’s price controls. It’s true that price controls will reduce the measure of inflation, but they actually hide inflation. Inflation is, after all, an increase in the cost of living. Most of us would rather buy steak at $10 a pound from the butcher who has steak than go to the butcher who doesn’t have steak but is charging $8 a pound. That $8 a pound does not signify a lower cost of living if we can’t get the steak.”

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RELATED | AMERICA’S RED INK RECKONING

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Price controls are staples of failed communist and socialist nations – which means those referring to this second iteration of Kamalanomics (her first idea was to crib Trump’s ridiculous ‘No Taxes On Tips‘ plan) as “communist” or “socialist” are technically correct.

Of course, politicians on the ideological right (many of whom are every bit as addicted to fiat currency as their liberal “antagonists”) have long overused the term “communism.” In fact, they’ve trotted it out so often to describe those on the left the allegation has lost any real punch.

While Harris is unlikely to succeed in the wholesale implementation of price controls, that doesn’t appear to be the point of this latest gambit.

“The plan is not designed to be passed — or even to be advanced intellectually,” Charles C.W. Cooke wrote for National Review. “Rather, the plan is designed to (a) get the disgracefully compliant media to repeat the premise — that the disastrous Biden-era inflation has been the fault of greedy corporations, and not of reckless fiscal policy, and (b) to get Republicans to oppose it as the terrible notion that it is so that Harris can insist to indignant cheers that she wants to bring grocery prices down while her opponents want to protect Big Meat.”

Indeed. This proposal is less about enacting price controls… and more about changing the subject.

“She’s interested in whitewashing the record of the Biden-Harris administration… and thereby in eliminating one of her key liabilities going into the election in November,” Cooke added.

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ABOUT THE AUTHOR …

Will Folks is the owner and founding editor of FITSNews. Prior to founding his own news outlet, he served as press secretary to the governor of South Carolina, bass guitarist in an alternative rock band and bouncer at a Columbia, S.C. dive bar. He lives in the Midlands region of the state with his wife and eight children.

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