In her first policy speech as a Democratic presidential candidate, Kamala Harris formally unveiled her economic plan to combat the high cost of living, but provided no further details on what economists have called a “Soviet” price control system.
During the North Carolina rally, Harris said her plan to tackle price gouging – a word she mispronounced as “price gouging” – would impose “new penalties” on companies that “exploit crises and break the rules” and “support smaller food companies that are trying to play by the rules and get ahead.” But Harris did not address concerns from leading economists who criticized the proposal, first unveiled Wednesday, as bad communist policy.
“It is hard to exaggerate how bad this policy is,” said the WashingtonPostCatherine Rampell wrote in a scathing commentary on Friday morning: “Supply and demand would no longer determine prices or profit levels. That would be done by far-away Washington bureaucrats.”
“We’ve seen this kind of thing tried in many other countries,” Rampell said in a CNN appearance following her editorial. “Venezuela, Argentina, the Soviet Union, etc. It leads to shortages. It leads to black markets.”
In her 35-minute speech, Harris compared her price control to her record as a California prosecutor, saying she had “taken action against companies that illegally raised their prices … and against companies that colluded with competitors to keep the prices of electronics high.”
Harris also said her actions would “help the food industry become more competitive,” saying she believes competition is the “food of our economy.” Critics of Harris’ plan, however, say her actions would likely drive competition out of the market.
Former Obama administration economist Jason Furman warned that Harris’ price control plan would prevent the economy from adjusting and artificially regulate competition. If prices are not allowed to rise in response to demand, new companies will be reluctant to enter the market to increase supply, he told the New York Times on Friday.
“This is not a sensible policy and I think the biggest hope is that it ends up being a lot of rhetoric and no reality,” said Furman, a Harvard economist. “There are no benefits to this and there are some downsides.”
The rest of Harris’ remarks focused on her proposed subsidies for first-time homebuyers and an increased child tax credit, which critics also called “economically stupid.” Her proposed plan provides an estimated $1.7 trillion in handouts for people struggling in the current economy under Biden and Harris, according to the Committee for a Responsible Federal Budget. The estimate does not include food price controls and comes largely from her increase in the child tax credit.
Harris promised to solve the housing crisis in her first year in office by bringing three million homes to market and giving first-time buyers a $25,000 down payment.
