Kamala wants price controls

Please stop talking, actually: For a while, political observers wondered when Kamala Harris would present an actual political program as part of her presidential campaign.

Now she has revealed some of it, and maybe it was actually better when we knew less.

In a statement released last night, Harris’ campaign said it would “enact the first nationwide ban on price gouging on food and groceries – with clear rules that make it clear that large corporations cannot unfairly exploit consumers to generate excessive corporate profits on food and groceries,” with enforcement power given to the Federal Trade Commission. You heard that right: price controls.

It is not clear how “excessive” profit should be defined, nor why policing that profit should be the responsibility of the federal government, nor why food prices in particular should be included. It is not clear what kinds of behavior that are currently legal should be prohibited.

Price controls have always proved disastrous when imposed. Prices are signals, they convey how much of a good consumers need and how much of it should be produced. When these signals are disrupted, terrible shortages result. Giving the government the power to interfere in the economy in this way will not bring prices down, but will force some firms into bankruptcy and leave some consumers facing shortages of goods they could otherwise have bought. The extent of this devastation depends on the extent to which the government interferes.

In a speech tomorrow, Harris will lay out her economic agenda in more detail. Expect a similar strategy: She will blame big business for the fact that Americans’ grocery bills are much higher now than they were before the pandemic, but will completely ignore the main reason for this increase in costs: inflation, which has been largely driven by government spending during the pandemic, including stimulus packages.

Both former President Donald Trump and President Joe Biden share the blame for this wasteful government spending, and both parties manage to obfuscate the situation by trying to convince voters that another force (greed?) is at work. But make no mistake: It was government recklessness that got us into this mess, and it won’t be government price controls that get us out of it. (It will be cautious, gradual Federal Reserve rate hikes aimed at cooling inflation with a soft landing, and that has already happened; yesterday’s consumer price index data showed that this strategy is working and that Fed officials intend to cut rates as soon as September.)

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The post “Kamala wants price controls” first appeared on Reason.com.