There’s no evidence ‘price gouging’ even exists

“Kamala Harris Is No Communist, Socialist, or Nixon,” Jill Lawrence assures us. OK. But are we sure?

Not that anyone’s asked me, but as someone who regularly accuses progressives of being “commies,” I think I can help shed some light on why many voters are getting the wrong idea.

For one thing, handing self-professed socialists Bernie Sanders and Alexandria Ocasio-Cortez prime-time slots at the Democratic National Convention could send some independent voters mixed signals.

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Nominating a vice-presidential candidate who not only honeymooned in Red China on the anniversary of the Tiananmen Square massacre but once taught high school kids that the Maoist system – one of the most (if not the most) murderous and dehumanizing regimes in history – is a place where “everyone shares” and gets free food and housing? That wasn’t helpful, either.

All that said, you definitely don’t want to make one of the pillars of your economic plan price controls.

Kamala Harris certainly isn’t the first politician to suggest controlling politically inconvenient prices, but history has conclusively proven that price caps cause shortages, hoarding, black markets and an array of other unpleasant outcomes.

If you’re going to rationalize this policy by blaming the kulaks of “price gouging” and peddling the age-old notion that cabals of bad guys in competitive markets can get together and dictate prices, it’s going to raise alarm bells.

There isn’t a scintilla of evidence “price gouging” – a conveniently elastic term, to begin with – exists. Big Grocery is one of the least lucrative big businesses in America, with a profit margin consistently under 2% – in fact, this year it was 1.18, a figure that lands on the lower end of the historical profit spectrum. While there’s nothing wrong with making a healthy profit, consistent margins tell us that price spikes are propelled by inflation, not some insidious plot.

Until the government shutdown of the economy during the COVID pandemic, grocery prices had been low and dropping. Probably because Big Grocery is also one of the most competitive industries in the country, with numerous national chains, regional chains, higher-end markets, affordable big-box chains and online competitors, including Amazon.

Yet we’re supposed to believe that one day, just as overall inflation happened to hit a 40-year high, everyone in grocery business decided to get together and collude to raise prices in a manner that was consistent with overall inflation? They think you’re idiots.

In an embarrassing Axios defense of Harris’ plan, headlined “Don’t call it price controls: How price gouging bans really work,” Emily Peck contends that “Harris’ economic proposals, broadly speaking, are meant to help middle-class Americans deal with a higher cost of living.”

Oh, is that what they’re meant to do? Axios assures us that states already have innocuous anti-gouging laws on the books for emergencies. (Yes, those are also completely counterproductive. “Price gouging” during emergency shortages helps alleviate hoarding.)

In any event, to stress the innocuous and ubiquitous nature of anti-“price gouging” laws, Peck is compelled to rely on the expertise of far-left Fordham University law professor Zephyr Teachout, as one assumes no self-respecting economist would go on the record defending price caps.

Which brings me to The New York Times’ Paul Krugman, who argues Harris really isn’t backing price controls, per se, but merely a ban on “price gouging on groceries” – which he surely knows is a myth. Harris’ plan is nothing but a “populist political gesture,” the Nobel Prize-winning economist explains.

Since the presidential candidate hasn’t offered any concrete plans, we must assume she still supports enacting Elizabeth Warren’s Price Gouging Prevention Act, which, despite the assurances of Axios and Krugman, would imbue the Federal Trade Commission with wide-ranging unilateral federal authority to dictate prices on groceries. And if you believe government regulatory agencies will judiciously use this power, I have news for you.

So, sure, it’s a bad sign that Harris intends to fight inflation using failed socialist policy prescriptions. Let’s not forget, though, the last time Harris vowed to help fix inflation, she was the “tie-breaking vote” on the effort to pump hundreds of billions of dollars into an overheated economy.

It’s fair to say that inflation is a complex, multifaceted issue that isn’t entirely any one entity’s fault. You don’t need to be a socialist lawyer from Fordham to understand that the Biden administration did everything to exacerbate inflation – ignoring warning signs, cramming through a massive partisan spending bill using parliamentary tricks, all the while undermining energy production.

Last I heard, Kamala was a member of that administration.

Has Harris proposed price caps on groceries because she’s a devout Marxist? Unlikely. The power-hungry politician’s tendency to embrace collectivist and zero-sum economic thinking is merely a sign of an authoritarian demagogue. Kamala is not Stalin. She’s more like some middling Latin American dictator. That’s bad enough.

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