“I hope she takes that proposal back. She had some good ideas, some mixed ideas,” Harvard professor Kenneth Rogoff told CNN. “It was a terrible idea.”

Rogoff’s position was based on doubts about whether retail was responsible for the wave of inflation that has weighed on Americans’ purchasing power over the past two years.

Harris called for an initial federal ban, arguing that companies have made record profits while many households are struggling with rising costs. Food prices have risen 25 percent since January 2020.

But according to market veteran Ed Yardeni, the data does not indicate that usury is the problem.

He wrote this week that the ratio between supermarkets’ consumer price index and producer price index has fallen since 2000, suggesting that profit margins in the industry are trending downward rather than upward. The consumer price index (CPI) tracks the prices paid by consumers, while the producer price index (PPI) measures the prices paid by wholesalers.

And yet consumers are convinced that corporate greed is a key factor in the abrupt rise in prices. In a study from May, consumers surveyed considered price gouging to be the second most common cause of inflation.

There are real-world examples. Cal-Maine, the largest egg producer in the US, saw profits increase by 718% in the first quarter of 2023. In December, the distributor was found guilty of artificially inflating prices.

“Price controls” – a party-political label?

Regardless of whether usury is to blame for inflation, Harris’ plan has also been criticized by some as ineffective government overreach.

Experts have alluded to price controls under President Richard Nixon. The Republican administration froze prices and wages more than 50 years ago to keep inflation under control, but prices ultimately rose much higher, according to the Cato Institute, a libertarian think tank.

“I think we all agree that price controls have never worked,” Stephen Moore, a visiting fellow at the conservative think tank Heritage Foundation, told CNBC. “They were definitely a complete failure in the 1970s when we had high inflation, 11 to 12 percent, and the government couldn’t get rid of it.”

Historical examples show that price caps can distort the distribution of goods and supply because prices no longer serve as a signal of surplus or shortage. This can ultimately lead to shortages and higher prices.

Supporters of the plan, however, argue that such comparisons are an overreaction to Harris’ proposal because the details so far say nothing about fixed costs.

“These are not ‘price controls.’ Forty states have anti-price gouging laws on their books. Those are red states. Those are blue states,” said Lindsay Owens, executive director of Groundwork Collaborative, noting that Donald Trump also cracked down on price gouging on medical products during the pandemic. “This is a sensible package of measures.”

The federal ban would help eliminate legal inconsistencies between states’ practices, experts told Business Insider. Harris would likely succeed in giving the Federal Trade Commission the power to crack down on scammers, although the challenge would be to define price gouging precisely.

While supporters of the plan are cheering it, anonymous campaign sources tell the New York Times that even allies may have misconceptions about the plan’s capabilities.

Because the ban would be based on state laws, it could only be used in an emergency, officials said. They said criticism of the price controls was misplaced, as was the expectation that the ban would immediately reduce food costs.

A campaign official pointed to other policy ideas from Harris, such as efforts to boost competition and support small businesses in the food sector.

While economists are divided, voters appear to support the proposal. According to a poll conducted this summer by the Democratic firm Blueprint, four out of five voters are in favor of criminal prosecutions for price gouging and price fixing.