Vice President Kamala Harris’ plan to give the federal government sweeping new powers to control food and grocery prices drew sharp criticism Thursday from several Republicans and economists, who argued it was “big government on steroids” and “economic insanity.”
The economic program of the 59-year-old Democratic presidential candidate envisages the implementation of “a first-ever nationwide ban on price gouging on food and groceries” within her first 100 days as president. The goal is to “reduce Americans’ food costs and keep inflation under control,” according to Harris’ campaign team, which released details of the plan ahead of its official presentation on Friday.
Senator Rick Scott (Republican of Florida), who is seeking to succeed Republican Minority Leader Mitch McConnell (Republican of Kentucky) as the strongest Republican in the upper house next year, argues that the plan completely misses its goal when it comes to fighting inflation.
“Tomorrow, Vice President Harris, a person who has never built a business, understands nothing about profit and loss, has never made payroll and has never competed in a consumer market, will propose federal price controls. That should terrify every American.” he wrote on X.
Scott noted that price gouging “is already largely illegal and is not the cause of high prices.”
“The skyrocketing prices caused by the Biden-Harris administration are not price gouging, they are inflation,” he added. “Their solution to the Harris price increases they caused is a strong state on steroids – where Washington bureaucrats stick their hands into American companies and tell them what price they can and cannot sell a product at.”
Jared Walczak, a researcher and vice president of the nonpartisan Tax Foundation, pointed to the slim profit margins enjoyed by grocery companies even as food prices have skyrocketed under President Biden.
“When Kamala Harris calls out grocers’ price gouging, it’s the industry’s profit margins that she’s railing against,” Walczak wrote on X, adding a chart showing grocers’ profit margin last year of 1.2%, compared to 8.5% profit margins across all industries.
Walczak told the Washington Post that while there are several factors driving up the cost of goods, including inflation, tariffs, labor costs and supply chain disruptions, “government policy itself is a key driver” and that “trying to combat the impact of these policy decisions with penalties for high prices will only further distort markets and consumers will once again be the losers.”
Senator Mike Lee (R-Utah) believes that “the federal government is entirely responsible for the higher prices.” He rejected the vice president’s view that food prices could be reduced through more government regulation.
“Instead of addressing the real problem (excessive spending and regulation) in a way that would keep inflation in check, Kamala Harris plans to cover up the problem – and thereby make it worse – by imposing price controls,” he wrote on X.
“When the government limits the price of something, it reduces the incentives of those who produce that thing (or might choose to produce it),” Lee argued. “Consequently, any product subject to price controls will ultimately become scarcer – because fewer people have an incentive to produce it.”
Samuel Gregg, Friedrich Hayek Chair of Economics and Economic History at the American Institute for Economic Research, bluntly called the Harris Plan “economic madness.”
“Price controls are a REALLY bad idea,” he wrote on X“They create shortages, serious misallocations of capital and impair the ability of prices to signal the information we all need to make decisions.”
“They didn’t work when tried by a Republican (Nixon), and they won’t work under a Democrat, no matter how strong the ‘vibes,'” Gregg noted in a separate post. “They only cause scarcity and misery.”
“Will no fiscally responsible Democrat denounce this irresponsibility?”
The Vice President’s far-reaching proposal would target “large corporations” that “unfairly exploit consumers to generate excessive corporate profits in the food and grocery trade,” the plan preview says.
Harris would also empower the Federal Trade Commission and state attorneys general to impose “tough penalties” on companies that violate the proposed order and would “provide the federal government with tools to detect price-fixing and other anti-competitive practices in the food and grocery industry.”
She will present the plan to voters at a rally in North Carolina on Friday.
