Harris’ fanciful economic proposals
Democratic presidential candidate Kamala Harris has decided that playing Santa Claus is her best bet to entice voters into backing her campaign for the presidency. It’s a strategy that, if anything, reveals a profound economic illiteracy on the part of the vice president of the United States.
Speaking in Raleigh, North Carolina on Friday, Harris declared she would “work to pass the first ever federal ban on price gouging on food.”
Days before, the Harris campaign elaborated that the federal government would establish “clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive corporate profits on food and groceries.”
Of course, what any of these charged words actually mean is unclear. But presumably, Harris’ view, it should be up to federal bureaucrats to determine when “big corporations…unfairly exploit consumers,” and interfere when this presumably happens.
While the promise of lower prices on food can appeal to anyone, the idea that the “wisdom” of federal officials can yield better results than, say, the pricing mechanism of a capitalistic market, is a peculiar one indeed.
As noted by the Cato Institute’s Scott Lincicome, the grocery industry boasted a net profit margin in January 2024 of, get this, 1.18%. That’s hardly a reasonable foundation for something as intrusive as what Harris is calling for.
But it does reveal that Harris does suffer from the great delusion of many on the left that government can just start barking orders and get positive results.
President Richard Nixon imposed price controls of his own half a century ago. And as Daniel Yergin and Joseph Stanislaw ‘explained in their 1998 book “The Commanding Heights: The Battle for the World Economy”: “Ranchers stopped shipping their cattle to the market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets.”
Harris is unlikely to find much more success than Nixon, because markets work how they work.
Harris’ lack of economic insights also manifest in her promise to provide up to $25,000 in down payment assistance to first-time homebuyers.
Harris rightly recognizes that many Americans struggle to afford a place to live (without straining themselves). But her proposed remedy of subsidizing demand completely misses the mark on what is needed.
The high cost of housing anywhere is a problem of supply-and-demand. The key is to make it easier for housing to be built, not easier for sellers to ask for even higher prices.
“As president, I will be laser-focused on creating opportunities for the middle class that advance their economic security, stability and dignity,” she said. “Together, we will build what I call an ‘opportunity economy.’”
That sounds good. But the substance of what Harris means by that is at odds with the stated objectives.
If Harris wants to improve economic opportunity, she needs to recognize that more government isn’t the solution to our problems. Instead, more often than not the correct way of improving economic opportunity is to get the government out of the way of workers, employers, consumers and businesses.