LARRY KUDLOW: Kamala Harris' price controls will never work

Kamala Harris' price controls will never work and that's the subject of "The Riff." Kamala Harris' economic plan, released today in North Carolina, is a command and control, socialist-type, central planning package the likes of which we haven't seen since the 1930s depression. 

Or, for those who remember the old Soviet Union communists, or for those unlucky enough to visit today's Venezuela, it's crazy stuff. No one is going to take it seriously. That kind of ultra-far-left planning has been out of favor in the U.S. for nearly 100 years. 

Democratic economists are attacking it. The Washington Post is attacking it. Early estimates of the cost of her plan are already running upwards of $1.3 trillion, which of course means more deficit spending and more inflation, in the unlikely event she were to be elected. 

LARRY KUDLOW: TRUMP IS DEDICATING HIMSELF TO ENDING THE BIDEN-HARRIS AFFORDABILITY CRISIS 

The big items so far: the $3,600 kiddie credit that costs about $1 trillion over 10 years, the newborn child credit -- another $100 billion, and a $25,000 home mortgage subsidy would be about $250 billion, and of course, there's going to be a lot more as the details come out. 

There's new tax credits for Obamacare, another bump-up in the earned income tax credit, some kind of debt cancellation for health care costs, and of course, let's not forget the unconstitutional student loan cancellations. The details of all that stuff are so far unknown, and of course, the headline grabber -- which is the first ever federal ban on "price gouging" on food and groceries -- is really just price controls dressed up as ... price controls. 

In other words, to quote Churchill, a "sheep in sheep's clothing" and President Trump's got it right, as well -- here, take a listen: 

DONALD TRUMP: Now, Kamala is reportedly proposing communist price control, but they don't work. They actually have the exact opposite impact and effect, but it leads to food shortages, rationing, hunger, dramatically more inflation. // We call it the Maduro plan. Like something straight out of Venezuela, the Soviet Union.

There you go. For one thing, no one's ever proven price gouging. No one even knows what it is. Even though the Bidens have tried for over three and a half years, a study by the San Francisco Fed ruled it out. 

What the Kamala Harris Democrats don't understand is that rising prices don't cause inflation -- inflation causes rising prices and inflation is too much money chasing too few goods. All of which devalues the money in your wallets and pocketbooks. 

This whole baloney about price gouging and excess profits, and corporate greed, is the longtime hallmark of the distant far left, and it pops up every now and then, is laughed out of the room, and we don't hear about it for a long while. 

Prediction: That's going to happen again this time around. 

Oh, by the way, profit margins for grocers like Kroger, Albertson, Walmart, Costco -- average 1.2% for grocers. And as far as those so-called predatory meat, beef, and poultry companies -- their margins are 4.7%. Very low.

So, both groceries and beef are well below the 8.5% profit margins of all American companies.

And, by the way, high-flying tech companies have huge profit margins: Apple 25%, Meta and Microsoft 34%, Nvidia 53%. But, so far, Kamala's not going after them. She talks about clear rules of the road, but doesn't offer up any. New authority for the Federal Trade Commission, FTC, which is a very scary thought.

But basically, apart from the headline price controls equals socialism, the whole rest of her program is top-down big government control of the economy. Government do this, government do that. Government cancel loans, government to boss around Wall Street.

By the way, the $25,000 down payment handout for first-time homeowners ... well, guess what? Every homeowner will raise their selling price by $25,000 to equalize the market.

And guess what else? Spending a couple trillion more dollars means borrowing more, debt creating more, which probably means even higher mortgage rates, which will probably still leave the dream of home ownership out of reach of Gen Z'ers. And hidden up her sleeve is a gigantic tax increase aimed at financing all this social spending and central planning.

And there she goes again, criticizing the Trump tax cuts with a pack of untruths, like the usual fare offered up by Joe Biden how only rich people and big corporations benefitted and never pay their fair share.

But, in fact, in today's Wall Street Journal's editorial -- entitled: "How the Biden-Harris economy left most Americans behind"... with the subhead: "A government spending boom fueled inflation that has crushed real average incomes" -- they talk about $6 trillion in new Biden-Harris deficits, twice as much as Trump.

And the highest inflation in over four decades. Prices increased by 20% since January 2021, compared to only 7.8% during the Trump years. Inflation adjusted average weekly earnings down 3.9% under Biden-Harris, compared to an increase of 2.6% during Trump's first three years.

They could have added that under Trump's tax cuts, poverty rates fell, minority unemployment dropped to record low rates, and the biggest gainers in the income scale were middle and lower income wage earners, not the rich.

Kamala is also spewing untruths about Trump tariffs that as yet don't even exist -- looks like he prefers reciprocity, a better approach than outright protectionism.

Plus, even with tariffs, Mr. Trump would offset that with tax cuts at home that would provide strong incentives to work and invest.

She accuses Trump of getting rid of Obamacare, but that's not his policy; instead, in his 2017 tax cut bill, he repealed the unpopular individual mandate.

But step back from all this for a moment.

Basically, Kamala Harris wants government central planners to run the economy -- and your life.

GET FOX BUSINESS ON THE GO BY CLICKING HERE       

On the other hand, Donald Trump wants you to keep more of what you earn in a competitive free enterprise economy.

Kamala is a prescription for economic decline. Mr. Trump is prescribing economic resurgence and growth. I'm betting on the growth guy.

This article is adapted from Larry Kudlow’s opening commentary on the August 16, 2024, edition of "Kudlow."