Economic illiteracy, shoddy logic, and non sequiturs: It’s going to be a long campaign.
You can tell that the GOP’s effort to tar Kamala Harris’s anti-“price-gouging” scheme as “price controls” has bite. Why? Because those who are invested in Harris’s success are contorting themselves into logical pretzels to insist that the government’s setting price limits by fiat is somehow distinct from “price controls.”
“Even some middle-of-the-road economic commentators have been hyperventilating, saying that she’s essentially calling for price controls,” wrote New York Times columnist Paul Krugman, “which is odd, because she didn’t say anything like that.”
We should be grateful to Krugman for voluntarily distancing himself from even “middle-of-the-road economic commentators,” whose prudence and intellectual honesty he does not share. “What she has actually called for is legislation banning price gouging on groceries,” Krugman continued. He goes on to say that Harris’s detail-free policy slogan is probably no more radical than Elizabeth Warren’s anti-price-gouging plan (which is, at the very least, damnation by faint praise). All Harris’s plan attempts to do, according to Krugman, is set “price limits” without which businesses actively collude to impose “shortages” on consumers. The example he cites is . . . California’s oppressively regulated energy market, which he appears to allege has deprived consumers of access to on-demand power for no particular reason.
Whatever the merits of Krugman’s logic, he most certainly does not explain why a plan to control prices does not, in fact, constitute a price control.
While Krugman was phoning it in, Axios reporter Emily Peck did her best to craft a cogent argument in favor of this hopelessly illogical proposal. “Don’t call it price controls,” Peck’s outfit declared, claiming to show “How price gouging bans really work.” She follows Krugman’s lead in asserting that it would not be a federal price-control scheme if the federal government set prices because state-level laws already prohibit price-gouging. That’s a non sequitur, but it’s one to which Harris’s defenders are partial.
Peck notes that most of the states in the Union have restrictions on excessive price hikes, but those laws are triggered in a disaster during which the governor or federal government has declared an emergency. “Under these laws, companies that raise prices can defend themselves by demonstrating that they increased prices because their costs went up,” Peck writes, citing Fordham University professor and onetime far-Left gubernatorial candidate in New York, Zephyr Teachout. “That means they should be able to maintain their profit margins, says Teachout.” Well, if Teachout says businesses will satisfy their fiduciary obligations to their stakeholders, the matter must be settled.
Having made no argument, Peck declares the case closed. “Price gouging is not the same thing as ‘price controls,’ where a government sets prices for certain goods (the U.S. dabbles there just a smidge; see the new insulin price cap).” To recap: the Federal Trade Commission’s arbitrarily setting price caps is meaningfully distinct from setting prices, for some reason, even though her example of an honest-to-God price-fixing scheme is a government-imposed “price cap” on insulin.
This is what passes for intellectual rigor among Kamala Harris’s brain trust in the commentariat. It’s going to be a long campaign.