Reading through Harris’s policy proposal on “price gouging,” Michael Strain concludes that it is probably a bad idea but not nearly as terrible as it sounds. A key reason for this conclusion: “Her regulations would kick in only during emergencies.” Arguably, that’s when price signals are especially important. But let’s leave that aside, and instead take a look at how Harris is promoting the plan.
Here’s what she had to say on August 16, according to the White House website:
When I am elected president, I will make it a top priority to bring down costs and increase economic security for all Americans. As president, I will take on the high costs that matter most to most Americans, like the cost of food.
We all know that prices went up during the pandemic when the supply chains shut down and failed, but our supply chains have now improved and prices are still too high. . . .
As attorney general in California, I went after companies that illegally increased prices, including wholesalers that inflated the price of prescription medication and companies that conspired with competitors to keep prices of electronics high. I won more than $1 billion for consumers. (Applause.)
So, believe me, as president, I will go after the bad actors. (Applause.) And I will work to pass the first-ever federal ban on prou- — price
gauging[gouging] on food. (Applause.)My plan will include new penalties for opportunistic companies that exploit crises and break the rules, and we will support smaller food businesses that are trying to play by the rules and get ahead. (Applause.)
The new law against “price gouging” is presented as the first component of a plan to address today’s high prices. Either we are in an emergency now — in which case the limiting language of her proposal doesn’t really limit — or she is providing a knowingly fake answer to one of the issues voters care most about.
For the public, the Harris campaign’s story is: I will take bold action. For the economists: Don’t worry, this won’t be what it sounds like.