In the past few days, I have seen some efforts from Kamala Harris’s allies to claim that she supports antitrust enforcement against price fixers rather than price controls. Don’t buy it.
First, that’s what she says she will do, for lots of things, not just food:
On Day One, I will take on price gouging and bring down costs. We will ban more of those hidden fees and surprise late charges that banks and other companies use to pad their profits. We will take on corporate landlords and cap unfair rent increases and we will take on Big Pharma to cap prescription drug costs for all Americans. Our plan will lower costs and save many middle-class families thousands of dollars a year.”
As economist Brian Albrecht explains in this great post, it is fair to call this price control:
Any policy that gives the government the power to decide what price increases are “fair” or “unfair” is effectively a price control system. It doesn’t matter if you call it “anti-gouging,” “fair pricing,” or “consumer protection” — the effect is the same. When bureaucrats, not markets, determine acceptable prices, we’re dealing with price controls.
That Harris was proposing some price-control schemes is how most economists and journalists (even those on the left) understood her proposal: the Washington Post editorial board, Jason Furman, Josh Barro, Catherine Rampell, and Ernie Tedeschi.
Here is how Jeff Stein reported it:
The exact details of the campaign’s plan were not immediately clear, but Harris said she would aim to enact the ban within her first 100 days, in part by directing the Federal Trade Commission to impose “harsh penalties” on firms that break new limits on “price gouging.” The statement did not define price gouging or “excessive” profits.
That’s price control. Maybe it is using antitrust, it is unclear, but whatever the FTC is doing, it will be doing it to enforce “new limits.” As it happens, the FTC is also a central element in this price-control legislation introduced by Senator Elizabeth Warren (D., Mass.) that she supported as a senator: the federal Price Gouging Prevention Act.
In the quotation above, Harris also mentions something that sounds very much like President Biden’s plan to cap rent increases on existing units to 5 percent per year at the national level. That’s price control too.
The reality is that the war on prices (price controls, rent controls, minimum wages, “anti-junk fee” regulations, and such) have been in the Democrats’ toolkit for a long time. So no one should be surprised.
Finally, let’s even assume that whatever she is proposing, it’s not really price controls. It remains a laughable attempt to blame corporations for inflation.