Washington Post columnist Catherine Rampell said during a Friday appearance on “CNN News Central” that Vice President Kamala Harris’ economic plans to address high prices were “totally unworkable” and would be “bad for markets.”
Harris announced her plan to enact a federal ban on so-called “price gouging” on groceries and to address high housing costs with aid for homebuyers during a Friday afternoon speech in North Carolina. Rampell warned that one of the potential solutions to fighting high prices that are featured in pending legislation could actually make it easier for companies to engage in collusion over pricing.
“Nobody can explain what price gouging means. It’s like that old line about pornography, ‘I know it when I see it,’ in the sense that what does it mean to have an excessive price or an excessive profit margin? That seems to be shorthand for ‘A price or profit margin that bugs me,’ that seems too high,” Rampell said. “So, you know, it’s very hard to pin down what this would actually mean if you look at the legislation that, as I mentioned, is already in the Senate led by Sen. [Elizabeth] Warren and Sen. Bob Casey and a slew of others.”
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“The particular way that this is written, which is likely to be the template for any proposal that Harris would eventually embrace, is especially bad in that it just bans excessive prices, grossly excessive prices, grossly excessive profit margins, and says that the Federal Trade Commission can use any the metric it deems appropriate to decide what that would mean, which basically says like it‘s not going to be markets, it’s not going to be supply and demand that’s determining how much your grocery store charges you for milk or for eggs, it’s going to be some bureaucrat in D.C., which seems like totally unworkable, first of all, for the FTC to be deciding like how much Kroger charges for eggs in Michigan, but it also would be very bad for markets,” Rampell continued.
Democratic Sen. Elizabeth Warren of Massachusetts introduced S. 3803, the Price Gouging Prevention Act of 2024, on Feb. 26, which nine additional senators, including Democratic Sens. Bob Casey of Pennsylvania and Tammy Baldwin of Wisconsin, co-sponsored. Harris was the sole co-sponsor of an earlier version of the bill introduced by Warren in 2020.
“We’ve seen this kind of thing tried in lots of other countries before: Venezuela, Argentina, the Soviet Union, etc.; it leads to shortages, it leads to black markets, plenty of uncertainty and beyond that, the specific way this bill is written might actually increase prices because of some of the other language in it,” Rampell said. “Things like requiring companies, public companies, to disclose in their quarterly reports the quarterly earnings reports how they’re setting prices, which is a great way to help them collude, which normally we don‘t want them to do.”
Rampell also took on Harris’ proposal to provide up to $25,000 in assistance for first-time homebuyers, saying people should “expect prices to go up.”
“That piece of her plan, I think, is likely to just drive prices up. We already have really strong demand for housing, the problem is that there isn’t enough supply,” Rampell said. “If you just give people even more money to spend on housing regardless of who they are. That’s probably just going to get passed through to the sellers. So it sounds nice, particularly for people who maybe don’t have a lot of savings, but it’s just going to get eaten up. If you got 25 grand in a tax credit, I think you should expect prices to go up more or less by 25 grand.”
Featured Image Credit: The White House
