Kamala Harris announced her solution to inflation: price controls. This may be a turning point in the 2024 election.
Until now, she was hiding her policy positions, refusing interviews, and having staff claim she had disowned her longstanding radical positions.
But now, on the central issue of the election – inflation – she has revealed she has no idea what causes it or how to stop it. Voters see the real Kamala Harris that cannot be unseen.
The government setting prices for goods and services has a very long history — of failure. It is not just a bad idea. It is a very old, bad idea.
The failure of wage and price controls (you cannot control the price of goods and services without first controlling the wages of workers) is acknowledged by historians and economists of all political persuasions. This is not a left-right argument.
Government laws setting prices, wages and rents do not bring down prices. They do not make inflation go away.
Even the socialist Swedish economist Assar Lindbeck said, “In many cases rent control appears to be the most efficient technique presently known to destroy a city—except for bombing.”
The Harris endorsement of the one “fix” to inflation that has never worked highlights her vote for the two large spending bills, the “American Rescue Plan” and the “Inflation Reduction Act” that drove inflation to the point that Americans find the dollars in their pockets are not worth 80 cents today.
Inflation was and is always caused by government spending and government printing money to cover that spending. There is no other cause of inflation.
As Vice President, Ms. Harris cast the deciding vote for large spending bills — increasing the federal spending by trillions.
Now, she acts to remind Americans of her complicity in what (yesterday) was Joe Biden’s unforgivable sin. Yes, she was as much a creator of the price increases we still suffer from as Joe Biden was. But her handlers had hoped that a new face on the ballot might make Americans forget this.
She has reminded us all of what she did and has proven that she doesn’t even know how to control inflation — by simply spending less and printing less money. The government spending programs she has proposed will no doubt spur worse inflation than the Biden-Harris efforts.
Today’s headlines remind us of the failure of price controls in the not too distant past. The policy proposal brings to mind the different approaches of Nixon, Carter, and Reagan to handling inflation.
Just last year, Argentina elected President Javier Milei who repealed most rent control laws. The cost of renting increased briefly and then fell dramatically as more rental units became available. Higher prices induce more supply. Who rents out their basement apartment if rent control keeps prices down? Remove the price controls and more homeowners rent out space and the cost of rental units falls with the surge in availability.
This is called “supply and demand” by economists, and “common sense,” by the rest of us.
Richard Nixon’s price controls failed to stop inflation but the controls continued nonetheless on oil. Many Americans remember the pain or at least the photos of drivers waiting in line for rationed gasoline in the late 1970s. The crisis cost Jimmy Carter the presidency. Those price controls were eliminated by Ronald Reagan and the cost of gasoline fell. Reagan reduced the rate of spending and stopped the printing presses at Treasury. Inflation fell from double digits.
Government needs to spend less to solve inflation. Harris wants our government to take more of our income in taxes — on payrolls, energy, capital gains — and will even then have to print more money as her spending promises to the special interest groups dwarf the significant tax hikes she is threatening each day.
The Harris campaign has spent a great deal of effort trying to distance herself from the Biden-Harris administration’s spending and inflation and big government regulations.
But in one day, Kamala has told the world she understands less about what causes inflation and how to fix it than Biden, Carter, and even European socialists.
There is no “joy” in the failure of price controls. Not in a collapsing Roman empire. Not during the Carter stagnation years. And not today.
Grover Norquist is president of Americans for Tax Reform which documents Kamala Harris economic proposals at Kamalanomics.org
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Ca_ller News Foundation.
Featured Image Credit: The United States Senate – Office of Senator Kamala Harris
