Former Top Biden Official Rejects Harris’ Price-Fixing Plan
A former high-ranking official from President Joe Biden’s administration has criticized Vice President Kamala Harris’ plan to combat inflation by imposing price controls on food manufacturers and retailers, suggesting that such a socialistic approach would not solve the problem but could actually exacerbate the situation for Americans.
Harris introduced a proposal that would allow the Federal Trade Commission (FTC) and state attorneys general to impose hefty fines on grocers and suppliers if their prices are deemed excessively high. The Biden-Harris Administration has consistently blamed the nation’s inflationary pressures on “corporate price gouging” rather than on their economic policies, which include high spending during periods of disrupted supply chains.
Former Biden White House Chief of Staff Ron Klain commented on the issue during an appearance on CNBC’s “Squawk Box” on Saturday, stating that “inflation came from a lot of places.” He continued, “And I think having a federal price gouging law was not going to solve inflation. But consumers deserve not to be gouged. That’s just fair.”
Co-host Joe Kernen challenged Klain’s stance by asking, “But where’s the evidence of gouging, Ron? When supply goes down, demand goes up — we’ve seen this movie before. I was around for Nixon’s price controls,” referring to the economic policies of the 1970s. “It’s the worst thing you can do. If you artificially control a price and keep it low, then competitors don’t come in to increase the supply and it just exacerbates the situation.”
Klain responded by claiming that former President Trump’s economic plans would be more detrimental to the country, despite the fact that Trump’s policies kept inflation low, raised wages for most American workers, and boosted the economy.
“But I agree, I think what we really need to do is to further smooth out supply chains…fix the supply chain problems we did in the Biden-Harris administration with improving the efficiency of our western ports to make them operate more efficiently and get goods into our country more quickly and avoid things like the freight rail strike that President Biden prevented,” Klain added.
“And so, I think you’re going to see an administration devoted to bringing down costs and also putting a little more money in middle-class families’ pockets,” he concluded.
Harris’ plan has also drawn criticism from other left-leaning voices.
“Food prices have surged by more than 20% under the Biden-Harris administration, leaving many voters eager to stretch their dollars further at the grocery store. On Friday, Vice President Kamala Harris said she has a solution: a federal ban on price gouging across the food industry,” wrote CNN economics reporter Elisabeth Buchwald.
“There’s just one issue: Harris’ proposal could create more problems than the one it’s trying to solve, some economists say. Gavin Roberts, who studied anti-price gouging laws passed by some states during the pandemic, noted that one of the biggest effects of these laws, especially at grocery stores, was that they motivated people ‘to go buy goods more than they would if prices had risen,’” she explained.
“When prices are high, in most cases, the best policy action in response is actually taking no action,” Roberts, the chair of Weber State University’s economics department, told CNN. This, he said, would lead consumers who are deterred by high prices of certain goods, like beef, to purchase alternative products. This shift helps keep beef available for those willing to pay the higher prices.
“And while Harris claims her proposal ‘will help the food industry become more competitive,’ Roberts said it would do just the opposite,” Buchwald pointed out.
The Washington Post Editorial Board was equally critical.
“Vice President Kamala Harris’s speech Friday was an opportunity to get specific with voters about how a Harris presidency would manage an economy that many feel is not working well for them,” the board wrote. “Unfortunately, instead of delivering a substantial plan, she squandered the moment on populist gimmicks.”
“One way to handle it might be to level with voters, telling them that inflation spiked in 2021 mainly because the pandemic snarled supply chains, and that the Federal Reserve’s policies, which the Biden-Harris administration supported, are working to slow it,” the editorial board suggested. “The vice president instead opted for a less forthright route: Blaming big business.”