Kamala Harris proposes a “risky” plan to ban price gouging
di Valentina Cordero
Vice Presidnt Kamala Harris has decided to play a very uncertain card hoping it can help her in the run towards winng the White House. People definitely hate high prices and the inflation, so she proposed to ban price gouging on grocerie store and food suppliers.
But, according to most, this plan is a terrible idea and will not work. It will actually create more problems. This proposal, which can basically be called a control price, could harm consumers as it could cause or even extend shortages by discouraing producers and suppliers from getting goods to the market.
“Everyday across our nation, families talk about their plans for the future, their ambitions, their apirations for themselves, for the children,” she said at a rally in North Carolina on Friday. “And they talk about how they are going to be able to actually achieve them financially, because, look, the bills add up.”
The Democratic candidate’s proposal would be implemented in her first 100 days in office, and it will give authority to the Federal Trade Commission and state attorneys general to impose fines on companies for setting eccessive high prices. Even though, so far, Harris hasn’t given any specific details about her plan, sharp criticism has already been in the spot light.
Harris’s plan should terrify every single American, as explained by GOP Senator Rick Scott, who clarified that the ban on price gouging is just a big government on steroids where Washington bureaucrats stick their hands into American businesses and say what they can and can’t sell a product for.
It is more than clear that prices of food have surged about 25% from 2019 to 2023, according to data from the Economic Research Service.
“We can’t unwind prices back to certain place,” told ABC Catherine Pakaluk, a professor of economics at the Busch School of Business at Catholic University. “All prices are linked together.”
This proposal “is more likely to mantain the status quo,” according to Gavin Roberts, chair of Weber State University’s economic department. This is because it would keep new comptetition from moving in to take advantage of bigger profit margins.
A price control would most likely cause shortages like it happened in the past, according to a 2022 report from the Joint Economic Committee Republicans.
“(An) economic theory predicts that when prices are set below the market clearing price, consumers will experience shortages,” it is explained in the report. “The evidence suggests that though price controls can temporarily lower prices for some consumers, the cost of shortages, reductions in quality, and other negative long-run consequences, such as decreased product innovation, dramatically outweight any benefits.”
