Prices are signals, ways of communicating how much of a good is needed by consumers and how much ought to be produced. Interfering with these signals will create terrible shortages. Giving the government the power to meddle in the economy in this way will not drive prices down, it will force some firms to go out of business and some consumers to experience shortages of goods they would have otherwise been able to purchase. The scale at which this devastation happens is contingent on the scale at which the government chooses to meddle.
In a speech tomorrow, Harris will detail her economic agenda to an even greater degree. Expect more of the same strategy: blaming big corporations for the fact that Americans’ grocery bills are substantially more expensive now than before the pandemic. But this wholly ignores the main driver of this spike in costs: inflation, which was driven in large part by pandemic-era government spending, including stimulus checks.
We’ve seen a similar playbook in Latin American regimes: Flood the market with inflation. Shift the blame to the “capitalists.” Promise to crack down on “price gouging.” When that fails, on to the next step: expropriation.
Kamala Harris is set to announce a federal price control protections in the food & grocery industries. This is a god-awful idea. But it’s an open question whether Republicans will have the spine to criticize her for it, because this would require abandoning other ideas that some Republicans have favored in recent years – like capping interest rates on credit cards, expanding FTC regulations, and raising the federal minimum wage.
The Big Cheat: the so-called “defenders of democracy” aren’t who you think they are 👇 pic.twitter.com/8e1mVs0mOQ
— Nicole Shanahan (@NicoleShanahan) August 15, 2024