Former President Donald Trump condemned his opponent calls for a federal ban on food price increases such as “communist” price controls. But experts say offer a far cry from Soviet-style caps, and more than three states led by both sides already have their own versions of the borders.
Vice President Kamala Harris, while outlining her economic agenda if elected, proposed last week to eliminate “excessive pricing that is unrelated to the cost of doing business” by food and grocers following major mergers.
Trump, a Rally in Pennsylvania responded over the weekend: “After causing catastrophic inflation, Comrade Kamala announced that he wanted to introduce socialist price controls.”
Although some experts and analysts criticized Harris’s idea as ineffective, compares President Richard Nixon’s wage and price freezes in the early 1970s, others say, made a significant difference.
“A price control is exactly what it sounds like — an agency that puts an actual hard cap on price,” Erin Witte, director of consumer protection for the nonprofit Consumer Federation of America, told NBC News in an email. Economists I generally agree that such caps can lead to shortages because limited profit potential leads companies to produce less, even if lower-priced juices are demanded.
Witte said that price-gouging laws, on the other hand, target corporate behavior rather than setting specific price levels: “Price-gouging laws require the enforcement agency to consider several factors and decide whether the behavior is illegal.”
Harris’ plan is to work with Congress to impose new “rules of the road” on pricing for industry heavyweights, though he’s been tight-lipped on the details so far. It would also give the Federal Trade Commission and state prosecutors the power to investigate and punish “bad actors” found to be violating them.
A potential Harris administration would have no shortage of anti-price-goal models at the state level, though most have different goals and parameters than his proposal. Thirty-seven states and Washington, DCPrevent companies from rapidly increasing the prices of certain goods and services under certain conditions, according to a 2022 report by the National Conference of State Legislatures.
The rules, which cover liberal states like California and New York and conservative states like Idaho and Alabama, usually apply during emergency declarations, but some Michiganis always valid. The most ban extreme jumps in the prices of “essentials” such as fuel, medicine, water or other commodities. Some cover a wider range of goods – even all consumer purchases – to limit sellers from taking undue advantage of shortages or unusual spikes in demand.
Witte said many of these rules are strictly enforced during the pandemic. Authorities in Texas, which has long imposed the toughest penalties on the books, warned businesses in the early days of Covid that He could face a fine of up to $250,000 if the victims of any price hike were the elderly.
In March 2020 Trump himself gave the order prevent corporate price gouging and halt the hoarding of “essential health and medical resources” such as personal protective equipment and disinfectant products. The move ordered the Departments of Justice, Health and Human Services to collect any corporate misappropriation related to the pandemic, including “unnecessary quantities of items to sell above fair market value,” under the Defense Production Act.
A spokesman for the Trump campaign did not respond to a request for comment.
“It’s not a blue state issue, it’s a red state issue,” said Zephyr Teachout, a professor at Fordham University School of Law and senior economic justice counsel for the New York Attorney General’s Office. offered its own price hike curbs In March 2023. Teachout, an antitrust expert and consumer advocate who ran unsuccessfully for several state offices as a Democrat, said the federal law would help close some loopholes in state action.
“The limitations of these state laws are that they are effective for small-time operators, but not effective against large multinationals that can game accounting to avoid state laws and operate in multiple states,” he said.
Harris’ plan could help “stop the big laughs,” Teachout said.
The consumer was the one who tamed the price increases Years of focus for the Biden-Harris administration Harris now stretches. He acknowledged that voters are still struggling despite inflation. mostly returned to normal levels after rising more than 9% from two years ago.
Nevertheless, some economists consider it inappropriate to rely on corporate misconduct. research this year by San Francisco Federal Reserve It concluded that price increases were not to blame for the recent rise in inflation. There is also a food industry criticized Harris’ proposalbrands that say don’t report excessive profits and warning that its crackdown would fuel inflation.
“We’re in the penny business” Target CEO Brian Cornell said Speaking on CNBC Tuesday, the retailers’ profit margins added that bargain-hunting shoppers have many options to compare prices.
If Harris wins the White House and moves forward with the idea, its impact will depend on how it is implemented, Witte predicted.
“Any price gouging ban will only be as good as its enforcement,” he said.