Never mind that many stores are currently slashing prices in response to renewed consumer bargain hunting. Ms. Harris says she’ll target companies that make “excessive” profits, whatever that means. (It’s hard to see how groceries, a notoriously low-margin business, would qualify.) Thankfully, this gambit by Ms. Harris has been met with almost instant skepticism, with many critics citing President Richard M. Nixon’s failed price controls from the 1970s. Whether the Harris proposal wins over voters remains to be seen, but if sound economic analysis still matters, it won’t....
Even adjusted for the pandering standards of campaign economics... Ms. Harris’s speech Friday ranks as a disappointment.
ADDED: We're listening to the speech. At one point, she called price gouging "price gauging."
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108 comments:
Are they trying to nuke her, too? WTF? Where’s Krugman and Larry Summers with the Sunday NYT think piece on why Kamala’s economic plan is Newer than the new deal?
https://www.grumpy-economist.com/p/opportunity-and-lower-costs
Here’s the constructive economic proposals…I know you prolly won’t read them.
We know Woke Salad Kammie is a blithering idiot. The question is … is her entire staff afflicted with the same economic illiteracy? You know this wasn’t her idea.
will D's have new respect for Richard Milhouse Nixon [I'm no crook]
The ones who have not yet driven spikes into their ears to stop the pain
WaPo says:
In a pivot from the raucous rallies that have so far defined Harris’s month-old campaign, the vice president instead opted for a smaller setting of about 250 supporters that allowed her to explain a number of economic policies aimed at “lowering costs for American families.”
The Last Refuge says:
The media construct around the political campaign of Kamala Harris took a big hit today when Harris held a campaign event in Raleigh, North Carolina, but did not have a big-name music star to bring the crowds. As a result, only a few dozen supporters showed up to hear the preliminary economic plan of Kamala Harris.
Po-tay-to, po-tah-to...
Kamala is just throwing linguini against the wall at this point. Does she think her voters are dumb enough to buy this BS? Is she even trying to win this election?
"Harris supplies gimmicks. ‘Price gouging’ is not causing inflation. So why is the vice president promising to stamp it out?"
Very interesting. Observations against interest by WaPo. Now, let's extrapolate. Might her entire candiacy be a "gimmick" in the same sense? Might her "proposals" all depend on the same kind of misdiagnosis? Could it be the case that she has no earthly idea about how an economy works or how policies affect economic behavior long term?
Who the F goes to a political rally? I understand why Trump draws a crowd. Anyone else? Why waste your time.
Who the F goes to a political rally? I understand why Trump draws a crowd. Anyone else? Why waste your time.
Where are these mysterious stores "Cutting prices" for "bargin hunting consumers"? Go look at the price of Groceries, Gas, your rent, housing prices, car prices, air ticket prices, or your Cable TV or Electricity Bill. Compare Jan 2021 to August 2024 and tell me, that "prices are down". LOL
Why for example, has the steak skyrocketed in the last 3 years and not come down? I thought supply would increase, thereby causing prices to lower. Econ 101. But that didn't happen. why?
I hate all these dumb morons, who don't know the facts, don't know why prices went up, don't know the industry structure, but when someone say "price controls" they remember their Econ 101 class and say "why that's communism, boy. That cant work".
If you think Harris proposing "price controls" is a vote loser - its not. Most people want lower prices and telling about "the magic of the free market" isn't going to cut it.
Harris proposes lots of politically smart voter payola for the middle class.
Policy wise? Mostly meh. But no worse than US politics as usual these days. No wonder we have huge deficit that nobody apparently cares about. Trump proposals are same or worse.
Why did price controls work during WW II? Discuss.
The point of price gouging is allocating scarce items to the people needing it most. Say you need ice to chill insulin after a hurricane. You outbid the beer drinker.
I love how the Establishment Liberal Democrats after supporting endless Trillion dollars spending bills that no one asked for. Now talk about how 'murican democracy just demands all that spending. And gosh darn it, the rubes have always been like that. Whaddayougonnado?
These are also the same assholes that support $200, $300, 400 billion dollars for useless war in the Ukraine or the Middle east. Or to buy bombs for israel. And want to spent $500 billion a year housing/feeding/supporting illegal immigrants. But Gosh, don't have those price controls on food. "Why that's communism, boy".
Well, for one thing- rationing. I have my grandparent's ration book and coupons.
Her big plan to "ban" price-gouging? Read the fine print: "More scrutiny" of grocery store mergers. Not stopping them. Just "more scrutiny." As if she has been scrutinizing them thusfar, but not scrutny enough. So she's going to up her scrut of these. It's a bunch of RUBE SPINNING.
She could, of course "increase scrutiny today." Since she's in CHARGE ALREADY. But no, we have to elect her to get the additional "scrutiny" but not stopping the mergers. Just scrutinizing them harder before okaying them.
They know they have a foolproof plan to STEAL the election. They don't need to campaign, or have policies that make sense. They just have to say words, then the media will write words and not scrutinize them very hard.
Ration coupons.
The Democrats have no incentive to cut the deficit as they did during the Clinton era. Every time that the supposedly fiscally disciplined Republicans have been in power in modern history they have blown the budget on tax cuts for the rich that never deliver without making the painful concordant cuts to the budget.
If the Democrats do all the hard work to bring some balance to the budget only to see the Republicans blow it all again they might as well spend for themselves and let the Republicans take responsibility themselves for once.
Once again, the Democrats return to their default position of claiming victim hood while promising to identify and punish the “villains du jour”. Today’s villains are grocery stores and Kamala is rounding up her lynch mob.
Last post. Its like rent control. They aint making more land, and if businesses decide to congregate in Manhattan or the bay area or wherever, rents skyrocket. So people naturally demand rent controls. The capitalists then wail "Let the free market work". Except that doesn't work for the renters, just the owners. Point that out, and they fall back on "But they'd build more rental units if there were no controls". So, allow the free market on NEW rentals. But mysteriously all the "Free Enterprise" types still don't accept that. Rent control is still bad.
So, you realize that its just greedheads using fake economics to "rent seek" off everyone else. Unless you're a gullible rube who watches Fox news.
By and large they didn't. Price controls on meat were particularly unpopular and resulted in black marketing and even a resurgence in cattle rustling. Ditto for gas. Wartime price controls and rationing only "worked" in spite of themselves and Office of Price Administration enforcement efforts got progressively more authoritarian as the war went on.ĺ
Oh man. I’m stealing that analogy without attribution…
The free market seems to work for fentanyl. No price-gouging there.
Rent control... An internet search of "city with the most rent control" provided this result:
"As of 2019, New York City had the most rent control of any US municipality with 63 cities, followed by Los Angeles, San Francisco, Oakland, and Washington, D.C.."
Maybe New York needs more rent control?
She ran to the right with her no tax on tips steal... Now she is basically going full Failed-State Venezuelan Socialism / Maduro.
Aside from the fact that you've completely ignored nearly 2000 years of experience regarding price controls (e.g., Emperor Diocletian's Edict on Maximum Prices, 301 A.D.), yeah, Sparky, you're on it.
The $25K home purchase subsidy will be given to the same people who got $100K in student loan bailouts already.
Yes, she does think her supporters are ignorant enough. She’s banking on “I’ll be the first black woman President” LIV to carry her across the finish line.
price gauging is THE MOST EVIL!!
Evil Capitalists GAUGE, JUST HOW HIGH they can jack up prices, and STILL make sales
THIS IS THE MOST EVIL!!!
ALL Prices MUST BE either set randomly, or by the central committee
Free Markets do NOT promote equity!!!
“Experts who faulted corporate price gouging for a portion of the price increases said it arose from market concentration that allowed a handful of dominant companies in a given industry, including the food and grocery sector, to raise prices without fear of competitors undercutting them with lower-priced alternatives.
Grocery retailer profit margins surged in 2021 and rose even higher two years later, even after price increases had begun to cool, a Federal Trade Commission study in March showed.
A price-gouging ban would help police corporations that otherwise would be tempted to leverage their market power by excessively raising prices, the experts said.
"Large, incumbent corporations that control a large share of a sector, including grocery companies, have way too much power to control prices," Lusiani said. "That's an underlying cause of the inflation."
ABC
I will point out here that Democrats could not be deficit spending for the last 3.5 years except for Republicans passing the Democrat spending bills in the House. Our problem isn't Republicans vs. Democrats ... it's FAKE POLITICAL PARTIES.
Please read Thomas Sowell's book on "Basic Economics" if you think they worked then.
The people who sign $1.9 T spending bills are not the people you want deciding what a loaf of bread should coat.
She’s proposing a micro solution to a macro problem.
Can she read a teleprompter? Or did it actually read "gauging" instead of "gouging". Kamala has a problem hiring and keeping competent staff. And as for Inga's little homily on "grocer profit margins" surged in 2021--in an industry where the usual profit margin--historically--is in the one to two percent range, it doesn't take much to be a "surge".
Don't be too hard on Kamala. She doesn't understand any of what she's saying. She's just reading a teleprompter. That's her job.
The Five Year Plans had a lot of downsides also. Just thought I'd mention that.
"Large, incumbent corporations that control a large share of a sector, including grocery companies, have way too much power to control prices," Lusiani said. "That's an underlying cause of the inflation."
Then why didn't we see it during the Trump Administration?
For Inga who obviously knows very little about the grocery store business "Conventional grocery stores have a profit margin of about 2.2%, making them one of the least profitable industries in the US." (Source:The Grocery Guy or any case Study at any B school in US
Kamala should just say that she is going to apply her rent control and price “gauging” limits tomorrow by telling Beiden to sign an eo. Then in a few months we should have some positive results. But if it will work, why did they not do it two years ago? To punish us?
She's drunk!
Inga is and says so every day.
For RC Ocean; The price of beef is almost always dependent on the price of feed. Price of feed goes up, herds get reduced, price of beef goes up until price of feed comes down and herds expand. Happens over and over and over again.
The good news is that Kamala promised 1st time homebuyers a $25,000 payout if they buy a home ... which means my home value just went up by $25,000. Thanks Kamala! Even though she can in now way do this, my house price just went up anyway, even if she never delivers this, and she can't.
The Honeymoon is over. I wonder to what extent the Joyous Honeymoon imbued Kamala’s speechwriters with enough hubris for them to float this monstrosity.
Nope, idiot.
If you think Kamala Harris will make steak affordable you deserve everything you get
Inflation is ALWAYS too much money chasing too few goods. All the rest is BS. I agree that Thomas Sowell's Basic Economics book is a must read for anyone who wants a general understanding of Economics . I doubt that anyone who reports for the MSM has ever read it or any other Econ text.
We know Woke Salad Kammie is a blithering idiot.
Ok. I thought that Kamala-lala-ding-dong was top notch, but Woke Salad Kammie is da bomb. I am trying to remember the artist. Was it Tony Joe White?
It's statistics again. Something that Inga does not understand.
Why Your Groceries Are Still So Expensive
“In 2022-2023 Kraft Heinz profits skyrocketed from $225 million to $887 million, an increase of 448%. Gross profit margins reached 34%, up 400BP over Q3 2022.
Similarly, chocolate candy sales are up 34%, unit volumes are down 8% and prices are up 46%. The top 3 companies, including Hershey’s, Mondelez and Mars, possess over 80% market share. Hershey’s CEO said in 2022, “Pricing will be an important lever for us this year and is expected to drive most of our growth.” Hershey’s saw a 62% increase in profits in 2021. Hershey’s 30 brands control at least 46% of the candy category.
Much Of This Pricing Activity Can Be Explained By Sellers’ Inflation
This is pressure from suppliers to increase prices. How? Professor Isabella Weber explains “that supply shocks allowed corporations to tacitly collude, hike prices, and rake in record profits…This is a form of implicit collusion,” she said. “Firms do not even need to talk to one another to know that a cost shock is a great time to raise prices.”
Alex Turnbull, a commodities analyst, echoes this, “When you go from 15 to 10 companies, not much changes. When you go from 10 to 6, a lot changes. But when you go from 6 to 4 – it’s a fix.”
And the record profits Professor Weber mentions? Groundwork Collaborative recently found that corporate profits accounted for 53% of 2023 inflation. EPI likewise concluded that over 51% of the drastically higher inflationary pressures of 2020 and 2021 were also direct results of profits. The Kansas City Federal Reserve even pegged this around 40%, indicating that sellers’ inflation is now a pretty mainstream idea.“
So why hasn't Biden/Kamala TAKEN THESE UNEARNED PROFITS?
I knew it! It’s the rich kulaks again!
Many dont know the difference between revenue and profit. Mention profit margin and you lose them.
I like how she thinks she is unburdened by the decisions made by the Biden Administration on the economy to date when she was often the tie breaking vote in the Senate.
So who does the Washington Post's editorial board think is going to ride in at the last moment and rescue us?
Not one word about energy prices more than doubling.
That big speech was nothing but bad vibes. Harris was laying it down, but the peeps aren’t picking it up. They know it’s pure, unadulterated horseshit.
Seen on the internetz…
Q: "Can someone please explain to me in crayon how "inflation keeps going down," but we continue to live in the most expensive timeline of our lifetime?"
A: "I used to weigh 200.
In 2020 | gained 5 lbs
In 2021 | gained 11 lbs
In 2022 9 lbs
In 2023 6 lbs
This year only 3 lbs
So my weight gain is down. But now I weigh 234?"
Biden smiles.
People think if inflation is coming down so should prices. That’s not how this works. It means prices are going up more slowly.
Let’s be real. Black Kamala throws collard greens.
When the government does it, they call it "Demand Management".
When you do it, they call it "Price gouging".
Dixie - Thank you. What a treat!
No. One. Cares.
Rant all you want on your blog, boomer. None of the generations that count care about you yelling at a cloud.
His caretakers should then check his Depends.
Yes, it was Tony… unh unh… Joe White.
What a fool believes…
Rent control is almost always a response to a government-caused housing shortage. That's why removing rent control rarely increases the supply of housing - the initial cause of the shortage is still there.
Back in the 1970s, Berkeley had made it very difficult to build new apartments, from a combination of environmental foolishness and hostility to the University. Combined with the effects of the Carter inflation, the political will to pass a very strict form of rent control was unbearable. However, 40 years later, Berkeley had decided to allow apartments to be built by private developers again, and rents are now increasing more slowly than rent control allows.
Inga's article from Forbes is garbage. Not once does it compare profit margins lately to pre-pandemic profit margins, or mention how producers did in 2020.
What do grocery prices matter to shoplifters?
OK, Inga, you fuckwit: why are companies gouging us today when they had their (wink wink) ally in the WH five years ago? You really should have yourself checked out to see if there's trachaenia worm up there in your an cephalic head.
Price gauging? I presume (1) it was a typo on the teleprompter, (2) there really are people like Will Ferrell’s character in the “Anchorman” movie series so clueless that they’d read whatever they see on the teleprompter, and (3) Kamala Harris is one of them.
Prove me wrong.
They really are trying to relive the election of 1968. President defers reelection, VP slotted in by hook and crook, Democrat convention in Chicago, maybe with riots. And now cribbing off Nixon of 1970 with price controls. Will the wage controls come after the election?
A last hurrah for those who remember the election of '68 fondly, I guess.
Does she think her voters are dumb enough to buy this BS?
Yes. (That's why they're her voters in the first place!)
Good for the WaPo. The NYT could only bring itself to publish equivocal piece, saying the issue is "complicated." Then they manage to find a Marxist economist who says going after "price gougers" is a great idea, and another economist who says it's a bad idea. So apparently it's just a mystery.
“she called price gouging "price gauging."”
The Hawk tuah path to victory is just inflated rethoric. And here is her Wikipedia page saying the selected Democratic Party candidate “graduated [Howard University] in 1986 with a degree in political science and economics.”
But wait! There's more! Let’s not forget that in 1968 RFK Senior was a candidate, that assassination played a role, and that Sirhan Sirhan was a Palestinian who used violence to make a political statement.
I was 1-A in 1968 and received my induction notice just 6 weeks after the election. I have no fond memories of that election at all.
Inga and Professor Weber assume the vegetables grow legs and walk to the store, not needing any trucks to bring them from the farm to the warehouse, or from the warehouse to the stores.
I grew up in AZ. We were not allowed to put the AC below 80. We had fans everywhere. It was fine, but not ideal.
Now in my own house we keep the temp at 78 and 76 for bedtime.
When we lived in Colorado we opened the windows often, but it's impossible to do with small children, unless you want them trying to sleep in broad daylight at 9pm.
I doubt any of these people have even comprehended trying to sleep when the room is 80. Have them try that and then get back to the rest of us about the luxury ofAC
This points to how economically ignorant her Alinskyite/Obama puppeteers are. And they’re eager to see if it moves the polls needle closer to the cheat margin they need. You can also easily see they are somewhat desperately trying to cleave off some lower socioeconomic deplorables from the Trump base.
Once again it’s all a Hollywood script ( narrative) that sounds real but is only a story. Add a smiling minority reader of the story and poof you are a politician. So don’t expect readers to pronounce the word as on the teleprompter right.
Damn you would think if grocers were price gouging they would do better than settle for 1.18% profit, which is down from the 3% historical average for that sector. I mean if they can name their own price why not make 9% like the financial sector, which coincidentally is supporting the Democrats?
That is really puzzling don’t you think, Inga?
Inga: If it even exists (it's one economists idea) "sellers inflation" is a product of general inflation. If you read the Kansas City Fed's article you will see that the margins sellers are "raising" today are being raised so that they can afford to purchase replacement merchandise in the future at much higher prices because of general inflation. We really should purge chickens because egg prices have gone up by about 75% over the last couple of year's now there's some real "seller's inflation"! Once again inflation is "too much money chasing too few goods" and once again the government is the guilty part.
"The Democrats have no incentive to cut the deficit as they did during the Clinton era."
It is almost like Rich is the dumbest fuck there is. The Republicans controlled both the House and the Senate during the last 6 years of the Clinton Administration. Even worse for Rich- the biggest spending item Clinton ever proposed was shot down not by Democrats but by Senate Republicans during Clinton's first 2 years in office.
They didn't. There were huge black markets for all the goods that price controls made scarce.
look at it this way. The purchasing power of your dollar went down by 25, 000. Governments cause inflation.
Inga. Corporations either make money or you don't eat. What I especially like about peasants like Inga is that she thinks that Albertsons or Ralphs have these giant walk in freezers stuffed to the gills with thousand dollar bills and bags of gold coins bursting at the seams. Explain Aldis to us Inga.
That's, like, your opinion, man. You might as well be talking to a chimp.
To be fair, "gouging" hasn't been in the news for years, and "gauging" is one of the most bedeviling words in English orthography (probably the French are to blame).
That doesn't justify the cockamamie policy, though, and if Kamala thinks those policies are good nothing stops her and Biden from implementing those policies tout de suite.
That is a great list.
You are correct that there are many voters who will find this appealing. You incorrect in assuming that they are right.
You also should review inflation. Its when the government prints a lot of money. That pushes up prices as the value of the currency falls.
No "corporation" has to do anything. Inflation is caused by government. Or you can explain why German hyperinflation was caused by German supermarket greed.
They spend money on subsidizing food already. SNAP and farm subsidies. You're a fool to want price controls. See Venezuela. Nobody will make products if they can't cover their costs, which are up due to inflation - the problem is costs went up but wages did not.
Every time we see negotiations on spending, it ends with "you want to shut down the government!" and GOP has learned voters don't like that.
2021? Oh right the time when everyone suddenly had stimulus money. And huge spending bills were passed. And inflation started. Gee, I guess prices would surge then.
BTW, yes, we actually do make more land.
Single family home. Knock it down. Build a 4 story apartment. You created more land. Then knock that down and build a skyscraper. Wow, you created even more land.
Do you know what a gross profit margin is? Its what you make before your other costs are deducted from it. You can have 50% gross margins and lose money.
https://www.nytimes.com/2024/05/10/business/cocoa-prices-chocolate.html#:~:text=For%20much%20of%20the%20past%20decade%2C%20the%20price,threshold%20that%20hadn%E2%80%99t%20been%20crossed%20since%20the%201970s.
Yes indeed. The only one I would disagree with is local zoning codes. You can destroy a neighborhood, or a town, very quickly if one asshole decides to do something awful. The people who live and invest in a place should have a say in what happens to the place where they live.
I am not an economist. (Way back when, I was an English major).
I do not understand how anyone can believe that "price controls" will "control prices" while the government prints and distributes ore currency.
X=goods. Y=Money. The more money there is to purchase goods, the more the goods will cost.
This is not rocket science. The people who try to tell you that there is some disconnect between the printing of money and the price of goods are lying to you.
(Yes I understand that as we produce more goods we probably need to make more currency to keep pace with growth in the supply of goods and the growth in the population. That is not the problem right now.)
XX
So people naturally demand rent controls.
No kidding. People also naturally demand more money, more sex, more food, more rock and roll, rock candy mountains and free cable.
Make a decree. Problem solved! Everybody gets what they want.
The $25K home purchase subsidy will immediately increase the price of every home on the market by $25K. Just as the endless education subsidies have increased the cost of education by the precise amounts of the subsidies.
Economics is not rocket science.
Alas, the all-access link is not.
That is far too intelligent to see the light of day.
Good cuts of steak were completely unavailable to the average consumer. Yet- pricy hotels and the elite didn't have any problems getting them...
In short- as usual- price controls benefited only the well connected, not anyone else.
Milei got rid of it in Argentina, along with allowing eviction of freeloaders, and, lo and behold, rental units available rose, and prices dropped. In a month. Before new building even kicked in.
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