- Kamala Harris' proposal to stop price gouging has sparked cheers and warnings from commentators.
- The Democratic presidential candidate plans to pursue a federal ban, make rules, and punish defiers.
- Dave Ramsey and Kevin O'Leary slammed her plan, while Paul Krugman said it might not be a bad idea.
Vice President Kamala Harris' plan to stop price gouging in the food and grocery industries has divided commentators, with some cheering her proposal and others labeling her a communist.
The Democratic presidential nominee intends to pursue the first federal ban on excessive overpricing of food and groceries, introduce rules to stop big industry players from exploiting consumers to rake in exorbitant profits, and empower regulators and prosecutors to root out and punish bad behavior.
Harris has framed her proposal as a response to painful inflation in recent years, which has made it far more expensive for families to afford basics such as food, fuel, and rent.
The Federal Reserve responded to surging prices by hiking interest rates from nearly zero to north of 5%, which resulted in many people paying more toward their credit cards, car loans, and mortgages each month. In short, consumers have been dealt a one-two punch of steeper prices and borrowing costs.
Several experts and other commentators have reacted strongly to Harris' plan. Here's what they said:
1. Lindsay Owens of Groundwork, a progressive think tank and advocacy group
Harris is "laser-focused on lowering costs for American families, particularly the costs that matter most — the cost of a roof over your head and food on the table," she said, later adding: "This is not price controls; 40 states have price-gouging laws on the books." She then said, "Donald Trump did price-gouging laws," adding: "The reason that she's proposing something like this is because it works." (CNBC)
2. Mark Zandi, chief economist at Moody's Analytics
"Aggressive or unfair pricing practices are at bottom of list of reasons" for the high inflation we've suffered over the past recent years, "if they're on the list at all," he said, adding: "Today, it's hard to point to any significant, meaningful examples of price gouging."
He later said: "Things can and should be done to make sure there is competition in the markets and businesses are following good pricing policies. And prices need to be transparent so people can shop for a good deal." (CBS MoneyWatch)
3. Donald Trump, Republican presidential nominee and former president
"After causing catastrophic inflation, Comrade Kamala announced that she wants to institute socialist price controls," Trump said, adding: "What they are doing is a communist takeover of our country." (New York Post)
4. Dave Ramsey, personal finance guru and host of 'The Ramsey Show'
"It's been tried; it does not work. What works is to flood the market with supply: Lots of oil means lower oil prices. Lots of labor means lower labor prices. Lots of whatever means lower prices — it's a simple supply-and-demand curve," he said.
Ramsey added: "When you insert government and try to artificially cramp it down, it simply does not work because you can only hold that hose for so long until the pressure builds up and then it blows on you." (Fox News)
5. Kevin O'Leary, 'Shark Tank' investor nicknamed 'Mr. Wonderful'
"Price fixing, we tried that in the '70s — that's beyond crazy. Can you imagine an America where there's a ministry of pricing for groceries that tells a farmer what an apple can be sold for and what you can buy it for? I mean, that is a horror film on Netflix no one's even written the script for. That's not America. There's no chance in hell that's going to happen."
O'Leary added that price fixing had strong links to communism, saying it's been tried in Cuba, Venezuela, North Korea, and the Soviet Union. "It just reduces supply like crazy. It's a really bad idea," he said. (Fox News)
6. Paul Krugman, Nobel Memorial Prize laureate and Princeton economist
"I've been amazed at how many credulous commentators, and not just on the right, have asserted that Harris is calling for price controls, making her out to be the second coming of Richard Nixon if not the next Nicolas Maduro.
"What she has actually called for is legislation banning price gouging on groceries. Obviously, this is a populist political gesture — a way to offer something to voters upset about high food prices. But just because something is popular doesn't mean that it's a bad idea."
Krugman added that many states, including Texas, had laws banning businesses from overcharging for essentials like food and fuel during disasters. (New York Times column)
7. Target CEO Brian Cornell
The retail giant's boss said that offering value to customers is core to Target's business, adding that its operating margin was only about 6% and shoppers could easily compare prices across different stores to find the best deal.
"We're in a penny business. It's a very competitive space," Cornell said. (CNBC)
