Vice President Kamala Harris‘ presidential campaign has embraced a populist economic message, blaming corporate greed for prime grocery prices. Nevertheless, her proposal to ban price gouging is drawing criticism from economists, including a key figure from the Obama administration.
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Jason Furman, who served as Chairman of the Council of Economic Advisers under President Obama, dismissed Harris’s plan in plain terms. “This is just not sensible policy,” Furman told The Latest York Times. “The most important hope is that it finally ends up being a number of rhetoric and no reality.”
Harris’s campaign announced last week that she would call for a federal ban on corporate price gouging for groceries in an upcoming economic policy speech. The move appears designed to appeal to swing voters frustrated by persistent inflation, particularly in on a regular basis essentials like food.
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Nevertheless, economists across the political spectrum argue that corporate behavior played a minor role in recent price increases in comparison with aspects like supply chain disruptions, shifts in consumer demand, and expansionary fiscal and monetary policies through the pandemic.
“If prices are rising on average over time and profit margins expand, that may seem like price gouging, nevertheless it’s actually indicative of a broad increase in demand,” Joshua Hendrickson, an economist on the University of Mississippi, explained to the Times.
Furman warned that policies aimed toward curbing price increases could hinder economic adjustment. “If prices don’t rise in response to strong demand, latest corporations may not have as much inclination to leap into the market to ramp up supply.”
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The controversy points to the strain between politically popular proposals and economic orthodoxy. Kevin O’Leary, the “Shark Tank” investor, expressed surprise that Harris didn’t move toward more “centrist” policies. “Her advisors have given her some bad advice,” O’Leary said in a recent Fox News interview, predicting increased scrutiny of how the programs could be implemented.
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Some economists, nonetheless, see merit in efforts to handle corporate pricing power. Isabella Weber of the University of Massachusetts Amherst argues that allowing corporations to reap outsized profits during supply shocks could set a worrying precedent for future crises.
“If the worst of times for odd people finally ends up being one of the best of times for companies, some kind of basic social contract is sort of crumpling,” she said within the report.
With inflation cooling but still a top concern for a lot of Americans, the controversy over price gouging and company profits will likely remain on the front of economic policy discussions within the months ahead.
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This text ‘This Is Not Sensible Policy’: Obama’s Chief Economist Dismisses Kamala Harris’ Price Gouging Crackdown originally appeared on Benzinga.com
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