As Democrats whoop it up at their somewhat vestigial (they’ve already nominated Kamala Harris for president in a “virtual vote”) national convention in Chicago, they seem relatively enthused by her economic platform — far more enthused than American consumers will be with its results if implemented.
Two features in particular stand out for their combination of economic ignorance, likely disastrous results, and, unfortunately, political popularity.
First, Harris proposes a federal ban on “price gouging” by sellers of food and groceries.
Second, she touts $25,000 in “down payment assistance” for first-time homebuyers.
Yes, “price gouging” sounds like a bad thing (that’s why it’s called “gouging,” to make it sound bad.) The real term for laws against it is “price controls.”
We’ve tried price controls in the past, and the results are in: They always result in shortages.
Maybe you’ll pay less for that head of lettuce or package of ground beef … if you can find it. But you’re a lot less likely to find it.
Holding prices artificially low by government edict tells producers — at least those producers who aren’t just wiped out of business entirely — that their money is better invested in something other than the price-controlled products.
By all means, enjoy that $3.99 ribeye that isn’t on the shelf in the spot marked “ribeye” when you do your shopping.
As for handing out $25,000 checks to millions of home-buyers, the main effect will be to drive up the price of that house you want to buy … by about $25,000. The word for more money chasing the same amount of goods is “inflation.”
Sure, more houses might get built (especially since Harris also proposes tax credits for homebuilders), but they’ll be more expensive houses. A government check on the front end won’t reduce your final cost on the back end. Maybe the $25,000 will get you closer to your down payment, but your mortgage payments will be higher or go on for longer.
Not that her major party opponent’s plans make any more sense.
Donald Trump’s “Tariff Man” act, which Harris criticizes even though Joe Biden just continued the Trump-era tariffs and even added some new ones, has been jacking up your cost of living for several years now … and he’s promised to put that on steroids.
Nor does either candidate offer any serious proposals to cut federal spending and balance the federal budget. It’s all tax and spend, all day long, in every direction.
OK, not EVERY direction. If Libertarian presidential candidate Chase Oliver wins in November, he’ll whip out his veto pen and push Congress to cut its spending, pay down its debt, and get its grubby hands out of your pockets.
Yes, I know how unlikely that is. But a man can dream.
Thomas L. Knapp (Twitter:@thomaslknapp) is director and senior news analyst at the William Lloyd Garrison Center for Libertarian Advocacy Journalism (thegarrisoncenter.org). He lives and works in north central Florida.
PUBLICATION/CITATION HISTORY