Jason Furman, former Obama economist, critiques Vice President Kamala Harris's price control scheme, highlighting potential adverse economic impacts.
Breitbart reported that Harris recently proposed a federal ban on price gouging as part of her strategy to address rising food inflation. During her announcement, she attributed the soaring prices primarily to corporate gouging, suggesting that stricter regulations could prevent unjustified price hikes.
On Thursday, Jason Furman, who served as an economist under President Barack Obama, voiced strong criticism against this proposal.
He described the price control policy as impractical and potentially harmful, asserting that if implemented, it could lead to worsening economic conditions rather than improvements.
Catherine Rampell, a prominent opinion columnist for the Washington Post, echoed Furman's concerns. She argued that the proposed policy would extend government-enforced price controls across numerous industries, not just the food sector. This drastic shift from market-driven pricing to regulatory oversight could disrupt the economy significantly.
According to Rampell, the implementation of such extensive price controls could trigger various adverse effects including shortages, black markets, and increased hoarding.
She highlighted that the policy's approach to shifting the responsibility of price determination from the market to government bureaucrats is fraught with potential pitfalls.
Rampell also pointed out that this change would prevent companies from offering quantity discounts, a common practice that benefits both businesses and consumers. Moreover, the policy mandates that public companies disclose comprehensive internal economic data, adding a layer of complexity and potential risk to business operations.
Economic data from the Department of Labor illustrates a stark increase in prices under the Biden-Harris administration.
Since their inception, the overall price level has surged by approximately 20%, with grocery prices alone escalating by 26%.
The input cost for a typical fast food meal exemplifies this inflationary trend, having increased by 33% since 2019. These statistics offer a concrete illustration of the inflationary pressures that have been building over recent years, affecting everyday expenses for average Americans.
A poll conducted in June by Monmouth University revealed widespread public skepticism about the administration's economic strategies.
The poll showed that 87% of Americans felt the administration's policies either harmed or did not impact inflation control efforts.
Furman's outlook on the proposed price control policy is dim. He hopes the policy remains mostly rhetorical rather than becoming a reality due to its potential to trigger significant economic repercussions.
"This is not sensible policy," Furman remarked during his critique. "There’s no upside here, and there is some downside.”
Rampell adds a broader perspective, detailing that such sweeping changes could have far-reaching effects on the entire economy. "It’s hard to exaggerate how bad this policy is," she stated forcefully. "Far-off Washington bureaucrats would replace supply and demand as the determinants of prices or profit levels."
The debate surrounding Harris's proposed policy highlights a critical intersection between political intentions and economic reality. With considerations of practicality and potential unintended consequences, the administration faces significant scrutiny as it attempts to navigate through these turbulent economic challenges.