Harris Announces Federal Ban on Food Price Gouging Amid Rising Costs
Food prices have surged by over 20% during the Biden-Harris administration, prompting many Americans to stretch their grocery budgets. In response, Vice President Kamala Harris announced a federal ban on price gouging within the food industry during a campaign event on Friday.
"My plan will include new penalties for opportunistic companies that exploit crises and break the rules," Harris stated.
However, some economists caution that this proposal could lead to unintended consequences. Gavin Roberts, chair of Weber State University’s economics department, studied anti-price gouging laws implemented during the pandemic and noted that such measures often led consumers to stockpile goods, worsening shortages.
“When prices are high, the best policy action is often no action at all,” Roberts told CNN, explaining that high prices might encourage consumers to switch to more affordable alternatives, helping maintain supplies for those willing to pay more.
While Harris argues that her proposal will enhance competition within the food industry, Roberts suggests it could instead maintain the status quo by discouraging new competition that might reduce prices in the long term. Jason Furman, a former top economist in the Obama administration, also criticized the plan, calling it "not sensible policy" with potential drawbacks for consumers.
Despite these concerns, Harris' campaign materials indicate that the plan includes increased resources for federal agencies to tackle price-fixing and anti-competitive practices in the food industry. Campaign staff declined to address the criticisms directly, referring instead to Harris’ speech and the campaign fact sheet.
The debate over the causes of recent inflation remains unresolved. While the San Francisco Federal Reserve found no strong link between price gouging and inflation, some progressive think tanks believe there may be a direct connection. Lindsay Owens, executive director of the Groundwork Collaborative, supports Harris' proposal, arguing it would empower agencies like the Federal Trade Commission to "crack down on bad actors" and ensure fair pricing for consumers. “It’s good to see this aggressive approach,” Owens told CNN.