Trump Criticizes Harris’ Price-Gouging Ban as “Communist,” Despite Similar Laws in 37 States
Former President Donald Trump has strongly criticized Vice President Kamala Harris’ proposal for a federal ban on food price gouging, labeling it as “communist” and akin to socialist price controls. However, experts argue that the proposal is far from Soviet-style economic policies, pointing out that 37 states across the political spectrum already have their own versions of such laws.
During a recent rally in Pennsylvania, Trump claimed that Harris’ plan would lead to disastrous price controls reminiscent of President Richard Nixon’s wage and price freezes in the 1970s. He derided her proposal as a dangerous overreach, but consumer protection experts suggest otherwise. Unlike price controls that set hard caps on prices, price-gouging laws focus on curbing corporate behavior that leads to unjustified price hikes, particularly during emergencies.
Harris’ proposal aims to crack down on “excessive prices unrelated to the costs of doing business,” particularly in the wake of major mergers in the food and grocery industries. She envisions working with Congress to establish new guidelines for price-setting and empowering the Federal Trade Commission (FTC) and state prosecutors to investigate and punish violations.
This proposal is not without precedent. States as politically diverse as California, New York, Idaho, and Alabama have already implemented their own price-gouging regulations. These laws, often activated during emergencies, prevent companies from sharply raising prices on essential goods like fuel, medicine, and water. For instance, during the early days of the COVID-19 pandemic, Texas enforced its strict price-gouging laws with penalties as high as $250,000.
Interestingly, Trump himself invoked similar measures during the pandemic, issuing an executive order to prevent the hoarding and price gouging of essential health and medical resources. This directive, under the Defense Production Act, sought to ensure that companies did not exploit the crisis for profit.
Supporters of Harris’ proposal, such as Zephyr Teachout, a law professor and senior counsel for economic justice, argue that a federal law could close gaps in the current patchwork of state regulations. Teachout contends that state laws are effective against smaller operators but often fail to hold large multinational corporations accountable, as these entities can manipulate their operations to skirt state laws.
However, the proposal has faced skepticism from economists and industry insiders. A recent study by the San Francisco Federal Reserve found that corporate markups were not a primary driver of the recent inflation surge. Moreover, industry leaders like Target CEO Brian Cornell have dismissed the notion that retailers are profiting excessively, noting that profit margins in the retail sector are slim and that consumers have numerous options to compare prices.
The success of Harris’ plan, if implemented, would depend heavily on its enforcement. As Erin Witte, director of consumer protection at the Consumer Federation of America, emphasized, “Any price-gouging ban will only be as good as its enforcement.”
As the debate continues, it remains to be seen whether Harris’ proposal will gain traction in Congress and how it will be received by voters concerned about the ongoing impacts of inflation.
