Dave Ramsey Disagrees With Kamala Harris’ Inflation Plan — What Do Others Think?
Written by
Vance Cariaga
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Chris Cluff
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When Vice President Kamala Harris recently unveiled a series of economic proposals as part of her 2024 presidential campaign, one item that immediately grabbed headlines was her support for a federal law against food price gouging. The idea is based on data showing that some food companies have seen record profits even as they’ve blamed inflation for skyrocketing grocery prices.
Those critics include radio show host and financial guru Dave Ramsey. Appearing on the conservative Fox News talk show “The Ingraham Angle,” Ramsey pointed to price controls in the 1970s as evidence of the failure of such policies.
“When you insert government in it and artificially try to cramp prices down, it simply does not work because you can only hold that hose for so long until the pressure builds up, and then it blows on you,” Ramsey said.
Ramsey is not the only one who has pushed back against the proposal. Republicans who back ex-President Donald Trump in the 2024 election accuse Harris of pushing “communist price controls,” Politico reported. Food industry officials have also sounded the alarm about the proposal, as have economists who question whether price controls will be effective in battling food inflation.
“There are lots of reasons for the high inflation we’ve suffered over the past several years, but aggressive or unfair pricing practices are at bottom of list of reasons, if they’re on the list at all,” Mark Zandi, chief economist at Moody’s Analytics, told CBS MoneyWatch. “It may have been more of an issue back when supply chains were being disrupted by the pandemic, but today it’s hard to point to any significant, meaningful examples of price gouging.”
Even economists who might otherwise back Harris have criticized the price gouging proposal. That includes Jason Furman, a Harvard economist who worked in the Obama administration.
“This [is] not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality,” Furman told The New York Times.
In a blog shared with GOBankingRates, Debbie Jennings of the National Taxpayers Union Foundation wrote that price controls for groceries “won’t actually fix inflation,” but they could lead to shortages or encourage black market activity.
“Instead, the administration should consider broad anti-inflationary measures to eliminate government barriers to production, repeal harmful tariffs and reduce deficit spending,” Jennings added.
In response to the criticism, Harris’ allies say her comments about price gouging have been taken out of context. Not much is known about how the policy would work, though it would likely allow the Federal Trade Commission to impose fines on excessive price hikes, The Washington Post reported.
Defenders of the idea say it merely represents a “targeted” expansion of existing state powers rather than new government price controls.
“Most of the criticism is from well-intentioned but poorly informed people who are interpreting the elevation of state laws to the federal level as price determination, but part of it is just malicious attacks from the other side trying to characterize her as a socialist,” Ben Harris (no relation to Kamala), a Treasury Department official under President Joe Biden, told The Washington Post.
Among those who have come to Harris’ defense is billionaire entrepreneur and “Shark Tank” star Mark Cuban, a frequent Trump critic.
As Benzinga reported, Cuban used a series of tweets on X (formerly Twitter) to clarify what Harris actually said. In one tweet, Cuban shared the transcript of Harris’ original speech mentioning the price gouging proposal and noted that it included “nothing about price controls or price caps.” Another tweet pointed out that 37 states, including Texas, already “have price gouging laws” on the books.
According to the FindLaw website, many current price-gouging laws are designed to prevent businesses from hiking prices when a state of emergency has been declared. For example, if an area is hit hard by severe weather, the law would ban businesses from hiking prices more than 10% above their normal levels.
Some states take it a step further by banning “unconscionable” price hikes for commodities, rental facilities, medicine or household essentials even if an emergency has not been declared.
Other Harris defenders have tried to calm the nerves of critics by suggesting that her proposal probably won’t ever make it into law, anyway. Such a bill “has no chance of passing Congress anytime soon” even if Democrats manage to win the White House and Congress this year, Politico reported, citing comments from six Democratic lawmakers and five Democratic aides.
Instead, they say, Harris’ proposal is a “messaging tactic” designed to show that she is attuned to the financial burden that high food prices have placed on U.S. households.
“I think people are reading too much into what has been put out there,” Michigan Gov. Gretchen Whitmer, a Democrat, told the NBC News program “Meet the Press.”
Meanwhile, not all economic experts think price controls are necessarily a bad idea in the first place.
Dan Scheitrum, a professor of agribusiness at California Polytechnic State University, San Luis Obispo, told ABC News that Harris’ plan to crack down on potential anti-competitive practices in the food sector could lower prices for some household staples.
“If price fixing is taking place and it gets addressed, I expect that could undo some of the price increases,” Scheitrum said.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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