Vice President Kamala Harris recently proposed a ban on “price gouging” by food suppliers and grocery stores, aiming to alleviate concerns over high grocery prices and inflation. Under the Biden-Harris administration, grocery prices have risen by 21%, contributing to an overall 19% increase in costs that has impacted Americans’ view of the economy. While wages have increased since the pandemic, many still struggle with higher expenses.
Price gouging usually occurs following supply disruptions like natural disasters when retailers sharply raise prices, particularly for necessities. While some states have laws against price gouging, there is no federal ban in place yet. Harris’ proposal may not immediately reduce grocery prices, as it’s uncertain how much price gouging is currently happening.
Despite President Joe Biden’s statement that inflation has subsided, Harris believes high prices persist even after supply chain issues have improved. The focus on combating inflation may stem from its continued political significance, with voters often blaming corporations for causing price surges. Although prices are not rising significantly, they remain high, indicating potential profit margins for manufacturers and retailers.
Economists largely attribute the inflation to supply chain disruptions and increased demand during the pandemic rather than price gouging. Some argue that corporations took advantage of the situation, leading to what they call “seller’s inflation” or “greedflation.” Harris’ proposal, while resembling price controls from the 1970s, seeks to protect consumers by enabling investigations into sudden price spikes rather than setting fixed prices.
While some economists criticize Harris’ approach as overly interventionist, others see it as a necessary consumer protection measure to prevent exploitation by corporations seeking to take advantage of market disruptions. The proposal doesn’t set specific prices but allows the Federal Trade Commission to probe instances of price spikes. Despite differing opinions, the proposal reflects ongoing efforts to address concerns about rising costs and inflation impacting American households.
