Representatives of the food industry executives pushed back on Vice President Kamala Harris’ claim that they were “price gouging” by raising the cost of groceries and making it more expensive for Americans to eat out.
Harris, the Democratic Party nominee for president, blamed corporate greed for soaring prices at supermarkets and said there was a need to institute price controls in order to bring down the cost of food nationwide, which has soared since President Biden took office.
Food companies responded that the cost of labor and raw materials have soared due to high inflation — necessitating price hikes. They also said they need to maintain healthy profit margins to keep developing new products.
“We understand why there is this sticker shock and why it’s upsetting,” Andy Harig, a vice president at FMI, a trade group representing food retailers and suppliers, told The Wall Street Journal.
“But to automatically just say there’s got to be something nefarious, I think to us that is oversimplified.”
Under the Biden-Harris administration, grocery prices have shot up 21%, part of an inflation surge that has raised overall costs by about 19% and soured many Americans on the economy, even as unemployment fell to historic lows.
Code red
Kamala Harris’ plan for American-style communism is a $1.7 trillion giveaway, when our budget deficit this year is $1.9 trillion, and our national debt is already $35 trillion. We rate some of the proposals on a scale of 1-5 hammer and sickles:
PRICE CONTROLS
Pitch: A “first-ever” federal ban on “price gouging.”
What’s wrong with it: What’s gouging? What’s excessive? It does not say, and price controls invariable backfire as demand increases for limited goods.
Cost: Black markets, hoarding, less competition . . . and higher inflation
Rating:
CHILD TAX CREDIT
Pitch: Restore the COVID-era child tax credit of $3,600, but raise it even more to $6,000 for the first year of a child’s life.
What’s wrong with it: It all comes at a massive cost, which is why it wasn’t renewed when the pandemic was over. The credit also disincentivized work, and helped fuel inflation as parents spent more on child care.
Cost: $1.2 trillion
Rating:
HOUSING GIVEAWAY
Thesis: Up to $25,000 in down-payment assistance for first-time homebuyers.
Critique: Will likely spur even more inflation. With the government chipping in money to help buy a home, home prices will go up.
Cost: $100 billion
Rating
BUILDER TAX BREAKS
Thesis: A $40 billion “innovation fund” to get cities to build more housing.
Critique: Harris again does not trust the market to operate as it always has — demand for homes will spur more construction. Instead she wants to give companies tax breaks, which likely won’t result in affordable housing.
Cost: $100 billion
Rating:
Grocery prices were 27% higher in July than they were during the same month in 2019 — a year before the coronavirus pandemic upended supply chains and wreaked havoc in the market.
Harris said that if she were to be elected president, her administration would ban price gouging by food suppliers and grocery stores.
She said her administration would empower the Federal Trade Commission and state attorneys general to issue new penalties on companies that exploit consumers to amass profits on food and groceries.
Her opponent, former President Donald Trump, blasted the proposal, calling it a “Soviet style” policy that would cause even higher inflation.
“The proposal calling for a ban on grocery price gouging is a solution in search of a problem,” the National Grocers Association told The Journal.
Executives at food companies said that profit margins are modest compared with other industries.
The Washington Post, whose editorial page is sympathetic to Democrats, also panned Harris’ proposal, saying that the “price gouging” ban is a “populist gimmick.”
“Inflation spiked in 2021 mainly because the pandemic snarled supply chains, and … the Federal Reserve’s policies, which the Biden-Harris administration supported, are working to slow it,” the newspaper wrote.
Instead of “level[ing] with voters,” the veep “opted for a less forthright route: Blaming big business,” the Jeff Bezos-owned newspaper wrote.
With Post Wires
