Gouging out the truth (Harris spoke briefly about her plans to crack down on price gouging in the grocery industry.)
By: Judd Legum
S E E D E D C O N T E N T
In a speech on Friday, Vice President Kamala Harris fleshed out some of the economic policies she would pursue if she won the presidency in November. Harris spoke briefly about her plans to crack down on price gouging in the grocery industry.
I will work to pass the first-ever federal ban on price gouging on food. My plan will include new penalties for opportunistic companies that exploit crises and break the rules, and we will support smaller food businesses that are trying to play by the rules and get ahead. We will help the food industry become more competitive, because I believe competition is the lifeblood of our economy. More competition means lower prices for you and your families.
A press release provided a few more details about Harris' proposal. According to the release, Harris will "[s]et clear rules of the road to make clear that big corporations can't unfairly exploit consumers to run up excessive profits on food and groceries." She acknowledged that "[p]rice fluctuations are normal in free markets" but distinguished those price changes with "excessive prices unrelated to the costs of doing business that Americans have seen in the food and grocery industry." Since 2019, grocery prices have increased by about 20%.
Former President Trump seized on Harris' proposal and claimed that she was planning to "implement SOVIET Style Price Controls." In a speech on Saturday, Trump claimed that Harris' proposal to address price gouging amounted to going "full communist," calling her "Comrade Kamala."
The right-wing media got the memo, with Rupert Murdoch's New York Post claiming Harris was proposing "Kamunism," running a cover photo of her in front of a podium with the Soviet hammer and sickle.
While the coverage from the New York Post and other right-wing outlets was to be expected, there was similar coverage in mainstream outlets. In the Washington Post, columnist Catherine Rampell published a column with the headline, "When your opponent calls you 'communist,' maybe don't propose price controls?" Rampell said that under Harris' plan, there would be "a sweeping set of government-enforced price controls across every industry." Rampell said, "[s]upply and demand would no longer determine prices or profit levels." Instead, [f]ar-off Washington bureaucrats" would make those calls.
It's unclear how Rampell arrived at this interpretation of Harris' proposal, which she indicated was limited to companies that "exploit crises" or market power. This is also how existing price gouging laws work in 37 states. Such laws have not turned Ohio, which has a broad anti-gouging statute, into a communist enclave with prices set by the government.
A similar piece by the Washington Post Editorial Board excoriated Harris for "blaming big business" for inflation. But several prominent economists believe big business played a major role in inflation following the onset of the pandemic. For example, two economists at the University of Massachusetts published a journal article arguing that "US COVID-19 inflation is predominantly a sellers' inflation that derives from microeconomic origins, namely the ability of firms with market power to hike prices." Other research found that, in 2020 and 2021, "corporate profits accounted for more than 50% of food price increases, whereas they accounted for only 11% of increases in the four decades prior."
The Washington Post Editorial Board further compared Harris' proposal to Nixon's ineffective 1971 executive order that froze prices for 90 days in an effort to combat inflation. (Harris did not propose freezing prices.) CNN, Newsweek, and The Atlantic also published highly critical coverage of Harris' proposal. Unmentioned in any of the coverage: Trump's own efforts to combat price gouging during his presidency.
When combating price-gouging was not communism
Both Harris' proposal for a federal law combating price-gouging and existing state laws are geared toward preventing large companies from exploiting a crisis or market disruption. Notably, during his presidency, Trump was confronted with a severe crisis, the onset of the COVID-19 pandemic in March 2020. He responded by announcing he would crack down on price-gouging.
In a March 23, 2020 press conference, Trump announced that he was implementing new policies "to prevent price gouging." Trump said that he would "not allow anyone to exploit the suffering of American citizens for their own profit." His plan was to make it a "crime" to sell certain products at "excessive prices."
This was not just rhetoric. That day, Trump signed Executive Order 13910, which the American Bar Association described as the "primary federal anti-price-gouging initiative." The Executive Order allowed the Secretary of Health and Human Services (HHS) to develop a list of products that would protected from hoarding and price-gouging. The list included surgical masks, surgical gloves, hand sanitizer, and disinfecting devices.
During the press conference, Attorney General Bill Barr explained that it was now a crime to sell the items on the list "in excess of prevailing market prices." Barr also announced he was convening a task force to prevent price-gouging and "designating in each of our 93 United States Attorney's Offices a lead prosecutor who will be responsible in that district for pursuing these cases."
When Republican members of Congress targeted price-gouging
Price-gouging in the food industry has been the subject of bipartisan concern. HuffPost reported that, in February 2023, Senators Mike Rounds (R-SD), Jon Tester (D-MT), and Chuck Grassley (R-IA) introduced the Meat Packing Special Investigator Act. The legislation sought to combat "[a]nticompetitive behavior in the meat packing industry" and address the widening gap "between the price paid to cattle producers for their high-quality American products and the price of beef at the grocery store." The Senators noted at the time that as consumers struggled with rising meat prices, "the four largest beef packers, who control 85 percent of our beef processing capacity, have enjoyed record profits."
Harris made a similar criticism of the meat industry in her speech on Friday, noting that ground beef prices are up 50%. " We will help the food industry become more competitive, because I believe competition is the lifeblood of our economy," Harris said. "More competition means lower prices for you and your families."
While some price-gouging is the result of exploiting a crisis or market disruption, market consolidation and anti-competitive behavior are a more systemic problem.
The meat industry is a prime example. In September 2023, the Justice Department "filed a civil antitrust lawsuit against Agri Stats Inc. …for organizing and managing anticompetitive information exchanges among broiler chicken, pork and turkey processors." Meat producers used this shared information to fix and artificially inflate prices, harming consumers, the Justice Department alleges. The meat processors participating in the scheme "accounted for more than 90% of broiler chicken sales, 80% of pork sales and 90% of turkey sales in the United States."
Anti-competitive behavior extends beyond the beef and poultry industry. In December 2023, a jury found that egg producers were guilty of participating in a price-gouging scheme, resulting in a $53 million verdict. Just last week, StarKist agreed to pay $200 million — including $130 million that will returned to consumers — to settle a class-action lawsuit alleging that it fixed tuna prices.
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Weren't you just saying yesterday that Harris didn't propose a "ban"?
It looks like even you don't believe Harris' own words when you read them or hear them.
She didnt propose a ban.
Thanks for proving my post correct.
Here is a direct quote from Kamala Harris, according to your very own seeded article and source:
Sounds EXACTLY like a ban--unless words no longer matter and can be freely twisted into meaning whatever the hearer decides he heard.
I am shocked to see you call Harris a liar.
I think we should give Kamala a quiz on economics.
Question 1: What influences prices?
A) Middlemen
B) Corporate greed
C) The law of supply & demand.
Sorry Kamala, the answer was C. Kamala, you flunked basic economics.
D. All the above.
You didn't read the article, did you?
A couple of points for consideration -
1. When a consumer picks up a package of potato chips and sees that it is now 10oz rather the 12oz that always has been and that the price is the same or higher, the consumer has two choices "suck it up" and pay the extra money for the brand he is familiar with or chose another product.
2. Companies should be free to choose, change and maintain the product packaging and marketing for their products without government control.
3. It is time to quit considering all consumers to be idiots - people spending money are smart enough to know that they are getting less and paying more.
4. When a company raises a price across markets (not in reaction to a localized issue, e.g. a hurricane or other disaster, it is not price gouging it is marketing.
5. The consumer ultimately controls the price of goods in the market based on whether they buy it at the offered price or not. If enough people "don't buy the product at the offered price", the company will lower the price. That is how business works.
6. There are products - medicines, medical services, utilities, etc that levels of control make sense - the grocery store is not one of those places
7. The government needn't control all aspects of our life.
Excellent points.
No.
I've noticed for a long time that certain products cost more for less amounts.
The government isn't controlling all aspects of our life.
You like paying more for less with no accountability for the reality that is price gouging?
Yes, that certainly happens when costs rise.
A senseless question, and certainly not based on anything you read in his post.
Where is the proof for your comments such as if customers don't buy the product at the offered price, the company will lower the price, that is how business works.
Proof? Just because you say 'that's how business works' doesn't mean it's true.
"I've noticed for a long time that certain products cost more for less amounts"
It's called shrinkflation, and it's up to the customer to determine if they want to purchase the item
Where is there any evidence of price gouging?
How do you imagine companies turn profits?
Here is a hint:
It isn't by sitting on unsold inventory.
Those grocers sure are gouging consumers with their 1% profit margins.
Inflation is caused by government and no one else.
Accusing grocery chains of price gouging shows that many of those complaining simply don't understand business.
Tessy
Actually, that has happened to me as well and you know what I do - I either pay the new higher price for the package even if it is smaller (if I really want the product) or I change to a new brand or type of product more reasonably priced.
If a person knows they are getting screwed, let's themselves get screwed and then complains about getting screwed - it is the fault only of that person.
Tessy
You should read up on "Supply and Demand" because that really is how business works.
that is called shrinkflation
Of course it's shrinkflation - it is a fact of life that sucks for the consumer, but repackaging product into smaller amounts is not illegal. Have you heard of the concept of "Caveat Emptor" (Let the Buyer Beware).
We need to be guardians of our own wallets and insure that we are knowledgeable of what we are paying and what we are paying for.
Generally speaking , consumers have been conditioned like pavlovs dogs. someone who likes Twinkies are not going to buy generic twinkies unless the Hostess Twinkies are not available, even if the store or Hostess raises the price. They have been conditioned to want their Twinkies. That is how business works.
Exactly, corporations, political campaigns, and nonprofit organizations all use findings about consumer behavior to determine how best to market products, candidates, or issues.
That is how large organizations work.
When you say "Exactly" it ain't necessary so. Like when my brother starts emails, "I find it funny", he never really does! Not Funny!
Do you think that political campaigns and nonprofits don’t use consumer behavior data to guide there marketing?
john
You are correct and thus the solution to this problem is to educate the consumer to either buy another brand or none at all until the price comes back down, which we are starting to see in some products already.
That is indeed how business works, it is legal, it is marketing, it is sneaky and conniving and again it is legal - there is no role for the government here except to educate the public.
Price gouging in my view is more when prices of bottled water, gasoline, generators, basic food items etc are temporarily raised to take advantage of a situation - like supply chain failure or a disaster.
How does one work on passing a ban without calling for a ban?
as always , the devil is in the details .
"She acknowledged that "[p]rice fluctuations are normal in free markets" but distinguished those price changes with "excessive prices unrelated to the costs of doing business that Americans have seen in the food and grocery industry." Since 2019, grocery prices have increased by about 20%."
Who's going to determine what's excessive and at what level? The government?
Manufacturing, distribution, grocery store. Grocery stores have traditionally operated at very low profit margins, relying more on volume.
In another story, it talks of a possible rail strike...that's greatly going to influence prices if prolonged.
Debt, Inflation, Unemployment - Ronald Reagan (youtube.com)
I saw that , and one in Canada is being talked about as well that would affect prices on this side of the border as well.
One of the economists here has claimed supply chain issues don't cause inflation.
I am simply waiting for the details on how this would be done . that place the devil resides and plays.
someone is going to likely be taking it in the Keester , but unfortunately , the one most would think it will be, or targeted , usually ends up NOT being the one taking the hit in the end .
Per her spokesman, the campaign doesn't provide details of plans to voters because plans can be analyzed. Instead they plan to let the media "explain their values" to voters and that results in good things for Democrats.
In case you ever wondered how Democratic politicians view the role of the press.
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for those that do not want to click the link , its a picture of a typical "honey wagon ".
Where our shit is their bread and butter!
i have heard that before , there are many crops that are irrigated and fertilized with grey and brown water , dont think there isnt one that isnt at some point .
For a minute in the earIy 80s I was partner in an independent porta john business in Dallas. We sold to Waste Management Company, which was our original plan from startup...