Trump, by contrast, is consistent. For better or worse, he’s pushing in 2024 the same agenda that he ran on in 2016 and 2020. The bad news is that means regurgitating some incredibly foolish proposals such as protectionism.
This raises an interesting question: Which candidate has the dumbest proposal of 2024?
They have both embraced the goofy idea of not taxing tips, so that’s a tie.
Looking at proposals that are unique to each candidate, Trump’s call for a giant tax increase on global trade is utterly awful. And, to make matters worse, he’s now suggesting a 20 percent tax on all imports rather than a 10 percent tax.
Given the terrible track record of protectionism (Great Depression, Argentina’s “import substitution,” etc), could there possibly be a worse idea?
The good news is that very few politicians want government-run factories and farms.
The not-so-good news is that some politicians want partial versions of central planning such as industrial policy.
And the bad news is that at least one prominent politician wants price controls.
That prominent politician, as you might suspect, is Kamala Harris, the Vice President of the United States and the Democratic presidential nominee.
As part of her campaign, she wants the federal government to have the power to control food prices.
I have a three-part series with videos explaining why price controls are incredibly foolish (see here, here, and here). But some readers may be skeptical since the critics are pro-market economists (as is this guy and this guy).
If so, maybe they will believe Catherine Rampell, a columnist for the Washington Post who has reliably left-wing views on all sorts of issues (unemployment benefits, the debt limit, tax increases, etc). Even she felt compelled to condemn Harris. Here are some excerpts from her latest column.
In a news release Wednesday, her campaign said the first 100 days of her presidency would include the “first-ever federal ban on price gouging on food and groceries… It’s hard to exaggerate how bad this policy is. It is, in all but name, a sweeping set of government-enforced price controls across every industry, not only food. Supply and demand would no longer determine prices or profit levels. Far-off Washington bureaucrats would. The FTC would be able to tell, say, a Kroger in Ohio the acceptable price it can charge for milk. …At best, this would lead to shortages, black markets and hoarding, among other distortions seen previous times countries tried to limit price growth by fiat. …At worst, it might accidentally raise prices. …If your opponent claims you’re a “communist,” maybe don’t start with an economic agenda that can (accurately) be labeled as federal price controls. We already have plenty of economic gibberish coming from the Republican presidential ticket. Do we really need more from the other side, too?
She’s right. Harris is proposing an idea that is absurdly bad.
By the way, I don’t fully embrace everything Ms. Rampell wrote. She fails to recognize that food prices (as well as other prices) increased a few years ago because the central bank created too much liquidity.
She gives the Federal Reserve a pass and instead focuses on things that might cause food prices to change relative to prices of other goods and services.
So what actually happened with grocery inflation, if not “price gouging” (however defined)? Superstrong consumer demand plus major supply disruptions (the coronavirus pandemic, bird flu, Russia’s invasion of Ukraine, etc.) pushed prices and profits up.
P.S. The reason Trump has called Harris a communist is because she has embraced equality of outcomes, which is disturbingly reminiscent of Marx’s assertion that society should be based on “From each according to his ability, to each according to his needs.”
P.P.S. If Harris wins and imposes price controls, the only silver lining to that dark cloud is that we might enjoy something akin to the Germany’s post-war economic miracle. But taking two steps backward to then take one step forward doesn’t seem like a good deal, even though it would be a teachable moment for future students of economics.
Dan Mitchell is co-founder of the Center for Freedom and Prosperity and Chairman of the Board. He is an expert in international tax competition and supply-side tax policy.
