Casey’s ‘Gouging’ Bill Is ‘Kind of Thing’ Venezuela, Soviets Tried

On Friday’s “CNN News Central,” CNN economic and political commentator The Washington Post Discussing various “price gouging” proposals, columnist and PBS NewsHour special correspondent Catherine Rampell called the bill from Sens. Elizabeth Warren (D-Mass.) and Bob Casey (D-Pennsylvania) “particularly egregious,” noting that “this kind of thing has been tried before in many countries, including Venezuela, Argentina and the Soviet Union,” and argued that the bill could actually drive up prices.

Rampell said, “First of all, no one can explain what price gouging means. It’s like the old line about pornography, you know it when you see it: What does it mean when prices are too high or margins are too high? That seems like a succinct description of what bothers me about prices and margins being too high. So it’s really hard to pinpoint exactly what it actually means.” As I said, if you look at the bill already in the Senate, led by Senators Warren and Bob Casey and a number of others, this bill, which is likely to be a template for the proposal Harris will ultimately adopt, is particularly badly written. It bans exorbitant prices, extremely exorbitant prices, extremely exorbitant margins, and says the Federal Trade Commission can use whatever metrics it deems appropriate to determine what they mean. So basically, it’s not the market or supply and demand that decides how much grocery stores charge for milk and eggs, but Washington bureaucrats. “This seems completely unfeasible, first of all, for the FTC to decide how much Kroger in Michigan charges for eggs. But it would also be very bad for the market.”

She continued, “This has been tried in many other countries, including Venezuela, Argentina, the Soviet Union, etc. This creates shortages, black markets, a lot of uncertainty, and it could actually cause prices to go up, depending on how this bill is specifically written, because other language in the bill includes things like requiring companies, public companies, to disclose their pricing methodologies in their quarterly reports, their quarterly earnings reports, which is something you normally don’t want companies to collude in, but it’s a great way to encourage collusion.”