Former Treasury Assistant Secretary for Economic Policy Michael Vogtunder says nothing has changed that would ease inflationary pressures on Kudlow.
vice president Kamala Harris He is set to unveil the first federal price-fixing plan for businesses as part of a comprehensive effort aimed at reducing food prices and other everyday expenses.
“There is a big difference between fair pricing in a competitive marketplace and exorbitant pricing that has no relation to the costs of doing business,” Harris’ campaign said in a statement. “Americans can see the difference when they look at the price of their groceries.”
The Democratic presidential candidate is expected to expand on the proposal during a speech in North Carolina today.
But some economists question whether companies are really to blame for rising food prices.
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“Food prices are affected by many factors: weather, geopolitics, the pandemic, supply chain issues and massive monetary and fiscal stimulus, which has caused price volatility across many industries,” Scott Linthicum, vice president of general economics and trade at the Cato Institute, told Fox Business.
“There’s really very little evidence of price gouging, profiteering, corporate greed or anything like that.”
Vice President Kamala Harris, a 2024 Democratic presidential candidate, speaks at a campaign rally in Atlanta on July 30, 2024. (Elijah Nouvelaj/AFP via Getty Images / Getty Images)
Lincicome pointed to recent data from New York University, which showed the US grocery industry’s net profit margin in 2023 was 1.18%.
“When you actually look at the players in the market, they’re not making any windfall here,” he said.
Recently published studies Federal Reserve System The San Francisco bank also suggests that corporate greed is not the main driver of the inflation spike that began in early 2021.
While some companies have raised prices since the COVID-19 pandemic — gasoline and car price increases, for example, have spiked in 2021 — the researchers found that overall price increases have remained roughly flat, consistent with periods of economic recovery over the past three decades.
“These patterns suggest that markup fluctuations were not the main driver of ups and downs in inflation during the post-pandemic recovery,” Sylvain Leduc, Huiyu Li and Zhen Liu wrote in the bank’s weekly report. Economic Letter.
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The findings run counter to Harris’ view that corporate greed and price gouging are to blame for persistently high prices.
While corporate profits have certainly risen since the pandemic, researchers at the San Francisco Fed note that profits are “typically volatile” and often rise in the early stages of an economic recovery, and data on the current economic recovery indicates that profit growth has “not been particularly marked relative to past recoveries that did not experience high inflation.”
“Overall, our analysis suggests that markup fluctuations were not the main driver of the post-pandemic inflation spike or the recent deflation that began in mid-2022,” the researchers wrote.
Under Biden, inflation has soared to its highest level in 40 years, with prices of basic necessities like rent, groceries and gasoline soaring. Federal Reserve System Raising interest rates to their highest level in 20 years. Rising interest rates have other downstream effects, pushing mortgage rates above 8% for the first time in decades and making it much harder for businesses to get credit.
A grocery store in Washington, DC, on February 14, 2024. (Mostafa Basim/Anadolu via Getty Images/Getty Images)
Although inflation has fallen sharply from a peak of 9.1% and the Federal Reserve is poised to cut interest rates this fall, many Americans are still not feeling reassured.
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Food prices rise 21%% Since the start of 2021, housing costs have risen 21.6%.%Energy prices are up 32%, according to FOX Business calculations.%. Price Increase This is especially devastating for low-income Americans, who tend to spend much of their already stretched paychecks on necessities. Save money.
Meanwhile, food prices are up just 3.2% compared to January 2023.
“Policies like this are much easier to explain in political terms than economics,” Lincicome said. “Even though food prices have stabilized, people are still angry when they go to the grocery store, and prices are much higher than they remember from a few years ago. And that’s a potential downside for the Harris campaign.”
