A Harvard economist who worked in President Barack Obama’s administration has slammed Vice President Kamala Harris’ plan for price controls to curb inflation, saying it is not based in “reality.”
“This is not smart policy, and I think the best hope is that we end up with policy that’s all rhetoric and no substance,” Jason Furman said. He told the New York Times “There is no room for upside here, but rather downside,” the report, released Friday, said.
Harris’ campaign announced Wednesday that if she becomes president, she would institute a federal corporate price-fixing program to stop “big corporations” from taking unfair advantage of consumers.
“There is a big difference between fair pricing in a competitive market and excessive pricing that has no relation to the costs of doing business,” Harris said. The campaign said “Americans can see the difference when they look at their grocery bill,” the statement said.
Liberal Washington Post columnist says Harris’ price controls are like “communism”
Democratic presidential candidate US Vice President Kamala Harris is due to announce her price control policy on Friday. (Photo: Andrew Harnick/Getty Images)
The proposal would give the Federal Trade Commission and state attorneys general the power to impose severe penalties on companies that set excessively high prices.
But some economists and financial experts have cast doubt on Harris’ plan, arguing that businesses have not played a significant role in driving up food prices.
Furman, who served as director of the National Economic Council under the Obama administration, told The New York Times that policies like Harris’s are dangerous because they prevent new companies from entering the market to meet consumer demand.
Other economists disagreed and praised Harris’s proposal to the Times.
Dave Ramsey explains why Kamala Harris’ price control plan won’t control inflation: ‘It’s not sustainable’
Personal finance expert Dave Ramsey and Obama economist Jason Furman suggested Harris’ price control plan wouldn’t work. (iStock)
Isabella Weber, an economist at the University of Massachusetts Amherst, argued that efforts to curb what Harris called “price gouging” would help companies remain accountable to consumers.
Weber told the Times that people may feel taken advantage of when businesses thrive while “ordinary people” endure economic hardship.
“Certain basic social contracts are falling apart,” she said.
Harris is expected to lay out her economic policies in her first official policy speech of the presidential campaign. Raleigh, North Carolina on friday.
The Harris campaign did not immediately respond to a request for comment. Fox News Digital.
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Her policies have also been criticized by personal finance expert Dave Ramsey and liberal Washington Post columnist Catherine Rampell.
“We tried that in the 1970s,” Ramsey told Fox News host Laura Ingraham on Thursday. “There was a movement to control all kinds of prices because inflation was raging out of control like it is now. So it was tried. And it didn’t work. What worked was to flood the market with supply.”
“It is impossible to overstate how bad this policy is,” Rampell wrote. An editorial published Thursday“This is sweeping government price control in all but name, not just in the food industry but in all industries. Supply and demand will no longer dictate prices and profit levels. Far-away bureaucrats in Washington will. The FTC will be able to dictate to, say, Kroger in Ohio, the fair price it can charge for milk.”
Fox News’ Jeffrey Clark, Jamie Joseph and Alec Schemel contributed to this report.
