Topic: Price Controls

David Brooks and Catherine Rampell's criticisms of Kamala Harris's proposed ban on grocery price gouging are featured. Brooks argues that price controls lead to shortages and black markets, citing Venezuela and the Soviet Union. He describes the "greedflation" narrative as a sign of economic illiteracy, noting that inflation has already significantly cooled.

Canadian Prime Minister Justin Trudeau has threatened "tax measures" against grocery chains to stabilize food prices, a move criticized as ineffective price control. In the United States, Chicago Mayor Brandon Johnson is exploring the creation of city-owned grocery stores to replace private retailers leaving the city. These initiatives are characterized as a shift toward socialist economic policies.

The European Commission proposed a cap on the revenues of low-cost electricity producers, such as wind and solar companies, whose profits have surged due to high gas-linked market prices. These "unexpected profits" are to be re-channeled to member states to support vulnerable households. This move is characterized by some as a form of price control or soft nationalization of the energy market.

Germany has introduced a 9-euro monthly public transport ticket to help citizens cope with record-high inflation, which reached 7.9% in May. While the measure is popular, it has led to concerns about overcrowded trains during the summer. The German government also lowered fuel taxes, though citizens report that the relief has not significantly impacted prices at the pump. These subsidies are characterized as "phony deflationary measures" that mask the underlying economic destruction.

Senator Elizabeth Warren introduced the Price Gouging Prevention Act of 2022, which seeks to prohibit "unconscionable" price increases during exceptional market shocks. The bill would grant the FTC and state attorneys general the power to enforce price controls on companies with over $1 billion in revenue, a move critics say will lead to increased bureaucracy and failure.

The current economic environment is compared to the stagflation of the 1970s, characterized by slowing growth and rising inflation. The hosts argue that politicians are following an old playbook that includes failed policies like price controls. They note the irony of Republican administrations often being the ones to implement massive stimulus and "quantitative easing" measures, such as those seen during the George W. Bush era and the 2008 financial crisis.

Economists warn that current inflation is likely to worsen due to years of quantitative easing and "mystery money" printing. There is growing concern that the government may eventually resort to failed 1970s-era policies like wage and price controls, which historically backfired under the Nixon administration.