No, Kamala Harris is not planning to turn America into Venezuela

By Brett Arends

Her economic proposals are empty, not ominous

Have you heard the latest? Apparently Kamala Harris is now a "socialist" or even a "communist." She plans to introducing sweeping price controls and rent controls, turning America into...Venezuela.

Or Cuba.

Or North Korea.

Or maybe even the Soviet Union.

So say a chorus of critics, after Harris's economic speech on Friday. They included liberals, conservatives, and of course Harris's opponent.

They also included Elon Musk (naturally), and even "Shark Tank's" Kevin O'Leary.

All of which goes to prove that we're all living in a clown show.

No, Kamala Harris has not proposed sweeping price controls - on food, rents or anything else. Sorry to disappoint those on the left (who would like such things) or those on the right (who would also like Harris to propose them, for very different reasons).

She didn't even come close. Nothing she said on Friday could remotely be described as a proposal for price controls, without the heavy use of recreational drugs.

The best criticism of Harris's speech was not that it was an ominous threat to turn America into a communist hellhole or set the price of eggs, but that it was empty campaign rhetoric. Exactly the kind of flimflam that sank her presidential campaign in 2019.

On food prices, she said: "As president, I will go after the bad actors. And I will work to pass the first-ever federal ban on price gouging on food. My plan will include new penalties for opportunistic companies that exploit crises and break the rules."

Shocking? Well, price gouging is already illegal. There are multiple state and some federal laws designed to punish companies that try to exploit a crisis unfairly or "defraud" consumers by overcharging them. These laws were used, for example, during the COVID crisis, to target people who traded in N95 masks and other personal protection equipment.

Price gouging is like the old line about pornography: It's hard to describe, but you know it when you see it. The classic example is charging extortionate prices for water, food and medicine right after a tornado blows through town and people are desperate and helpless.

I'm not aware of any politician who wants to scrap laws protecting people against something like that.

But Harris won't be "cracking down" on "price gouging" in the supermarket because she probably won't be able to find much. If any.

Dean Baker, a leading liberal economist, points out that food has actually fallen in real terms over the past decade - compared to general prices, and to wages.

And look at the supermarkets' financials.

Walmart (WMT) reported $5.3 billion in net income last quarter on $162 billion in revenue, a profit margin of 3.3%. Last year it booked $16.3 billion in net income out of $648 billion in revenue, a profit margin of 2.5%. During the big inflation of 2022 it reported $11 billion in net income out of $611 billion in revenue, a profit margin of...er...1.8%.

Kroger's (KR) margin was 2.1% last quarter, 1.5% last year and 1.5% in 2022.

Albertsons (ACI): Just 1% last quarter, 1.6% last year and just under 2% in 2022.

Some "gouging."

So even if Harris is elected, and even if she announces a "crackdown" on "price gouging," nothing much will happen.

If anything.

Actually the main examples of "gouging" she's likely to find will be by smaller operators in areas where they're a monopoly.

As for rents? Harris did not propose rent controls either.

Here's what she said: "Some corporate landlords collude with each other to set artificially high rental prices, often using algorithms and price-fixing software to do it. It's anticompetitive, and it drives up costs. I will fight for a law that cracks down on these practices."

Once again, there's no "there" there.

Collusion and price-fixing is already illegal. The most we can probably expect from a Harris administration - if anything - is a rigorous enforcement of the laws.

And, once again, I'm not hearing any politicians saying we should get rid of these laws. Even my MAGA friends have expressed alarm that Wall Street firms have been buying up a lot of rental properties.

I honestly haven't met a single person who wants to legalize price gouging, market manipulation or collusion.

So, in a nutshell, Harris's policies that would turn America into a hellacious mixture of Venezuela, Argentina, North Korea, Cuba and the Soviet Union turn out to be policies...that are already the law of the land, and are broadly accepted by every liberal, centrist and conservative you are likely to meet.

But never mind the facts. Hysteria is so much fun.

-Brett Arends

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

08-20-24 0815ET

Copyright (c) 2024 Dow Jones & Company, Inc.