Obama’s Chief Economist Rejects Kamala Harris’ Doormat Crackdown

Vice-President Kamala HarrisThe presidential campaign embraced a populist economic message, blaming corporate greed for high food prices. However, her proposal to ban price increases is drawing criticism from economists, including a key figure in the Obama administration.

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Jason Furman, who served as chairman of the Council of Economic Advisers under President Obama, dismissed Harris’ plan in plain terms. “This is not sensible politics,” Furman told The New York Times. “The biggest hope is that it ends up being a lot of rhetoric and no reality.”

Harris’ campaign announced last week that it would call for a federal ban on corporate food price gouging in an upcoming economic policy speech. The move appears designed to appeal to swing voters frustrated by persistent inflation, particularly in everyday essentials such as food.

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However, economists across the political spectrum argue that corporate behavior has played a minor role in recent price increases compared to factors such as supply chain disruptions, changes in consumer demand and expansionary fiscal and monetary policies during the pandemic.

“If prices are rising on average over time and profit margins are expanding, that might look like rising prices, but it’s actually an indication of a broad increase in demand,” Joshua Hendrickson told The Times. economist at the University of Mississippi.

Furman warned that policies aimed at reducing inflation could hinder economic adjustment. “If prices don’t rise in response to strong demand, new companies may not be as inclined to jump into the market to increase supply.”

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The debate points to the tension between politically popular proposals and economic orthodoxy. “Shark Tank” investor Kevin O’Leary expressed surprise that Harris did not move toward more “centrist” policies. “Her advisers gave her some bad advice,” O’Leary said in a recent Fox News interview, predicting increased scrutiny over how the programs will be implemented.

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Some economists, however, see merit in efforts to address corporate pricing power. Isabella Weber of the University of Massachusetts Amherst argues that allowing companies to make huge profits during supply shocks could set a worrying precedent for future crises.

“If the worst times for ordinary people turn out to be the best times for corporations, some kind of basic social contract kind of crumbles,” she said in the report.

With inflation easing but still a major concern for many Americans, the debate over rising prices and corporate profits is likely to remain at the forefront of economic policy discussions in the coming months.

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This article ‘This is not rational policy’: Obama’s chief economist rejects price hike crackdown by Kamala Harris originally appeared on Benzinga.com

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