I want to start with a little true personal story from 2012 which may seem unrelated but it deals with economics, a key focus of his essay. Rick Santorum (R-PA) had been in GOP Senate leadership until Bob Casey, son of a former pro-life governor (and currently running for reelection), overwhelmingly defeated his reelection bid. Santorum set his sights on winning the 2012 GOP POTUS nomination. I thought a former senator who got blown out in a swing state for reelection didn't stand a chance against popular incumbent Obama, up for reelection. But Santorum scored an unlikely victory over favored Mitt Romney in Iowa and some early February primaries.
Santorum, like me a devout pro-life Catholic (with a deep respect for the traditional Latin mass), and his wife Karen have a large family of 7 (surviving) children. Years earlier Karen was pregnant with a preborn boy they named Gabriel. She noticed an issue with his mobility around the quickening, and I believe it turned out to be some untreatable congenital urinary tract abnormality, Doctors recommended terminating Gabriel, noting he was unlikely to survive long after birth. (Gabriel ended up dying hours after birth.) During her difficult pregnancy, Karen penned some poignant letters to their son, later published, and I bought a copy.
I noticed during the early stretch of the primary when Santorum was waging an unexpectedly strong challenge to Romney, Letters to Gabriel was fetching up to $1500 a copy on major auction sites. (I suspect the volume was no longer in print. No, I didn't part with my copy, although I was tempted. (The book supply issue was eventually resolved, and I believe the interested reader can even find ebook versions.)
The point is, Harris is trying to scapegoat vendors during supply/demand shocks for inflation. Note if I had resold my copy, I would have had to declare the gain on my income. Theoretically Harris isn't satisfied with the tax revenue. what about the poor Santorum fan who I would be taking advantage of with my "greed"? Note: the populist demagoguery behind Harris' price gouging gimmick is not limited to Dems/states; for example, red states Florida and Texas have relevant laws on the books {which serves to point out that the free market is nor necessarily embraced by right-wingers.) Usually there are manipulative examples, say the sale of generators needed to cool life-saving insulin supplies..(Of course power outages happen all the time. If you need to power home medical, the time to select, buy, and test power alternatives is in advance of an outage.) We have the underlying law of supply and demand. If 2 people agree on a price under current market constraints, what moral right do we have to intervene? Price points provide a context for related transactions, prospective suppliers and the efficiencies of market competition. We don't need government bureaucrats trying to monitor prices of a vast 330M consumer market picking winners and losers in the marketplace.
The last thing we need is someone like Trump or Harris resuscitating Ford's "Whip Inflation Now" initiative or Carter suggesting we wear sweaters to save on heating costs. Those aren't policies but political gimmicks. Biden has targeted supermarkets and pas stations . The idea that these highly-competitive thin-margin businesses were scapegoats for inflation is absurd; all were for-profit concerns for up to decades of relatively low-inflation. If they ever had this alleged power, how did it ever start/stop? To give an example, I live in a small town north of Baltimore; I live within easy driving distance of supermarkets like Walmart, Sam's Club, ShopRite, Weis, Food Lion, Aldi, Giant, and Lidl. I can also drive to a Costco, Trader Joe's and Safeway. Local military personnel can shop at the post commissary. There are also various convenience stores, local markets, mom 'n pop stores, etc. I've also bought some foods from Amazon, and I think Amazon locally delivers fresh groceries from Weis. The point is, it's highly competitive, and shoppers have options. The law of supply and demand holds. When the avian flu hit, eggs skyrocketed to almost $5/dozen--I can still remember buying eggs before that for under $1/dozen. I didn't buy a lot of eggs at the high end of that range (I ate other things for breakfast)--but as supply normalized, eggs fell rapidly to about $1.12/dozen. Lidl probably makes some modest markup on eggs but most of that $5 cost back then reflected supply chain costs at the time. Whatever that margin was, they probably made less overall on overall egg sales. Walmart makes its profits as a retailer on volumes, logistics and turnover of discounted products (leveraging their volumes with suppliers and slim margins). Why doesn't Walmart raise its prices when competitors drop out? For one thing, it might lower sales and provide opportunities for competitors. Rockefeller built a kerosene empire by relentlessly driving prices lower. ("In fact, between 1870 and 1897 the price of kerosene fell from 26 cents a gallon to 6 cents a gallon.")
I recall in my area Lidl opened up a new local supermarket within a half mile of Walmart superstore and an Aldi. Both Lidl and Aldi are German concept markets. I recently saw a riveting German native woman on YouTube comparing Aldi German vs. US stores. Lidl in its middle aisle might feature changing different merchandise specials--everything from gardening equipment to gadgets to clothing items. Mostly limited varieties competitively priced private label goods and a sprinkling of familiar name brands. But I use an approach similar to the YouTuber, who stocks up on basics at Aldi and gets more varieties at Kroger. For example, I typically stock up on grass-fed ground beef at Lidl, but I can usually find grass-fed chuck roast, turkey parts, or diet root beer at Walmart
We've seen these ludicrous conspiracies of pricing power and manipulation. Look, there's no doubt price competition works. For example, Google Fiber (an ISP) has competitor cable Internet providers slashing rates when it enters markets. Generic medications work (I've used them in the past). Why didn't egg producers and refineries maintain high prices, given alleged market power? In essence, competitors can drive sales volume and market share by passing along supplier price cuts.
So Kamala Harris badly misfired in trying to frame the federal government's intervention into the economy in leftist populist terms. The fundamental problem had to deal with too much government, not its absence. The Federal Reserve had flooded the monetary system with currency without underlying assets. The Congress and Presidency engaged in unprecedented, unpaid for spending since the start of the pandemic--net over $10T to the national debt. Serving the debt now approaches the aggregate amount of an already bloated DoD budget.
Are there things a President can do to reduce regime uncertainty, promote economic growth, and improve the daily lives of citizens? Yes, For one thing, he could declare unilateral free trade and spread trade agreements. He could scale down defense and domestic spending, get the government out of the college loan and home mortgage markets. He could reform the biggest cost drivers of the federal budget: entitlements, especially nearly insolvent senior entitlements. He could decentralize social spending to the states. He could pursue sound money policies, scale back regulations and mandates.
Harris' flirtation with federal wage and price controls is a flagrant failure to recognize their proven failure in federal policy, in particular Nixon's disastrous policies. Nixon, concerned by runs on US gold reserves given deficits driven by unpaid for spending on Vietnam and domestic spending, closed the gold window ending the Bretton Woods system. Unbacked greenbacks ignited inflation, and Nixon resorted to wage/price controls. As others have noted, "Ranchers stopped shipping their cattle to the market, farmers drowned their chickens, and consumers emptied the shelves of supermarkets.”. It would take tough Fed policy via Volcker appointed by Carter to break the back of inflation. As Sam Cooke might sing, Kamala Harris "don't know much about history".
Note that I have my own issues with Trump's failed economic policies. The only things I might defend is tax reform and regulatory reform; the former was a long overdue lowering of a globally noncompetitive tax rate. Harris' trying to raise that tax rate is like a form of economic suicide. The biggest issue I had was Trump and the GOP didn't cut spending enough. Improved growth offset some of the revenue loss. But Harris' tax increases will have a negative effect on growth, investment and jobs. On regulations Trump needed more from Congress to rein in the administrative state.
Trump added nearly $8T to the debt and I don't see him taking on politically unpopular budget cuts. He refused to touch senior entitlement reform. He's promising to exacerbate trade wars by Draconian tariffs globally which will not only backfire again on American exporters but be passed on to Amrerican consumers, adding to inflationary pressures
There is one candidate in this race who believes in free trade, free markets, and fiscal responsibility: Chase Oliver.
