Recently Vice President and Democratic Presidential candidate Kamela Harris announced an economic plan to federally ban price gouging by "setting clear rules of the road to make clear that big corporations can’t unfairly exploit consumers to run up excessive corporate profits on food and groceries.” This is the right thing to do politically, because President Joe Biden's administration, and by extension, the Vice President herself, have had low approval ratings on the economy for quite some time now. By coming out on this issue more strongly than Biden has, Harris can forge a more forceful image for herself on the economy and blame big corporations for price inflation, a popular idea with many voters.
But while it may be the right thing politically, economically it doesn't seem necessary: the most recent reports on inflation show that it has sunk to under 3% for the first time since 2021. Clearly, the Federal Reserve raising interest rates have cooled down the economy enough that inflation is under control again. So her plan feels like a solution looking for a problem, and honestly I think that by the time she's in office if she wins, inflation and price gouging will have been reduced as an issue to a point where she probably won't actually do anything about it. To me it's all political theater, but if it helps her win, I'm fine with it.
This issue does reveal one of the weaknesses of the mostly good Biden presidency: he should have made inflation a bigger issue. Overall, the economy has been strong under Biden, with excellent job growth and a skyrocketing stock market. But the issue of inflation has been blamed on him even though it wasn't his fault, and, of course, inflation is something that all Americans see at the grocery store. It reached a high of 9.1% in 2022, and recent polls say that many Americans think that increased government spending is what caused it, and while that is perhaps part of it given how much pandemic financial relief was passed by both the Biden and the Trump administrations, other factors like the pandemic leading to increased product demands and compromised supply lines are another part.
And then there's the Russian invasion of Ukraine, which began in 2022. Although Biden mentioned the invasion as it related to American inflation in some speeches, he failed to hammer the point home effectively, so few Americans know how that war has affected food prices not only in American but also all over the world. Before the invasion, the Ukraine was the world's fifth biggest exporter of wheat and other grains, obviously the war has changed that. The invasion also triggered a round of sanctions against Russian oil exports that inevitably lead to a rise in oil prices.
So, if one person is to be blamed for the increases in the price of gas and groceries, it should be Russian Prime Minister Vladimir Putin, but I doubt most Americans even are aware of this. I wish that the Biden administration really had pushed harder on the fact that Putin's invasion was more than an attack on Ukraine, it was a blow against the economies of Western countries. Oh sure, the right wing media would have scoffed at Biden blaming Putin for what they saw as his own failed economy, the message may still have gotten through to many swing voters. Sadly, it didn't, and now Harris has to break with the soon to former president on the economy as a way to sell herself as a different kind of Democrat. While I sure hope it works, I think she would have an easier job of it today if Biden had more effectively linked Putin to inflation.
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