Dave Ramsey disagrees with Kamala Harris' inflation plan – what do others think?

When Vice President Kamala Harris recently unveiled a series of economic policy proposals as part of her 2024 presidential campaign, one item immediately made headlines: her support for a federal law to combat gouging in food prices. The idea is based on data showing that some food companies have made record profits even as they blamed inflation for skyrocketing food prices.

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Although the details of Harris' proposal are still unclear, it has already become a lightning rod for criticism.

Radio host and financial guru Dave Ramsey is one of these critics. On Fox News' conservative talk show “The Ingraham Angle,” Ramsey pointed to price controls in the 1970s as proof that such measures failed.

“If you bring in the government and try to artificially depress prices, it just doesn't work because you can only hold the hose for so long until the pressure builds up and then it bursts,” Ramsey said.

Ramsey is not the only one pushing back against the proposal. Republicans supporting former President Donald Trump in the 2024 election have accused Harris of pushing “communist price controls,” Politico reported. Food industry representatives have also raised the alarm, as have economists who question whether price controls will be effective in combating food inflation.

“There are many reasons for the high inflation we have suffered over the past few years, but aggressive or unfair pricing practices are low on the list of reasons, if they are on the list at all,” Mark Zandi, chief economist at Moody's Analytics, told CBS MoneyWatch. “This may have been a bigger problem in the past when supply chains were disrupted by the pandemic, but today it is hard to find significant, meaningful examples of price gouging.”

Even economists who would otherwise support Harris are criticizing the anti-price gouging proposal. They include Jason Furman, a Harvard economist who worked in the Obama administration.

“The [is] not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality,” Furman told the New York Times.

Debbie Jennings of the National Taxpayers Union Foundation wrote in a blog shared with GOBankingRates that price controls on food “wouldn’t really fix inflation” but could lead to shortages or fuel the black market.

“Instead, the government should consider comprehensive anti-inflation measures to reduce government barriers to production, remove harmful tariffs, and reduce deficit spending,” Jennings added.

In response to the criticism, Harris' allies say her comments about price gouging were taken out of context. How the rule would work is not yet known, but it would likely allow the Federal Trade Commission to impose fines for excessive price increases, the Washington Post reported.

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Proponents of this idea claim that it is merely a “targeted” expansion of existing government powers and not new government price controls.

“Most of the criticism is coming from well-meaning but ill-informed people who interpret the federal imposition of state laws as price determination, but some of it is just vicious attacks from the other side trying to paint her as a socialist,” Ben Harris (no relation to Kamala), a Treasury Department official under President Joe Biden, told the Washington Post.

Among those who rushed to Harris's aid was billionaire entrepreneur and “Shark Tank” star Mark Cuban, who frequently criticizes Trump.

As Benzinga reported, Cuban used a series of tweets on X (formerly Twitter) to clarify what Harris had actually said. In one tweet, Cuban shared the transcript of Harris' original speech mentioning the price gouging proposal, noting that it “didn't say anything about price controls or price caps.” Another tweet pointed out that 37 states, including Texas, already have “anti-price gouging laws” on their books.

According to the website FindLaw, many of the current anti-price gouging laws are designed to prevent businesses from raising their prices when a state of emergency has been declared. For example, if an area is hit by severe storms, the law would prohibit businesses from raising their prices more than 10% above normal levels.

Some states even go a step further and prohibit “unreasonable” price increases on raw materials, rental properties, medicines or household items, even if a state of emergency has not been declared.

Other Harris defenders tried to calm critics by suggesting that her proposal would likely never become law anyway. Such a bill “has no chance of passing Congress anytime soon” even if Democrats manage to capture the White House and Congress this year, Politico reported, citing comments from six Democratic lawmakers and five Democratic aides.

Rather, Harris' proposal is a “messaging tactic” to show that she is aware of the financial burden that high food prices place on American households.

“I think people are reading too much into what's being released,” Michigan Democratic Governor Gretchen Whitmer said on NBC's “Meet the Press.”

However, not all economists agree that price controls are fundamentally a bad idea.

Dan Scheitrum, a professor of agricultural economics at California Polytechnic State University in San Luis Obispo, told ABC News that Harris' plan to crack down on potentially anti-competitive practices in the food sector could lead to lower prices for some staple foods.

“If price fixing takes place and action is taken against it, I think that could reverse some of the price increases,” Scheitrum said.

_{Editor's Note on Election Coverage: GOBankingRates is nonpartisan and strives to objectively cover all aspects of the economy and present balanced reporting on politically focused financial topics. For more coverage on this topic, visit GOBankingRates.com.}

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