There are “no benefits” from Harris' “Soviet-style” price-fixing in the food trade; they could trigger the worst shortages since the 1970s, economists say.

Vice President Kamala Harris' “Soviet” plan to set food prices at the federal level has “no advantages.” She plans to present the plan at a rally in North Carolina on Friday afternoon. And it would likely lead to the worst supply shortages since the 1970s, economists told the Washington Post.

The Harris team announced Friday that the Democratic presidential candidate will push for “the first nationwide ban on price gouging on food and groceries” if elected in November. She will also instruct the Federal Trade Commission and state attorneys general to investigate any companies that oppose centrally planned price dictates.

Not only were the policy proposals “extraordinarily vague” and addressed an “economic non-problem,” but they also seemed to come “straight from the five-year plan” of a figure like Mao or Joseph Stalin, economists told the Washington Post.

“Who exactly is going to decide what a fair price is for eggs, bread or cereal?” asks Brian Riedl, a senior economist at the conservative Manhattan Institute. “Will the federal government create a Soviet-style list of what grocery stores can charge without being penalized by the state?”

The plan is similar to a bill proposed by Democrat Senator Elizabeth Warren, who recently joined the Harris campaign. Warren was the first to bring up the idea of ​​tougher action against price gouging.

“Anyone who lived through or studied the 1970s knows that price controls are disastrous because they lead to shortages,” Riedl told the Post. “Demand far exceeds supply. … That's why there were lines at the gas stations.”

While the price controls could have a “moderate disinflationary” effect in the short term, Riedl continued, Harris' other measures, such as requiring a $25,000 down payment for first-time home buyers, would have an “absolutely inflationary” effect.

Scott Lincicome, vice president for general economics at the libertarian Cato Institute, told the Washington Post that the plan to fix food prices and subsidize housing during the first 100 days of a Harris presidency also made little sense, since the US had “clearly left the period of peak inflation behind.”

“Food prices have not moved since January 2023. Real estate prices have increased but are back to their pre-pandemic trend levels,” Lincicome said, adding that there are “no real signs of price gouging.”

“If you look at the data, especially in the food sector, you are not talking about an industry that is making unexpected gains,” he added.

“Grocery stores make very little profit, the price markups are small,” Riedl agreed.

Jason Furman, a Harvard University economist and chairman of President Barack Obama's economic advisory council, told the New York Times that prices had stabilized and further controls were “not sensible policy.”

“I think the biggest hope is that it ends up being a lot of rhetoric and no reality,” Furman said. “There are no benefits to this, and there are some downsides.”

Moreover, the proposals would not come close to addressing the inflation rate, which has hovered around 20 percent since Harris took office in January 2021 – even though she and her vice presidential candidate Tim Walz claim their administration will cut costs and “keep inflation under control.”

Studies by the Federal Reserve Bank of San Francisco and other financial institutions also failed to establish a strong connection between the alleged price gouging and inflation.

“Consumers want outright deflation, and the reality is we're not going back to that,” Lincicome added, noting that the current rate is “a clear combination of fiscal and monetary policy meeting a tight monetary environment” after former President Donald Trump and President Biden “legislated trillions and trillions of dollars in new spending.”

Furman had warned in 2022 that much of this spending – as well as Biden's new expensive proposals to unilaterally cancel up to half a trillion dollars in student loans – was “reckless” and amounted to “pouring oil on an already burning inflation fire.”

But economists' fears about the inflationary impact of runaway spending have had little impact on the American public or politicians' messaging, according to polls first reported by Politico. Nearly three-quarters of voters in swing states support rent controls.

Only 2 percent of economists believe that rent caps “would make middle-income Americans significantly better off over the next decade,” according to a July survey by the University of Chicago’s Booth School of Business.

Still, it's part of a style-over-substance approach the Harris campaign has pursued since she replaced Biden at the top of the 2024 Democratic ticket and other key swing-state polls put her ahead of Trump.

“This is politics,” Riedl noted. “The Harris campaign is vulnerable on inflation because the Biden-Harris administration has made inflation worse through spending deficits and tariffs – and this initiative is completely a [effort] to deflect blame and instead blame the greedy, price-gouging corporations.”

“This is pandering to populists who just want low prices and free stuff but don't remember basic economics from school,” he said. “And they don't remember the 1970s.”

Both the Harris campaign and the FTC declined to comment for this article.