Harris’ Price Controls Are a Solution in Search of a Problem
Operating margins for the food products industry show companies aren’t squeezing Americans in the post-pandemic world.
What the numbers say.
Photographer: Allison Joyce /AFP/Getty Images
Vice President Kamala Harris proposed price controls on groceries last Friday to stop food companies from “gouging” American consumers. It’s a terrible idea from the Democratic presidential nominee, as many have already pointed out, because price controls lead to shortages and other bad outcomes. It’s also doubtful Harris could push such a policy through Congress.
But before debating the merits, there’s a question about whether food companies are in fact gouging people. There’s been talk about price gouging ever since inflation spiked in 2021, so in early 2022, I looked at the financial results of companies in the S&P 500 Index to see if they were exploiting consumers or merely passing on their own higher costs. It looked to me at the time that they were raising prices to beef up profits.