MIKE POMPEO: Kamala Harris would crush families with big-government price controls
When a politician promises to use government power to force "lower prices" and "transparency," you should expect the opposite outcome. Under the Biden-Harris administration, families have faced skyrocketing costs on everything from groceries to prescription drugs, yet Vice President Kamala Harris has proposed on the campaign trail that the best way to fix this is to insert even more federal control into every corner of our economy. Here's why these policies would be so devastating and lead to even higher costs for Americans.
While Harris has largely avoided the press and declined to publish policy plans on her website, she recently gave a speech outlining her economic priorities in three key areas: food, healthcare, and housing. An examination of her proposals shows that they would all be disasters.
Harris began her remarks by acknowledging that under her tenure as vice president, "a loaf of bread costs 50% more" and "ground beef is up almost 50%." She's right — and anyone who has been to the grocery store has seen similar price increases for eggs, cereal and many other staple foods.
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But instead of taking responsibility for the out-of-control government spending and failed policies that actually caused these increases, Harris instead proposed passing the "first-ever federal ban on price gouging on food." Under this "ban," bureaucrats in Washington would get to decide what constitutes gouging — or, in other words, what they think the price should be.
Banning "price gouging" is not a new or novel idea — it’s just that when the Soviet Union was still around, we called it by its proper name: price controls. Federal bureaucrats at the Federal Trade Commission would decide a "fair" price for bread in Pittsburgh or milk in Topeka.
Price controls don’t work for very simple and sound reasons. Grocery stores operate on very thin profit margins, often just a few percentage points. So, when a federal bureaucrat tells them they must sell bacon for less than what it costs them to purchase it, they simply won’t sell bacon.
Smaller stores that rely on sales of such products to survive would go under. Customers would be left with fewer options to buy bacon at all. And as stores stop selling bacon, there would be less of a market for farmers and ranchers to produce it, reducing supply and pushing prices even higher — as competition and incentives collapse. This isn’t just theory. We literally saw it happen to the Soviet Union.
The price hikes we’re seeing under the Biden-Harris administration are driven by inflation across the market, not by suddenly greedy grocery store owners. The solution is to return to responsible, limited government and a pro-growth economic platform — not impose ruinous price controls that would set a course toward total implosion of our economy.
Harris’s healthcare proposals have received less attention but are just as damaging. She criticized pharmacy benefit managers (PBMs) — the companies that negotiate lower drug costs on behalf of employers and other purchasers of healthcare coverage.
I ran small businesses in Kansas and, having seen the high cost of prescription drugs for employees, I know the importance of these negotiations, and the savings they produce. Harris’s attacks on PBMs follows years of anti-PBM policies from the current administration, particularly from Federal Trade Commission (FTC) Chair Lina Khan.
While transparency sounds appealing, what she’s really proposing is for PBMs to disclose publicly — including to all drug manufacturers—the savings they secure in negotiations.
Disclosing this information would be good only for the biggest drug manufacturers. It would allow them to gain a government-created upper hand in knowing which drugs they can discount less, ultimately meaning higher prices for patients.
Imagine if grocery stores had to disclose to food manufacturers the prices they paid to other manufacturers. This would effectively end negotiations and set one price for everyone — a higher price. And just as it would be harmful for grocery stores, forcing PBMs to reveal their negotiated prices would allow pharmaceutical companies to raise costs for patients.
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Additional proposals targeting the market-based, cost-saving role of PBMs have been touted by Harris allies in Congress. These proposed government mandates would eliminate market-based incentives that produce savings through competition and negotiation, hiking healthcare costs for employers and consumers by billions of dollars each year, while artificially increasing drug company profits.
Healthcare costs have already risen under the Biden-Harris administration. Government intervention would drive them even higher, making it harder for American businesses to offer cost-effective prescription drug coverage, and increasing costs for consumers and taxpayers.
Finally, Harris turned to housing costs, a fitting focus given that average mortgage rates have nearly tripled since the Biden-Harris administration took office. She proposed preventing landlords from setting "artificially high rental prices," which might sound appealing — until you consider that this means federal bureaucrats would decide what constitutes a "fair" rent.
If federal bureaucrats control housing costs, it would discourage homebuilders from entering the market. Why would builders invest their capital and time constructing homes if, after making that investment, a federal official could arbitrarily decide its valuation? Fewer homes being built would lead to even higher prices for both renters and homebuyers.
The consistent theme in Harris’s economic approach is clear: she believes the government knows better than the free market, and that putting the government in control will somehow lower prices.
Every leftist leader promises that just a little more government intervention will lead to better outcomes — but common sense and history tell us this approach doesn’t work. You can’t fix problems caused by socialism with more socialism. Americans should reject these reckless policies come November.