CNBC’s Joe Kernen is known for going to battle with the leftists that appear on his show - and it was no different when Chief Elizabeth Warren appeared to defend Kamala Harris’ communist economics on price controls.
Harris has specifically called for price controls on groceries, blaming high food prices on “price gouging.” This makes absolutely no sense for a handful of reasons; the most relevant being that U.S. grocers only have average profit margins of 1.6%. How could they possibly be gouging when they’re not even earning 2 cents on the dollar? By contrast, the average U.S. public company had a profit margin of 11.5% in the first quarter of the year.
"Competition doesn’t come in," Kernan said, criticizing the “flawed idea.” "If the price of beef is too high, people don’t move the chicken. Competitors don’t come in to undercut where the beef prices are. Nothing works when you try to artificially control prices. It’s just a supply and demand issue. It’s a flawed idea."
"It’s not price gouging that’s the issue," he said, before asking her when she was going to propose a policy that would actually accomplish anything.
Watch the exchange below:
It’s been joked that if you lined up the world’s economists side by side, they wouldn’t form a conclusion - but price controls are one of the few topics where there is a strong consensus.
The University of Chicago’s poll of economists asked them in 2022 their opinion on the following statement; “A significant factor behind today’s higher US inflation is dominant corporations in uncompetitive markets taking advantage of their market power to raise prices in order to increase their profit margins.”
Only 7% of economists agree to any degree, while 67% disagreed. When weighted for confidence, 79% disagreed. When asked if 1970s-era price controls could reduce current inflation, only 23% agreed.
Matt Palumbo is the author The Man Behind the Curtain: Inside the Secret Network of George Soros
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