Consumer Beware: Kalmalanomics Is Worse than Bidenomics
Kamala Harris finally announced her economic plans. If you think “Bidenomics” was bad—and it was— Kamalnomics will be worse—much worse! She has the economic knowledge of a chestnut. I don’t know who her economic advisors are, but they’ve got to be just as bad.
I do not claim to be an economics wizard. But I did take four economics courses in college and read just about everything written by renowned Nobel Laureate and Professor of Economist Milton Friedman. And what Harris is proposing will be disastrous.
When Trump left office, inflation was 1.9%. It shot up to 9.1% in the first 18 months of the Biden-Harris administration, fueled by a $5 trillion spending spree paid for with debt and printing money. It’s basic supply and demand. Too much money chasing too few products. That’s what caused the inflation, which over Biden’s term had a cumulative growth of almost 20%.
The cornerstone of her plan is placing federal price controls on “greedy corporations” that are “price gouging” consumers. It will be a $1.7 trillion giveaway when this year’s budget is $1.9 trillion. Our national debt is already $35 trillion.
Let’s go through this boondoggle one piece at a time.
1. She wants a federal ban on price gouging. Question: What is gouging? What’s excessive? Who can prove that? Most businesses operate on small margins. Grocery stores have about a 2% profit margin—if they’re lucky. Believe it or not, it’s the same for gasoline.
Kamala Harris doesn’t understand that companies raise their prices to cover their rising costs to stay in business.
I remember back in 1971 when prices were spiraling out of control, Richard Nixon announced an executive order to stop inflation by ordering a freeze on all prices and wages. This established a 90-day freeze and was enforced by a “Pay Board” and a “Price Commission.” It was a complete failure. After 90 days, inflation was worse.
A study by the Brookings Institution found that ending price controls and the return to the free market led to on average a 30% reduction in prices thanks to the power of free market competition. The energy crisis of the 1970s ended when Ronald Reagan, on the first day of his presidency, lifted all oil and gas price controls, which had only benefited the Saudis and killed domestic production.
Price controls go back to the Roman Empire and the results are always the same – hoarding, stifled competition, black markets, and higher inflation.
2. A $25,000 down payment assistance for first-time home buyers. The result will be higher home prices and further boost inflation. Again, supply and demand. And it will cost roughly $100 billion.
3. A $40 billion “innovation fund” to get cities to build more housing. Harris doesn’t care much for the free market, which has always depended on demand to spark more construction. She wants to give companies tax breaks, which will almost certainly not lead to affordable housing. The cost: $100 billion.
4. Her plan is also to increase the Covid-era child tax credit of $3,600 to $6,000 for the first year of a child’s life. This will come at an enormous cost, which is why it wasn’t renewed after the pandemic.
This would be calamitous. It’s worse than socialism. As The New York Post put it, it’s “Kamumnism.” And where has that worked?
What next Kamala? My money is on a mortgage debt relief policy.
Think I’m wrong? Add your comments to my website where my blog is posted at https://www.FrankVictoriaAuthor.com/blog
Frank
Frank Victoria is an award-winning author and screenwriter. He’s been an Amazon bestseller with his recent book,
The Founders’ Plot- a political thriller for our times.
He donates proceeds of his books to Tunnels to Towers
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