The Harris-Walz campaign has said they want to create a federal ban on corporate price gouging (usually mentioned when folks talk about price hikes in grocery stores). I see economists complaining about variations of this policy being bad, e.g. leading to food desserts. But as far as I can tell there hasn’t been anything specific proposed. Could someone explain our best guess at what they are proposing, and if it’s been serious analyzed/tested elsewhere?
They cite existing legislation in the states; maybe explaining what that legislation does/how it works would be helpful?
Price cap increases perhaps. No more than 5% increase from the price the product was on January 01 that year.
That one seems kinda scary - if inflation was 6% and something wasn’t sold at any profit, all stores would stop selling it. (This is true for most food.)
If they stop selling it, they stop buying it from suppliers and then the suppliers need to find a way to decrease their costs to make it so stores buy their products again. Otherwise they go out of business, so they will find a way.
I think the scary thing is if it takes the suppliers more than 3 days to figure that out. Companies oftentimes can last 3 days without food (and rarely fix things very quickly at any scale).
