In a campaign speech in North Carolina last Friday, Vice President Kamala Harris detailed her plan for “creating opportunities for the middle class that advance their economic security, stability, and dignity.” That’s a great promise. All Americans—not just the middle class but the poor, too—need more opportunities, more security, more stability, and greater respect for their dignity.
She continued, promising to “remove the barriers to opportunity so anyone who wants to start a business or advance their career can access the tools and the resources that are necessary to do so,” to cut “needless bureaucracy and unnecessary regulatory red tape,” and to encourage “innovative technologies while protecting consumers.”
Again, all good things. I’m for free markets—markets with as few barriers to entry as possible. We have too much “needless bureaucracy and unnecessary regulatory red tape.” Now she has my attention. Perhaps we finally have a presidential candidate who understands Econ 101.
Then it got even better: “Your salary should be enough to provide you and your family with a good quality of life,” “no child should have to grow up in poverty,” “after years of hard work, you should be able to retire with dignity,” and “you should be able to join a union if you choose.”
Awesome. She actually cares about the poor, not just the middle class. And she wants everyone to be able to provide for their families through their own hard work, only having “to join a union if you choose,” busting the union stranglehold on manufacturing and public sector jobs and creating more wealth so there’s more to go around for everyone … right?
She said she’ll be “lowering the cost of living.” She knows why it’s too high now, right? And how to fix it, right?
“We all know that prices went up during the pandemic when the supply chains shut down and failed, but our supply chains have now improved, and prices are still too high. A loaf of bread costs 50% more today than it did before the pandemic. Ground beef is up almost 50%.”
Of course, the inflation from the pandemic, caused by supply chain failures (and adding nearly $6 trillion to the money supply from 2020–22), didn’t go away. It has only slowed to normal rates. As Harris put it, “New numbers this week alone show that inflation is down under 3 percent.” But we haven’t had deflation. So anyone who didn’t get a raise—or didn’t get a big enough raise—took a pay cut. As a result, some even struggle to afford basic groceries.
Clearly she must know this, right?
Alas …
Instead of promising to maintain sound monetary policy and never to needlessly shut down so much of the economy again, Harris blamed grocery stores and food suppliers for price gouging and promised to enact a federal ban.
Now, before anyone freaks out about this, it’s important to note that this could amount to nothing. If the price cap is set higher than the market price any grocery good would ever rise to, this will never matter.
In fact, Harris did not stop at groceries, but cited President Biden’s $35/month cap on insulin for Medicare patients. Biden claimed that patients were paying $400/month. Unfortunately for him, the claim was fact-checked, and the real cost came out more like $400/year—$452, to be exact. That comes out to $37.67/month.
Now, I’m not sure what the profit margins are on insulin and whether $2.67/month adds up for insulin makers. Maybe it’s like the missing half-cent from Richard Pryor’s paycheck in Superman 3. Who knows? I also believe “a penny saved is a penny earned,” and whatnot, but I expect an extra $2.67 didn’t amount to a meaningful difference for a diabetic’s monthly budget.
Of course, what everyone who does have an Econ 101 education worries about with price controls is shortages. Many states already have anti-gouging laws for groceries, and they did go into effect during the COVID-19 pandemic. Remember those empty store shelves? Everyone knew we had supply-chain problems. If stores had been able to raise their prices proportionally, it would have prevented the hoarding of basic goods like toilet paper. Those goods would have cost more, and some families and their communities would have had really difficult decisions to make about whether or how they could afford them. But at least they would have had a decision. No one agonized over whether they could afford to buy toilet paper that wasn’t there.
As it turns out, we actually have had insulin shortages since the 2022 Inflation Reduction Act, which had no direct effect on inflation but did introduce the $35 cap on insulin for Medicare patients. Most recently, Novo Nordisk announced a shortage of three of its insulin products on July 29, 2024. Many things can cause shortages—Novo Nordisk did not disclose a particular reason—but still, a price control was enforced, and it should be investigated as a possible contributing factor.
So this is the sort of thing, at best, that Vice President Harris has proposed. It won’t fulfill her promises or prevent the known causes of the problems she hopes to solve.
Unfortunately, she didn’t stop there. On housing, the vice president promised to build more homes (how remains unclear) but also to impose non-credit-based rules on mortgage lenders and to further subsidize down payments for first-time home buyers, encouraging moral hazard.
At the least, if Harris’ policies really do lead to 3 million new houses, that would help. The problem with housing prices is that we have too few housing options—whether single-family dwellings or apartments—on the market. That’s because of restrictive zoning laws and high costs for building materials, including those worsened by Trump-era tariffs, which have continued under President Biden.
Harris also promised “$6,000 in tax relief to families during the first year of a child’s life,” which is great if you don’t already receive all your taxes refunded back every April—i.e., if you’re not truly poor. Tax deductions won’t do anything for someone whose current deductions already cover 100% of their taxes.
Charitably, Harris did at least attack former President Trump’s proposal to impose 20% tariffs on all imported goods. That isn’t even good mercantilism! James Steuart would be appalled. She rightly noted that his proposal amounts to an across-the-board tax on all Americans, claiming that “economists have done the math.”
Too bad she didn’t ask those economists to do the math on her proposed price controls and child tax deduction. I mean, it isn’t very difficult math. I did it, and all my degrees are in theology. But still, I bet economists could do an even better job. They get paid big money to do it owing to their specialized skillset. Boy, if only more people had specialized skillsets! I bet that would help alleviate poverty, too! Too bad none of Harris’ policy proposals addressed that.
Americans—especially the poor—really do deserve the “economy of opportunity” Vice President Harris promised. Everyone should want that. It’s the right, moral, and loving thing to want for our neighbors. Unfortunately, the vice president’s proposed policies amount to an empty promise at best.
