It didn’t take long after Vice President Kamala Harris announced plans to crack down on corporate “price gouging” on Friday for Donald Trump to accuse her of suggesting Soviet-style communism.
In an apparent reference to Harris’ vague plan to ban food “price gouging,” the former president wrote on the Truth Social website: “Horrible SOVIET-style price controls,” one of several policies he claimed would make inflation “100 times WORSE.” .”
The Republican National Committee joined in, splitting the New York Post’s Saturday headline “Communism” with an X under the headline “Comrade Horrible.”
It’s not clear what would be considered price gouging under Harris’ proposed federal ban.
But Harris made it clear that he agrees with economists who have found that, rather than simply raising prices in response to a spike in demand relative to existing supply, some companies have taken advantage of market conditions to boost profits with higher prices. And in select industries, Harris and these economists argue, dominant firms have found ways to reduce competition in such a way that there is no natural rate-correction mechanism when this price increase occurs.
In addition, Harris singled out two industries, beef and pharmaceuticals, that have drawn scrutiny from many Republicans.
In December, Sens. Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) introduced legislation to limit the operations of pharmacy benefit managers (PBMs), the intermediary industry that negotiates prescription drug prices for insurance plans. The bill, which now has the support of 10 Republicans and five Democrats, would require PBMs to charge insurance plans the same amount the PBM reimburses pharmacies and to pass on to insurance plans any discounts they negotiate with pharmacies.
Grassley has long criticized the pricing practices of PBMs and drug companies, going so far as to accuse some companies of price gouging. “As a leading advocate for lowering drug prices in the U.S. Senate, I have drawn leaders of Big Pharma and pharmacy lobbyists to Congress, led a two-year bipartisan study on lowering insulin prices, and advanced bipartisan reforms to lower the cost of insulin and many other prescription drugs,” Grassley wrote. October 2022 published In the Iowa City Press-Citizen.
He sounds a lot like Harris, who said on Friday“With your support, I will lower the cost of insulin and prescription drugs for everyone, not just our seniors, and demand transparency from the intermediaries between Big Pharma and insurance companies who use transparent practices to drive up drug prices and profit from the need for drugs.”
Many Republican lawmakers have also called for federal intervention to stop price gouging in the beef industry. Grassley joined Sens. to Mike Rounds (RS.D.) and Jon Tester (D-Mont.) in February 2023 to reintroduce Meat packing specialist lawwhich would create a new special investigator at the Department of Agriculture to curb the anti-competitive practices of the meatpacking giants.
The trio argued that the focus on the meatpacking industry, now dominated by just four companies, has allowed the companies to simultaneously squeeze independent farmers with lower purchase prices and then charge consumers ever higher prices at supermarkets.
“Over the years, the gap has grown between the price paid to cattle producers for their high-quality American products and the price of beef at the grocery store,” Rounds said at the time. “Meanwhile, the four largest beef packers, which control 85 percent of our beef processing capacity, have taken record profits. This has resulted in an average of nearly 17,000 livestock farmers going out of business every year since 1980.
Harris alluded to a similar dynamic when he lamented that “the price of ground beef is up 50%. Many major food companies are seeing their biggest profits in two decades. And while many grocery chains are passing on those savings, others still aren’t.”
“We help the food industry to become more competitive because I believe that competition is the lifeblood of our economy,” he added. “More competition means lower prices for you and your family.”
Some Republicans have even shared Harris’ concern about the lack of competition in supermarkets.
Alaska Sens. Lisa Murkowski and Dan Sullivan, both Republicans, wrote in September to the Federal Trade Commission to encourage a strict review of the potential merger of the Kroger and Albertsons chain stores.
“Consolidation of convenience stores in our state does not bode well for Alaskans’ food security, affordability and our dedicated workforce,” the couple wrote.
When the FTC sued to block the merger in February, Murkowski was celebrated decision. “This announcement will come as a relief to countless Alaskans,” he said. “From potential increases in global food prices to extended store closures, there were too many unknowns and uncertainties for this merger to proceed.”
