“Bidenomics, Without Biden,” The Atlantic describes our economic future under Kamala Harris.
But this should strike you, dear reader, as quite strange.
A big reason for the electoral defenestration of Biden was the American people simply didn’t like Bidenomics. Team Biden fought stubbornly against this, mostly through the White House telling voters that the economy was great even if they didn’t realize it.
That backfired.
While he was still the Democrat nominee, poll after poll showed Biden was drowning in negativity on his economic policies – especially because of high consumer prices.
Enter Kamala Harris.
She’s going to fix all this, we’re told. You could say her economic policies “will be unburdened by what has been” on Biden’s watch. Sure, she’s technically the second-in-command of the Biden administration that has messed up so much, but Kamala deserves the credit for whatever has gone well over the last four years, and magically, none of the blame.
This isn’t a surprise. Kamala Harris’s whole campaign is an exercise in cognitive dissonance.
Kamala is running to “save our democracy” – even though she herself has never won a primary, is not the choice of Democrat voters, and was selected by party elites to be the 2024 nominee.
She’s a far-left California progressive who suddenly, without explanation, has repudiated a whole slew of highly controversial policy positions. In 2020, Kamala said she wanted to ban fracking. Her media minions say she no longer does. Why? We aren’t allowed to know, and the media isn’t asking.
Similarly, during her (highly unsuccessful) primary run in 2020, Kamala raised her hand on the debate stage in response to a question about whether she would support Obamacare for illegal aliens. Would she still give free healthcare to the over ten million illegals who have infiltrated the country over the last four years? Again, the American people aren’t getting answers because Kamala isn’t taking questions.
But on the economy, Kamala has been forced to lay out an actual position about “helping the middle class” and “growing the economy.” Her endorsement of price controls, notably, has become a problem for even her most stalwart defenders in the media. “When your opponent calls you communist, maybe don’t endorse price controls,” a Washington Post column recently wrote.
Let’s take a look at why Kamala’s affinity for this particular market intervention has created a weak spot that the Trump campaign is working hard to exploit. A good place to start is the historical record.
Price Controls: A Brief History of a Bad Idea
Example: set food prices from above, and everyone can afford food, right?
This is the central promise of price controls. Sounds good, and people under day-to-day financial pressure often go for it.
But markets don’t just bend to political will. Supply and demand isn’t a suggestion.
This is why history is littered with the economic wreckage of controlled prices. Let’s start with a classic: Ancient Rome.
The Emperor Diocletian, in a bid to curb inflation, issued the Edict on Maximum Prices in 301 AD. The idea was simple – limit the maximum price that could be charged for goods and services, and voila! Inflation cured, right?
Wrong.
Merchants, faced with the prospect of selling their goods at a loss, simply stopped selling them. What followed was a black market boom, as people quickly realized they could trade goods at whatever price they could secretly agree upon.
And the punishment for breaking the price controls? Death.
Turns out, not even the threat of execution could force an economy to follow an emperor’s whim. The edict was quietly abandoned, and Diocletian’s legacy now serves as a cautionary tale for would–be economic meddlers.
Fast forward to the 20th century, where we find another government eager to take the reins of the market: post-revolutionary Russia. In 1921, amidst the chaos of the Russian Civil War, Lenin implemented the New Economic Policy (NEP), which included, among other things, price controls.
The result? A dire shortage of goods. Even mass starvation.
Farmers, unwilling to sell their produce at artificially low prices, chose to hoard or simply produce less. Bread lines became the norm, and the countryside starved. Lenin, eventually realizing that even his iron grip couldn’t squeeze blood from an economic stone, reversed course and allowed some degree of market freedom. But the damage was done – millions suffered because of the illusion that prices could be controlled from the top down.
Let’s not forget the United States’ own brush with price control folly during World War II. The Office of Price Administration (OPA) was created to prevent inflation by capping prices and rationing goods.
The result?
Widespread shortages, a flourishing black market, and a lot of unhappy citizens.
Want butter? Good luck finding it legally. Gasoline? You’ll have better chances buying it from a shady character in an alley. The OPA’s heavy-handed approach led to more scarcity, not less, proving once again that when the government tries to control prices, the market simply finds ways to bypass the controls – often in ways that are far less efficient and far more corrupt.
Even in the modern era, price controls continue to rear their ugly heads with predictably disastrous results. Venezuela, under the leadership of Hugo Chávez and later Nicolás Maduro, imposed strict price controls on everything from food to fuel.
What followed was empty supermarket shelves, a booming black market, and one of the worst economic collapses in modern history.
It’s Not Different This Time
When the price of goods is set below the cost of production, producers stop producing, and the economy grinds to a halt. What was supposed to make basic necessities affordable instead made them disappear altogether.
So, why would Kamala launch her economic policies atop such a tried-and-true failure?
It’s convenient politics, even if it’s economic malpractice.
Price controls offer a quick fix for politicians to do something in the face of rising prices. And in a way, they’re the perfect Kamala economic policy: heavy on promise, low on reality.
So far, her entire campaign seems to be an exercise in ignoring or rewriting history and vague promises of the clearly unattainable.
Pretending she can lower the price of groceries by decree fits perfectly into that model. Let’s hope she never gets the chance to add yet another chapter to the failed history of this bad idea.
Regards,
Buck Sexton
Editor, Message From Buck