Kamala Harris’s proposed price-gouging ban might irritate academics, but it makes sense to everyone else.
By Zephyr Teachout, Portside
Last week, the economics commentariat and much of the mainstream media erupted with contempt toward Kamala Harris’s proposed federal price-gouging law. Op-eds, social-media posts, and straight news reports mocked Harris for economically illiterate pandering and warned of Soviet-style “price controls” that would lead to shortages and runaway inflation.
The strange thing about these complaints is that what Harris actually proposed was neither radical nor new—and it certainly wasn’t price controls. In fact, almost every state already has a law restricting at least some forms of price gouging. Although Harris has not specified the exact design of her proposal, one hopes that it would follow the basic outline of state-level bans: forbidding unwarranted price hikes for necessary goods during emergencies.
Price gouging in the popular imagination has a “know it when you see it” quality, but it is actually a well-developed body of law. A typical price-gouging claim has four elements. First, a triggering event, sometimes called an “abnormal market disruption,” such as a natural disaster or power outage, must have occurred. Second, in most states, the claim must concern essential goods and services. (No one cares if you overcharge for Louis Vuitton handbags during a hurricane.) Third, a price increase must be “excessive” or “unconscionable,” which most states define as exceeding a certain percentage, typically 10 to 25 percent. Finally, the elevated price must be in excess of the seller’s increased cost. This is crucial: Even during emergencies, sellers are allowed to maintain their existing profit margins. They just can’t increase those margins excessively.
Recent Posts
Tragedy and Potential: The Non-Proliferation Treaty Review Conference
Take Action Now The U.S.’s short, very general, poorly proofread statement on the conference outcome reflected a lack of interest in or familiarity…
California Democrats Keep Selling “Medicare for All” — While Protecting the System That Profits From Sickness
Take Action Now Gov. Gavin Newsom embodies that contradiction more than anyone.By Joshua Scheer, ScheerPost For nearly a decade, California…
Congress Quietly Moves to Integrate U.S. and Israeli Militaries
Take Action Now In the first step towards shifting aid further into the shadows, the House’s 2027 NDAA would all but fuse the two…
Company Behind California Chemical Leak Was Building F-35 Parts Amid Rush of Orders From U.S. and Israel
Take Action Now The military contractor whose leak displaced 50,000 people makes millions aiding fighter jet production for Lockheed Martin.By…