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
Colbert’s Termination Is A Corporate Assault On Dissent And A Victory For Trump
Take Action Now Three weeks ago, Paramount agreed to pay Trump $16 million to settle the suit, amid rumors of side-deals that content would shift at…
‘Unconstitutional. Unethical. Authoritarian.’ ICE Bars Millions Of Immigrants From Bond Hearings
Take Action Now One watchdog said the new policy “seems like a blatant attempt to stop them from exercising their right to due process.”……
Americans Are Not Nearly Alarmed Enough About Climate Change
Take Action Now Americans still don’t comprehend how imminent, dangerous, and far-reaching the threat is—and journalists are partly to blame.By…
The IRS Is Building A Vast System To Share Millions Of Taxpayers’ Data With ICE
Take Action Now ProPublica has obtained the blueprint for the Trump administration’s unprecedented plan to turn over IRS records to Homeland Security…