Joe Kernen of CNBC schooled Democratic Sen. Elizabeth Warren of Massachusetts on the history of price controls in a debate about the economic policies of Democratic presidential candidate Kamala Harris.
Kernen explained the free market argument against price controls to Warren on “Squawk Box” Friday a day after Harris accepted the nomination for the presidency at the Democratic National Convention.
“I can paint you a picture of how that would work and how it’s worked in the past where we’ve artificially tried to hold prices down, competition doesn’t come in,” said Kernen.
“If beef is too high, people don’t move to chicken because competitors don’t come in to undercut where the beef prices are. Nothing works when you try to artificially control prices. It’s just a supply and demand issue. It’s a flawed idea,” he continued.
“So did you have a question here?” Warren replied condescendingly.
“Yes, why would you propose a flawed idea when the real problem, if you really want to help the middle class, if you really sincerely want to help people having trouble at the grocery store, it’s not price gouging? That’s the issue,” Kernen said.
“I understand if you just want to lecture about this,” Warren responded with more condescension.
She argued that price-gouging laws were not the same as price controls and pointed out that many states, including Florida and Texas, had passed price-gouging laws in previous decades.
“And they have used them effectively,” she said.
Warren said that prices had gone awry during the pandemic for many different reasons but focused on corporate greed as the target of her ire. She argued that corporations took advantage of the pandemic to gouge Americans by hiking up prices far beyond their rising costs.
“Senator, that’s sophistry,” replied Kernen. “Can I tell you why those are fallacious and misleading at best?”
He countered that the example she gave was misleading because it essentially came down to an accounting anomaly and not evidence for price gouging. Warren interrupted Kernen, and he jabbed at her for trying to railroad him.
“This is the way you can never lose an argument because no one can ever say anything back to you, Senator. It’s frustrating,” said Kernen.
He went on later in the interview to accuse the administration of trying to find a scapegoat for the inflationary consequences of the Biden administration.
“How do you decide? This is not the government’s job to decide these things. It’s a fool’s errand,” Kernen said.
“And also, you’re using it to divert the real cause of inflation over the last four years which is you had demand after the pandemic, which obviously there was a lot because we reopened, and all of a sudden there are supply chain issues, and the demand is juiced by all of this stimulus from the [Inflation Reduction Act] and all of the other spending that we did,” he added.
Parts of the exchange were widely circulated on social media, where it garnered hundreds of thousands of views, but a longer video of the debate can be watched on CNBC’s channel on YouTube.
Warren had worked on a price-gouging bill with the Trump administration during the coronavirus pandemic.
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