Of course Kamanomics is an incoherent mess. Kamala Harris simply did a Ctrl-C/Ctrl-V on Bidenomics, which consists of nothing but incoherence and gimmicks. All Joe Biden and now Harris have in their repertoire to deal with the inflation they created through gimmicks are even more demand-side gimmicks, free cash rather than the bread and circuses of old.
Anyone with a few working brain cells can figure that out. That's what makes yesterday's blast from the Washington Post's editorial board so surprising:
Vice President Kamala Harris’s speech Friday was an opportunity to get specific with voters about how a Harris presidency would manage an economy that many feel is not working well for them. Unfortunately, instead of delivering a substantial plan, she squandered the moment on populist gimmicks.One way to handle it might be to level with voters, telling them that inflation spiked in 2021 mainly because the pandemic snarled supply chains, and that the Federal Reserve’s policies, which the Biden-Harris administration supported, are working to slow it. The vice president instead opted for a less forthright route: Blaming big business. She vowed to go after “price gouging” by grocery stores, landlords, pharmaceutical companies and other supposed corporate perpetrators by having the Federal Trade Commission enforce a vaguely defined “federal ban on price gouging.”Never mind that many stores are currently slashing prices in response to renewed consumer bargain hunting. Ms. Harris says she’ll target companies that make “excessive” profits, whatever that means. (It’s hard to see how groceries, a notoriously low-margin business, would qualify.)
Actually, Kamala Harris promised to go after "price gauging." Unfortunately, I'm not kidding.
The WaPo editors didn't include it in their criticism, but it fits so well with the incoherence of Kamanomics that the connection must get as much visibility as possible. Kamala Harris doesn't grasp economics well enough to even know its terminology. As Carlson points out, Harris went on obliviously after this error, on a theme her campaign wants to emphasize as its main economic message. It's not us - it's all the price gauging!
How incompetent does one have to be to not stop and correct one's self after misspeaking in this manner?
Even where Harris does get it right, however, she manages to get it wrong. The biggest driver of inflation now is in shelter costs, which I also covered last night. Unfortunately, that's a supply issue, as the WaPo editors also point out, and her main policy would again be nothing more than a demand-side gimmick in the form of an inflationary give-away that would make the problem worse:
Ms. Harris’s housing plan is built on a slightly firmer foundation. In urging construction of 3 million new homes over the next four years, she puts her finger on the essence of the housing-affordability problem: insufficient supply. She offers clever tax incentives to help make it happen. But her proposed $25,000 in down payment assistance for first-time home buyers stimulates the demand side, which risks putting upward pressure on prices.
WaPo's editors get this half-wrong, too. The problem in housing supply isn't federal tax policy; it's mainly land-use regulations and Byzantine permitting processes at the local and state level. The tax subsidies would largely only get used by people who would have built anyway -- larger firms with economies of scale to overcome those hurdles. It won't accelerate the expansion of housing units to anywhere near the level needed to end the inflationary wave in housing.
They're certainly correct about the stimulus program Harris (and Biden) propose, though. The incoherence of proposing stimuli as a cure for inflation is emblematic of both Biden and Harris. It's completely reactionary and entirely without any sort of economic comprehension. They're throwing free cash at people to mollify them while trying to shift blame for their own failures to THE KOREPORASHUNS to jolly people long enough to get past an election.
Anyone with a lick of sense can grasp Harris' incompetence and incoherence, as I wrote at the start. But why is the Washington Post editorial board going out of its way to rip Harris? Did they ever go after Joe Biden and Bidenomics in such a sharp fashion, even though Harris proposes almost exactly the same policies as Biden did just five months ago? Biden meant that as a campaign argument too, and yet the Post's institutional editorial voice didn't offer any commentary at that time, to my best recollection.
One of their columnists did, however. Catherine Rampell has consistently rebuked the Biden-Harris administration and other Democrats for their "corporate greed" excuse for inflation. And lo and behold, CNN gave Rampell plenty of time to make these arguments yesterday before Harris spoke about "price gauging".
Rampell was just as critical of the down-payment stimulus proposal:
RAMPELL: ... It leads to shortages. It leads to black markets. You know, plenty of uncertainty. And beyond that, the specific way this bill was written might actually increase prices because of some of the other language in it, things like requiring companies, public companies to disclose in their quarterly reports, the quarterly earnings reports, how they're setting prices, which is a great way to help them collude, which normally we don't want them to do.So anyway, you know, the devil's in the details, I guess, for that bill. But it's really hard for me to imagine any form of legislation that preserves the spirit of what she's proposing that would not be, you know, at best do nothing, at worst cause a lot of harm.SANCHEZ: So not a fan of the price gouging ban portion of her proposals. But, Catherine, what about the plan to offer this homeowner subsidy, $25,000, to first time home buyers? Obviously, housing costs have become a concern for many Americans. Would that actually help, or would that drive, as some critics have argued, home prices up?RAMPELL: So that piece of her plan, I think, is likely to just drive prices up. We already have really strong demand for housing, the problem is that there isn't enough supply if you just give people even more money to spend on housing. Regardless of who they are, that's probably just going to get passed through to the sellers.So it sounds nice, particularly for people who maybe don't have a lot of savings, but it's just going to get eaten up at, you know, if you get $25,000 and a tax credit, I think you should expect prices to go up more or less by $25,000.
So now we have both the Washington Post and CNN going after Kamala Harris and Kamanomics. Why? And perhaps even better, why now? The Post's editors have already blasted Harris for ducking reporters and press conferences; CNN may be getting frustrated with it as well. Now that she's talking policy (after nearly four weeks as the nominee), that makes detailed questions even more necessary to find out how Harris plans to implement it -- especially given the economic incoherence of both Kamanomics and Kamala Harris.
Team Kamala should be very, very worried about this. They seem to have lost the Washington Post and CNN, at least momentarily. If they can't correct that, then their ambitions and their momentum will get gouged over the next several weeks. Or at least gauged. Gimmicks and giggles aren't going to be enough to get by.
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