Bad economic ideas are everywhere in this presidential campaign

By Matthew Gagnon

As we approach the 2024 presidential election, it’s becoming painfully clear that neither major party has any interest in living in a world of economic reality, choosing instead to advocate for populist garbage masquerading as serious policy proposals. 

The sheer volume of nonsense being paraded around by Kamala Harris and Donald Trump is, to be frank, stunning to behold. 

Let’s start with Harris, who recently unveiled her new economic agenda, filled to the brim with bad ideas that have been discredited for decades. Among the most egregious are her “anti-gouging” proposals, which are little more than redressed price controls. Harris says that prices are too high, greedy corporations are responsible for it and her anti-gouging policies will drive prices down. 

This is, of course, nonsense. Someday, someone is going to have to explain to me why greed didn’t exist prior to inflation, and suddenly appeared in time to spike prices. Greed is not a new phenomenon. 

Inflation is a problem that belongs to both parties, and exists today because of a complex mix of many issues, including the massive monetary expansions that took place in 2020, the radical, debt-fueled spending binge that took place in response to COVID and the hangover from disruptions to the supply chain during the same period. It isn’t “greed.”

Besides, price controls like these have a long history of failure. They can lead to shortages, black markets and inefficiencies that harm the very people they’re supposed to help. In the 1970s, for example, Richard Nixon implemented price controls in an attempt to curb inflation. Rather than stabilizing prices, the controls led to widespread shortages and worsened inflation. Producers, unable to cover their costs due to artificially low prices, cut back on production, leading to long lines at gas stations and empty shelves in stores. 

Harris’ apparent economic illiteracy doesn’t stop at price controls, though. In response to high housing costs, she has also proposed a $25,000 subsidy for homebuyers. This, like the price controls, would likely exacerbate the very problem it aims to solve. By injecting substantial government subsidies into the housing market, the policy could inflate home prices further, as sellers adjust prices upward in response to the increased purchasing power of buyers. 

As I have repeatedly said, the housing crisis is a classic problem of high demand and low supply. Harris claims that her simultaneous call for building 3 million new homes will address that supply issue, but there is nothing meaningful in her proposal that would actually encourage the radical expansion of building that we need. 

Not that I really expected much from Harris, to be honest. The Biden administration has been marked by misguided interventions. This is just more of the same.

But lest you think I believe the Republicans are any better, let me talk about Trump for a moment. Since emerging as a candidate in 2015, Trump has demonstrated a disturbing hostility to free-market capitalism on many issues, particularly on trade. As a candidate and then as president, Trump has continuously peddled protectionism as if it’s some sort of economic panacea. Now, he’s doubling down on it. 

Vice presidential nominee JD Vance recently claimed that tariffs don’t increase prices and are “smart” economically. This statement is not only false but shows a disturbing lack of understanding of basic economic principles.

Tariffs — which, remember, are taxes on Americans — raise the price of imported goods, leading to higher prices for consumers and often resulting in retaliatory tariffs that harm domestic industries. By artificially inflating prices, tariffs create economic inefficiency, distort markets and ultimately hurt the very consumers and businesses they are meant to protect.

Are you noticing a theme?

But, of course, it isn’t just tariffs. Remember that during Trump’s time in office, the deficit grew significantly, hitting almost $1 trillion annually even before COVID. Once the pandemic hit, the spending floodgates opened, with trillions of dollars spent with little consideration of fiscal restraint.

Sadly, both parties now seem to represent the same toxic combination of high domestic spending, huge deficits, trade protectionism and gimmicky economic populism. They differ only in the degree to which they engage in these destructive policies.

So where does that leave people like me? Politically tribeless, I suppose. Like everyone else, I’m still going to have to make a choice this year, but no choice this year offers a real path forward for America’s economy. Instead, we get hollow gibberish, and I have to choose between “really bad” and “much worse.”

The only thing that’s clear is that no matter who wins, the market economy is going to lose.

Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland. A Hampden native, he previously served as a senior strategist for the Republican Governors Association in Washington, D.C.