Votes for Handouts
MN Gordon

Vice President Kamala Harris wants to help you.  But you must vote for her first.  She needs to be elected President in November before she rolls up her sleeves and gets her hands dirty for the American people – including you.

The cost of consumer goods and services went through the roof on her watch.  In fact, consumer prices are up over 20 percent since January 2021.  Food, rent, and electricity are up even more.

Yet her four years as President Joe Biden’s sidekick don’t count.  Bidenomics is on the big guy.  Not Harris.  And now, Harris has a plan.  A multifaceted plan.  That’s why she needs your vote.

When she’s elected president of the USA she promises to save you money.  She says she will give you $25,000 to buy your first house.  She also plans to give you $6,000 every time you give birth.

Harris also wants to stick it to purveyors of foodstuff.  She says she will save you money on your weekly grocery bill.

Specifically, Harris says she will enact a federal ban on price gouging for food and groceries.  She says the reason groceries cost so much is because of greedy corporations; that price hikes have nothing to do with the rampant money printing, deficit spending, or policies of extreme dollar debasement over the last four years.

What a federal ban on price gouging for food and groceries would entail is unclear.  But we suppose it will involve lowering sticker prices below production costs.  Anyone with a basic grasp of arithmetic can understand why such a proposal is full of problems.

Nonetheless, for gullible voters, it’s a winning presidential platform.

Political Opportunity

Price controls are a neat trick that have been tried by all aspiring communists over the years.  While it’s a great tactic for getting votes from people struggling to make ends meet, in practice, it’s a disaster.

Price controls lead to scarcity and empty shelves.  Always have.  Always will.  Kamunism will too.

Maybe Harris would have had a better case to make had she chosen a different market to go after.  Something like the luxury handbag market, where there’s plenty of price gouging fat to trim.

Besides, isn’t it a right, in the year 2024, for all Americans – both documented and undocumented – to own a luxury purse?

By comparison, the grocery business is a notoriously terrible industry.  The margins are squat – just 1 to 1.5 percent.  The competition is fierce.  And much of the product – like meat, dairy, and produce – has a very short shelf life.

If a grocer cannot sell its perishables before they spoil, it must toss them in the trash or donate them to the food bank.  Any potential profits can sour faster than a rotting tomato.  And that’s if spikes in transportation and freight costs don’t wipe out the profits first.

John D. Rockefeller, the most ruthless businessman America has ever known, left the produce business early in his career.  He knew the toeholds he could dig into and exploit to his advantage were few and far between.

Still, Harris sees political opportunity in the grocery business.  She knows people are bitter about the sticker shock of their grocery bill these days.  It is something they are reminded of each week at the checkout counter.  And she’s determined to use people’s frustrations to get votes.

Highway Robbery

Harris learned a valuable lesson during her four years under Biden’s tutelage.  That blaming corporate greed for rising prices is a political winner.  It provides a simple and effective answer for why consumer prices are so high.

In one simple statement blame is shifted away from the government’s failed policies.  At the same time, it redirects populist animosity towards an easy target.

Harris’ logic is simple.  Prices are increasing; therefore, corporations are greedy.  But if corporations are greedy because prices are rising, isn’t the government also greedy because prices are rising?  The logic should cut both ways, shouldn’t it?

Specifically, if corporations are increasing prices because they are greedy, does that mean the U.S. Postal Service (USPS) is also greedy?

For example, when the forever stamp was rolled out in 2007, it could be purchased for just 41 cents.  In January of this year, the price of a forever stamp increased from 66 cents to 68 cents.  This amounted to a 3 percent increase and a 66 percent increase from the original price.

But a price of 68 cents per forever stamp isn’t enough for the greedy price gougers at the USPS.  Last month, the USPS raised the price of a forever stamp but again.  This time it raised the price an additional 5 cents, to 73 cents.

That will bump the cost up 10.6 percent just this year alone, and a combined 78 percent since the forever stamp was introduced 17 years ago.  That’s highway robbery.  Clearly, something must be done.

Votes for Handouts

Presently, the USPS is operating at a massive loss.  It reported a $6.5 billion loss for fiscal year 2023 and is projecting a $6.3 billion loss in 2024.  But with Uncle Sam and your taxpayer dollars backing it, the USPS will continue to operate at a forever loss.

These losses, of course, are made up for with government deficits.  And deficit spending, which borrows consumption from the future into the present, is inflationary.  Thus, the USPS is guaranteeing that the cost of forever stamps, and other consumer goods will continue to rise and rise.

According to Harris, this is because corporations – and by her logic, the USPS – are greedy.  But is this the correct answer?

A more discerning answer is that money is losing its value.  Why?  Because the value of money is being systematically destroyed to finance government spending which is completely out of control.  Going after grocers and giving away handouts in exchange for votes will only further accelerate the dollar’s decline.

Harris may not be the sharpest knife in the drawer.  Still, pure stupidity isn’t what’s behind her price controls proposal.

Soviet Socialists, Communist Cuba, Peronism, among others, already conducted decades of field research.  Their findings, after much earnestness, are conclusive without a doubt.

Central planning succeeds at retarding growth, increasing poverty, and sapping the imagination and inventiveness of its inhabitants.  Before long they’re rifling through the garbage cans in search of a cure for their hunger pangs.

Harris is aware of this.  Her advisors are too.  Quite frankly, they don’t care.

What they’re after is control.

Consequently, Harris will promise the masses handouts in return for votes.  And the dumbbell voters will buy it hook-line-and sinker.  Just wait and see.

[Editor’s note: It really is amazing how just a few simple contrary decisions can lead to life-changing wealth.  And right now, at this very moment, I’m preparing to make a contrary decision once again.  >> And I’d like to show you how you can too.]

Sincerely,

MN Gordon
for Economic Prism

MN Gordon is President and Founder of Direct Expressions LLC, an independent publishing company. He is the Editorial Director and Publisher of the Economic Prism – an E-Newsletter that tries to bring clarity to the muddy waters of economic policy and discusses interesting investment opportunities.

 

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