DV Journal

Price controls may seem like an obvious and easy solution to our economic problems, but those who understand their long-term effects know better. To say price controls will solve the hardships of working-class Americans is like trying to cure a headache with a Band-Aid. Here’s why.

In the early 2000s, Venezuela was plagued by poverty. Hugo Chavez, a military figure turned president, implemented an economic plan similar to Kamala Harris’s. Private businesses, large and small, began to disappear. Those not controlled by the government lived in fear of losing everything. 

As a child, I didn’t fully grasp the implications, but I saw my family’s fear and heard warnings about “communism.” Streets became more dangerous as Venezuela spiraled into economic collapse. Food shortages and mass starvation led to violence, chaos and a deeply divided country. This reminded my grandparents of Cuba in the late 1950s. Chavez’s and Fidel Castro’s price control policies, like Stalin’s before them, all led to disaster.

When Harris revealed her economic plan, I had the same ominous feeling my grandparents experienced. Her proposal to control grocery prices mirrors the failed policies of communist Cuba and Venezuela. In Venezuela, price caps on eggs and bread initially made them affordable but quickly resulted in their disappearance.

Companies, unable to cover their costs, stopped producing and distributing goods. What was once expensive but attainable became nonexistent. Price controls led to empty supermarket shelves, or they were stocked with one irrelevant product, like the Christmas bread panettone, while basic necessities vanished. People waited in massive lines for scarce items, like milk, knowing they might not see it again for weeks.

In 2003, Chavez imposed price controls on essential items like coffee, milk and pasta, but by 2013, food shortages had increased dramatically. By 2017, 93 percent of Venezuelans couldn’t afford food. The crisis expanded beyond food. By 2011, price controls covered household necessities like soap and toilet paper. Scarcity worsened, leaving families to make do with inadequate substitutes.

When companies can’t afford production due to price controls, imports are cut and goods vanish. Farmers in Venezuela faced equipment shortages, which disrupted crops and broke the supply chain. Mexico had a similar experience in 2021 when price controls on gasoline led to shortages that affected food safety. Two days after the controls were implemented, distributors of natural gas, used by 70 percent of Mexican households, went on strike.

Cuba’s experience is no different. The government imposed price caps on basic food items like chicken and powdered milk, leading to the worst food shortages since the 1990s. Cubans have been fleeing in record numbers, escaping a deteriorating economy. Shortages in food, medicine and power are devastating the island.

Economists agree that price controls do more harm than good. CNN reported that limiting the ability to raise prices can hurt the economy by discouraging new companies from entering the market. Jason Furman, a former Obama administration official, noted that price controls lead to reduced supply and higher prices or outright shortages.

In August, Donald Trump gave a speech addressing the cost-of-living crisis, pointing out that Harris’s economic agenda continues President Biden’s policies. Under Biden, food prices have soared — meat and poultry by 23 percent, children’s food by 24 percent, and cereal by 26 percent. In his speech, Trump promised to reduce energy prices by half, eliminate taxes on tips and Social Security, and grow the economy through sensible regulation and abundant supply.

Voting for Harris would bring to the United States the same economic collapse that Latin Americans and Eastern Europeans have experienced. Price controls are a failed, communist-style idea. We must prevent history from repeating itself.

China is the principal challenge to U.S. economic and political leadership in the world. With activities such as the Belt and Road Initiative, China is continuing to expand its influence economically and militarily with an eye on replacing U.S. leadership and Western democratic values with its own brand of statism. The challenge is seen in Beijing’s IP theft, culpability in the COVID-19 pandemic, aggressive behavior in Asia, disregard for human rights, and predatory economic practices.

Bringing China into the world economic and political order was done with the best of intentions across multiple U.S. administrations, both Democratic and Republican. The idea was that their increased participation in the global marketplace would bring China into the mainstream and drive internal reforms benefiting everyone. This has not happened. Instead, it has produced a military and economic juggernaut with little interest in maintaining the values we cherish.

The hope was also that globalization would benefit the American public by reducing costs and lifting more people up into the middle class. Cheaper goods would equal more disposable income for the average American, and more money to save.

The reality is that globalization has shipped the very jobs that allow that ascendancy to the middle class to China.

As global business leaders, in their search for higher earnings and larger profit margins, essentially outsourced the world’s supply chain to Beijing, we are left with the problems we see every day, from shortages of key industrial inputs to thinly stocked shelves.

By single threading the global supply chain, we have put China in the driver’s seat of the world’s economy. Even the basest components of items built in other countries are now sourced from China.

By taking away manufacturing jobs from the U.S., we make the population less financially stable, and drive wealth further into the pockets of a foreign adversary and in the US, an elite class.

Additionally, this is an urgent national security situation: With critical telecommunications gear, IP enabled security cameras, mobile phones, and other key components of 21st-century infrastructure manufactured in whole or in part in China, the global community has placed us all at the mercy of the whims of a “frenemy”.

At best, the global supply chain is at risk of the impact of disasters and pandemics on a country where hundreds of millions of people live below the poverty line; at worst, we have wrapped the world economy in dynamite and handed a potential foe the trigger. Imagine if China’s government, which centrally controls all businesses in that country, decided to stop producing cell phones or modems, or the parts that allow those devices to function? The result would be catastrophic for our internet-based economy.

The China challenge requires a strong U.S. response which I will work towards as a member of Congress. This response should include::

1. Greater local investment in key technologies.  Intel’s recent decision to build a state of art chip plant in Ohio is to be commended, and replicated across industries.
2. Tax incentives to encourage more manufacturing, R&D, and investment in worker training. Incidentally, the Delaware Valley is well-positioned to take advantage of this increased investment, with proximities to major arteries, abundant locations for factories and workplaces, and a diverse population.
3.  Aggressive enforcement of IP laws and sanctions against nations that persist in the theft of Intellectual Property, to protect and encourage the innovation that will power the economy of the future.
4. Increased investment in STEM education, educational choice, gifted programs, and skilled labor development. As a former School Board President, I am acutely aware of the challenges that public education faces, especially after the COVID-fueled “lost year(s)” that many children faced. In order to remain competitive on the global stage, education must be an urgent priority.

Mao Zedong said, “Communism is a hammer which we use to crush the enemy,” The United States can no longer allow itself to be a nail. Strong, clear-eyed leadership is required to address the China challenge.

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