The reason we have inflation is because the government shutdown the economy during covid and then printed trillions, making prices go up and your savings worth less. That’s why groceries and nearly everything else costs more right now.

You might hear some politicians saying that inflation is down. That’s not true. The accurate way of saying it is that that costs aren’t going up as fast as they were before. The inflation rate is lower than it was at the pandemic peak when we hit a 9.1% inflation rate in June of 2022, but inflation is still going up overall.

Note that the official inflation rate is also misleadingly low because it doesn’t include energy or food prices – you know, the stuff we purchase every day to survive – because of their volatility. It’s exactly that “volatility” that is slamming our wallets.

Costs are still rising, and things are getting more expensive.

And we all feel it.

Vice President Kamala Harris recently proposed federal price controls to “stop price gouging” by grocery stores as a way of dealing with inflation. But if price gouging is the reason prices are going up, then why did these businesses only recently start doing that, but didn’t during the previous two decades when inflation rates were low?

The idea that grocery stories are “gouging” customers is not supported by the facts. Grocery stores have razor thin margins. In 2021, the year President Biden took office, the average profit margin for the nation’s largest grocers – Walmart, Target, Costco, Kroger, and Albertson’s – was 2.6%. Today, in 2024, the average profit margin for those same large grocers is 2.4%. Their profit margin has gone down. Where’s the gouging?

I don’t like paying higher prices for food either. But the retail industry is ultra-competitive, and if a grocery store was price gouging, there would be a huge competitive advantage for other stores that don’t raise their prices. The allegation of “price gouging” is just blaming a scapegoat. So price controls as a solution is nonsense.

Price controls only sound good if you don’t understand how supply and demand works.

Government price controls, always and everywhere (see the U.S.S.R., Cuba, Venezuela, etc.) result in shortages, meaning empty shelves. That is the greatest difference between grocery stores in market-based economies versus socialist economies. In market-based economies, grocery products wait on shelves for customers to arrive. In socialist economies, customers wait in line for the grocery products to arrive.

In 1971, President Nixon imposed federal price controls. Inflation was running at 4.29%. By 1974 (the year I graduated from high school), inflation had jumped to 11.05%. That’s our recent US history with federal price controls. Let’s not go down that road, again.

When elected officials, particularly in an election year, start spouting theories of price gouging and greed as the reason for your pain in the checkout line, be wary – especially if they offer a solution that ignores the root causes of inflation. Price controls, and any other centrally enforced “solutions”, will only make matters worse.

We’ve seen the failure of price controls, firsthand, during the 1970s and during WWII under President Roosevelt. We’ve seen the failure of price controls around the world in country after country.

Let’s not try something again that we already know doesn’t work.