The Patriot Post® · CAP's Foolish Plan to Cap Grocery Prices
President Donald Trump takes a backseat to no one when it comes to the political game of taking credit or assigning blame. “I’ve won affordability,” he told the crowd in Rome, Georgia, on Thursday. Democrats “caused the affordability problem.”
“We had record inflation. We don’t have it anymore.”
He’s correct, but don’t worry; a left-wing think tank still has a plan to solve the problem Democrats created.
Also on Thursday, the Center for American Progress (CAP) proposed capping grocery prices for two years on a couple of dozen items.
Over the past few years, Americans have faced sticker shock at the grocery store. Following years of very moderate price growth, the price of groceries is up 30 percent since January 2020, and the typical family of four is now spending more than $1,000 per month at the grocery store.
The Trump administration has only made groceries less affordable and agriculture more volatile since retaking office.
Wait — who made groceries unaffordable in the first place? Joe Biden and congressional Democrats, of course. And who wrote the CAP proposal? Among the authors was Jared Bernstein, chair of the White House Council of Economic Advisers for — drumroll, please — Joe Biden.
Oh.
So Bernstein was a key part of causing the problem, and now he’s blaming Trump and proposing the wrong solution. Got it.
Eventually, however, the report’s authors sort of admit something important:
Recent price increases have not only outpaced overall inflation but also significantly eroded households’ purchasing power at the grocery store. Over the long term since the 1960s, annualized wage growth was faster than grocery price growth, meaning that Americans could generally expect a typical paycheck to go further at the store. That trend — where wages grew faster than grocery prices — was a bedrock of the American middle class. But the 2021–2022 price spike ended that trend … meaning grocery prices rose so fast that they swallowed up increases in worker pay. The total change in earnings since December 2021 is only now about to match the total change in food costs, despite moderation in food inflation.
As Hot Air’s John Sexton pointedly writes, “Another way to put this might be: For nearly 70 years wages outpaced grocery prices but Joe Biden ruined that trend by encouraging overspending in response to the pandemic and helping to spike inflation at a time when the supply of goods was already constrained.”
Leftists are rarely right but always confident, though, so they proceed with the “solution.”
The CAP plan has three major components:
- Provide immediate relief to households through a negotiated, temporary price cap on core grocery items to help wages catch up to food costs while ensuring farmers receive a fair price on these products.
- Increase competition and protect consumers and producers from abusive practices.
- Modernize U.S. agricultural policy to build resilience to prevent future price shocks by supporting farmers, strengthening supply chains, and investing in innovation.
This strategy would save the typical family of four an estimated $134 per year on average.
$134? Well, paint me gold and call me Oscar.
I mean, savings is savings, but I also don’t believe for a moment that price controls ever work. Ever. In fact, this proposal would constrict supply, which was a big part of the problem in 2021-2022. It would also achieve the first goal of negotiated prices by “capping credit card swipe fees” — in other words, passing along the costs of those caps to credit card companies.
In short, this proposal is economically illiterate and would be destructive if somehow it were implemented. Everyone wants cheaper groceries, but this isn’t the way to do it. In fact, it reminds me of Star-Lord’s line in “Avengers: Infinity War” — “I like your plan, except it sucks, so let me do the plan, and that way it might be really good.” And by “me,” I mean the market, not some eggheads on a think tank committee who are making a sloppy attempt to clean up their own mess.