Sometimes a policy proposal comes along that is so bad, it has to be intellectually dismantled before it ever sees the light of day. Senator Elizabeth Warren is famous for such plans. Remember her mantra in the 2020 presidential campaign, “I’ve got a plan for that”? Thankfully, her Accountable Capitalism Act – which would have ended capitalism as we know it – was rejected, along with her candidacy.
But now Senator Warren is at it again. This time she is suggesting that inflation, and higher food prices in particular, are a result of "price gouging" by large grocery store companies. Her solution is to crack down on “Big Grocery” with antitrust legislation, claiming that chains like Kroger are earning monopoly profits while ordinary Americans pay the price. There’s just one problem: grocery stores operate on razor-thin profit margins, and represent one of the most competitive markets around.
Don Boudreaux alerted me to this story on his blog, Cafe Hayek, where I always start my day. He returned to the show to expose the fallacies at the heart of her proposal. Putting aside the more nuanced issue of price gouging (a topic I’ve covered with Don in the past), I couldn’t let Warren’s farcical claims about grocery store monopolies go unchallenged. We discussed whether the idea is born of ignorance, mendacity, or some combination of the two.
Elizabeth Warren Blames High Food Prices on Grocery Chains' 'Record' 1 Percent Profit Margins
(Michael Brochstein/Sipa USA/Newscom) On Friday, Sen. Elizabeth Warren (D-Mass.) tweeted a video clip from her appearance on MSNBC's Stephanie Ruhle Reports a couple of days earlier. What happens when only a handful of giant grocery store chains like @Kroger dominate an industry? They can force high food prices onto Americans while raking in record profits.