Harris' Economic Agenda: A Solid Center-Left Agenda

As he fails around throwing insults and racially motivated barbs Donald Trump has called Kamala Harris a "communist" simply because she proposes policies that would reduce child poverty - which can be costly for all of us down the road - seek to address the affordability of housing, and go after corporations that price gouge to line increase their profits at the expense of consumers.  None of the proposals are radical or in any way "communist."   Her policy proposals do, however, underscore the stark contrast with Republican proposals that would further reduce taxes on the very wealthy and large corporations (Harris would increase taxes on these segments of society), eliminate public safety regulations and allow corporations to engage in unfettered corporate greed.  And none of that includes Trump's proposed tariffs that would increase prices for all consumers and hit the non-wealthy the hardest. In short, Harris seeks to assist the many in America while the Republican agenda - I call it "reverse Robin Hood" - would aid the few.  A column in the New York Times looks at Harris' proposals:

On Friday, Vice President Kamala Harris gave her first big economic policy speech as the Democratic presidential nominee. It was, of course, very different from the “economic” speech and news conferences Donald Trump has held in the past couple of weeks.

For one thing, Harris actually outlined her economic proposals, rather than veering off onto topics like who has the biggest crowds and how windmills are killing birds. For another, she doesn’t seem to have said anything demonstrably untrue — a sharp contrast with Trump, who lied or distorted the facts about twice per minute during an event at Mar-a-Lago.

But what about the substance? The usual suspects are claiming that Harris revealed herself to be an extreme leftist. . . . . saying that she’s essentially calling for price controls, which is odd, because she didn’t say anything like that.

All in all, Harris staked out a moderately center-left position, not too different from President Biden’s original Build Back Better agenda, which he was able to implement only in part because in an evenly divided Senate, Joe Manchin had an effective veto.

So let’s go through the substance, working off a fact sheet released by the Harris campaign, which provided more detail than the speech itself.

The most important and, as I see it, best proposal was for the restoration of an expanded child tax credit, which the Biden administration implemented in 2021 but expired at the beginning of 2022 because Democrats didn’t have a big enough congressional majority. This credit significantly reduced child poverty while it was in effect; Harris would supplement it with an even bigger credit for families with children in their first year.

Let’s start by saying that the case for aggressively fighting child poverty is overwhelming, not just on moral grounds — in a rich country, why should children who happen to be born into lower-income households suffer deprivation? — but in terms of the economics: On average, Americans who grow up in poverty have worse health and lower incomes as adults than those who don’t, which makes fighting child poverty an investment in the nation’s future.

I’m less enthusiastic about Harris’s proposals on housing, which combine tax incentives for homebuilders with down payment assistance for first-time home buyers. These aren’t bad policies per se. But the broader problem with housing affordability in America is zoning and regulation that blocks construction of new housing units. Unfortunately, these barriers to construction exist mainly at the state and local level and are out of reach of any politically plausible federal policy.

Finally, about prices: I’ve been amazed at how many credulous commentators, and not just on the right, have asserted that Harris is calling for price controls, making her out to be the second coming of Richard Nixon if not the next Nicolas Maduro.

What she has actually called for is legislation banning price gouging on groceries. Obviously, this is a populist political gesture — a way to offer something to voters upset about high food prices. But just because something is popular doesn’t mean that it’s a bad idea.

We don’t have a detailed Harris price-gouging plan, but it’s unlikely to be more aggressive than a bill introduced this year by Senator Elizabeth Warren. And that bill is surprisingly mild — not all that different from the anti-gouging laws already on the books in many states.

Why do we have laws against price gouging? Mainly because voters hate it when businesses take advantage of shortages to charge very high prices, but also because when there aren’t effective price limits, businesses sometimes act to make shortages worse — some of us still remember the California energy crisis circa 2001, when power producers reduced supply to drive up electricity prices.

And for those comparing Harris to Nixon, who imposed price controls in 1971, bear in mind that Nixon also pressured the Federal Reserve to juice up the economy before the 1972 election — while Harris has been clear about respecting the Fed’s independence.

So what have we learned about Harris’s economics? She is, as expected, moderately center-left. And for those determined to view her as a communist — sorry, she isn’t.