When President Trump called “affordability” a “hoax,” Democrats believed he handed them the perfect message for the midterms:
“You’re struggling to afford food. Trump doesn’t care.”
They’re wrong.
In reality, Trump wasn’t dismissing the economic pain millions of Americans still feel. He was expressing disbelief at how Democrats were framing the affordability issue.
He’s right: It took a lot of gall for Democrats to cast themselves as champions of affordability after advancing Biden policies that sent inflation to a 40-year high and raised grocery prices by over 23% in just four years.
Since last January, Trump’s agenda has kept inflation in check, delivered bigger paychecks and tax refunds, and removed millions of illegal immigrants who were driving up housing costs and holding down wages. But the damage Biden caused can’t be undone overnight.
Americans are still wincing at the supermarket checkout counter, and Trump knows voters will take that frustration out on Republicans unless he delivers relief quickly. The temporary spike in gas prices caused by the war with Iran only adds to the urgency.
One way Trump can reassure voters that he’s working to bring down food costs is by using antitrust enforcement to target industry abuses.
On April 14, the Federal Trade Commission opened its public comment periodfor a proposed rule that would crack down on hidden fees charged by online grocery delivery services. Around one-fifth of American households buy groceries online. If they’re being ripped off, they deserve to know about it, to be made whole, and to be protected from similar exploitation in the future.
Then, a few days later, The Wall Street Journal reported that the Justice Department was preparing to file a lawsuit accusing some of the nation’s largest egg producers of price collusion. Over the past year-and-a-half, the price of eggs has become more politically contentious than that of any other grocery store staple. Showing voters that he’s serious about bringing them down will buy Trump a lot of goodwill.
Industry abuses like these are real and harmful, but they demand precise, measured responses like the ones FTC and DOJ are pursuing. Government interventions in the market can have disastrous outcomes when they fail to account for unintended consequences and second-order effects.
But when voters worry about the cost of living, it tempts politicians to blame the entire problem on “corporate greed” and to propose broad, reckless solutions that would only make things worse.
Democrats, who are out of power and under no pressure to deliver actual results, have fully succumbed to this temptation.
A perfect example of this reality-free messaging is the Fair Prices for Local Businesses Act, which Sen. Chris Murphy (D-CT) introduced in March.
A press release from Murphy’s office promises that the bill would “bring down prices for American families and support small businesses by cracking down on corporate price discrimination.”
That sounds great until you find out what it would actually do: threaten many companies, like grocery stores, with legal action if they negotiate bulk discounts with their suppliers.
For everyone other than Murphy and his co-sponsors, this practice is just common sense: Costco and Wal-Mart pay less because they buy more — and then pass those savings on to shoppers. Murphy’s bill would threaten those practices and risk driving up prices for millions of Americans.
Suppliers facing such threats tend to “respond rationally,” antitrust expert Alden Abbott explains. “[T]hey refuse to offer discounts, adopt rigid uniform pricing, and sometimes stop dealing with small purchasers altogether—the very businesses the statute was meant to protect.”
Under Biden, the FTC tried to use lawsuits to achieve the same outcome Murphy is pursuing through legislation. Thankfully, the current administration realizes the folly of that pursuit. Trump-appointed FTC Chair Andrew Ferguson has already dropped the Biden-era bulk pricing case against Pepsi and is likely to drop the last remaining one — which targets liquor distributor Southern Glazer’s — very soon.
Murphy knows his bill has no chance of becoming law, and he probably knows it would be counterproductive if it did. But none of that matters. All he cares about is slamming the administration on grocery prices and showing that he’s willing to propose “bold solutions” — even if they’d never work in real life.
Equally reckless is the attempt by Iowa state Rep. Josh Turek, the likely Democratic nominee for his state’s open Senate seat, to revive Kamala Harris’ plan for grocery price controls.
The second bullet point on Turek’s website promises a “federal ban on price gouging on food.” He leaves the definition of “price gouging” conveniently vague, but assures Iowans that banning it will make groceries cheaper. History shows that these arbitrary price caps do the exact opposite, but again, that’s not important to Turek. He doesn’t need to bring down grocery prices. He just needs to win an election.
President Trump is tackling the root causes of high grocery costs, like inflation and low wage growth, while taking on industry abuses where they actually exist.
Democrats, on the other hand, are making grandiose campaign promises that, if actually implemented, would devastate the food industry and leave Americans worse off than they were at the beginning of Trump’s second term. It seems like they’ll say anything to get elected. Let’s just hope they don’t mean it.
