From Price Controls to Mass Starvation
From taxes to spending, Kamala is the most left-wing major party candidate since George McGovern -- who proposed a Universal Basic Income in 1972 and went on to win a single state.
But her most hare-brained scheme -- so far -- has been price controls, where she's to the left of McGovern, threatening to punish grocery stores for daring to charge more than their costs.
In fact, grocery stores make 1 to 2 pennies on the dollar. Meaning they have to pass along costs that come straight from the Washington money printer.
That means price controls would, in short, break food.
Price Controls Always Fail
In a recent video I mentioned how price controls have been tried many times, and each time they failed so spectacularly they were repealed. After much pain, suffering, and empty shelves.
When France tried, they got a black market that actually did price gouge. Even Venezuela repealed price controls in 2016 after food shortages and nationwide riots.
But what do price controls look like in reality. For that I go to a great thread by Robert Sterling, a former M&A executive at one of the biggest food producers in America.
Robert walks us through a thirteen step process from grocery price controls to widespread food shortages -- something we haven't seen in this country since the Great Depression, when FDR also imposed price controls.
Stage One: Bankrupt Grocers
So, first, government announces grocery stores can't raise prices even though inflation continues -- courtesy of the Fed and Wall Street. That means their costs keep going up, so those pennies of profit turn into losses.
Like any business that's losing money, they shut down.
Of course, not all grocery stores are created equal -- small ones lack economies of scale, and while rich people buy high-margin vegetables and expensive cuts, the poor buy low-margin packaged foods.
So the small stores and the low-income stores go first.
You get food deserts, as people in urban centers or rural areas have to drive miles -- or take multiple buses -- to find food. And, ironically, you get more concentration, as the little guys drop out.
The survivors increasingly aren't even selling food. They shift shelf-space to things that aren't price-controlled. Clothing, furniture, supplements.
Grocery stores start to look more like a Dollar Store, with a little food and a lot of junk.
As cities clear of food, you'd need police patrolling parking lots and armed escorts on delivery trucks -- perhaps you could even have government-run groceries like Chicago just announced.
Stage Two: Bankrupt Food Producers
The only way to save any grocery stores is to price-control their costs. Meaning food producers like Kraft, Heinz, Tyson, Hormel.
Of course, again, Kraft's costs aren't being controlled -- their ingredients, wages, parts and electricity. So now they're losing money.
Like groceries, they wind down, closing marginal factories and running out equipment then not replacing it.
As food producers downsize or go under, now you start getting actual shortages. And the only solution -- once again -- is price control the next level down. Farmers.
Stage Three: Bankrupt Farmers
Which brings us to the final stage. Because remember Farmers, too, are now forced to sell at a low price, yet their inputs like fertilizer or tractors are still going up.
They, too, go under.
You are now full Venezuala, with the only alternative to starvation a complete government takeover of the food supply, central planned from farmer to grocer.
As Sterling puts it, "the government will struggle to operate one of the most complex industries on the planet. The entire food supply chain starts imploding."
“Imploding” as in starvation.
What’s Next
It's very unlikely we'll get to starvation. For the simple reason that at some point the frog boils and the voters -- or rioters -- share their thoughts with policymakers.
That's exactly why price controls fail, from France to Venezuala.
Having said, we managed it before under FDR.
And, unfortunately, if the morons running Kamala's brain trust are dumb enough for price controls, they're dumb enough for a whole lot more.
Every week I write an article on the top stories in economics with regular deep dives into history like the Fall of Rome, the Weimar hyperinflation, or FDR’s Great Depression.
I also make daily videos on economics and freedom, posted on X/Twitter, Youtube, and Rumble.
And a weekly podcast with interviews of key figures in liberty and a roundup of all the week’s videos. This week’s a great one with Lawrence Lepard on our looming Debt Crisis. I hope you’ll give it a listen!
Price controls are obvious first step toward calorie controls.
If you can control the ability for the populace to feed itself, you control the population.
Energy is everything, and food is the fuel we use to power our bodies. We see climate controls being used to reduce power generation. We see regulatory bottlenecking and other forces used to reduce calorie generation.
Remember how in previous disasters the Farmers ended up vilified?
The uprising in China... the Kulaks in Russia.
History keeps repeating.
I lived in Krakow, Poland for a few months in the summer of 1989 during college. They had government run food stores, and it was shocking and much like you describe in this article. The stores were maybe a little bigger than our average convenience store, and were almost empty of food except for packaged snacks, equivalent to our Little Debbie’s and the like. Plenty of plastic crap, like picture hangers other random stuff. To get any real food, like fruit or vegetables, you’d have to go to one of the private market stands, which of course the average Pole didn’t have the money to afford. When a store did get meat, it was always pork cutlets or pork sausage, I would go with one of the guys I worked with to stand in line for 3 hours. These guys hardly worked because they were always out standing in line for something. I earned about $3/month at the official exchange rate for my ‘internship’, which was (I think, it’s been a while) 750 zloty to the dollar, while the black market exchange rate was 10,000 zloty to the dollar. My salary was a normal starting salary for someone just out of college. So everyone there was hustling and doing whatever they could to earn hard currency, mostly US dollars or Deutschmarks. To buy food. Not to buy bling. Anyway, a glimpse of this at 21 for a few months made me a solid fiscal conservative, and I can’t express how dangerous and infuriating I find the financial rhetoric of the current Democratic leadership. It sends chills down my spine.
By the way, the Polish people were amazing - super friendly, as I’ve found most people to be on my travels since.