Obama economist trashes Kamala Harris' price control plan: 'This is not sensible policy'
'The biggest hope is that it ends up being a lot of rhetoric and no reality,' Jason Furman said
{{#rendered}} {{/rendered}}A Harvard economist who worked in President Obama's administration ripped Vice President Kamala Harris' price control plan to curb inflation as not based in "reality."
"This is not sensible policy, and I think the biggest hope is that it ends up being a lot of rhetoric and no reality," Jason Furman told The New York Times in a report published Friday. "There’s no upside here, and there is some downside."
The Harris campaign announced on Wednesday she would institute a federal price-fixing plan for corporations, as president, to stop "big corporations" from taking advantage of consumers.
{{#rendered}} {{/rendered}}"There’s a big difference between fair pricing in competitive markets and excessive prices unrelated to the costs of doing business," the Harris campaign said in a statement. "Americans can see that difference in their grocery bills."
LIBERAL WASHINGTON POST COLUMNIST SAYS HARRIS' PRICE CONTROLS SOUND LIKE ‘COMMUNISM’
Democratic presidential candidate U.S. Vice President Kamala Harris will roll out her price control policy on Friday. ((Photo by Andrew Harnik/Getty Images))
The proposal would give authority to the Federal Trade Commission and state attorneys general to impose harsh penalties on companies for setting excessively high prices.
{{#rendered}} {{/rendered}}However, some economists and financial experts have cast doubt on Harris' plan, arguing that corporations don't play a huge role in rising grocery prices.
Furman, the former National Economic Council chair under Obama, told the Times that policies like Harris' are risky because they discourage new businesses from joining the market to meet consumer demand.
Other economists disagreed and praised Harris' proposal to the Times.
{{#rendered}} {{/rendered}}Personal finance expert Dave Ramsey and Obama economist Jason Furman suggested Harris' price control plan wouldn't work. (iStock)
Isabella Weber, an economist at the University of Massachusetts Amherst, argued Harris' efforts to curb what she calls price gouging could help keep businesses accountable to consumers.
Weber told The Times that people may feel taken advantage of if corporations are thriving while "ordinary people" are enduring financial hardships.
{{#rendered}} {{/rendered}}"Some sort of basic social contract is kind of crumpling," she said.
Harris is slated to roll out the economic policy during her first formal policy speech of her presidential campaign in Raleigh, North Carolina on Friday.
The Harris campaign did not immediately respond to a request for comment from Fox News Digital.
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Her policy has also been criticized by personal finance expert Dave Ramsey and liberal Washington Post columnist Catherine Rampell.
"We tried it" in the 1970s, Ramsey told Fox News host Laura Ingraham on Thursday. "There was a whole movement for price controls across everything, because inflation was out of control and rampant, just like it is now. And so it's been tried. It does not work. What works is to flood the market with supply."
{{#rendered}} {{/rendered}}"It’s hard to exaggerate how bad this policy is," Rampell wrote in an op-ed published on Thursday. "It is, in all but name, a sweeping set of government-enforced price controls across every industry, not only food. Supply and demand would no longer determine prices or profit levels. Far-off Washington bureaucrats would. The FTC would be able to tell, say, a Kroger in Ohio the acceptable price it can charge for milk."
Fox News' Jeffrey Clark, Jamie Joseph and Alec Schemmel contributed to this report.