Reason.com - Free Minds and Free Markets
Reason logo Reason logo
  • Latest
  • Magazine
    • Current Issue
    • Archives
    • Subscribe
    • Crossword
  • Video
  • Podcasts
    • All Shows
    • The Reason Roundtable
    • The Reason Interview With Nick Gillespie
    • The Soho Forum Debates
    • Just Asking Questions
    • The Best of Reason Magazine
    • Why We Can't Have Nice Things
  • Volokh
  • Newsletters
  • Donate
    • Donate Online
    • Donate Crypto
    • Ways To Give To Reason Foundation
    • Torchbearer Society
    • Planned Giving
  • Subscribe
    • Reason Plus Subscription
    • Print Subscription
    • Gift Subscriptions
    • Subscriber Support

Login Form

Create new account
Forgot password

Politics

Elizabeth Warren Introduces Price-Gouging Bill That Fails To Define What Qualifies as Price Gouging

The bill would penalize companies for price gouging during times of war, public health emergencies, or natural disasters—which would have encompassed all of the last two years.

Liz Wolfe | 5.13.2022 11:26 AM

Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests
warren (0-00-00-00) | Jeff Topping/Polaris/Newscom
(Jeff Topping/Polaris/Newscom)

"The prices Americans are paying for groceries and other essentials are at all-time highs. One of the reasons?" asked Sen. Elizabeth Warren (D–Mass.) on Wednesday via Twitter. "Giant corporations are price gouging & reaping record profits. We need to put a stop to corporate gouging that drives up prices for families."

It couldn't be that runaway inflation—which has reached astonishing 40-year highs in recent weeks—is, according to Federal Reserve of San Francisco economists, partly attributable to President Joe Biden's mid-pandemic economic stimulus plans, which pumped money into the bank accounts of Americans with seemingly little thought given to what could result. In Warren's view of the world, it's corporate, not government, malfeasance that's leading to pocketbook pain for everyday Americans.

Warren holds that such problems must be solved by the federal government in the form of a new bill that would limit the prices companies can charge consumers during times of "exceptional market shock." That includes times of war, public health emergency, or natural disaster—which would have encompassed all of the last two years, barring firms from raising their prices to adapt to difficult and fast-changing economic circumstances.

Warren's bill, introduced with Sen. Tammy Baldwin (D–Wis.) and Rep. Jan Schakowsky (D–Ill.), would empower the Federal Trade Commission (FTC) to investigate and penalize companies with "unconscionably excessive price increases," which is disturbingly defined nowhere in the legislation.

Hey the anti-price-gouging bill that Warren has been teasing for weeks is finally out.
How is "price-gouging" defined? Why, it's just pricing that is "unconscionably excessive."
What does that mean? TBD, but it will definitely be illegal!https://t.co/ehQS61iDSZ pic.twitter.com/M5CsYZBsrU

— Catherine Rampell (@crampell) May 12, 2022

Companies will be "presumed to be in violation" if they use "the effects or circumstances related to the exceptional market shock as a pretext to increase prices." In other words, companies responding to inflation or supply chain woes caused by the pandemic could be presumed in violation and fined by the FTC, unless such price increases were due to costs outside the firm's control. Companies would also be required to disclose information about their pricing strategies in regulatory filings.

How large is an "unconscionable" price increase? The FTC would get to decide that based on the avg price over the last 120 days. Only allowable defense would be to show price increases were driven by "costs outside your control" 2/8 pic.twitter.com/QhbWhiP4FT

— Chris Conlon (@conlon_chris) May 12, 2022

The bill is unlikely to garner broad support and become law. So-called price gouging is a pet issue of Warren's, one shared by the likes of the White House, which has claimed, amid the ongoing nationwide baby formula shortage, that it will crack down on price gouging as supplies dwindle.

Prices contain useful information about how hotly demanded a product is. Consider what would happen if firms never charged higher prices for goods or services in high demand: They would run out of the good or no longer be able to offer the service at all, denying consumers the ability to get the good or service they need. Uber's surge pricing is inconvenient when you need to get somewhere, but it also conveys useful information about the scarcity of available drivers, allowing some would-be customers to shift to an alternative, better coordinating the remaining supply so drivers are provided to those who are either least price-sensitive or most in need, conveyed by their willingness to pay.

Moreover, it's not clear that Warren's bill is narrowly tailored to target "price gouging" as people classically understand it. It looks more like the federal government wading into the sticky territory of setting price controls over the long term, given how broadly the text defines "exceptional market shock." It is important, during prolonged periods of war or pandemic, for companies to be able to adjust their pricing strategies to respond to, say, higher prices and decreased supply of wheat, when one-quarter of the world's supply is cut off due to Russia's war in Ukraine and will remain cut off for an unknown length of time. (Ditto for pork, crabs, and a gazillion other products that have been affected by COVID-related supply chain disruptions over the last two years.) Empowering the FTC to hassle these companies for engaging in the exceedingly normal practice of altering their prices to respond to changing supply and demand is ludicrous, and yet another step on the road toward Venezuela.

Though Warren's bill is unlikely to pass, this pet issue won't be shelved anytime soon. We can at least hope she continues to adapt her silly price-gouging script to be seasonally appropriate:

Americans are paying record high prices for their Thanksgiving turkey while big poultry companies are paying billions in dividends, giving CEOs raises & earning huge profits. These companies are abusing their market power. I'm asking DOJ to investigate.https://t.co/G70KyaUd1Q

— Elizabeth Warren (@SenWarren) November 23, 2021

Start your day with Reason. Get a daily brief of the most important stories and trends every weekday morning when you subscribe to Reason Roundup.

This field is for validation purposes and should be left unchanged.

NEXT: Randy Weaver Dies

Liz Wolfe is an associate editor at Reason.

PoliticsPolicyPrice controlsElizabeth WarrenFederal Trade CommissionCongestion Pricing
Share on FacebookShare on XShare on RedditShare by emailPrint friendly versionCopy page URL
Media Contact & Reprint Requests

Hide Comments (79)

Editor's Note: As of February 29, 2024, commenting privileges on reason.com posts are limited to Reason Plus subscribers. Past commenters are grandfathered in for a temporary period. Subscribe here to preserve your ability to comment. Your Reason Plus subscription also gives you an ad-free version of reason.com, along with full access to the digital edition and archives of Reason magazine. We request that comments be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of reason.com or Reason Foundation. We reserve the right to delete any comment and ban commenters for any reason at any time. Comments may only be edited within 5 minutes of posting. Report abuses.

  1. But SkyNet is a Private Company   3 years ago

    Let’s Go Brandon!

    1. ElvisIsReal   3 years ago

      Let's go Brandon, I agree!

      1. Moonrocks   3 years ago

        Let's Go Brandon!

    2. Don't look at me!   3 years ago

      Fuck Joe Biden

      1. Union of Concerned Socks   3 years ago

        Fuck Joe Biden

        1. BigT   3 years ago

          Let's go fuck Joe Biden, Brandon.

          Did I get that right?

          1. ravenshrike   3 years ago

            Fuck Joe fuck Joe Biden Biden is certainly weird syntax, but it gets the point across.

    3. middlefinger   3 years ago

      Yup. Taking us one step closer to Venezuela was on his website. To place Donna Hylton on the DNC stage was second best after his website.

      No mean tweets. President Warren

  2. Red Rocks White Privilege   3 years ago

    Can this bitch at least get a wardrobe that doesn't scream "mid-1990s office manager"?

    1. Don't look at me!   3 years ago

      That’s what she is.

    2. Inquisitive Squirrel   3 years ago

      She's so remarkably out of touch and has an astounding lack of self-awareness.

      1. (Redacted)   3 years ago

        Yet wants to control everything. Her ambition rivals her total incompetence and incapability.

  3. Longtobefree   3 years ago

    Fascists gotta do fascism.

  4. Brandybuck   3 years ago

    Clowns to the left of me
    Jokers to the right
    I never considered myself to be in the middle, yet here I am stuck there.

    Both sides want to micromanager every facet of the economy. The Right demands that baby formula be distributed by the government, the Left wants government to set prices during a government declared emergency. Neither sides gives a shit about government created inflation eroding away our money.

    1. Don't look at me!   3 years ago

      The Right demands that baby formula be distributed by the government,..

      Cite?

      1. Hank Ferrous   3 years ago

        There is none, it made it up.

    2. CE   3 years ago

      Except the Left is the guys who are already distributing the baby formula.

    3. But SkyNet is a Private Company   3 years ago

      BOOOOAAAAFFFFFF SSSSSIIIIIIDDDEEESSSS

      1. sarcasmic   3 years ago

        Yup. They both suck. Acting like a teenager doesn't make it less true.

        1. DesigNate   3 years ago

          It’s patently obvious that the Democrats suck WAAAAY worse on economic freedom.

    4. Inquisitive Squirrel   3 years ago

      Not sure you're doing an apples to apples comparison here.

    5. bobby oshea   3 years ago

      "The Right demands that baby formula be distributed by the government."

      No they don't.

    6. A Thinking Mind   3 years ago

      Who on the right is demanding distribution of baby formula?

      1. Inquisitive Squirrel   3 years ago

        He's conflating calls for use of the Defense Production Act to generate more formula as the right demanding distribution. It's a disingenuous "both sides" argument.

        1. Sevo   3 years ago

          BrandySHIT is still trying to justify has assholish TDS rants.

      2. BigT   3 years ago

        I am.

        I demand you turn over the formula for making a baby.

        1. DesigNate   3 years ago

          Babies don’t exist, they’re mythical beings.

  5. Unicorn Abattoir   3 years ago

    Evil bitch.

  6. Bender B. Rodriguez   3 years ago

    Ah, Senator Delores Umbridge. How can one person be so highly educated, and yet so economically illiterate?

    1. Hank Ferrous   3 years ago

      Because there is only the most tenuous of links between education and intelligence. You've been here long enough to note that the nominally well educated commenters are generally both ignorant and stupid. More true at VC, where the confusion about their opinion being somehow a fact based on purest white collar elitiism.

  7. CE   3 years ago

    So Warren wants to make shortages worse. Not surprised.

    1. BigT   3 years ago

      The Soviet Union had fixed prices - remember how full and inviting their stores looked?

      1. stevea   3 years ago

        Similar to the way ours will look w/ the impending food shortages.

  8. creech   3 years ago

    Aren't these the same D.C. "representatives" who want to gouge out $40 billion from the taxpayers and send it to Ukraine?

  9. sarcasmic   3 years ago

    “The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.”

    ― Thomas Sowell

    That woman has the first rule of politics down to a science.

    1. (Redacted)   3 years ago

      She’s also very stupid.

  10. Union of Concerned Socks   3 years ago

    Christ, what a mendacious, idiotic cunt.

  11. Jerryskids   3 years ago

    I would be willing to contribute to a GoFundMe to raise money for Warren to go kill herself and I would not consider that to be price-gouging no matter what price were set.

  12. Quicktown Brix   3 years ago

    Oh sure, but price gouging was just fine when her people charged the Dutch all those beads and trinkets for Manhattan island.

  13. cgr2727   3 years ago

    So if "we need to put a stop to corporate gouging" then is it ok if the Pakistani guy who owns one gas station down the street raises his prices the next time a tanker runs aground, there's a hurricane in the gulf, or a Russian fuckwit invades his neighbors?

    1. ElvisIsReal   3 years ago

      Nope, for equity we will set price controls on gas and then act surprised when it's not available at any price.

  14. Inquisitive Squirrel   3 years ago

    The amount of soul selling that Warren has done to become a raging progressive hack it really quite impressive.

  15. Not Robbers=Nut Rubbers   3 years ago

    So-called price gouging is a pet issue of Warren's, one shared by the likes of the White House, which has claimed, amid the ongoing nationwide baby formula shortage, that it will crack down on price gouging as supplies dwindle.

    You mean like the "entrepreneurs" using their WIC dollars to buy unlimited cans of formula and then selling them at exorbitant rates?

    1. ElvisIsReal   3 years ago

      I guess we found all those new small businesses Biden was bragging about.

  16. Outlaw Josey Wales   3 years ago

    I feel gouged by the "unconscionable" price increase in my tax bill this year. And by the price we all pay for this government we get.

    Are our government services eligible for the Price Gouging Act?

  17. Minadin   3 years ago

    I've said this before, but for every $1.00 I spend at the grocery store, the store gets about $0.03 in profit, and the government gets $0.39.

    1. ElvisIsReal   3 years ago

      Ditto gallons of gas.

      1. Minadin   3 years ago

        Honestly, it's probably a lot worse for gas.

        1. Hank Ferrous   3 years ago

          It's definitely much worse for fuel.

  18. n00bdragon   3 years ago

    The best thing about blaming inflation on corporate greed is that the inflation itself creates the illusion of "record profits", which are measured in hard numbers rather than percentages.

  19. TJJ2000   3 years ago

    As-if Democrats didn't have a running record of being CRIMINALS!!!!

    "How much for the car?"
    "$x...."
    "Oh no it isn't. SEE my Federal Gov-Gun!"

  20. 10percenter   3 years ago

    She can't tell you what price gouging is, but she knows it when she sees it.

    1. cgr2727   3 years ago

      Potter Stewart would approve.

  21. PedroMartinez1   3 years ago

    So, someone that has never spent a second working in the real world producing a sellable product or an essential service now tells us we need an old nanny like her to protect us from the multitudes of evil businesses that are price gouging the public. She needs to look in the mirror because she and her sewer pit of political elite are "gouging" us in more ways than just pricing.

  22. BigT   3 years ago

    She really ought to go after America's colleges and universities. Talk about price gouging! They add another climbing wall and lazy river and gender studies course and College Office of
    What's What and raise their price by 20%.

    1. DesigNate   3 years ago

      Fucking kids these days get a lazy river and are still ungrateful!

  23. Dismalist   3 years ago

    Those stupid corporations, waiting until an increase in demand, fueled by money, to raise their prices!

    Warren is not merely wrong; she is dangerous. This is the face of left populism.

  24. emkcams   3 years ago

    This has been done and failed in this lifetime. Jimmy Carters' "Windfall Profits Tax" only made gasoline harder to get than it already was and failed to put any money in the Federal coffers, because there were no windfall profits. And there are none occurring now. Ms. Warren, who self identifies as a fount of new ideas, is reaching for a failed idea from 50 years ago.

    1. Sevo   3 years ago

      Well, you might compare her ideas to those wonderful insights which powered the Russian revolution in 1917.
      Isn't the world thankful to be enjoying the benefits of that struggle?

  25. BarackMugabe   3 years ago

    The ONLY one gouging me is the greedy, slothful, wasteful government. And unlike the private sector, I have no alternatives to turn to.

    When is Warren going to attack gouging by government?

  26. BarkingSpider   3 years ago

    Has this cupid stunt with the turkey neck ever accomplished anything while in office???

  27. stevea   3 years ago

    “The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by an endless series of hobgoblins, most of them imaginary.” ― H.L. Mencken

    The main tools of the Left to this end are incitement of envious victimhood, and hatred of profits, and success in the private sector.

  28. MatthewSlyfield   3 years ago

    Ah yes, the "How can we make the supply chain crisis worse?" bill.

  29. Carey Allison   3 years ago

    For cripe's sake, will commenters please stop the griping. Senator Warren is doing her best to protect us from rapacious capitalists who care more for profit than people, and those who hold to the ridiculous notion that if it belongs to them (i.e., it is stocked on their shelves), they can sell it for whatever price they want that the people are willing to pay. Heaven forfend!!

    Wally World International has been selling hammers at retail for 75¢ for years. Their Mexican supplier (Speedy Gonzales Hammers, Incorporado) has been providing them for the wholesale price of 50¢. But now Mexico has lost all of its hammer artisans (all proficient swimmers, by the way) to the evil capitalist colossus of the north, and now no longer produces enough hammers to export, barely able to meeting the surging hammer demand south of the border.
    Now with tool sections bare of hammers, and in palpable fear of the federal government providing them with rules to "help" them meet this crisis, W W Int'l. seeks out a contract for hammers from Maxwell's Silver Hammers, who make a "specialized" hammer, capable of functioning in multiple roles. Unfortunately, the cost of Maxwell's Silver Hammers have always been $1.00 at wholesale. While the Maxwell Silver Hammer truck is backed up to and unloading in W W Int'l's warehouse -
    Now comes, all riding in one big black SUV, the FTC, FCPS, EPA, OSHA, FDA, along with Sec./Trans. (no pun intended) Petey D. Buttgigger (after all, a truck is involved) to explain that numerous regulations and several federal laws are being violated if a hammer shipped on an interstate highway is, in times of this national hammer shortage emergency, is sold for a price greater than 75¢, after which Janet Yellen, Sec./Treas. emerges from the black SUV to explain to the W W Int'l. board and the media that W W Int'l. can just sell $1.00 hammers for 75¢ and make up the difference on volume.
    What could go wrong? Don't price controls always result in merchant shelves loaded with quality goods and fair prices?

    1. Duelles   3 years ago

      Oh cripes, is right.
      I grew up with Nixon’s wage and price controls and then to Carter’s windfall taxes and Ford’s WIN buttons (Whip Inflation Now)
      Wonder how we ever survived.

  30. CopaGent   3 years ago

    This person has no business being in government at any level.

  31. kfs   3 years ago

    I think our first native American senator has wandered off the reservation. DOH!

  32. DrZ   3 years ago

    I can help. I know price gouging when I see it. The government should hire me.

  33. Hank Ferrous   3 years ago

    Warren is a specialist in gouging, as that is what she does -grifting, gouging, making bogus claims. Most of the DNC royalty: warren, schumer, pelosi, leahy, biden, menendez, obama, bernie, have not worked a job, and in a sane world, they would have been held accountable for their dishonesty and lack of productivity long ago.

  34. Groucho Marx   3 years ago

    The definition is self implied: price gouging is whatever the government says it is. Saying otherwise is a disinformation and that will sic the singing censor lady after you.

  35. Art Stone   3 years ago

    I called a small unimpressive liberal arts college near me, and they told me their tuition is about $55,000 a year. Perhaps that's the place to start looking for price gouging.

  36. Bruce Hayden   3 years ago

    Dems in Congress significantly helped create the inflation by spending several $Trillion$ that we didn’t have on various leftist wet dreams, as well as for mostly unneeded COVID-19 relief. Their response? Not to quit spending money that we don’t have. Heaven forbid. No - their response is to make inflation illegal.

    The lesson taught by King Canute is a millennium old now, but still effective today: he could order the sea not to rise. He just couldn’t make it happen. Similar to Warren making inflation illegal.

  37. Duelles   3 years ago

    SO…. Companies are free to increase prices unconscionably during times of no crisis. Which they will have to do to have the funds available to defend themselves. Hmm! Makes sense.
    And skip Econ 101 or any Econ completely and just subject us all to a 5 year plan.
    MA is a rigged up state to elected this wingnut

  38. Wally   3 years ago

    "unconscionably excessive" is right up there with "fair share". Never defined but requiring a huge Cathedral full of slime creatures to oversee on whatever powertrip they decide to embark on that day.

  39. CharlotteHaze   3 years ago

    I despise Warren, she's such a sanctimonious Ivy Starnes.

  40. Ride 'Em   3 years ago

    Just when I think she can't do something that is worse than her lat proposal she goes and does it.

    Shades of the FDR's National Recovery Act. Will businesses have eagle decals in their windows?

  41. I, Woodchipper   3 years ago

    The dumbest member of the senate, every time.

  42. I, Woodchipper   3 years ago

    the price control believers are the flat-earthers of the left.

  43. tlapp   3 years ago

    The economic ignorance knows no bound with this one.

Please log in to post comments

Mute this user?

  • Mute User
  • Cancel

Ban this user?

  • Ban User
  • Cancel

Un-ban this user?

  • Un-ban User
  • Cancel

Nuke this user?

  • Nuke User
  • Cancel

Un-nuke this user?

  • Un-nuke User
  • Cancel

Flag this comment?

  • Flag Comment
  • Cancel

Un-flag this comment?

  • Un-flag Comment
  • Cancel

Latest

How the NCAA Helped Trump Score Big on Transgender Issues

Billy Binion | 7.2.2025 5:34 PM

Under the 'Big, Beautiful Bill,' Car Companies Won't Be Fined for Failing To Hit Arbitrary Fuel Efficiency Goals

Joe Lancaster | 7.2.2025 5:15 PM

The 'Big, Beautiful Bill' Keeps Most of Joe Biden's Energy Subsidies

Jeff Luse | 7.2.2025 4:44 PM

Florida Plans To Deputize 9 National Guardsmen as Immigration Judges To Increase Deportations

Autumn Billings | 7.2.2025 4:08 PM

The Tax Bill Rewards States for Higher Rates of Food Stamp Fraud

Eric Boehm | 7.2.2025 3:25 PM

Recommended

  • About
  • Browse Topics
  • Events
  • Staff
  • Jobs
  • Donate
  • Advertise
  • Subscribe
  • Contact
  • Media
  • Shop
  • Amazon
Reason Facebook@reason on XReason InstagramReason TikTokReason YoutubeApple PodcastsReason on FlipboardReason RSS

© 2024 Reason Foundation | Accessibility | Privacy Policy | Terms Of Use

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

r

Do you care about free minds and free markets? Sign up to get the biggest stories from Reason in your inbox every afternoon.

This field is for validation purposes and should be left unchanged.

This modal will close in 10

Reason Plus

Special Offer!

  • Full digital edition access
  • No ads
  • Commenting privileges

Just $25 per year

Join Today!