BBC
Would Harris’s price gouging plan really help US consumers?
4 hours agoShareSave
Ben Chu
BBC Verify policy and analysis correspondent
When Kamala Harris was asked on Wednesday what she would do to help an undecided voter worried about the price of groceries, she said she would introduce a national ban on price gouging.
Her plan, she told an audience in Pennsylvania, would “stop companies taking advantage of the desperation and need of the American consumer and jacking up prices without any consequences”.
The proposed ban – one of her key economic policies – would apply during “times of crisis”.
But would it really bring down prices for consumers? And could it even prove potentially counterproductive?
The backdrop of rising prices
Rising prices have been a key concern for Americans in recent years and polls suggest a majority of Americans feel worse off than they did four years ago.
In April 2024, the share of Americans naming the high cost of living as the most important financial problem facing their family reached 41%, the highest since 2005.
Overall inflation peaked at 9.1% in the year to June 2022, rates not seen in four decades.
And food inflation peaked even higher, reaching 11.4% in the year to August 2022.
Both are now back below 3%, though average US food prices are still around 27% higher than at the end of 2019.
Inflation has been a global problem, but some economists argue that the economic stimulus policies of the Biden-Harris administration contributed to this spike in US prices, making inflation an issue on which she is keen to reassure voters.
There have also been claims that some corporate retailers took the coronavirus pandemic in 2020 – when supply chains were disrupted and people’s lives and shopping habits severely impacted by lockdowns – as an opportunity to increase their prices and profit margins.
This phenomenon has been dubbed by some as “greedflation” and forms the economic justification for Harris’s price gouging ban.
Donald Trump has compared her plan to “communist price control” and “like something straight out of Venezuela or the Soviet Union.”
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What is Harris’s price gouging plan?
The Harris team has said the federal ban would apply to “essential goods during emergencies or times of crisis”.
Thirty-seven US states already have laws which prohibit price gouging in the wake of local states of emergency, which can follow extreme weather events such as hurricanes or disasters such as wildfires.
They were also triggered in dozens of US states during the coronavirus pandemic.
We do not know how Harris’s nationwide controls would work, but when she was a senator in 2020, she co-sponsored legislation that would have defined price gouging in an emergency as charging more than 10% above the previous average price for an item.
It is assumed that Harris’s federal ban on price gouging would be like a nationwide version of the various state-level regimes.
On CNN, she was asked how her plan would help bring down grocery prices in general, given it would only apply during emergencies.
She did not respond directly, instead talking about companies “taking advantage of people” during the recent hurricanes and in the pandemic.
What is the economic evidence?
The argument over how much the overall spike in US prices in recent years can be attributed to price gouging is contested among economists.
Isabella Weber, an associate professor of economics at the University of Massachusetts, Amherst, has argued that there is compelling evidence of what she calls “seller’s inflation” in the US since 2020.
She cites the fact that total US corporate profits measured as a share of the overall US economy jumped between 2020 and 2022 – and, as an example, points to the case of the giant US meat processor, Tyson, which doubled its profit margins in the second half of 2021.
Tyson attributed the higher margins to increases in its productivity.
Weber wrote in August that “Harris is right about going after price gouging”.
However, many other economists argue that although there might be individual examples of such corporate behaviour, by far the largest driver of rising inflation since 2020 has been a simple shortage of goods relative to demand.
“Price gouging played little role in the US inflation issues over the past several years,” argues the consultancy Oxford Economics.
Moreover, economists are generally wary of government interference in prices set by businesses, even in times of crisis.
A common example used by critics is the case of a severe snowstorm in which local demand for new shovels shoots up and a local retailer increases prices in response.
The logic is that while such price hikes might seem unfair – and polling shows they are extremely unpopular – the higher prices induce other retailers to order more snow shovels from suppliers. This increases the supply and brings the price down again naturally, while ensuring as many people as possible get access to the shovels they need.
A study from 2007 suggested that if a federal price gouging law had been in place on gasoline sales after hurricanes Katrina and Rita in 2005, the economic damage would have been greater because of the discouragement for producers to increase their supply. The authors estimated that the overall economic damage would have increased by $1.5-3bn.
Economists generally prefer governments to focus their efforts to tackle price gouging, to the extent that it exists, through breaking up corporate monopolies and oligopolies (small groups of dominant sellers in a given market) and creating more free market competition, rather than directly controlling prices.
“Price gouging’s not the right way to think about it but price competition is and anything the government can do to facilitate that competition [I’m] all for it”, says Mark Zandi, the chief economist of Moody’s Analytics.
In 2012 a panel of eminent economists were asked whether they agreed that the US state of Connecticut was right to try to ban price gouging during severe weather events. Only 8% agreed.
And there are numerous examples from history where attempts by governments to control prices have backfired, resulting in shortages or inflation over the longer term.
The Soviet Union used price controls and the result was long queues in shops. The former president of Venezuela, Hugo Chavez, imposed price controls for food in 2003, contributing to chronic shortages and a huge rise in the undernourishment of the Venezuelan people.
However, it is a stretch to interpret Harris’ proposals, as laid out by her team, as a general lurch into a regime of price controls given the price gouging law would likely be limited to times of crisis and limited to food and groceries.
Capping drug prices
Another proposal from the Harris team is to lower prescription drug costs including by extending a “cap” on insulin drug prices to all Americans.
Insulin was capped at $35 (£27) a month for patients on Medicare – a federal insurance programme primarily designed to serve people aged 65 and over.
This is not a typical state price control, where the economic cost is borne by the retailer. Rather, the federal government, which runs the Medicare system, is responsible for reimbursing drug manufacturers for the difference between the $35 maximum price and the retail cost of the insulin.
However, applying the cap to all Americans would mean imposing the price restriction on private US health insurers, not just the public Medicare system. Unless pharmaceutical companies reduced their prices, this would mean those private insurance companies would need to cover the difference.
And some economists warn they might have to raise their premiums for everyone in the scheme as a result – so while certain drug prices would be lower, overall healthcare costs would be unchanged.
The same logic applies for Kamala Harris’ proposal to extend a $2,000 total annual cap on out-of-pocket costs for prescription drugs on Medicare to all Americans, including those in private health insurance schemes.
22 hours agoShareSave
Ben Bevington
BBC News, Washington
With just one day to go, the race for the White House is deadlocked – both at the national level and in the all-important battleground states.
The polls are so close, within the margin of error, that either Donald Trump or Kamala Harris could actually be two or three points better off – enough to win comfortably.
There is a compelling case to make for why each may have the edge when it comes to building a coalition of voters in the right places, and then ensuring they actually turn out.
Let’s start with the history-making possibility that a defeated president might be re-elected for the first time in 130 years.
Trump could win because…
1. He’s not in power
The economy is the number one issue for voters, and while unemployment is low and the stock market is booming, most Americans say they are struggling with higher prices every day.
Inflation hit levels not seen since the 1970s in the aftermath of the pandemic, giving Trump the chance to ask “Are you better off now than you were four years ago?”
In 2024, voters around the world have several times thrown out the party in power, partly due to the high, post-Covid, cost of living. US voters also seem hungry for change.
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Only a quarter of Americans say they are satisfied with the direction the country is going in and two-thirds have a poor economic outlook.
Harris has tried to be the so-called change candidate, but as vice-president has struggled to distance herself from an unpopular Joe Biden.
2. He seems impervious to bad news
Despite the fallout from the 6 January 2021 riot at the US Capitol, a string of indictments and an unprecedented criminal conviction, Trump’s support has remained stable all year at 40% or above.
While Democrats and “Never-Trump” conservatives say he is unfit for office, most Republicans agree when Trump says he’s the victim of a political witch-hunt.
With both sides so dug in, he just needs to win over enough of the small slice of undecided voters without a fixed view of him.
3. His warnings on illegal immigration resonate
Beyond the state of the economy, elections are often decided by an issue with an emotional pull.
Democrats will hope it’s abortion, while Trump is betting it’s immigration.
After encounters at the border hit record levels under Biden, and the influx impacted states far from the border, polls suggest voters trust Trump more on the immigration – and that he’s doing much better with Latinos than in previous elections.
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4. A lot more people don’t have a degree than do
Trump’s appeal to voters who feel forgotten and left behind has transformed US politics by turning traditional Democratic constituencies like union workers into Republicans and making the protection of American industry by tariffs almost the norm.
If he drives up turnout in rural and suburban parts of swing states this can offset the loss of moderate, college-educated Republicans.
5. He’s seen as a strong man in an unstable world
Trump’s detractors say he undermines America’s alliances by cosying up to authoritarian leaders.
The former president sees his unpredictability as a strength, however, and points out that no major wars started when he was in the White House.
Many Americans are angry, for different reasons, with the US sending billions to Ukraine and Israel – and think America is weaker under Biden.
A majority of voters, especially men who Trump has courted through podcasts like Joe Rogan’s, see Trump as a stronger leader than Harris.
Harris could win because…
1. She’s not Trump
Despite Trump’s advantages, he remains a deeply polarising figure.
In 2020, he won a record number of votes for a Republican candidate, but was defeated because seven million more Americans turned out to support Biden.
This time, Harris is playing up the fear factor about a Trump return. She’s called him a “fascist” and a threat to democracy, while vowing to move on from “drama and conflict”.
A Reuters/Ipsos poll in July indicated that four in five Americans felt the country was spiralling out of control. Harris will be hoping voters – especially moderate Republicans and independents – see her as a candidate of stability.
2. She’s also not Biden
Democrats were facing near-certain defeat at the point Biden dropped out of the race. United in their desire to beat Trump, the party quickly rallied around Harris. With impressive speed from a standing start, she delivered a more forward-looking message that excited the base.
While Republicans have tied her to Biden’s more unpopular policies, Harris has rendered some of their Biden-specific attack lines redundant.
The clearest of these is age – polls consistently suggested voters had real concerns about Biden’s fitness for office. Now the race has flipped, and it is Trump who’s vying to become the oldest person to ever win the White House.
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3. She’s championed women’s rights
This is the first presidential election since the US Supreme Court overturned Roe v Wade and the constitutional right to an abortion.
Voters concerned about protecting abortion rights overwhelmingly back Harris, and we’ve seen in past elections – notably the 2022 midterms – that the issue can drive turnout and have a real impact on the result.
This time around, 10 states, including the swing state Arizona, will have ballot initiatives asking voters how abortion should be regulated. This could boost turnout in Harris’s favour.
The historic nature of her bid to become the first female president may also strengthen her significant lead among women voters.
4. Her voters are more likely to show up
The groups Harris is polling more strongly with, such as the college-educated and older people, are more likely to vote.
Democrats ultimately perform better with high-turnout groups, while Trump has made gains with relatively low-turnout groups such as young men and those without college degrees.
Trump, for example, holds a huge lead among those who were registered but didn’t vote in 2020, according to a New York Times/Siena poll.
A key question, then, is whether they will show up this time.
5. She’s raised – and spent – more money
It’s no secret that American elections are expensive, and 2024 is on track to be the most expensive ever.
But when it comes to spending power – Harris is on top. She’s raised more since becoming the candidate in July than Trump has in the entire period since January 2023, according to a recent Financial Times analysis, which also noted that her campaign has spent almost twice as much on advertising.
This could play a role in a razor-tight race that will ultimately be decided by voters in swing states currently being bombarded by political ads.
20 hours agoShareSave
Americans are choosing their next president, in a contest being closely watched around the world.
The race is exceptionally close and either Vice-President Kamala Harris or former president Donald Trump could win.
Voters also selecting members of Congress, politicians who play a key part in passing laws that can have a profound effect on life in the US.
When is the US presidential election?
The 2024 election is on Tuesday, 5 November 2024.
Ahead of election day, tens of millions of voters have taken part in early voting events across the US.
The winner will serve a term of four years in the White House, starting in January 2025.
On the world stage, the US leader has considerable freedom to represent the country abroad.
Within the US, the president has the power to pass some laws on their own but he or she must mostly work with Congress to pass legislation.
Who are the candidates for president?
Former president Donald Trump is representing the Republican Party. He won the party’s support with a massive lead over his rivals.
Trump chose Ohio senator JD Vance to be his vice-presidential running mate.
Kamala Harris, the current vice-president, is the candidate for the Democratic Party. She joined the race after President Joe Biden dropped out and no other Democrats stood against her.
Her running mate for vice-president is Minnesota Governor Tim Walz.
There are also some independent candidates running for president. One of the most prominent was Robert F Kennedy Jr, but he suspended his campaign in August and backed Trump.
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What do Democrats and Republicans stand for?
The Democrats are the liberal political party, known for supporting civil rights, a social safety net and measures to address climate change.
In the 2024 election, issues highlighted by Harris include tackling the cost-of-living crisis and supporting abortion rights.
The Republicans are the conservative political party. They have stood for lower taxes, shrinking the size of the government and gun rights.
Issues Trump has campaigned on include tackling illegal immigration and ending inflation to “make America affordable again”.
How does the US presidential election work?
The winner is not the person who gets the most votes overall.
Instead, both candidates compete to win contests held across the 50 states.
Each state has a certain number of so-called electoral college votes, partly based on population. There are a total of 538 up for grabs and the winner is the candidate that gets 270 or more.
All but two states have a winner-takes-all rule, so whichever candidate has the highest number of votes is awarded all of its electoral college votes.
Most states lean heavily towards one party or the other, so the focus is on about seven states where either of them could win. These are known as the battleground or swing states.
It is possible for a candidate to win the most votes nationally – like Hillary Clinton did in 2016 – but still be defeated.
Who can vote in the US presidential election?
Most US citizens aged 18 or over are eligible to vote.
Each state has its own voter registration process and deadline.
Who else is being elected in November?
All of the attention will be on who wins the presidency, but voters will also be choosing new members of Congress – where laws are passed – when they fill in their ballots.
Congress consists of the House of Representatives, where all 435 seats are up for election, and the Senate, where 34 seats are being contested.
Republicans currently control the House, which initiates spending plans. Democrats are in charge of the Senate, which votes on key appointments in government.
These two chambers pass laws and can act as a check on White House plans if the controlling party in either chamber disagrees with the president.
When will we know who has won the election?
Usually the winner is declared on the night of the election, but in 2020 it took a few days to count all the votes.
The period after the election is known as the transition, if there is a change of president.
This gives the new administration time to appoint cabinet ministers and make plans for the new term.
The president is officially sworn into office in January in a ceremony known as the inauguration, held on the steps of the Capitol building in Washington DC.
5 hours agoShareSave
Sam Cabral
BBC News, Washington
American voters go to the polls on 5 November to choose their next president.
US election results have sometimes been declared within hours of the polls closing, but this year’s tight contest could mean a longer wait.
When is the 2024 presidential election result expected?
In some presidential races the victor has been named late on election night, or early the next morning. This time, the knife-edge race in many states could mean media outlets wait longer before projecting who has won.
Democrat Kamala Harris, the current vice-president, and Republican Donald Trump, the former president, have been running neck-and-neck for weeks.
Narrow victories could also mean recounts. In the key swing state of Pennsylvania, for example, a state-wide recount would be required if there’s a half-percentage-point difference between the votes cast for the winner and loser. In 2020, the margin was just over 1.1 percentage points.
0:53BBC’s Sumi Somaskanda explains when a new president will be announced
Legal challenges are also possible. More than 100 pre-election lawsuits have already been filed, including challenges to voter eligibility and voter roll management, by Republicans.
Other scenarios that could cause delays include any election-related disorder, particularly at polling locations.
On the other hand, vote-counting has sped up in some areas, including the crucial state of Michigan, and far fewer votes will be cast by mail than in the last election, which was during the Covid pandemic.
When have previous presidential election results been announced?
The 2020 election took place on Tuesday 3 November. However, US TV networks did not declare Joe Biden the winner until late morning on Saturday 7 November, after the result in Pennsylvania became clearer.
In other recent elections, voters have had a much shorter wait.
In 2016, when Trump won the presidency, he was declared the winner shortly before 03:00 EST (08:00 GMT) the day after the election.
In 2012, when Barack Obama secured a second term, his victory was projected before midnight on polling day itself.
However, the 2000 election between George W Bush and Al Gore was a notable exception.
The vote was held on 7 November, but the two campaigns went to war over a tight contest in Florida and the race was not decided until 12 December. The US Supreme Court voted to end the state’s recount process, which kept Bush in place as winner and handed him the White House.
What are the key states to watch in 2024?
Across the country, the first polls will close at 18:00 EST (23:00 GMT) on Tuesday evening and the last polls will close at 01:00 EST (06:00 GMT) early on Wednesday.
But this race is expected to come down to results from seven swing states. These are Arizona, Georgia, Michigan, Nevada, North Carolina, Pennsylvania and Wisconsin.
Polls close at different times in different regions. State-specific rules could prolong counting in some states, while other states may report partial figures moments after the last in-person vote is cast. Also, some absentee and mail-in ballots, including votes by members of the military and Americans living overseas, are normally among the last to be counted.
Georgia – Polls close in the Peach State at19:00 EST (00:00 GMT). Early and mail-in ballots will be counted first, ahead of in-person votes. Georgia’s top election official estimates that about 75% of votes will be counted within the first two hours, with a full tally possible expected by later in the night.
North Carolina – Polls close thirty minutes after Georgia. North Carolina’s results are expected to be announced before the end of the night, however, complications may arise in areas that were hit by a hurricane in September.
Pennsylvania – Voting ends at 20:00 EST (01:00 GMT) in the Keystone State – the crown jewel of all the swing states in this election cycle. Like Wisconsin, Pennsylvania does not allow counting to begin until the morning of the election, leading to an expected delay in results. Experts agree that it may take at least 24 hours before enough votes are counted for a winner to emerge.
Michigan – Voting concludes at 21:00 EST (02:00 GMT) in the Wolverine State. Michigan allows officials to begin counting votes one week before election day, but they are not allowed to reveal the results until these polls shut. Michigan’s top election official has said that a result should not be expected until the “end of the day” on Wednesday.
Wisconsin – Results should come in shortly after polls close at 21:00 EST for smaller counties. However, it often takes longer for major populations centres to tabulate votes, leading experts to predict that the state won’t have a result until at least Wednesday.
Arizona – Initial results could come as early as22:00 EST (03:00 GMT), however, they won’t paint a complete picture. The state’s largest county says not to expect results until early Wednesday morning. On top of that, postal ballots dropped off on election day could take up to 13 days to count, according to officials in Maricopa County, the largest district in the state.
Nevada – Votes here could also take days to count, because the state allows mail-in ballots to qualify as long as they were sent on election day and arrive no later than 9 November.
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