CNBC “Squawk Box” co-anchor Joe Kernen pushed back on a proposed price gouging ban during a testy interview with Sen. Elizabeth Warren (D-Mass.) on Friday, calling her arguments “fallacious” and “misleading.”
The Massachusetts senator – who worked with Harris on a price gouging bill in 2020 and introduced similar legislation early this year – argued that states like Texas and Florida already employ effective price gouging bans.
“Price gouging laws are not price control,” Warren said. “Price gouging laws are to say, sometimes markets go off the rails and when they do, we need some ways to get them back on the rails. We need some curbs on that behavior.”
Kernen questioned Warren on the details behind a vague price gouging ban backed by Vice President Harris.
He nodded to an opinion piece in The Washington Post titled “The times demand serious economic ideas. Harris supplies gimmicks.”
“If you lose The Washington Post as a Democrat, you have some serious problems,” Kernen said, arguing that artificial price controls never work.
For example, if consumers think beef prices are too high, those same consumers will not move on to buy chicken – and there will be no competition to swoop in and sell beef at lower prices, he said.
“It’s just a supply and demand issue,” Kernen said. “It’s a flawed idea.”
“Where have you been for the last 30 years as three dozen states have price gouging laws and they use them effectively?” Warren shot back.
“This is the way you never lose an argument,” Kernen said. “Because no one can ever say anything back to you, senator, and it’s frustrating.”
Warren said prices shot up during the pandemic, then up again during the Russia-Ukraine conflict because of “supply chain kinks.”
As a result, companies took advantage of the opportunity to raise their prices higher than necessary, thus skyrocketing their profit margins, she argued.
Harris has taken heat on her proposed price gouging ban, with some business leaders warning it could reheat inflation and former president Donald Trump saying she has gone “full Communist.”
“They are not random one-offs,” Warren said. “It is part of the problem when you’ve got companies that are gouging consumers on prices, consumers need to know they’ve got somebody on their side.”
Warren raised the example of a controversy surrounding egg producer, Cal-Maine, one of several major egg suppliers who were hit by a lawsuit that Kraft, General Mills and other food companies claiming they artificially inflated prices in an attempt to rig the egg market.
“Their profit margins increased by 718%. That’s not just passing along costs.”
Warren and Kernen spoke over each other before the CNBC host attacked Warren’s argument.
“That’s sophistry,” Kernen countered. “Kraft, you say, was 440% profit increase.”
“The example you used, the prior quarter from the year before, they had a charge of $1.3 billion dollars, an accounting change which wiped out profits. Then they earned what they – let me finish now,” Kernen said, before being interrupted by Warren.
“You didn’t let me finish,” Warren said. “Look at the data. We have economic study now after economic study.”
Kernen, visibly frustrated, said, “This is the way it always goes. Senator, 40 million eggs because of avian flu.”
The 40 million tossed eggs is a nod to the same large egg supplier Cal-Maine, which announced in April that an outbreak of avian flu was found at one of its Texas facilities – leading it to destroy 1.6 million laying hens and 337,000 pullets, or young female chickens.
Kernen appeared to argue that the avian flu supply hit could explain the vastly different profit margins.
