CNBC’s Joe Kernen, Elizabeth Warren Clash Over Price Gouging: You Never Lose an Argument Because ‘No One Can Ever Say Anything Back to You’

KERNEN: “Look at The Washington Post. And if you lose The Washington Post as a Democrat, you’ve got some serious problems. This is what they said about the price gouging, or the price control legislation. It was really pilloried from both sides of the aisle, even Jason Furman. I don’t know if you saw some of his comments. He said it’s not good policy and it can actually do more harm than good. I can paint you a picture of how that would work and how it’s worked in the past, where we’ve tried to artificially hold prices down. Competition doesn’t come in, people don’t — like, if beef is too high, people don’t move to chicken. Competitors don’t come in to undercut where the beef prices are. Nothing works when you try to artificially control prices. It’s just the supply and demand issue. It’s a flawed idea.”
Warren: “So — so did you have a question here?”
KERNEN: “Yes. Why would you propose a flawed idea when the real problem — “
Warren: “So let me ask you a question — “
KERNEN: “If you really want to help the middle class, if you really, sincerely want to help people having trouble at the grocery store, it’s not price gouging that’s the issue. And if you look at it seriously and really want to help them, then let’s do something about it together. Fine.”
Warren: “I understand if you want to do a lecture about this, but let’s just start with, where have you been for the last 30 years, as three dozen states have price gouging laws and they have used them effectively? States like Texas and Florida, they’ve used price gouging laws. Price gouging laws are not price control. Price gouging laws are to say, you know, 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. So, for example, we watched in the pandemic how prices went up for a whole lot of reasons. They went up partly because we had supply chain kinks, we had problems because of the war in Ukraine that cut supplies of certain commodities, and one of the things that happened as a result of that is there were corporations that said, ‘Whoa! Now that we have inflation, now that prices are up overall, this is a great opportunity for us to raise prices not just in passing along costs, but to go way, way, way above that. And how do we know that it was way, way above just passing along costs? Look at what happened to their profit margins. If they had just been passing along costs, profit margins would have stayed about the same. But for some industries, some companies, profit margins shot up. And do you know where they shot up most often? It was in companies, or in industries where there was a lot of concentration, a lot of market power, places where the market is not functioning competitively. So you end up with some — and you remember, we all talked about egg prices. You end up with something like this giant egg producer, Cal-Maine, and Cal-Maine raises the price of eggs. Their profit margins increased by 718%. That’s not just passing along costs. And that is a time — “
KERNEN: “That’s sophistry. Your example on Kraft — your example on Kraft is either — “
Warren: “You finished first. In any of the states around the country that already have price gouging laws — “
KERNEN: “Can I tell you why those are fallacious and misleading at best? And you Kraft analogy, please let me tell you. 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, an accounting change which wiped out profits. Then they earned what they normally — let me finish now. They earned — “
Warren: “You didn’t let me finish. Look at the data. Come on. We have economic study now after economic study — “
KERNEN: “This is the way it always goes.”
Warren: “When there is more concentration — “
KERNEN: “Senator, 40 million eggs were destroyed because of avian flu.
Warren: “When there is more concentration in an industry, we have seen much greater increases in the profit margins.”
KERNEN: “Do you attribute the inflation, that’s what you think we need to do to solve it?”
Warren: “And they’re not random. They’re not random one-offs — 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.”
KERNEN: “Senator, senator, we’re trying to help — we’re trying to actually do — “
Warren: “Where are you in the 36, 37 states that currently have price gouging laws — “
EVANS: “Just quickly on that point, senator, this is Kelly, can I just clarify just how this would work — “
KERNEN: “We’re never gonna be able to — this is the way you never lose an argument, because no one can ever say anything back to you, senator. It’s frustrating.”