Kevin O’Leary, widely recognized as “Mr. Wonderful” from the TV show “Shark Tank,” has voiced major concerns over Vice President Kamala Harris’ newly disclosed economic plan.
O’Leary, who is a businessman, aired his concerns on Fox News’ “Jesse Watters Primetime” on August 19, 2024, regarding the economic proposals of the Democratic presidential candidate.
During a CNN interview, O’Leary expressed disapproval of several key points of Harris’ proposals, especially her approach to fighting price gouging and her initiative to assist first-time homebuyers with a down payment. He suggested that these measures might lead to serious unintended consequences.
Harris disclosed her economic plan at a North Carolina rally on August 16, detailing a wide array of policies designed to ease the financial burden on American households. Her plan features federal steps to prevent grocery price gouging, tax credits for homeowners and families with children, and an ambitious target of building three million new housing units in the next four years.
O’Leary, however, was skeptical that these policies would be effective. Regarding price gouging, he cited the historical failures of similar approaches in other nations. His apprehensions echo the wider skepticism among economists about the usefulness of price controls in curbing inflation without triggering shortages or black markets.
O’Leary also discussed Harris’ plan to aid first-time homebuyers with a $25,000 down payment. In his view, this policy could fuel inflation by pushing up home prices in a tight housing market. “When you give $25,000 to anybody in a constrained market, you cause inflation,” O’Leary said, further explaining, “If there’s three houses for sale on the street and everybody bidding on it gets another $25,000, all of that attributes to the seller, and you cause the price of the house to go up because there’s no supply.”
This criticism aligns with concerns raised by other financial experts, who have noted that increasing demand without addressing supply constraints could lead to higher housing costs. Harris’ proposal to build three million new homes aims to tackle these supply issues, but O’Leary questioned its feasibility. “[Real estate] is not controlled by a federal mandate; housing is state-by-state,” he argued. “She can do nothing to solve that problem. There’s no way she’s building 3 million houses. Which state is going to give her that mandate?”
The economic plan has recently become a hot topic for both supporters and critics.
Supporters of Harris argue that her policies could offer much-needed relief to American families, particularly those grappling with the high costs of housing and increasing grocery prices.
Even though O’Leary criticized her plan, he expressed a wish for Harris to succeed if she were to become president.
As the debate over Harris’ economic plan intensifies, the implications are significant. The policies she’s proposing could profoundly affect the U.S. economy, especially in sectors like housing and consumer prices. However, the difficulties of enacting such broad changes, particularly amid strong opposition, remain a significant obstacle.
O’Leary’s criticisms highlight the wider debate within the business and investment sectors about the future of U.S. economic policy.
Further Details on Harris’ Economic Plan
In addressing skyrocketing grocery prices, Harris has proposed a federal ban on price gouging at grocery stores. In a statement from her campaign, Harris drew a distinction between fair pricing and the excessive costs Americans have been facing, particularly in the food and grocery industry. She noted that even as meat processing companies reported record profits post-pandemic, meat prices, which have considerably contributed to higher grocery bills, have soared.
Despite overall inflation falling to 2.9 percent for the year ending in July, grocery prices have surged by 21 percent during the Biden-Harris administration. This has led some to perceive Harris’ plan as an attempt to attract voters concerned about the administration’s handling of inflation.
Grocery stores, which operate on slim margins of one to three percent, have expressed significant concern over Harris’ plan. Although Harris has not publicly addressed these margins in her price-fixing proposal, she has criticized certain grocers for unfairly hiking prices to inflate profits. “A loaf of bread costs 50% more today than it did before the pandemic, and ground beef is up almost 50%,” Harris commented. “Meanwhile, many big food companies are enjoying their highest profits in two decades, and while some grocery chains pass along savings, others still do not.”
To aid American families in home ownership, Harris has proposed constructing three million new housing units over the next four years. This is part of her wider effort to tackle the housing affordability crisis in the United States.
To promote the development of affordable housing, Harris’s plan includes the “first-ever” federal tax incentive specifically aimed at building starter homes for first-time homebuyers. This incentive is intended to make it more financially feasible for developers to build lower-cost housing.
Harris also plans to extend existing tax credits for affordable rental housing, further increasing the availability of affordable living options for low- and middle-income families.
She has also proposed reinstating the COVID-19-era child tax credit policies, which were $3,600 for qualifying children under age six and $3,000 for other qualifying children under age 18.
Harris’s plan includes a $35 price cap on insulin for Medicare recipients, with a $2,000 annual out-of-pocket limit applied to all Americans, not just seniors. It also proposes stricter regulations and stronger antitrust enforcement to prevent consumer price increases on drugs and food.
