NEWS ALERT: Step by step, how Harris’ price-increase ban would collapse America

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People from both sides of the political aisle have slammed the economic agenda laid out by Democratic presidential nominee Kamala Harris on Friday, and many are saying it’s nothing more than straight communism.

Harris announced a number of taxpayer-funded big money giveaways, along with a draconian plan to set price limits on groceries and a crackdown on landlords that would affect their ability to raise rent fees. She also touted a $25,000 giveaway to first time home buyers, eliminating medical debt, capping prescription drug costs, and providing a $6,000 Child Tax Credit for the first year of a baby’s life.

The plan Harris announced is being met with so much backlash that a new hashtag is even trending on social media: “Kamunism.

But one of the most chilling explanations of Harris’ plan was posted on social media by investor and strategist Robert Sterling.

He started off by mockingly implying that it’s not as bad as everyone says, but by the end of his list, he has come right back to exactly what everyone else is saying.

Sterling lays it all out, how the entire country will fall like a house of cards, if Kamala Harris is elected and implements her plan.

READ IT ALL BELOW, FROM START TO FINISH:

People need to stop overreacting about Kamala’s plan to reduce food inflation, as if it would lead to communism, mass starvation, and the end of America.

I worked in M&A in the food industry. Here’s a step-by-step summary of what would actually happen:

1. The government announces that grocery retailers aren’t allowed to raise prices.

2. Grocery stores, which operate on 1-2% net margins, can’t survive if their suppliers raise prices. So the government announces that food producers (Kraft Heinz, ConAgra, Tyson, Hormel, et. al.) also aren’t allowed to raise prices.

3. Not all grocery stores are created equal. Stores in lower-income areas make less money than those in higher-income areas, as the former disproportionately sell lower-margin prepackaged foods (“center of the store”) instead of higher-margin fresh products like meat (“perimeter of the store”). Because stores in lower-income areas aren’t able to cover overhead (remember, even if their wholesale costs are fixed, their labor, utilities, insurance, and other operating expenses aren’t fixed… yet), grocery chains start to shut them down. Food deserts in rural areas and in low-income urban areas alike become worse.

4. Meanwhile, margins for food producers are also quickly eroding. Their primary costs (ingredients, energy, and labor) aren’t fixed, and their shrinking gross profits leave less cash flow available to cover overhead, maintain facilities, and reinvest in additional production capacity.

5. Grocery chains, which have finite shelf space, start to repurpose their stores (those they didn’t have to shut down, I should say) to sell more non-price-controlled items—everything from nutrition supplements to kitchenware to apparel—and less price-controlled food products. Your local Kroger or Safeway starts to look and feel more like a Walmart.

6. Food producers stop making products with lower margins. Grocery chain start competing with each other to secure inventory. Since they can’t compete by offering stronger prices (remember, producers aren’t allowed to raise prices here, and, even if they could, grocery chains no longer have the gross profit to bear price increases), they compete on things like payment terms.

7. Small grocery chains start to shut down entirely, or get sold to larger chains like Kroger. In addition to not being able to cover fixed costs, a major reason for this is because they can no longer reliably secure delivery of products, due to producers prioritizing sales to larger customers, which are able to leverage their stronger balance sheets to offer superior payment terms.

8. Smaller food producers—which typically sell via distributors, rather than directly to grocery chains—start to go out of business. Because these producers have an additional step their value chains, and because they have lower volumes over which to spread their fixed costs, their cost structure is inherently disadvantaged compared to major food producers. When grocery stores aren’t able to raise prices, cutting product costs becomes all the more important, and deprioritizing purchases from smaller producers is an easy way to do so.

9. As supply chains break down, lines start to form outside grocery stores every morning. Cities assign police officers to patrol store parking lots, and food producers draft contingency plans to assign armed escorts to delivery trucks.

10. The federal government announces a program to issue block grants for states to purchase and operate shuttered grocery stores. The USDA also seizes closed-down production facilities.

11. The government announces that prices for all key food costs—corn, wheat, cattle, energy, etc.—are also now fixed, to stop “profiteers” from gouging the now-government-operated food industry.

12. Shockingly, the government struggles to operate one of the most complex industries on the planet. The entire food supply chain starts imploding.

13. Communism, mass starvation, and the end of America quickly ensue.

Hey wait a second…

One reader added to Sterling’s list. Richard wrote:

You forgot a step that my parents went through.

12.5 Government can’t manage the supply and demand, so they impose ration cards (in today’s world, digital app). This controls what and amount you can purchase each month. Black markets open, where people begin to trade things they don’t need for things they need or other things.

BOOM! Trump responds to Kamala Harris economic plan

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