‘Really bad ideas’: Kevin O’Leary blasts Kamala Harris’s economic plans, says $25K down payment help will ‘drive up inflation’ — compares price gouging ban to measures in Cuba, Venezuela

“When you give $25,000 to anybody in a constrained market, you cause inflation. So 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,” O’Leary explained during an interview with CNN.

He was stark in his criticism of the policy, categorizing it as more than just a bad idea. “There are bad ideas, bad bad ideas, and really bad ideas, and that falls in this category,” O’Leary stated.

Housing affordability

O’Leary said that he doesn’t care who wins the presidential election — though he has previously noted that a Donald Trump presidency might benefit his energy investments. Instead, he emphasized the importance of the policies implemented by the next president, as his role as an investor requires him to strategically allocate capital.

Yet, housing impacts all Americans, not just investors. Despite significant interest rate hikes by the Federal Reserve, home prices remain elevated. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, for example, has surged 54.5% over the past five years.

Moreover, a recent analysis from Zillow indicates that, as of 2024, homebuyers need to earn over $106,000 annually to afford a home comfortably, marking an 80% increase from 2020.

Harris’s housing strategy extends beyond the proposed $25,000 down payment assistance. She’s also calling for the construction of 3 million new housing units and offering tax incentives to builders.

O’Leary remains skeptical about the feasibility of these plans, expressing doubts about the federal government’s ability to influence housing. “Housing is state by state. 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?” he questioned.

In response to CNN anchor Jessica Dean’s comment that Harris intends to collaborate with state and local entities to address the affordable housing crisis, O’Leary retorted, “Really? Then, what’s she been doing for the last three and a half years? They haven't solved that problem. What have they been doing at all?”

Price gouging

Rising food costs have been another major concern for many Americans. According to Bureau of Labor Statistics data, the prices for food purchased for home consumption have escalated by 25% since the beginning of 2020. This spike in grocery prices reflects broader inflationary pressures affecting various sectors of the economy.

Harris has a solution in mind: her campaign has revealed plans to introduce a federal ban on “corporate price-gouging in the food and grocery industries.” Additionally, she intends to increase scrutiny of potential mergers and acquisitions among large food producers and grocery chains, “specifically for the risk that the proposed merger would raise grocery prices for consumers.”

O’Leary is critical of such regulatory intervention. He cites historical precedents from other countries, arguing that similar policies there did not yield positive outcomes.

“Let's take her price gouging idea… They tried that in Venezuela, Cuba, North Korea, the USSR. No, that’s not going to work. It’s impossible to understand how a corporation would set pricing based on gouging. What does that even mean? That's why it’s being ridiculed,” he commented.

Responses are mixed on proposals

Ernie Tedeschi, who previously worked on President Biden’s Council of Economic Advisers and is now the director of economics at Yale University’s Budget Lab, told the Wall Street Journal that profit while margins for food and beverage retailers have stayed high post-pandemic, margins for retailers in other sectors, like clothing and general merchandise, haven’t seen similar increases.