Saturday, February 17, 2007

Chávez Threatens to Jail Price Control Violators

NYT reported Faced with an accelerating inflation rate and shortages of basic foods like beef, chicken and milk, President Hugo Chávez has threatened to jail grocery store owners and nationalize their businesses if they violate the country’s expanding price controls.

Don't you have any economists in Venezuela that understand Supply and Demand? Shortages are the normal result of price controls.
Food producers and economists say the measures announced late Thursday night, which include removing three zeroes from the denomination of Venezuela’s currency,
Talkabout major inflation.
are likely to backfire and generate even more acute shortages and higher prices for consumers
It will happen.
Inflation climbed to an annual rate of 18.4 percent a year in January, the highest in Latin America and far above the official target of 10 to 12 percent. Mr. Chávez, whose leftist populism remains highly popular among Venezuela’s poor and working classes,
Who are learning that it is better to have the stores filled with goods it is difficult to afford, than to have prices they can afford, but empty stores.
seemed unfazed by criticism of his policies. Appearing live on national television, he called for the creation of “committees of social control,” essentially groups of his political supporters whose purpose would be to report on farmers, ranchers, supermarket owners and street vendors who circumvent the state’s effort to control food prices.
That's totalitarian government for you. Do you think these spies are going to persuade farmers to grow more when they can't get a good price for what they do grow?

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