Reasoning 101 not taught in Venezuela, and other places too

AFP:

Venezuelans on Tuesday woke up to discover that the government-controlled price of corn flour — used to make corn patty arepas, a staple of local cuisine — has risen 900 percent.

The government of President Nicolas Maduro had kept the price of corn flour frozen for 15 months at 19 bolivares a kilogram. But late Monday the government’s Superintendent of Fair Prices increased the price to 190 bolivares a kilo, or $19 at the government rate used for imports such as medicine and scarce food.

The Superintendent also said that the price of chicken would rise, up 13 times from 65 bolivares a kilo to 850 bolivares. The price of chicken had also been frozen since February 2015.

Venezuela is enduring the world’s highest inflation rate: 180 percent in 2015, and a projected 700 percent for 2016.

A “Law of Just Prices” sets a maximum profit margin of 30 percent for all goods and services. But in the case of food and medicine, a senior official said that profits are “compressed” to between 14 and 20 percent.

Venezuela: no beer, no Coke, no tires.

Price controls are among the stupidest things in the world. They do not control prices. They control supply: always creating shortages and black markets. We can’t blame the Venezuelans too much however. Nixon tried price controls. So did Carter. They were advocated by McCain. Hawaii tried them 10 years ago. Failure, Failure, Failure, Failure. Why can’t people learn the obvious?

One Response to “Reasoning 101 not taught in Venezuela, and other places too”

  1. RobM Says:

    Keeps getting tried because… the failures before were because of sabotage and/or they just didn’t do it “right”.. rinse repeat. Wonks gonna wonk and politicians of a certain mindset are all too willing to tinker because they can.

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