Sam writes:
Venezuela has price controls. If you have price controls you will have shortages. That’s just the way it works.
Not really. The shortages have been going on for years, and the price controls just went on recently.
I don’t get it. The Chavez-haters scream that there’s high inflation, and then the Chavistas put in the only thing that slows down inflation, price controls, and now the price controls are evil too. So the problem shows how bad Chavez is, and the solution also shows how bad Chavez is. You can’t win.
The price controls are not very rigorous. My understanding is that you can still make an good profit even with the price controls, and many businesses are doing just that.
The capitalists are simply refusing to import goods with the dollars the government gives them, and instead they put it in investments in Miami. So the government cut way back on the dollars it was giving them. New problem. Now the capitalists said they didn’t have access to dollars to import stuff. You can’t win.
The capitalists are keeping stuff off the market. They did this under Allende too to artificially create shortages, make the economy scream and get rid of the regime.
The shortages go way back in Venezuela. Every single time there was election in Venezuela, major shortages of all sorts of products would magically appear. Can someone explain that to me? The capitalists were trying to make the economy scream and make the Chavistas lose the election each time
due to the bad economy.
1/3 of all imported goods go to the black market or out of the country to Colombia. Sure you can make a fair profit even with the price controls, but you can make a lot more by selling your stuff on the black market or shipping them to Colombia. And the more stuff you withhold and hoard, the more it drives up black market products. We know that the capitalists have slowed their factories way down for months now. Most Venezuelan industry is simply producing a lot less than normal, and they are doing this on purpose. Apparently it’s all deliberate to try to ruin the economy so the Chavistas will be voted out.
Every week a major Venezuelan business is caught with a huge warehouse full of tampons or toothpaste or whatever that have been sitting there for months.