Thursday, February 08, 2007

Food Shortage in Venezuela

So, Venezuela is relearning the lesson that they could have learned from history.

Meat, sugar scarce in Venezuela stores

There is no excuse for a government to make this mistake. You can not regulate prices to make them lower than would be profitable. If the inflation is that bad, maybe you should look at other reasons why. A government that only responds to crisis and does not take steps to avoid them is in trouble.

Looks like socialism and dictatorship aren't working out too well. Who would have thought?

The same thing is happening in Mexico, with many Mexicans unable to buy tortillas. The government tried to regulate prices, but that just means that no one will sell any because they won't make any profits. Interesting about the tortillas, is that our attempt to use green-er fuels has caused poor Mexicans to go hungry. The push for corn to ethanol drove up the prices of corn.

If you are going to try and regulate the price of a good, to at least have a chance you have to subsidize the good so that people continue to profit. The thing about subsidizing it is that you have to get the money from somewhere, guess where?! the people! You might as well just let prices rise, because in the end the people pay for it. If you just let the price rise, you don't incur the cost of having the money go through the government.

No comments: