More Fun with Price Controls
Michael C. Moynihan | February 15, 2008, 11:25am
It was with astonishment that
The Economist surveyed Hugo Chávez's first five years in office: "In the five years to 2003, Mr Chávez's performance was disastrous. The proportion of households below the poverty line increased by more than 11 percentage points...It was the first time since data were collected that poverty rose even as the oil price did too."
But in the past few years, the Venezuelan economy has undergone significant growth, with an influx of oil money resulting in 18 percent growth in 2004 and 10 percent in 2005 (though the economic expansion has
tapered off in recent months). Back in 2006, Latin American studies Professor Michael Shifter, who is somewhat sympathetic to the Chavism, said that while the economy has improved, and "record oil profits...are funding social spending, [Chavez's] initiatives have yielded only very modest gains." In a
previous piece on the
caudillo of Caracas, I quoted former chief economist of the Venezuelan National Assembly Francisco Rodriguez on the much-heralded decrease in poverty: "It's normal for poverty to decline during economic expansions and that the decline under Chávez is not unprecedented—indeed, it is
smaller than the decline observed during similar periods in the past."
And despite oil hovering at around $100 a barrel, the economic situation seems to be getting worse. This is what one must endure if one wants to buy "subsidized food" in the city of San Antonio de Tachir:
The New York Times' excellent Latin America correspondent Simon Romero has
a must-read (well, for those interested in such things) on Chavez's eroding popularity. A sample:
While Mr. Chávez remains Venezuela's most powerful political figure, his once unquestionable authority is showing signs of erosion. Unthinkable a few months ago, graffiti began appearing here in the capital in January reading, "Diosdado Presidente," a show of support for a possible presidential bid by Diosdado Cabello, a Chávez supporter and governor of the populous Miranda State.
Outbreaks of dengue fever and Chagas disease have alarmed families living in the heart of this city. Fears of a devaluation of the new currency, called the "strong bolívar," are fueling capital flight. While the economy may grow 6 percent this year, lifted by high oil prices, production in oil fields controlled by the national oil company, Petróleos de Venezuela, has declined. Inflation soared by 3 percent in January, its highest monthly level in a decade.
Add to this Exxon's
court-approved freezing of $12 billion in PdVSA (Venezuela's state oil company) assets and widespread food shortages (those pesky price controls again!) and it looks like Chavez's Bolivarian revolution is, at long last, in decline.
Rex Rhino | February 15, 2008, 1:40pm | #
As if we never see such lines when stores are having major sales events.
I have never seen such lines when stores are having major sales events. No.
Generally though, you would expect long lines to occur when their are shortages. I have seen lines (of about 100 people, nothing like in Venezuala) for items like concert tickets, or for limited edition autographed CDs, etc. - Things that the supply is far smaller than the demand, yet things that can't be sold at an extremly high price because of bad publicity (if a rock band sells tickets for $1000.00, often times fans will get very upset and angry, even if $1000 should be the going market price... so rock bands often sell tickets far below fair market value. Or in the case of autographed CDs, the band will look like dicks if they charge for an autograph, even though the market value for an autographed CD is far greater)
Lines generally mean that there isn't enough of something for everyone... so people line up to get it, first come first serve.
If you see people lining up for basic food items, you would expect that means that there is an extreme shortage of basic food items. Otherwise, people would just come later when it is less crowded.
You are joking right? (Its hard for me to detect sarcasm when reading some of these posts because a few are actually serious).
If you mean that I am 100% certain that Chavez is a CIA puppet, then no, I am not 100% certain. I haven't seen any conclusive evidence, and so I can fully accept that I might be wrong.
I am not being sarcastic, though. I believe it is very possible that Chavez is a puppet of the U.S. government. If I was betting money in Vegas on it, I would give it 3 to 1 odds that Chavez isn't a puppet.
I do know 100% that the CIA has backed puppet Communists... I don't think that is really up for debate, is it? They just haven't been as high up the ladder as a national leader like Chavez.
