Today:
Venezuela's top food company has accused troops of illegally seizing more than 500 tonnes of food from its trucks as part of President Hugo Chavez's campaign to stem shortages.
That's one sure-fire way to stop the shortages: make sure you discourage professional food distributors from bringing any more of the stuff in.
The leftist Chavez this week created a state food distributor and loosened some price controls, seeking to end months of shortages for staples like milk and eggs that have caused long lines and upset his supporters in the OPEC nation...
Jose Anzola, a director of food company Alimentos Polar, told reporters that troops stopped 27 of its trucks over the last three days and described the seizures as "illegal, arbitrary and irresponsible."
Troops said they halted the transport of 350 tonnes of food to states along the Colombian border on suspicion of smuggling, he said.
Understandable! Those food-pushers have to be stopped. (I hear food addiction is on the rise down there, with countless people unable to go about their lives without a daily fix of the stuff.)
Another 165 tonnes were impounded in an eastern state on accusations of hoarding, he added.
Yeah, they hadn't voluntarily delivered it to Chavez's warehouses yet.
Business leaders say shortages of these products are caused by strict price controls, which have lagged inflation that is Latin America's highest.
Price controls causing shortages? Har-har! Those capitalist pigs! They'll say anything to scare people. Next thing you know, they'll be claiming that printing too much money causes inflation!
Chavez is focusing on practical issues like food supply and crime after losing a December referendum that would have let him run for re-election indefinitely and expand his self-styled revolution.
Well, how convenient there are such "issues" for him to solve. I'm sure he'll get lots of credit for trying to rescue his people from these mysterious "food shortages" which only seem to be affecting his nation.
He announced an increase of more than 30% in the retail price of milk in an effort to ease shortages that have created headaches for consumers of all social classes.
Ah! That'll do it. Perhaps if he increased the price further still -- say, 300% -- then it would be flowing in the streets, available to all.
He also threatened to expropriate companies selling food above regulated prices.
Because it's better if people are told they can have nonexistent cheap coffee, meat, bread and beer, than to allow them to pay for "overpriced" (but real!) foodstuffs.
"Anyone who is distributing food ... and is speculating, we must intervene and we must expropriate (the business) and put it in the hands of the state and the communities," Chavez said during the inauguration of a new state-run market in Caracas.
Gosh, that Hugo Not-A-Dictator Chavez really cares for the people of Venezuela. Who else would love them enough to protect them from the greedy businessmen who want to exploit them by distributing food to them?
anon -
Imagine it costs $2 to make a gallon of milk, refrigerate it, pasturize it, bring it to market, etc.
Imagine the stores sell it for $2.25/gallon, making a .25cent profit per gallon.
Now, the government comes along and says "you cannot sell milk for more than $1.25/gallon. That's all that people can afford."
Suddenly, it will be very difficult for anyone to buy milk anywhere, because farmers and markets will lose money by making it and selling it at the capped price. Who do such laws help?
Price controls are very ineffective methods of economic policy (except, perhaps, in cases where there is some kind of unassailable monopoly like phone service.)
The point is that you cannot get something for nothing. A person who could not buy milk at $2/gallon will still not be able to buy milk if the price is capped at $1.25/gallon since no-one will be producing milk at unprofitable prices.
anon - From the above article; The leftist Chavez this week created a state food distributor and loosened some price controls
If you loosen price controls that means that, in the past, you must have put price controls in place. Right?
So as I read the article, Chavez had, in the past, demanded that food sell below market value. This resulted in shortages. Now, Chavez is trying to deal with those shortages by slightly raising the price at which food can sell (while still demanding that it sell below market value) and also by stealing food and 'distributing'it.
Hmmm, looks like someone is rolling the red carpet out for a black horse. I'd ask how people don't realize that government intervention is the cause of almost all of the famines in the 20th century, but, then again, one should ask how socialism/communism is the cause of the biggest mass murders.
*sigh*
Posted by: Michael Zappe on January 25, 2008 10:43 AM