The folly of price controls

February 15, 2003

Not only has the Chavez Government established price controls on hundrerds of items, but the prices at which the control ahs been set are in some cases those going back to the second quarter of last year, when the exchange rate was Bs. 1,000 per US$. The controls are being imposed at the same time the rate has been regulated at Bs. 1,600 to the US$. By regulated I mean there is an office that will hand out dollars, but there is no guarantee you will get them anyway. If you don’t you have to go to the black market, but if you are going to lose money you just give up and dont produce anything. Chavez seems to be trying all of the failed formulas of the 60’s and 70’s in Latin America. Problem is, we all lose.

This entry was posted on February 15, 2003 at 11:18 pm and is filed under Venezuela.

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