Whatever happened to zero inflation for the poor?

May 20, 2009

Chavez and his cronies always come up with novel economic theories. About a month or two ago, a new one claimed that inflation was not a relevant problem for the poor, because through the chain of Government owned supermarkets Mercal, they could buy everything with zero inflation.

Funny, because increased the price of 14 items of the products sold by Mercal and now the theory is turned around and it is claimed that the increases will only have a 1.4% impact on the CPI. Of course, this is the CPI that a month ago was not felt by the poor, but now that they want to dilute the effects of the new increases into it, they use it. However, others calculate that the impact is 12%.

You may be wondering how come they have to increase the prices if most things Mercal sells at imported at the official rate of exchange of Bs. 2.15 per US$? Simple, all of these products were being sold below cost and now the Chavez administration is taking the capitalistic approach of not losing money in their “socialist” enterprises.

Which only tells us that money must be very tight if the Government has decided to resort to such measures.

And, of course, to hell with our new economic theories which have a lifetime of less than two months, if that long…

It is after all, an ever improvising revolution, with no real consistency behind it.

9 Responses to “Whatever happened to zero inflation for the poor?”

  1. GeronL Says:

    Dang. I am rereading Atlas Shrugged.

    Ayn Rand had it about nailed.

  2. liz Says:

    No wonder Daniel calls it ‘voodoo economics!

  3. Roberto Says:

    “The believers are so full of denial that it is impossible to get through to them even in the face of a black & white situation like YoYo Sat.”

    And, there, as the Bard said, lies the rub. Until someone manages to lift the blinders.

    I wish I knew the answer!

  4. Bois Says:

    Remember Chavez boasting about his new socialist satellite “If it wasn’t for the socialist Revolution, China wouldn’t have achieved the scientific  and technological advances it posses today.  China is a clear example that you do not need an empire to be a power.”

    The U$400 Socialist Satellite is a no-show not capable of transmitting an old Beatles song.

  5. island canuck Says:

    The thread in Noticiero Digital about YoYo Sat has now had 407,092 visitors & 12,712 replies.

    The Chavez apologists keep insisting that the satellite is still working while Juan Perdomo Guerrero keeps proving it has failed.

    This really explains the problems here in Venezuela.

    The believers are so full of denial that it is impossible to get through to them even in the face of a black & white situation like YoYo Sat.

    Trying to explain things like economics or the coming shortages is just a waste of breath on deaf ears.

    The funny thing is that the government has stopped talking about it hoping the 500 million dollar loss will just go away.

    Welcome to 21st century socialism & the robolution!

  6. Robert Says:

    Sorry this is off topic but know this topic is close to the heart of Devisl Excrement, here’s an interesting bit on the socialist satellite.


  7. eduardo Says:

    There´s no better revolutionary than an empty stomach, and Chavez is sure doing a hell of a job recruiting new revolutionaries. This could very well spell his demise. Therefore he better hurry up and finish his palisade around Miraflores. because, what´s next? What other fungible assets are there for him to take over, so that he can shore up his finances? It won´t be the opposition he´s facing now, it will be his own pueblo, the one that has once and again voted for him to stay ad eternum.

  8. Robert Says:

    The robolution is bankrupt and can no longer subsidize the poor and the oligarchs? (mercal does not discriminate)

    It’s ironic that inflation has been out of control for years and the gov now arrives to the point of pouring fuel on the fire because of continuing financial irresponsibility. It just gets worser and worser………

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