SC and Prole: We told you so

[JayB]

What he lacks in discipline he'll more than make up for with ineptitude. The path wander a bit, but of the final destination there is absolutely no doubt.

 

Prices communicate real information about the relationship between supply and demand, which are a function of realities that cannot be eliminated. When food is scarce, the price goes up. Artificially suppress the price and you suppress effective demand, which effectively prevents the generation of additional supplies.

 

Regimes such as Chavez's can attempt to control prices, but since they cannot control the realities and contingencies that generate them, this experiment is doomed. Moreover, once they no longer have the information provided by prices to engage in economic calculations, they won't even be able to tell if a particular enterprise is generating outputs that are worth more than their inputs. Is state-run company X generating a profit or loss? Who knows.

 

Expand this example infinitely and you begin to see the process by which the missallocation of resources that characterizes socialism generates the cumulative depletion of productive resources and structural distortions that guarantee its failure.

 

Look for significant outmigration to commence in 5-10 years once the confiscation party is over and the mismanagement of the oil-bounty has worked its magic.

 

is he instituting price controls?

 

Yes.

 

how and where?

 

Exchange rates and selected staples. I'm amazed that you missed the opportunity to sink some assets into the "Bond of the South" that they issued last year to mop-up dollars in an attempt to shrink the glaring disparity between official Bolivar/Dollar exchange-rate and the real exhange rate.

 

As far as I know, the price-controls on staples are only in force in government-owned stores, but as the government assumes more control over the economy as per the aforementioned confiscations, or through involuntary "partnerships," look for them to increase in size and scope.

 

More on "The Bond of the South":

 

http://www.bloomberg.com/apps/news?pid=20601086&refer=latin_america&sid=auKaVIzbn2jM

[Fairweather]

what does this say about your allegience to democratic values and the voice of the majority?

 

A leader - elected or not - who incrementally supplants democracy with his own cult of personality and shreds a nations guiding documents is no longer legitimate. I'm not sure he's there yet, but I remain convinced it's where he'll be soon enough.

 

And of course you already know that democracy and "the voice of the majority" are not necessarily the same. Do you really support mob rules?

[sexual_chocolate]

so now his support comes simply from mobs? crazy.

 

[sexual_chocolate]

jayb, would there ever be an occasion when you would support a federally instituted price control?

[Fairweather]

I'm sorry; are his armed Bolivarian Circles anything but?

[Fairweather]

jayb, would there ever be an occasion when you would support a federally instituted price control?

 

Nice trap. Our own government already has a nasty propensity re agricultural prices/subsidies. Should be scrapped.

[sexual_chocolate]

not a trap necessarily. he spoke disparagingly of venezuelan price controls; i simply want to know if this position of his is consistent throughout the economic and political spectrum.

[KaskadskyjKozak]

 

Chavez should confiscate all property from Bourgeous Capitalist Pigs - especially those with boats.

 

[sexual_chocolate]

jayb, would there ever be an occasion when you would support a federally instituted price control?

 

Nice trap. Our own government already has a nasty propensity re agricultural prices/subsidies. Should be scrapped.

 

you don't think the viability of our domestic food supply should be protected?

[joblo7]

we are dying to tell and force venezuela to follow our lead. the only reason is, we want what THEY have . OIL.

"If there be one principle more deeply rooted than any other in the mind of every American, it is that we should have nothing to do with conquest. "

Thomas Jefferson (1743-1826), U.S. president.

Edited January 9, 2007 by virendra7

[joblo7]

what does this say about your allegience to democratic values and the voice of the majority?

 

A leader - elected or not - who incrementally supplants democracy with his own cult of personality and shreds a nations guiding documents is no longer legitimate. I'm not sure he's there yet, but I remain convinced it's where he'll be soon enough.

 

And of course you already know that democracy and "the voice of the majority" are not necessarily the same. Do you really support mob rules?

 

 

do you mean g.w bush ??

[sexual_chocolate]

propriety my friend, propriety. next you'll be eating salad with the dinner fork. shame.

[KaskadskyjKozak]

we live in one of the most fucked up country in the world !!! yet we are dying to tell and force venezuela to follow our lead. the only reason is, we want what THEY have . OIL.

"If there be one principle more deeply rooted than any other in the mind of every American, it is that we should have nothing to do with conquest. "

Thomas Jefferson (1743-1826), U.S. president.

 

The only thing "fucked up" about this country are ignorant ingrates such as yourself who live here.

[sexual_chocolate]

and thomas jefferson.

[joblo7]

you calling TJ ingrate and f 'up ?

[sexual_chocolate]

sometimes you have to read between the lines, my friend.

 

soft focus usually helps.

[joblo7]

the ignorant conquering forces that are infesting this glorious country of ours will never succeed in permanently damage its golden heart and selfless soul !!!!

 

we are however going to suffer and make others suffer a lot before we learn our lesson it seems.

leave venezuela to its democracy and fix OURS . FW/JB ETC you guys are so bright!

 

[joblo7]

sometimes you have to read between the lines, my friend.

soft focus usually helps.

 

your giving me a tone.condescending .

i am passionate about this subject and request a little latitude being that we are in spray.

so what are you saying?

 

 

[JayB]

not a trap necessarily. he spoke disparagingly of venezuelan price controls; i simply want to know if this position of his is consistent throughout the economic and political spectrum.

 

 

I can't think of a situation where price controls wouldn't ultimately do much more harm than good, so I can't think of a situation where I'd support them. With respect to the US, the only strict price controls that we have that I'm aware of come in the form of the minimum wage, and I've been clear in saying that it would be a much better idea to use targeted subsidies like the EIC or some other sort of negative income tax to achieve the ends that minimum-wage supporters are hoping to achieve. The single-mom working the till at McDonald's would qualify for a subsidy, the kid working the same job, living at home, and saving up for an iPOD and a new amp for his tricked-out Accord wouldn't. The public, rather than the employer, would shoulder the financial burderns of the policy.

 

 

With respect to all of the other subsidies that riddle our economy, there's a critical difference between price controls and subsidies, in that the government acknowledges there's a difference between the market price and the price that the government has concluded a particular good/service/commodity should be sold for, and it pays the difference between the two. I'm not a fan of either, but subsidies at least have the minor merit of indicating that whoever is implementing them has not yet completely succumbed to the notion that reality - ergo prices - can be determined by administrative fiat.

 

If you liked Zimbabwe in 2006, you'll love Venezuela in 2015.

 

 

 

 

[foraker]

Interesting idea JayB. One question though, what if said kid isn't working for an iPod and new amps but for college. Expect him to have his 520 set up or something? How does that work if he's not just trying to cover tuition but books and food and all those annoying administrative fees?

[LandShark]

Puhlease. You don't really think that kids in the ghetto that work for McDonald's really have any life aspirations do you? They're just in it for the stuff. That's like arguing that single mom's don't have more babies to increase their welfare payments. Wake up to the realities of the world! They aren't like you and me.

 

 

[JayB]

You can thank the late Milton Friedman and his acolytes for the idea. I think the conceptual hurdles are more formidable than the administrative ones. There's already something like this in place for students working their way through college via the work-study program at most universities. I'm not terribly familiar with the parameters that govern who gets the EIC, but this is more or less a negative income tax that's extended to people who meet certain conditions. In any event, I suspect that most of the administrative machinery necessary to implement this kind of program is already in place.

 

 

 

 

[foraker]

This sounds vaguely familiar now that you mention Friedman. Will have to dig this up.

[Peter_Puget]

I am not so sure Milton "invented" the negative income tax.

 

Any way here is an interesting article by a well respected economist that pretty much sums up why Ven ( and Iraq by the way) is screwed. There is a more updated version available here but it costs $5.00.

 

 

Edited January 9, 2007 by Peter_Puget

[sexual_chocolate]

jayb, would you consider the federal reserve's role in setting interest rates something that amounts to "price control"?

 

and are laws against "price gouging" a form of price control in your eyes?