Venezuelans To Starve!

[Lloyd Danforth]

http://www.telegraph.co.uk/news/worldnews/southamerica/venezuela/4938993/Venezuelas-Hugo-Chavez-tightens-state-control-of-food-amid-rocketing-inflation-and-food-shortages.html

[John Edward Mercier]

Must be using Jimmy Carter as an economic advisor.

[Pat McCotter]

http://www.telegraph.co.uk/news/worldnews/southamerica/venezuela/4938993/Venezuelas-Hugo-Chavez-tightens-state-control-of-food-amid-rocketing-inflation-and-food-shortages.html

White rice, the staple for many Venezuelans, can now only be sold at a price of 2.15 bolivares (71p) per kilo. Private companies insist that production of that kilo costs 4.41 bolivares (£1.46) and that government regulations are impossible to fulfil and companies will quickly go broke.

I guess the suppliers of rice producers will have to lower their prices so the rice producers can sell at a lower price. And NO, labor does not contribute to the price of rice so don't even think about lowering wages..

[WithoutAPaddle]

Must be using Jimmy Carter as an economic advisor.

It was Nixon, not Carter, who instituted price controls.  Further, the Carter Administration did more to dergeulate business, including the airlines, trucking, railroads, oil and banking, than did any other administration.  Deregulation of oil was nearly complete when Carter TEMPORARILY froze the price on domestic oil to stop domestic producers from cashing in on the immediate oil shortage.  All Reagan did regarding deregulation of oil was to sign an executive order accelerating the date of the final deregulation by six months.  Unfortunately for Carter, the cost of the economic dislocations caused by deregulation is incurred "up front".  As Gary Wills wrote, Carter did a lot of things right economically, but at the worst time for himself, politically.

Chavez has made himself relatively popular by pumping out lots of oil from his country's underground trust fund and giving a little more of that money to the general population.  While that seems like a sleazy thing to do, the fact is, there is really no consensus on what is the "just" rate for a country to deplete its non-renewable resources. In Dubai, they are pumping oil out so fast that it will all be gone in 25 years.  Is that wrong?  Is it even less fair than what Alaska extracts and shares with its residents each year?  Beats me.

I am really getting sick of seeing these "Call Joe for Oil" commercials in which the trust fund boy thanks the people of Venezuela for donating the oil to the needy  Americans.  We have about five times the per capita income of Venezuela.  Chances are, nearly everyone who qualifies for free oil from the people of Venezuela makes more money than does the average Venezuelan.  I doubt that the people of Venezuela want to make those donations to the United States.  

[MTPorcupine3]

 Further, the Carter Administration did more to dergeulate business, including the airlines, trucking, railroads, oil and banking, than did any other administration.

Now that you mention it, I understand that it was he who "allowed" home beer brewers to do their thing again.

[dalebert]

And NO, labor does not contribute to the price of rice so don't even think about lowering wages...

Interesting. I've heard somewhere that labor is the #1 cost of just about every business in existence. Must be a rumor spread by evil capitalists.

[John Edward Mercier]

Though I was too young... my understanding is Nixon sought both wage and price controls, thus controlling both supply and demand... while Carter sought on supply control (specifically oil).

Chavez doesn't seem to be trying to control wages (demand) only supply.

[Pat McCotter]

Though I was too young... my understanding is Nixon sought both wage and price controls, thus controlling both supply and demand... while Carter sought on supply control (specifically oil).

Wages are prices.

Chavez doesn't seem to be trying to control wages (demand) only supply.

Of course not. The majority of wage earners are his constituency.

[John Edward Mercier]

Wages aren't prices.
Prices include capital earnings and dividends.

[David]

Wages are certainly a price to those that have to pay them.  In restaurants labor as a percentage of sales is usually 29-30%.  The cost of the food itself is about 27-35% of sales. 

[John Edward Mercier]

So the price control wouldn't limit wages until they reached 65-73% of sales.

[BillKauffman]

And NO, labor does not contribute to the price of rice so don't even think about lowering wages...

Interesting. I've heard somewhere that labor is the #1 cost of just about every business in existence. Must be a rumor spread by evil capitalists.

Yes, and without state privilege capital would not command labor and cost would be the limit of price.

That is why capitalism is NOT the same as a free market.