Thursday, May 28, 2015

Maduro's Law drives out Gresham's

In Venezuela good money drives in and flips the key to the parking valet, according to Kejal Vyas of the Wall Street Journal. Even though it's officially illegal to price goods and services in los dolares del diablo; 2009, then-President Hugo Chávez scorned the dollar as “paper without backing.” But as Venezuela’s economy crumbles and its currency plummets amid triple-digit inflation, the country is in effect dollarizing. Coded messages increasingly let buyers know that greenbacks are welcomed.
.... From real estate to cars to even some cheaper goods like health-care products, an increasing number of vendors demand dollars ....
Hugo is dead and buried, but his socialism lives on and increases inequality between rich and poor.
[Venezuela's currency] controls have helped exacerbate class divisions between those who hold only bolivars and those with access to dollars, undermining Mr. Chávez’s so-called Bolivarian Revolution, the social movement embraced by his successor, President Nicolás Maduro, which aims to equitably distribute wealth.
Everybody knows it, even as Maduro denies it it;
“What can I buy in bolivars? Well, not much,” said Juan Verde, a retired lawyer with 20,000 bolivars ($50) a month pension, saying he recently spent all of his savings to buy groceries. “Things are a little up in the air for me. Much like how they are for many Venezuelans.”
Roberto León, head of Anauco, an independent consumer protection agency, said he has received scores of complaints about store salesmen illegally quoting the prices of appliances to prospective buyers in dollars. “Everything is now being referenced to foreign currency,” Mr. León said. “If we’re going to just go ahead and officially use the dollar, the government should just come out and say it.”
Hombre, in politics good intentions drive bad policy.

No comments:

Post a Comment