Monday, November 11, 2013

Ricardo Nixon?

No, not the 1970s in the USA, but today in Maduro's Venezuela (of course);
"I have decided that, once the enabling law is passed, mandatory percentage limits on profit margins will be implemented on all items. There will be minimum and maximum profit margins for everything, in the first place. Secondly, we will also use the enabling law to make adjustments intended to toughen as much as possible the penalties for any businessperson who is sold US dollars of the Republic through the established system (...) and uses the US dollars of the Republic to speculate on the currency, to speculate on products and rob and plunder the people," Maduro admonished.
He criticized the fact that at present speculation is punished with fines and shutdown of stores. "No! That people have to be arrested, detained, and prosecuted. We have to go after the wealth they stole from the people," he said.
As foolish as his medievil just price-ism sounds, it's not much worse than what Richard Nixon imposed on America in 1971, with his base price diktat imposed on even small businesses;
August 15, 1971.  In a move widely applauded by the public and a fair number of (but by no means all) economists, President Nixon imposed wage and price controls.  The 90 day freeze was unprecedented in peacetime, but such drastic measures were thought necessary.  Inflation had been raging, exceeding 6% briefly in 1970 and persisting above 4% in 1971.  By the prevailing historical standards, such inflation rates were thought to be completely intolerable.
The 90 day freeze turned into nearly 1,000 days of measures known as Phases One, Two, Three, and Four.  The initial attempt to dampen inflation by calming inflationary expectations was a monumental failure. 
Speaking of Presidents who deliberately lied (according to Milton Friedman, who met with Nixon at the time, he knew exactly what folly he was engaging in) to the American people for political convenience.

But, at least Nixon paid with his job, eventually.

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