Centerfield: Hugo's Campers Not Happy

January 12, 2006

Hugo's Campers Not Happy

Here's an update on Hugo's Ongoing Adventures in Economics. In this episode, Hugo's fellow campers are unhappy when Hugo's attempted magic trick at the talent show goes awry:

"For my first trick, I will pull the string at one end, but the other end of the string will not move."

Needless to say, hilarity ensues:

As coffee disappeared first from the supermarkets and then from the streets, the National Guard was sent out to confiscate coffee that had been stockpiled at private warehouses.Two warehouses were raided, and dozens more are on government lists.

Some supermarkets in the capital, Caracas, said they had also run out of sugar, chicken, powdered milk and maize. Store managers said they were not being supplied with new stock from wholesalers and producers, who were complaining that their profit margins were too low. Frustrated customers were told that coffee, milk and sugar suppliers were sitting on their goods until the government raised retail prices.

"I'm really fed up," said Clara Fuentes, 25, a mother of two small children. "I have spent the last three hours trying to find a shop that sells coffee and sugar. After visiting six supermarkets, I have given up."

Here's the thing with basic market economics. It's not rocket science. Buy low. Sell high. But because it isn't rocket science, that means that some people think there isn't a good way and a bad way to do it.You can do whatever you want, just because you're in charge. if anything goes wrong, you can fix it by doing something else, because you're in charge. That's the more rocket-science-y part, you're not in charge, the market's in charge. If Chavez has half a brain he'll find a clever way to back down before things get worse. Because "Soldiers, Seizures, and Shortages" is getting worse reviews than Showgirls.

Posted by Kranky Kritter at January 12, 2006 01:36 PM

Comments

Hugo's lack of an working knowledge of economics certainly doesn't seem to be hurting him with the American far left. Rev. Jesse's been down for the customary visit, as well as this weeks visit from American icon Harry Belefonte. (Sorry, sometimes I like to use the word "icon" rather liberally.)

Posted by: AR at January 12, 2006 02:16 PM

The far left everywhere isn't so good on reality.

Sounds like Hugo is establishing grounds for removal....

Posted by: Tully at January 12, 2006 02:19 PM

ROTFLMAO! You're killing me, Tully.

Posted by: AR at January 12, 2006 02:39 PM

GROAAAAANNNNNN

Coffee production in Venezuela has fallen steadily over the past decades, as has sugar production. Once a net exporter of sugar, Venezuela is now only 71% self-sufficient in sugar. Source

Their economy is hugely dependent on the price of oil. Expect Chavez to act much more like other OPEC countries in the future in attempts to keep oil prices high.

Posted by: PatHMV at January 12, 2006 02:54 PM

Venezuela has just come out of a major recession. OK, depression. Two years in which GDP plunged by nearly 10% each year. Oil is 1/3 of their economy, and 80% of their exports. Only the rise in oil prices has allowed them to go back into positive GDP growth. They've still got 20% unemployment and 24% inflation. Half their population is below the poverty line. The only one of their neighbors they're NOT squabbling seriously with are the Brazilians.

Posted by: Tully at January 12, 2006 04:46 PM

At some point Chavez will lose popular support--and that's when he'll atempt to seize power through other means. The story with these guys is always pretty much the same. The very fact that a certain number of American liberals idolize this fool is further proof that the left in America is a lost cause.

Posted by: Alan at January 12, 2006 09:45 PM

Of course, how long did ex-Governor Davis stand in that same spot WRT to energy?

Fortunately, CA has a healtby democracy, with referendum, so he's now an EX-governor. Won't be so easy in Venezuela, alas. In fact, Lenin never admitted to his mistakes even after seeing communism fail....

Oh, yes, Alan, we're definitely on the point of death. Of course, since there are three or four righties who actually believe in Pat Robertson, the righties are clearly a lost cause too. You could get tossed out of the White House and Congress any week now.

Posted by: Jon Kay at January 12, 2006 09:53 PM

Already happened--the close 2004 recall referendum was of very uncertain honesty, and he began supression of opposition well before that, including suppression of the judiciary. The upper and middle classes despise him, and he holds onto the lower class with help from the military.

Chavez initially tried to boost national income by restricting oil production. Someone forgot to tell him that this only works when you have a market monopoly. Oil production has still not recovered to previous levels. Chavez DID manage to squeeze a better deal out of the foreign producers by re-negotiating royalties, his one real success (other than not being overthrown).

Posted by: Tully at January 12, 2006 10:01 PM

The far right everywhere isn't so good on reality either.

Posted by: Tully at January 12, 2006 10:03 PM

Any government interested in its own survival will find a way to make sure its citizens get the coffee they need.

As I've written here and here, over the next few months Chavez is facing a much bigger problem than coffee. The main bridge from Caracas to the airport is out, creating massive transportation problems. If anyone has a flight to Caracas, you may want to check on that.

Posted by: boz at January 13, 2006 04:51 AM

He really needs a free-market system in agriculture and sugar like we have here in the U.S.

Ha! Just kidding.

Posted by: Oberon at January 13, 2006 09:23 AM

How long until Morales does something similar?

Posted by: Scott Smith at January 13, 2006 10:27 AM

He really needs a free-market system in agriculture and sugar like we have here in the U.S. Ha! Just kidding.

Sure, that's a fair point. Perhaps our markets are far from "free." I know for myself that when I speak of a "free" market, I know that I really mean "what currently passes for a free market, and is a comparatively free market compared to others." And I assume that other people with an understanding of economics know that those are the only sorts of free markets out there.

At least our markets are free enough to provide us with sugar, coffee, and fresh produce, soi we've got that going for us, right?

Posted by: bk at January 13, 2006 11:12 AM

He really needs a free-market system in agriculture and sugar like we have here in the U.S. Ha! Just kidding.

At least our markets are free enough to provide us with sugar, coffee, and fresh produce, soi we've got that going for us, right?

Posted by: bk at January 13, 2006 11:15 AM

Our un-free subsidized agriculture markets don't leave us with food shortages. Chavez's un-free price-controlled coffee market seems to have a problem with shortages. Different kinds of un-freedom. In one the producers are overpaid, and there is abundance. In the other producers are underpaid, and there is shortage. Hmm, I bet there's a market principle in there somewhere....

Posted by: Tully at January 13, 2006 02:57 PM

Centerfield

A Weblog of Centrist Voices in American Politics

January 12, 2006

Hugo's Campers Not Happy