Friday, January 25, 2008

Dictator du Jour

It’s our old buddy, Hugo Chavez. In a country swimming with oil revenue, somehow he as managed to produce food shortages. Chavez’ press release has been reprinted by Reuters, while the alternative, and more likely to be true, version, is here. As Ed Morrisey notes, this is nothing less than creeping Zimbabwism. And we know how well that’s worked out. More on the Zimbabwe – Venezuela comparison is here.

Even on the face, this program of price controls is ludicrous. There’s no incentive for anyone to export food to Venezuela, so all (except for what the “international community” will pony up as aid to prop up his regime) will have to be grown within country. Except that there’s no incentive to grow food for sale. So, farmers will have to restrict output (remember, their costs of production – wages, seed, fertilizer, equipment – are not controlled) in order to avoid bankrupting themselves. This, of course, gives Chavez grounds to seize their farms and give the land to political supporters (well, after Chavez’ cut).

At minimum, it gives Chavez some additional time to weed out prominent opponents of his recent "president for life" initiative.