So, Price Controls. When Will We Begin To See Shortages?

When will shortages start to appear in supermarkets?

  • 2 weeks

    Votes: 17 35.4%
  • 1 month

    Votes: 8 16.7%
  • 2 months

    Votes: 10 20.8%
  • Never. Cristina will solve the inflation problem with price controls.

    Votes: 13 27.1%

  • Total voters
    48
My wife saw the article about price controls in La Nación today and went straight to the supermarket to start buying up all the stuff we need. I think most middle class Argentines understand that price controls = shortages.

It seems we can never learn from past mistakes.
 

French jurist

Registered
Maybe are the answers a bit biased?
Even the "never" one is quite ironical. Depends also on the definition of shortages.

Those price controls won't really benefit directly the lumpenos (they don't buy in Coto or Jumbo).

I propose a new poll:

What do you think of CFK politics?

A- It's a disaster
B- It's a nightmare
C- It's aweful
D- It's great. Cristina will save the World: solving the hunger problem, all the worldwide conflicts and such.
 

Conorworld

Active Member
I'm not no Chicago School disciple, far from it. But it really is common sense that price controls rarely work and especially with common goods will reduce the amount on offer and make things worse. Price controls are just stupid, silly and blunt tools. It's like trying to fix a leak in a dam by scooping up the leaking water with buckets. It's not a solution. The government need to nip inflation rather than the effects of it. It would save them and everyone else a lot of hassle.

Common sense: Prices are going up so they place a price freeze for two months on commodities that have been going up constantly for years. What do you do? Buy in bulk because the minute the price freeze is over the price will go up. Now you can be a "vulture" and take advantage of that and sell to others at a higher prices but the average Argentine is just too busy trying to scrape by so they dont have the time to think that. Buy now is their mantra to survive.

It's a lazy, stupid idea
 

dennisr

Veteran
What happens when the price freeze expires?

http://www.iprofesional.com/notas/154055-Plan-freezer-y-la-razn-de-fondo-que-lleva-al-Gobierno-a-querer-congelar-precios-en-los-sper-por-apenas-dos-meses
 

Joe

Registered
You guys are looking at this the wrong way. You're concentrating on the negative economic aspects of this policy instead of the positive political aspects of it for the K-Regime.

The K-Regime will reap significant political benefits from this strategy including:
  1. They appear to be "helping the poor" by holding down prices.
  2. They can blame the evil supermarket corporations (some foreign) for creating "fake shortages".
  3. K-Cronies will control the black market profiteering once shortages appear.
  4. Carrefour will be nationalized and the name changed (replace second 'r' with 'n') to CarneFour - Todos.
 

nlaruccia

Registered
When the price freeze is up the inflation rate will probably double to compensate. I love how they mentioned in the news that the supermarkets, AKA "chinos",refuse to sign the price freeze agreement making them sound they like profitable money hoarding Scrooges. Yet I often find the price for The same product in a chino costs HALF than the exact same thing in Coto o Carrefour. Example in a chino: milk $4.50, Frutigram cookies $6.00, ricecakes $6.50, can of lentils $5.50, pickles $12.00. Carrefour: milk $9.00, Frutigram cookies $12.00, ricecakes $10.00, can of lentils $8.50, pickles $22.00. Just stick with the chinos and be sure to check the expiration date on all products. They're still cheaper than the major supermarkets with price freezes. Elevated prices frozen that will probably double when the freeze is over.
 

syngirl

Registered
I thought that the chinos did in the end sign. Anyway a lot of anti-Ks are saying that they've put it through to essentially hold back inflation while they negotiate the paritarias... once negotiations are over govt will loose the reins and everything will go up again (syndicatos are arguing for an augmento to keep up with inflation, if inflation isn't happening, why pay what they're asking).
 

PhilinBSAS

Veteran
Please! Price controls are not new to Argentina - they have appeared before in many guises and at best they have proven to be short term political fixes that havnt worked previously in resolving underlying inflationary pressure.

AND Price controls are fashionable at the moment in south east Asia. And where has Cristina just come back from?

http://www.economist.com/node/10733112

quote


ACROSS Asia inflation is rising, largely because of higher food and energy prices. China's inflation rate surged to an 11-year high of 7.1% in January and looks set to climb further this month, after some severe snow storms. India, Indonesia, Thailand and Singapore all have inflation rates above 4%.

(yes I know that's nothing like the inflation rate in Argentina but that's not the point - if you are desperate for ideas (as K Economics has now become then you will try any trick borrowed from someone else's box whether it is sound or not)

quote continues .....

Central banks are reluctant to raise interest rates by much at the same time as America's Federal Reserve is slashing its rates, for fear this would attract foreign capital and push their currencies sharply higher. Stronger currencies would in fact help to reduce the price of imported food and energy. But instead, many governments are resorting to price controls and government subsides to curb inflation. India has long imposed price ceilings on a wide range of goods. Thailand, Malaysia and the Philippines are considering new price controls or subsidies. In January the Chinese government froze the prices of energy, transport and water, and announced that producers of essential food items, such as meat, grain, eggs and cooking oil must seek approval before raising prices

So major BRICS economies and even China are trying it out as well!! We can expect wider shortages world wide as producers withdraw


BTW There is nothing exclusively "Chicago school" about saying that monopolists can either control price or quantity but not both. This is common currency since Alfred Marshall. In any case Joan Robinson wrote a rather better explanation in her "Imperfect Competition" than Chamberlin did (although that was good too) probably because Joan studied under JMK

And behaviour of Governments is different from behaviour of firms and a "command economy" such as much of China differs in its operation from a "free market economy". Argentina has attributes of both.
 
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