You’d still be wrong

December 9, 2013

…if you thought "the lessons from letting governments mismanage economies would be apparent to people by now and that they wouldn’t let their governments try that" (as I wrote six months ago).

This article from The Christian Science Monitor reports that the Venezuelan government is still trying to micro-manage the country’s economy in the usual statist manner. That is, by force and the threat of force: "levying hefty fines and even jail time on venders who don’t comply with government-approved prices." (My emphasis below.)

Venezuela: where used car salesmen are king?

For the past nine months, Luis Medina, a building caretaker, has scoured new car listings, searching for a light truck or SUV. Despite having the cash in hand, he’s regularly turned away from dealerships due to years-long waiting lists.

“At this point it’s whatever’s available,” he says.

New cars in Venezuela have become something of a rarity, yet many like Mr. Medina balk at the thought of buying used. “They’re far too expensive for what they’re worth,” he says.

The premise may leave car enthusiasts in other parts of the world scratching their heads, but vehicles actually gain in value in Venezuela – as soon as they’re driven off the new or used lot. Shortages and government-mandated currency controls have led to higher preowned car prices, as many consumers are desperate to find a vehicle.

On TuCarro.com, a popular used car website, a secondhand 2012 Jeep Grand Cherokee is more than double the price of a new one. Similarly, five-year-old Ford Fiestas and Explorers easily match factory sticker prices.

But in a move to protect consumers, Venezuela’s National Assembly has sought to throw the brakes on soaring car costs. Last month, a bill was passed that, if signed into a law by President Nicolás Maduro, would attempt to regulate both new and used car prices, levying hefty fines and even jail time on venders who don’t comply with government-approved prices.

As though the poor citizens of Venezuela don’t have it bad enough with 45% inflation, now they’re probably facing price caps when selling used cars — as though the boys in Caracas have all the used car angles figured already.

When do you think the Venezuelan government will figure out that citizens are both consumers (buyers) and producers (sellers) in a used goods market? I haven’t met many people who’ve bought used cars but never sold any. Have you?

Will the Venezuelan government ever make that connection? Or will it be too proud of its new law to ‘protect consumers’ to notice that today’s buyer is tomorrow’s seller?

Speaking of the Venezuelan government, I wonder how its campaign against that nasty toilet paper conspiracy turned out?


  1. […] last post about Venezuela concerned how the statists running the country were planning to micro-manage the used car […]

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