Have High Inflation? Simply lower Prices!

[Ice]

http://www.cnn.com/2007/WORLD/africa....ap/index.html

Spoiler Alert, click show to read: 

Thousands arrested in Zimbabwe for not cutting prices

HARARE, Zimbabwe (AP) -- Nearly 5,000 store owners, managers and business executives have been arrested since the government began its campaign to slash prices last month, state media reported Thursday.

The government ordered that prices be slashed by around 50 percent to curb inflation, officially at 4,500 percent but estimated to be twice as high.

Already scarce staple foods, gasoline and many basics have disappeared from shelves because store owners say they can't afford to sell at the new low prices.

The Herald newspaper said that at least 23 owners and managers of shops and gasoline stations had been arrested for overcharging Wednesday, bringing the total to 4,926.

A senior police official, Bothwell Mugariri, told the newspaper -- a government mouthpiece -- that the latest to be arrested were rounded up in Harare's central business district and would appear in court Friday.

Most of those arrested -- among them several of the country's top businessmen -- have been briefly jailed.

President Robert Mugabe told parliament Tuesday that his government was committed to its program to restore "price stability" and protect ordinary consumers from "inexplicable and astronomical" price increases by profiteers.

Foreign investment, loans and development aid to Zimbabwe have dried up amid years of political and economic turmoil after Mugabe's government began often-violent seizures of thousands of white-owned farms in 2000.

Mugabe rejects criticism that the meltdown is the result of mismanagement and instead blames Western sanctions.

Their finance minster really needs to be fired.

[Big King Sanctaphrax]

Isn't this what you lot did to try and sort out your inflation in the seventies? I'd love to comment more, but I'm not really that up on economics.

Out of curiosity, what would you do if you were the Zimbabwean finance minister?

[Xiahou]

http://www.cnn.com/2007/WORLD/africa....ap/index.html

Spoiler Alert, click show to read: 

Thousands arrested in Zimbabwe for not cutting prices

HARARE, Zimbabwe (AP) -- Nearly 5,000 store owners, managers and business executives have been arrested since the government began its campaign to slash prices last month, state media reported Thursday.

The government ordered that prices be slashed by around 50 percent to curb inflation, officially at 4,500 percent but estimated to be twice as high.

Already scarce staple foods, gasoline and many basics have disappeared from shelves because store owners say they can't afford to sell at the new low prices.

The Herald newspaper said that at least 23 owners and managers of shops and gasoline stations had been arrested for overcharging Wednesday, bringing the total to 4,926.

A senior police official, Bothwell Mugariri, told the newspaper -- a government mouthpiece -- that the latest to be arrested were rounded up in Harare's central business district and would appear in court Friday.

Most of those arrested -- among them several of the country's top businessmen -- have been briefly jailed.

President Robert Mugabe told parliament Tuesday that his government was committed to its program to restore "price stability" and protect ordinary consumers from "inexplicable and astronomical" price increases by profiteers.

Foreign investment, loans and development aid to Zimbabwe have dried up amid years of political and economic turmoil after Mugabe's government began often-violent seizures of thousands of white-owned farms in 2000.

Mugabe rejects criticism that the meltdown is the result of mismanagement and instead blames Western sanctions.

Their finance minster really needs to be fired.

Price controls eh? Yeah, they always work out so well.

[AntiochusIII]

Out of curiosity, what would you do if you were the Zimbabwean finance minister?

Fly a Messerschmitt to Scotland at first opportunity.

Mugabe's a madman. 'Nuff said.

[Crazed Rabbit]

Out of curiosity, what would you do if you were the Zimbabwean finance minister?

Get rid of all price controls, get Mugabe to stop the sanctions by not being such a brutal dictator, and plead for temporary help from the west, emphasizing that it's to help the starving people, not Mugabe.

CR

[Ice]

Get rid of all price controls, get Mugabe to stop the sanctions by not being such a brutal dictator, and plead for temporary help from the west, emphasizing that it's to help the starving people, not Mugabe.

CR

Pretty much.

[Big King Sanctaphrax]

Oh. It's that simple? I thought there'd be some sort of complicated solution involving interest rates and increasing exports. Or something like that.

[Xiahou]

Oh. It's that simple? I thought there'd be some sort of complicated solution involving interest rates and increasing exports. Or something like that.

Well, some respect for personal property might help too.

[Lemur]

Their finance minster really needs to be fired.

If you've been following Zimbabwe's implosion, then you know that the finance minister is the least of their problems.

[Ice]

Oh. It's that simple? I thought there'd be some sort of complicated solution involving interest rates and increasing exports. Or something like that.

That would also work. Increase interest rates to point where no one can afford anything and money becomes scarce. Of course, people won't be able to buy anything, but inflation would be gone!

That would actually decrease exports and increase imports. A stronger currency makes other countries' goods look more attractive to people in Zimbabwe.

[Ice]

If you've been following Zimbabwe's implosion, then you know that the finance minister is the least of their problems.

Good article, Lemur. It actually appears that leader of their central bank has a half a brain in his head.

Inflation, officially estimated at more than 3,700%, may actually be twice as high.

So President Robert Mugabe has decided to try to do something about the galloping prices of basic goods. Ignoring protests from Gideon Gono, the governor of the central bank, Mr Mugabe, who famously despises “bookish economics”, has sent the police in to order shopkeepers to slash their prices, forcing them to sell at a loss.

"Bookish Economics" LOL. I love when people don't understand how an economic system works, so they just dismiss it. Priceless.

[AntiochusIII]

"Bookish Economics" LOL. I love when people don't understand how an economic system works, so they just dismiss it. Priceless.

I don't think presenting Mugabe as the same as most average people who "dismiss [economics]" is quite fair to the latter. I mean, the guy is a Pol Pot -- imagine a country deprived of 1/4 of its population solely by the actions of its own government!

He's running a classic dictatorial modern terror state and nobody really tries to do anything. South Africa is even guilty of trying to protect him and excuse what amounts to crimes against humanity. Idiotic economic decisions by the Great Leader are probably only a drop in an ocean of incredible human incompetence and criminality.

About the topic: Price Controls are actually in place in many ways for many countries and many issues and sometimes they are beneficial. I'm quite aware you and Xiahou are relatively laissez-faire capitalists in viewpoint and probably disagree with me on this though. Unfortunately, an economy is a delicate thing, and most people in charge are smart enough to know that measures taken have to be gentle nudges here and subtle incentives there. The heavy-handed shoot-the-nonbelievers tactics of the Mugabe regime is unfortunately altogether too characteristic of what one would expect of him.

It's like watching The Last King of Scotland in real life really.

[HoreTore]

About the topic: Price Controls are actually in place in many ways for many countries and many issues and sometimes they are beneficial. I'm quite aware you and Xiahou are relatively laissez-faire capitalists in viewpoint and probably disagree with me on this though. Unfortunately, an economy is a delicate thing, and most people in charge are smart enough to know that measures taken have to be gentle nudges here and subtle incentives there. The heavy-handed shoot-the-nonbelievers tactics of the Mugabe regime is unfortunately altogether too characteristic of what one would expect of him.

For proof on how price control can be beneficial I can simply take a look at my own electricity bill from this winter, and compare it to my parents bill from around 5 years ago...

[Brenus]

“Fly a Messerschmitt to Scotland at first opportunity” and died in jail for crimes which started after you fled because you took part of the process which made them possible… Been done and tested… No future…

[cegorach]

BTW Didn't Zimbabwe got the leadership of UN commision of sustainable development quite recently ??

[AntiochusIII]

“Fly a Messerschmitt to Scotland at first opportunity” and died in jail for crimes which started after you fled because you took part of the process which made them possible… Been done and tested… No future…

Haha, true that. I suppose you could try and stay and keep your head down, do what the Great Leader says and keep your sensitivities out. Then after the regime implodes writes a book on how you really really weren't involved in screwing your people in catastrophic proportions.

- Antiochus, Godwin Law's advocate since 2007

[Ice]

About the topic: Price Controls are actually in place in many ways for many countries and many issues and sometimes they are beneficial. I'm quite aware you and Xiahou are relatively laissez-faire capitalists in viewpoint and probably disagree with me on this though. Unfortunately, an economy is a delicate thing, and most people in charge are smart enough to know that measures taken have to be gentle nudges here and subtle incentives there. The heavy-handed shoot-the-nonbelievers tactics of the Mugabe regime is unfortunately altogether too characteristic of what one would expect of him.

You assumed wrong if you believed I was relatively laissez-faire. Price Controls are needed somewhat, but nothing near to what this man is imposing. Price controls used to an extreme, like this man is using, creates shortages.

I'm probably moderate when it comes to the economy.

[Slyspy]

BTW Didn't Zimbabwe got the leadership of UN commision of sustainable development quite recently ??

I believe so. This seems to be in the hope that by involving them some good advice may rub off on them and is not, so far as I can see, that unusual.

[Marshal Murat]

I like the part about factories being kept open to keep up production. Unconventional.
The massive need of the people of Zimbabwe will encourage imports, since there has been this massive vacuum of products. How about the government compensates the difference instead of paying for an army?

Then again, I didn't pay attention in math and have no working knowledge of economics.