By Julian Peters Photos @Adobe Stock
Kamala Harris vs Price Gouging/Rationing
NRO reports today that Cuba has cut bread ration from 80 grams to 60 grams per day.
Doesn’t that sound like headline news from the mid 1950s? Not at all, assures Dominic Pino in NRO. It is not news from 50 years ago. It is news of today.
Is This Normal
In Cuba that bread costs about one-third of a cent (about one peso), explains Dominic Pino.
There are private markets in Cuba for bread sold at market rates. The problem is that the average Cuban makes only $15 (4,648 pesos) per month, so he can’t afford to pay even a dollar for bread.
Implications of Kamala’s Potential Presidency
The Kamala Harris campaign unveiled sweeping plans to enact “the first-ever federal ban on price-gouging on food and groceries” in her first hundred days, warns Marc Oestreich in Spectator.
The price ceilings would extend to prescription drugs and into other industries as well, seeking to put a cap on so-called “excessive” profits. If the language sounds familiar, it is. If it sounds troubling, it ought to. If that’s surprising, it shouldn’t be.
A Neoclassical Perspective
Wouldn’t a more nuanced, evidence-based economic view consider technology, entrepreneurial risk, and other inputs in value creation? Call it “capitalist” if you wish, grants Mr. Oestreich. Whatever you call it, it does recognize that wages reflect labor’s marginal productivity, while profits drive investment and innovation, leading to economic growth. Perhaps this notion is too complex for Kamala to embrace.
Back in Cuba, The Flour Tastes Like Acid
Reuters Reports:
Cuba’s ration book, or “libreta,” as it is known among island residents, was once considered a hallmark of Fidel Castro’s 1959 revolution, providing a range of deeply discounted products to all Cubans, including bread, fish, meat, milk, and cleaning and toiletry supplies.
Today, the crisis-racked government offers just a fraction of those products, and often, they arrive late, in poor quality or not at all.
That is the predictable consequence of rationing. If producers can’t charge the market price for a good, they’ll provide quality that matches the level they are allowed to charge.
One-third of a cent is going to be pretty low quality. But don’t worry: “Cuba’s government has said it planned to reinforce inspections at state bakeries to assure quality does not suffer.”
Waging War on Its Citizens
“Beyond the few remaining centrally planned economies like Cuba’s and North Korea’s, rationing is typically only used during wartime, natural disasters or specific contingencies.”
Greater Government Control of the Economy
Reuters, continues Mr. Pino, deserves credit for straightforwardly attributing the decision to “Cuba’s communist-run government.”
Cuba’s poverty is imposed on it by its Communist Party, which has had 65 uninterrupted years in power to figure things out. It hasn’t, because it can’t repeal the laws of economics.
Read more here.
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