Venezuela Enacts ‘Fair Prices Act’

The socialist economic insanity continues down in Venezuela. The government has enacted the “Fair Prices Act” which is sure to just add to the economic misery. Profits over 30% are prohibited and there’s now an 8 to 10 year prison sentence for hoarding.

The following is a translation from El Economista:

The Fair Prices Act, an instrument with which the Government of Nicolas Maduro intends to control prices and eliminate shortages, includes a ban on profit margins over 30%, with penalties of up to 10 years imprisonment for hoarders.

The law passed in November, and the Supreme Court ratified the law yesterday.

The law, published in Official Gazette, states that the profit margin will be established annually “addressing scientific criteria” by the National Superintendency for the Protection of Socio-Economic Rights (SUNDDE).

The law provides for the application of preventive measures and sanctions such as confiscation, temporary occupation of premises or property, the temporary closure of an establishment or suspension of licenses and the “immediate adjustment” price.

In the section of the law regarding hoarding, those who “restrict supply, circulation or distribution of regulated goods or cause distortions in prices, shall be punished with imprisonment judicially 8 to 10 years.”

The law also provides for fines ranging from 107,000 bolivars ($17,000) to 5.3 million bolivars ($850,000).

SUNDDE will “fix maximum prices for the production or importation, distribution and consumption according to their importance and strategic nature for the benefit of the population as well as the technical criteria for assessing the levels of exchange equitable and fair of goods and services.”

What could possibly go wrong? Mish Shedlock has an idea:

Under this preposterous measure, no companies will be able to import and sell goods at anything but a loss. Expect all goods and services to vanish soon.

What little they had left. They already struggle with shortages of basics like toilet paper, this will just make everything worse.

Let’s just hope this doesn’t give President Obama and ideas. He has a pen and a phone, you know.