Argentina just announced price controls. Yet, common sense alone is all it takes to know that price controls cannot work. For example, if government sets prices too low, suppliers will not sell merchandise at a loss, and shortages will appear. It will not matter one bit what the official prices is, because it will be impossible to get merchandise at deep discounts to true market prices. It's as simple as that, yet politicians think they can halt the incoming tide by decree. Please consider Argentina Freezes Prices to Break Inflation Spiral.
Argentina announced a two-month price freeze on supermarket products Monday in an effort to stop spiraling inflation. The price freeze applies to every product in all of the nation's largest supermarkets — a group including Walmart, Carrefour, Coto, Jumbo, Disco and other large chains. The companies' trade group, representing 70 percent of the Argentine supermarket sector, reached the accord with Commerce Secretary Guillermo Moreno, the government's news agency Telam reported. The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1. Polls show Argentines worry most about inflation, which private economists estimate could reach 30 percent this year. The government says it's trying to hold the next union wage hikes to 20 percent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 percent.
