She is a commerce minister, she surely passed Eco 101. But Eco 102?

Worn out lipstick included

Meet Edmée Betancourt.  She is the commerce (and trade?) minster of Venezuela.  I heard that she is rather affable in private but prone to rather outrageous/militant public declarations.  But the one of this week deserve a special consideration because, well, if she really thinks so then she is either an ignorant or sabotaging Chavez.

As you may know, or not, it does not matter, that the regime has decided to go around price controls of essential items by simply deciding that all products must have their cost calculated and the government will decide how much more they can charge.  among the many outrageous declarations on this thing we can mention the one of Juan Carlos Loyo that people will be able to update their cost anytime courtesy of a web page from the government and thus ask for price increases as necessarily.  This in a country of very faulty internet, even faultier official web pages and this coming from a guy who has no qualm in paying countries such as Nicaragua coffee up to100% above Venezuelan coffee which price has remained blocked for years....  But I digress...


The thing is that Edmée thinks that 10% earnings is quite fair.

“Todo esto se tomará en cuenta para poder estimar cuál será el precio máximo de un producto. Por supuesto que habrá un precio determinado de un producto en la matriz de costo. A partir de allí es cuando se fija cuánto será el precio máximo al público. Yo opino que una utilidad razonable de una empresa puede ser de 10%”All will be taken into account to determine what will be the maximum price of a product.  Of course there will be a determined price of a product in a cost matrix (WTF ????? Editor's note).  From there it is that we will fix the maximum price to the public.  My opinion is that a reasonable earning for a business could be 10%. 

Such things cannot be made up....

That you sell a million trinkets or half a dozen heavy machinery in a year, 10% is fine.
That the inflation of a country is 30% does not matter, obviously.  You can absorb the 20% loss of capital.
That banks could pay me more than 10%  interests should not be an incentive to sell my business and put the money in the banks.
And the 10% earnings should certainly be an incentive to keep working, amen of all the fun that can be found battling SENIAT, LOPCYMAT, Inspectoria del Trabajo, Min Ambiente, etc, etc... amen of outright expropriation risks

I better stop.