How to keep inflation under control, Econ 101

This cartoon is from today’s El Diario. Current Economics Bolivian minister is walking inside a supermarket and prices around him show the before and after changes!

He is saying: “…it just take someone from the government to pronounce that little word starting with G… and they rise all without control..!…” The G word is for “gasolinazo” a Bolivian word that reflects the uncertainty, speculation and driving most prices up back in December 2010. Bolivian people rioted, specially the social movements that support current government, forcing them to cancel the sudden increase in the prices of gasoline, natural gas and diesel; which they continue to be subsidized.

So, how to keep inflation under control??? first do this, and it is completely doable, it does not require real or honorific university degrees or any other type of skills… just keep you mouth shout! And you will have controlled speculation and the first battle against inflation will be accomplished; citizens do not need extra stress…

It can be argued that subsidies are wrong and Bolivia needs to solve that problem, fine. The thing is the government has to be responsible, to enforce a doable decision and release and absorb the impact. Governments are there to enforce the law and look after citizen’s well-being over the long-run, not to be friends or mild public servants.

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