Venezuelan Government Confiscates 4 Million Toys Right Before Christmas

11 Dec

This week, I was teaching my Economic Law and Int’l Economics students about the dangers of Government Mismanagement of resources as one of 6 leading causes for economic collapses. Then this article came out as a perfect demonstration!

Venezuela is desperately in need on businesses to increase its economy. Now, thanks to this move, while poor children might enjoy it for a bit – the long term results are not promising. The company, with no profits for Christmas, will likely employ much fewer workers for the holiday and may in fact fire several. It is also possible that they will go bankrupt. Thus resulting in more poor children (demand) and an even smaller supply of toys. Which means both more poverty and likely higher prices. Even my students with an elementary economics-background were able to say “the government has poor long-term vision”

“Venezuela seizes almost 4mn toys to distribute among poor children at Christmas”

Members of the Venezuelan national guard stand next to boxes full of confiscated toys in a warehouse in Caracas on December 9, 2016. © Federico Parra

“Venezuelan authorities seized 3.8 million toys from one of the country’s main distributors, accusing it of hoarding and hiking prices. They promised that the seized goods would be distributed among poor children.

Venezuela’s country fair pricing watchdog Sundde seized toys that distributor Kreisel kept in three warehouses located in Caracas and Guarenas on Friday, local media reported.

Meanwhile, authorities ensured local supply committees (CLAPs), created in April, would distribute subsidized food and commodities, to “fairly” spread the confiscated toys among poor children.” . . . .

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