Juan Cristóbal says: – One of the most frustrating aspects of watching the (in)action of the Venezuelan opposition is that nobody seems to make an eloquent case for freedom. Ultimately, what the government’s policies boil down to is a complete and utter takeover of the freedom of Venezuelans, freedoms one Simón Bolívar, born 226 years ago today, gave his life to secure. Can there be anything less Bolivarian than stripping Venezuelans of their basic rights? Case in point: the current discussion regarding the proposed Law for the Car Sector.
In case you haven’t heard, the government is now discussing a law whereby it will regulate (and I mean really, really regulate) the prices and profits that car dealers can make. Currently, getting a car in Venezuela takes months of waiting and bribing. Typically, you don’t have a choice on the type of car, the features, or the color – once your number is up, you buy what you can get.
Hell, there is even a scam going on between dealers and banks. If you don’t work through the bank the salesman gets a commission from, you’re essentially placed at the bottom of the list. This happened to my brother, who wanted to pay for his car in cash and had the door slammed in his face.
All this is the product of heavy regulation. From the import permits to get the parts to the dollars needed to buy them, from the wages your workers make to the gas that goes into the car – every single step of the process of buying and owning a car is regulated. And the auto sector is in crisis. Coincidence?
Well, the government’s response to the crisis is, unsurprisingly, more regulation. With this new law, the government will set dealers’ margins at 15% of the wholesale price (this in a country with rampant inflation). It will also ban the resale of a car within two years of having bought it, and if you get caught, you will have to pay a huge tax.
Gas, meet fire. Any eight-year old can understand this creates a whole series of perverse incentives. The likely product of these policies ranges from a black market of car registration to an increase in car theft.
And yet all these arguments against this policy fall somewhat short because they miss the basic point: this is an unacceptable takeover of the basic rights of Venezuelans. Because when the government forbids you to sell something that is rightfully yours, we are all less free, and we are all poorer.
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