Lessons for America From Hugo Chavez, Economist

Lessons for America From Hugo Chavez, Economist

Venezuelan President Hugo Chavez has decided to devalue his country's currency and impose price controls. These actions will provide U.S. politicians, economics professors and the public with a textbook demonstration of how bad government policies hurt consumers.

In early January, the Chavez government announced that it was devaluing the Venezuelan currency against the U.S. dollar. The bolivar is on a fixed exchange rate, meaning that the government determines how many U.S. dollars it officially trades for. The official exchange rate had been 2.15 bolivars per dollar, but now the Chavez government will allow international trades at a rate of 4.3...