Some 75,000 unionists, farmers and leftists marched to protest price increases in basic foodstuffs like tortillas, a direct challenge to the new president's market-oriented economic policies blamed by some for widening the gulf between rich and poor.OK, so President Calderon supports the free market and thereby opposes price controls. Yet notice how the third paragraph offers only one justification for Calderon's position: it gives agribusiness larger profits (which allegedly hurt the poor).
Since taking office Dec. 1 after a disputed election, President Felipe Calderon has drawn his greatest criticism for failing to control the largest price spike in tortillas in decades. Tortillas are a staple of poor Mexicans' diet.
The national uproar has put him in an uncomfortable position between the poor and some agribusiness industries hoping to profit from the surge in international corn prices, driven mostly by the sudden explosion of the U.S. ethanol industry. A free-market advocate, Calderon has said he does not want to return to direct price controls enforced by many former Mexican presidents.
What about the fact that the "sudden explosion of the U.S. ethanol industry" is due to government mandates and subsidies, and that these mandates and subsidies coercively steer producers away from fulfilling market demands and instead push them toward fulfilling government demands? Don't misguided government mandates hurt the poor?
What about the fact that price controls discourage production and thereby encourage shortages by mandating that a good be sold at below market rates? Don't shortages hurt the poor?
What about the fact that the abolition of price controls will lead to an increase in production-an increase that creates jobs? Doesn't the creation of new jobs help the poor?
And what about the fact that the lure of new profits compels participants to learn how to be more efficient (and thereby reduce prices), rather than simply troll about for the government-set price? Don't decreasing prices help the poor?
There are a host of critical points about the impact of price controls upon people's lives, yet this news article fails to consider any of them. So what then does it consider?
High tortilla prices put some Mexicans in danger of being malnourished.Does this information offer any information or insight as to what the government of Mexico should do with its price controls? Does the reporter even think it is relevant to present economic evidence in his story beyond that the poor are poor? Apparently not, yet this is what often passes for news reporting these days.
The poor eat an average of 14 ounces of tortillas daily, giving them 40 percent of their protein, according to Amanda Galvez, who runs a nutrition research institute at Mexico's National Autonomous University.
With the new prices, workers earning the minimum wage of about $4 a day could spend a third of their earnings on tortillas for their family.
"Some people can switch to more unhealthy alternatives. Others just go without," Galvez said.
It's no wonder Latin America is lurching toward the left; free market ideas (let alone their moral base) don't even show up on the radar screen.