Venezuela is reaching the end point of socialism: economic collapse. Its government, headed by Hugo Chavez’s successor and acolyte Nicolas Maduro, has followed the classic left-wing playbook, with the result, inter alia, that you can no longer buy toilet paper in Venezuela. Producing such a complex product evidently is beyond the capacity of the state.
Naturally, Venezuela suffers from rampant inflation, currently running at over 50% annually. So the government has imposed price controls. With an election impending, President Maduro has vowed to intensify enforcement of penalties for “price gouging.”
Venezuela’s President Nicolas Maduro said a stricter wave of inspections for suspected price-gouging would begin on Saturday in an aggressive pre-election “economic offensive” aimed at taming the highest inflation in the Americas.
“We’re not joking, we’re defending the rights of the majority, their economic freedom,” Maduro said on Friday, alleging price irregularities were found in nearly 99 percent of 1,705 businesses inspected so far this month.
Maduro, who has staked his presidency on preserving the legacy of late socialist leader Hugo Chavez, launched a theatrical – and often televised – wave of inspections this month to force companies to reduce prices.
He says “capitalist parasites” are trying to wreck Venezuela’s economy and force him from office.
I suppose they are actually trying to stay in business, but undoubtedly one of Venezuela’s biggest problems is a shortage of “capitalist parasites.” Don’t laugh, it could happen here, too.
“The inspections are continuing daily and have let us see into the under-world of capitalism,” Maduro said in his latest speech to the nation, warning of severe sanctions starting Saturday against businesses maintaining unjustifiably high prices.
Government officials say companies have been marking up prices by as much as 1,000 percent over cost, though many retailers say they have been forced to hike prices sharply due to lack of access to foreign currency at the official rate.
“Cost” equals cost at the official exchange rate. However, you can’t obtain hard currency or foreign goods at the official exchange rate since it is a fiction dictated by the Venezuelan government; nor can you buy much of anything in Venezuelan currency because Venezuela’s economy can’t produce much. More:
And in another populist move, the president said interest rates for savers on low incomes would be hiked to 16 percent, from 12.5 percent currently.
“This is just a first step to reward savers,” Maduro said.
Great reward! Inflation at 54%, interest at 16%. Yes, that’ll work!
None of this is hard to figure out. The amazing thing is that there are apparently are still Venezuelans willing to vote for economic collapse:
Having narrowly beaten opposition candidate Henrique Capriles to win April’s presidential vote, Maduro and his supporters are gearing up for a new test at the polls with nationwide municipal elections on December 8.
The opposition is painting the vote as a referendum on Maduro’s record, but any voter backlash over the economic problems may be tempered by his recent populist measures.
It is easy to laugh at a government as dumb as Maduro’s, but these days the laughter may be a little uneasy. One wonders: is Barack Obama’s goofball approach to health care much different from Nicolas Maduro’s theory of toilet paper production? Democrats have already begun denouncing “greedy, overpaid doctors.” Obamacare’s arithmetic doesn’t add up, which means that price controls can’t be far behind. So let’s not be too quick to laugh at the Venezuelans.