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Francisnomics

Popenomics

 

One of the many distressing aspects of the current pontificate is the strong attachment that Pope Francis has to economic nostrums that invariably end in the State largely controlling the economy for the “good of the poor”.  How such ideas have played out disastrously time and again in human history should be obvious to any sentient being.  The latest case study is Venezuela.  Richard Fernandez gives us the bad, albeit unsurprising, news:

 

Pop quiz.  Suppose a whole country decides to live off an imaginary inexhaustible stash promised by its president. One day it runs out of other people’s money and begins to starve. Hospitals start to close. Even the beer runs out. What do you do? What do you do?

According to the International Crisis Group that is the problem the world faces in Venezuela. “Some economists predict a sudden collapse in food consumption and widespread hunger, and public health specialists already say that some surveys are showing chronic malnutrition.”  If the Colossus of the North doesn’t save it, then all hell with break loose.  Can’t let that happen can you?

 
 

Aside from purely humanitarian concerns, Venezuela’s neighbours and the wider international community have pragmatic reasons for acting. If a solid institutional and social welfare framework can be restored through a negotiated settlement, and economic measures taken to deal with inflation and scarcity, a humanitarian crisis can be averted. If not, the collapse of the health and welfare infrastructure is likely to make political conflict harder to manage and could lead to a further erosion of democracy and an increasing likelihood of violence.

This in turn would have an impact beyond Venezuela’s borders. Potential risks include large-scale migration, the spread of disease and a wider foothold for organised crime. Without a change of economic policy, the country is heading for a chaotic foreign debt default, probably in 2016. An unstable Venezuela unable to meet its international commitments could destabilise other countries in the region, particularly Caribbean nations that have come to rely on subsidised energy from Caracas. It would also have a direct impact in Colombia, along a border already under multiple threats.

Venezuela should have been rich what with being the “12th largest oil producer in the world … and a beneficiary of the most sustained oil price boom in history”.  Instead it is flat broke. It’s currency, the Bolivar is worth 1% of its official rate on the black market and 1/1000th of what it was before Hugo Chavez assumed power.
The country may be on the verge of hyperinflation. Most economists reckon that the inflation rate is already 120% a year (the central bank stopped publishing price data, so no one is sure). Some expect it to reach 200% by the end of 2015.

The Bolivar has essentially stopped working as legal tender and now everything is doled out by the state in an effort to make things “affordable”. “The government uses a labyrinthine system of price and exchange controls to shield Venezuelans from soaring prices. But these make matters worse. Price ceilings have devastated local production; factories are operating at half-capacity and more than two-thirds of food is imported. Affordable goods are in short supply.”

The result has been food riots. Desperate gangs of looters are roaming the streets, forcing the remaining businesses to shut down. “One person was killed and dozens were detained following looting of supermarkets in Venezuela’s southeastern city of Ciudad Guayana on Friday morning, according to Venezuelan authorities. Shoppers seeking scarce consumer staples including milk, rice and flour broke into a supermarket warehouse on Friday morning, leading businesses in the area to shut their doors.”

Go here to read the rest.  My late sainted mother taught me long ago the worth of arguments that rest on the authority of the person making the argument:  “Nonsense is nonsense no matter who is saying it.”  Alas, Catholics are learning under Pope Francis that this wise maxim also applies to popes.

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Donald R. McClarey

Cradle Catholic. Active in the pro-life movement since 1973. Father of three and happily married for 35 years. Small town lawyer and amateur historian. Former president of the board of directors of the local crisis pregnancy center for a decade.

14 Comments

  1. “The International Crisis Group foresees an eventual collapse. “To forestall the severe consequences of a humanitarian crisis in Venezuela” it urges the regime to admit its errors and begs the opposition not to exploit the situation for political advantage. ”
    .
    Right.

  2. “This opinion, which has never been confirmed by the facts, expresses a crude and naïve trust in the goodness of those wielding economic power and the sacralized workings of the prevailing economic system.”

    Of course, he has a crude and naïve trust in the goodness of those wielding the power of the State. An opinion which has been disproven by the 20th Century.

  3. Why does Pope Francis distrust the men who are merchants in the market place, but trusts the men who are politicians in govt? Both are men given to concupisence of every sort. Personally I would rather trust the first who admits he wants my money than the second who promises me someone else’s money.

  4. I suspect Francis is a sterling example of how flat the learning curve is amongst a certain type of bourgeois in Argentina (to the country’s detriment). I suspect he’s also a sterling example of the ecclesiastical economy attracts and nurtures and certain character type (see the fictional Harold Skimpole). The state comprehends a set of social relations, as do private firms, as to philanthropies and voluntary associations, as do households. What transpires between them is also a set of social relations. It does not occur to Francis that the state in Latin America is not nurtured properly as a matter of policy nor does policy provide for the state to focus on and meticulously execute the tasks proper to it (which do not include much in the way of capital allocation beyond construction and maintenance of public works). So, you have an apparat and court system which cannot reliably delineate real property titles and enforce those titles while at the same time building public housing, ruining housing markets with price controls. You have a regulatory regime which is so rococo and promiscuous (but so haphazard in its enforcement) that you bifurcate the private sector into a set of informal off-the-books enterprises and a set of legal enterprises who keep up their political connections at all costs. You run large public sector deficits because your inclination to put swaths of the populace on state patronage well exceeds your capacity to collect taxes. And, of course, you have horrendous quanta of street crime most places. The homicide rate in Brazil is 5x what it is in the United States and 20x what it is in Britain. Francis is dead to this and instead talks like a clueless opinion journalist.

    http://thinkprogress.org/economy/2013/11/26/2997451/pope-francis-trickle/

  5. What’s also interesting is that you hear these throwaway lines out of Francis without the slightest acknowledgement that you cannot find on the globe a political economy of which Ayn Rand would approve. Every advanced economy is a mixed economy of some sort, as are the more affluent 3d world societies like Argentina, and the main thing that’s lacking throughout much of the rest of the world is production itself and not redistribution.

  6. The Bolivar has essentially stopped working as legal tender and now everything is doled out by the state in an effort to make things “affordable”. “The government uses a labyrinthine system of price and exchange controls to shield Venezuelans from soaring prices. But these make matters worse. Price ceilings have devastated local production; factories are operating at half-capacity and more than two-thirds of food is imported. Affordable goods are in short supply.”
    .
    This paragraph could apply equally to Obamacare. Statists and their silly and costly Utopian dreams.

  7. I remain stunned that a Pope espouses a demonstrably dangerous ideology and does so in complete disregard of Catholic teaching, in disregard of and contradiction to his many predecessors, in disregard of history, and in disregard of the economic and political facts of life. I can’t help but wonder and ask what he was doing all those years in Argentina. Was he living without a concern about what the Popes had said about Marxism and liberation theology, or worse, was he undermining Church teaching? There may be many reasons why the Church is in complete free fall throughout South and Central America, and we may be seeing one of them in the person of this Pope.

  8. I remain stunned that a Pope espouses a demonstrably dangerous ideology

    I doubt Francis is a systematic thinker, unless you regard the habit of viewing social relations as an injury done by one party to your preferred clientele as a ‘system’.

  9. That quote from Pope Francis with his photo is a keeper.

    As long as we avoid defining economic “justice” as “equality” and avoid a universalist definition of inclusiveness, we can safely state that we HAVE seen that statement as having been “confirmed by the facts”. It just hasn’t been confirmed in the country that Francis grew up in, due to corruption. The problem is that Francis cannot conceive of any economic activity that is not corrupt, and he has some idea that democratic control of the economy lessens the effects of corruption. Neither is of course true.

  10. I remain stunned that a Pope espouses a demonstrably dangerous ideology

    I doubt Francis is a systematic thinker, unless you regard the habit of viewing social relations as an injury done by one party to your preferred clientele as a ‘system’.

    AD—agree but I did not mean to suggest any prog/statist/Marxist/lib/dem was a systematic thinker. Systematic destroyer, yes; thinker… not borne by the evidence. 🙂

  11. Has PF not heard of Communism & it’s effect on “The Poor?”

    is it possible to send PF a copy of the book entitled “The Black Book of Comunism”?

    A conservative estimate of “The Poor” killed under those Communist countries in the 20th Century (the form of govt he apparently loves & thinks is pleasing to God) is 100 million.

  12. I am with Art Deco on this: P Francis, the “sterling example of how flat the learning curve is”—actually among our treasured ecclesiastical elites, the Society of Jesus.

    But in particular, some (I count myself) have been harping from shortly after his announced election that this man is highly under-educated for his position and seriously lacking in critical/analytical skills and knowledge to lead the CC. From the beginning, his claim of having an elite Ph.D from Frankfurt’s Sahnkt Georgen Theologate was a fabrication. Several of our elite order stoutly maintained this untruth far too long: so it was asked to see a link to, or a place to obtain through inter-library loan, his doctoral thesis. Gar nichts, rien, nada, niets. JP2’s, BXVI’s, just about all the recent popes’ doctoral works can eventually be obtained and verified. P Frantic? Global-climate-changing hot air.

    Someone like this who is at the helm of the ship with no real qualifications and no insight into what he is doing predictably will (1) rely on opportunistic “brainy guys” (Kasper, Marx, are you there?) and (2) will claim transcendental “visionary” status—to levitate above and out of reach of anyone rationally examining his claims. Laudato Si especially conveys this: as others have pointed out, in LS, when the pontiff quotes Great Universal Apodictic Truths about global climate-change, he provides zero source quotes. Visionaries don’t need to quote facts, troglodyte!
    ….
    Where this is going can be predicted: The whole Francis-cult, already crashing down, is convincing the most moderate Catholics to take flight: “This is a bad dream: wake me later. ” He stands to become more and more isolated with his same mantra-repeating like-thinker buddies, especially since socialists, lacking self-critical capabilities, predictably redouble their efforts when their outcomes fail. And the last thing he can be expected to do is to sincerely reach out and build bridges to those Promethean Pelagians he so fiercely and de jure has rejected. I have taken to calling him, “P Paul VII”.

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