It is painful to see a venerable superstition dying a hard death. I am of course referring to the superstition of socialism. Since the 19th century socialism has had an iron hold of the mentalities of many elites, and would be elites, in most nations around the globe. Wherever it has been tried it has proved damaging to economies and where its attempts have been extreme enough the socialist economies prove to be productive only in producing mass poverty. The latest example of this is in Venezuela, currently undergoing riots, as Maduro, Chavez’s successor, oversees an economy in free fall and desperate protestors take to the streets at the risk of murderous repression at the hands of Maduro’s thugs. Richard Fernandez at PJ Media tells us how bad the economy has become in Venezuela:
The suddenness of Venezuela’s collapse should have come as no surprise because downfalls are inherently abrupt. Collapse is a phase change. One moment something is sailing along fat, dumb and happy and the next moment it is sinking beneath the waves. The change from two to one is a loss of 50%; but the change from one to zero is binary.
So it was in Venezuela. Imagine waiting two years to buy a car and finding just when you thought you finally buy one that there are no cars for sale at all.
Leonardo Hernandez had hoped to buy a new car this year, ending nearly two years of waiting on various lists at different dealerships throughout the country.
Those hopes were dashed last week when Toyota Motor Co. said it would shut down its assembly operations in Venezuela due to the government’s foreign exchange controls that have crippled imports and made it impossible to bring in parts needed to build its vehicles.
The country’s other car manufacturers, including General Motors and Ford, haven’t even started operations this year, while waiting for needed parts to arrive.
Think of not being able to buy soap, rice or toilet paper or order a cup of coffee, where even the rich are feeling poor. “In the serene private clubs of Caracas, there is no milk, and the hiss of the cappuccino machine has fallen silent. In the slums, the lights go out every few days, or the water stops running. In the grocery stores, both state-run shops and expensive delicatessens, customers barter information: I saw soap here, that store has rice today. The oil engineers have emigrated to Calgary, the soap opera stars fled to Mexico and Colombia. And in the beauty parlours of this nation obsessed with elaborate grooming, women both rich and poor have cut back to just one blow-dry or manicure each week.”
Imagine there’s no money to keep up the sovereign bond payments, the only source of money to keep power plants going. Continue Reading