Feb

18

Tax, Regulate & Squander

Filed Under Economics, Global, Socialism 

Hugo Chávez’s Venezuela, the modern test tube of the new socialism, which is oddly the same as the old socialism. One more try to prove that socialism just might work if only the right man is in charge. HA!

Let’s check the progress since Mr. Chávez’s December re-election victory and his new dictatorial powers.

INFLATION: “Inflation has climbed to an annual rate of 18.4 percent a year in January” and “the bolívar, the country’s currency, fell more than 30 percent to about 4,400 to the dollar in unofficial trading following Mr. Chávez’s nationalization of Venezuela’s main telephone company, CANTV, and its largest electric utility, Electricidad de Caracas.”

Like a true dictator, Chavez has made “vague threats issued to newspapers that publish unofficial currency rates (officially the bolívar is quoted at about 2,150 to the dollar).”
That’s rule one of socialism…never let the truth get out no matter how bad things get. Threats of physical violence or incarceration are perfectly normal and legal in a authoritarian regime. He learned that from Stalin I think.

FOOD SUPPLY: Major food stuffs remain in short supply due to price controls. Price gougers are threatened with jail. “Shelves are fully stocked with Scotch whiskey, Argentine wines and imported cheeses like brie and Camembert”, but who can afford those with their devalued bolivar’s? But good news, “the government’s own Mercal chain of subsidized grocery stores, are left with choices like pork neck bones, rabbit and unusual cuts of lamb.” Yummy!

Chavez solution: “Appearing live on national television, he called for the creation of “committees of social control,” essentially groups of his political supporters whose purpose would be to report on farmers, ranchers, supermarket owners and street vendors who circumvent the state’s effort to control food prices.” Nothing like having spies to rat on their neighbors for trying to make a living. Sounds like those price gouger hot lines that some US politicians set up after hurricane Katrina.

Great quotes:
“This country is going to turn into Cuba, or Chávez will have to give in” - Cándida de Gómez, 54, a shopper at a private supermarket in Los Palos Grandes

“If I don’t sell at the regulated price they’ll fine me, and if I don’t sell meat I’ll be out of business” – unidentified butcher shop owner (for obvious reasons)

TAXES: To help alleviate high food costs, Chavez will remove taxes on food sales, which will “deprive the government of more than $3 billion in revenues.” But have no fear, “he said tax increases on luxuries like beach homes and yachts would make up for part of the shortfall.” I think he learned that from American Democrats, if you screw up things with bad economic policies, tax the rich and hope for the best.

GOVERNMENT SPENDING: The Chavez NEW DEAL continues, squander your nations wealth on public works projects, subsidizing, cartelizing and nationalizing industries. FDR must be smiling from his grave. Great Depression here we come!

Great Quotes:
“It is surreal that we’ve arrived at a point where we are in danger of squandering a major oil boom,” and “If the government insists on sticking to policies that are clearly failing, we may be headed down the road of Zimbabwe.” says José Guerra, a former chief of economic research at Venezuela’s central bank.

Regardless of all these troubles, “Mr. Chávez, whose leftist populism remains highly popular among Venezuela’s poor and working classes, seemed unfazed by criticism of his policies.” That’s another trick he must have learned from Washington congressman, to remain in power, buy your voters with entitlements.

Thanks to the New York Times for this story.
Commentary by me

Comments

2 Responses to “Tax, Regulate & Squander”

  1. Kevan Gilbert Online » Blog Archive » Venezuela is breaking down on February 21st, 2007 8:12 pm

    [...] The New Liberty, with help from the New York Times, talks of how Chavez is taxing, regulating and squandering Venezuela. [...]

  2. Kaylynn Carlsen on June 14th, 2007 9:34 am

    This one makes sence “One’s first step in wisdom is to kuesstion everything - and one’s last is to come to terms with everything.”

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