Puerto Rico and the USA could become like Venezuela’s socialist “victory”

Socialism has “won” in Venezuela, but look at how the people have lost, other than a small number of corrupt government officials and their cronies who enriched themselves.  This is happening in the US too, over time as the country slowly continues its shift to the left.  As the saying goes, people who forget history, are doomed to repeat it.   This story of Venuzuela’s government killing its people is out there.  However, the American media isn’t giving it the attention it deserves as it isn’t tying it to the future of the US, as the US continues marching in the wrong direction with more government control and less individual freedom.   What happened in Venezuela didn’t happen overnight.  It started with Maduro, continuing with Chavez, over a number of years.   A similar situation is happening in the USA, but on a slower pace, as “the rich” are demonized and more Socialist redistributionist policies like the Unaffordable Care Act, aka Obamacare, are institutionalized.  This slide into the abyss has happened much faster in Puerto Rico than the rest of the USA as the welfare state has grown to be so large in Puerto Rico, strangling the economy.

To those who think what has happened in Venezuela cannot happen in the states are kidding themselves, denying reality, and are failures at history.  You should read the comments at the end, as well.

http://www.wsj.com/articles/venezuelas-hunger-is-no-game-1462738401

Venezuela’s Hunger Is No Game

Inflation hit 180% in late 2015. Little food is available, and most people can’t afford it.

The line to buy basic food items at a supermarket in Caracas, Venezuela, April 28.

The line to buy basic food items at a supermarket in Caracas, Venezuela, April 28

Mary Anastasia O’Grady

May 8, 2016 4:13 p.m. ET

271 COMMENTS

In his craving for power, the late Hugo Chávez pledged to redistribute Venezuela’s wealth to the poor masses. The god-father of “21st-century socialism” seems to have been unaware that the resources he promised to shower on his people had to first be produced.

Fifteen years into the Bolivarian revolution, Venezuela is facing dire food shortages. A crisis may still be averted—but only with a sharp reversal of the policies that have destroyed the country’s productive capacity. A nation either has to produce what it consumes or must import it. What it imports is paid for with foreign exchange from exports or debt.

Venezuela has long relied on oil dollars to pay for imports. But it also has grown corn, sorghum and rice, and it has had cattle, poultry and fishing industries. Now the nation is in trouble not only because of lower oil revenues and institutionalized corruption but also because government policies have badly damaged domestic production.

Among the many stupidities that socialism promotes is the idea that by imposing price controls and forbidding profits, government can make food both cheap and widely available.

The opposite is true, and Venezuela proves the rule. An August-September 2015 survey by the multi-university, Caracas-based social and economic research project Encovi found that 87% of those polled reported that they did not have sufficient income for food. Their privation is a result of artificially holding down prices, which creates shortages. Consumers are forced to scurry about black markets looking for what they need and then pay dearly for it—if they can. They face killer inflation which, according to the central bank, was 180.9% on an annual basis in the fourth quarter of 2015, up from 82.4% in the first quarter of last year.

Hunger is only a symptom of a broader economic collapse, all along the production chain, brought on by state diktat.

In a 1958 essay “I, Pencil,” Leonard Read, founder of the Foundation for Economic Education, gave a voice to the lowly writing utensil in order to illustrate the power of economic freedom. Read’s pencil explained how it was born of the decisions of thousands of individuals, operating freely in their own self-interest, and yet in harmony with one another. Almost all the actions described in the pencil’s creation are illegal, unprofitable or personally perilous in Venezuela today.

Consider what’s happened to transportation. Workers need to travel to their jobs, components must be delivered to factories and inventories to retail outlets, and tractors have to plow fields. Yet wheels are grinding to a halt in Venezuela.

The local manufacturer of car batteries in Caracas has trouble importing components, and government price controls have strained the profitability of the business. To replace a battery, customers line up at the factory—which to cut costs rarely uses retailers for distribution any more—in the wee hours of the morning. But it takes several days of waiting to complete the transaction, and the old battery must be surrendered. If it’s been stolen, which is not uncommon, customers need to present a special certificate from law enforcement.

A weeping woman was spied by a friend at the factory gate one morning recently. She had lost several days of work waiting in the line only to be told that the certificate she had to prove that her battery was stolen was no good.

More than vehicle batteries are in short supply. Roving bands of robbers strip farm equipment of parts, which carry a good price because they are so hard to get. That’s only one headache for the farmer.

Chávez confiscated the country’s most-productive farms and turned them over to chavistas who don’t know how to farm. Even on farms that were not seized, planting is diminished. Most seeds used in Venezuela are imported and without dollars cannot be had. Farmers are reluctant to plant when the costs are high and the harvests are price-controlled. Dairy farms are also less productive now that daily power outages shut down electricity-powered milking machines. Trucks carrying food cargo are often hijacked.

Protein is hard to come by. Eggs have all but disappeared from grocery stores. In October, seven tuna canneries employing 3,000 people had to close because they could not get dollars from the central bank to pay foreign suppliers who provide the materials for production like fish and cans. Basic medicines like aspirin have vanished.

“We cannot go on this way,” a source in Caracas told me last week. “The price of food is going up and up. Some salaries are adjusted [for inflation] but most are not. I don’t see how people without dollars can feed their families.”

Ironically the very rich, who Chávez swore to crush but who still have dollars, are not starving. But the poor and working classes face a grim future.

Write to O’Grady@wsj.com.

270 comments

MAUREEN FAUL subscriber 5pts

Unfortunately, many in this country believe that more government control either directly or by regulation is the answer to our problems.  So while we are not there yet, we are sadly begun heading down that pathway  the  to destruction that Venezuela is well along on.  Big government just does not work.

Joe Cobb subscriber 5pts

It is funny how the nightmares of Ayn Rand’s “Atlas Shrugged” seem to be coming true in Venezuela.  Socialism is failing.  Will this lead to the stigma of “socialism” in the history of mankind, just as “naziism” is now stigmatized (along with eugenics)?

We have our doubts.

“Socialism” is based on wishful thinking and fantasies about “equality.”  Yet nothing except total liberty of the individual has ever produced anything, other that slavery and waste of capital and labor.

I am glad to see Venezuela “going to hell and taking everyone with it” so perhaps to establish another historical object-lesson (along with Cambodia, the Gulag, and Auschwitz) — monuments to the failure of worshiping “strong leaders” and their State police bureaucracies.

WILLIAM VILLAIRE subscriber 5pts

@Joe Cobb  I don’t think Socialism will ever be stigmatized based on the many examples of socialist failures yet many still think they can make it work.

Nevin Taylor subscriber 5pts

When a famous Marxist/socialist was asked why socialism had failed miserably in nearly every country that adopted it he replied that they didn’t pursue a ‘pure enough’ form of socialism.

I guess that’s why they keep trying…to achieve ‘pure socialism’ and the nirvana that it always promises.

Perhaps Bernie’s campaign slogan should be:  “Let’s give it one more try.”

Graham Martin subscriber 5pts

How do people such as Bernie or his supporters even exist? How is socialism even a part of the discussion as a realistic, viable solution?? Case studies on current Venezuela, early 20th century Russia, Mao’s China, Franco era Spain, current souther Europe, et al. should be taught in all schools. How anyone could ever espouse and push for a socialist system is absolutely ludicrous to me. I hate to sound dogmatic, but how anyone could ever think there is an option other than capitalism is beyond me. Why would we look at the greatest civilization in the history of humanity, the U.S., and criticize its economic and political system, Capitalism–or at least that’s what it used to be, and want to trade it for the above Marxist, Chavez solution?

Matthew Ferrara subscriber 5pts

Graham, the answer is simple and twofold:

Visit a public school (especially a State funded university); then turn on the news. You will find mention of none of your historical examples in either space; and even fewer able to reference them outside.

Today’s children are doomed to repeat those mistakes because their elders declared an end to history a generation ago.

C.I. Mothershead subscriber 5pts

Wait 50 years and Obama and the NY Slime will declare Venezuela an “unspoiled ” beauty to vacation in.

Sound familiar?

Jenn Harrington user 5pts

A parable of Socialism.

Once there was a farmer. He planted apple trees. He watered and pruned and sprayed. He waited for years before the trees bore fruit. When they did the government came around. They wanted 10% of his apples. He thought, “I watered, I pruned I planted, but I am a citizen, I will pay my dues,”and he gave the government the apples. Next year the government wanted 25% of his apples. He thought it was wrong, he thought it was unfair, but he paid the government. The next year the farmer struggled, and because the government had taken the apples, he could barely afford the water and shears to prune. The government created regulations that made it longer, harder, and more expensive to tend his orchard.

The next year, the government came and wanted 50% of his apples. The farmer shook his head. When the government left, he sat down and thought. Then he went and burned down all the apple trees, and moved somewhere else to start over.

Then everyone starved to death. The End.

DOUGLAS HUNTER subscriber 5pts

How many times do we have to watch this movie? What do Sanders supporters, or for that matter most of the US electorate, not understand about where their collectivist fantasies lead? They point to Denmark and Sweden, not understanding that these countries, even with their small, homogeneous populations and unique social fabric, will still arrive at the same place.

Jenn Harrington user 5pts

@DOUGLAS HUNTER Particularly now that they are following the “open borders” policies of American Democrats.

Richard Butler subscriber 5pts

To all those Venezuelans who rallied for Chavez back in the day I have one question:  How are things working out for you?

It is amazing to me that there are still people who don’t understand that the laws of economics are as immutable as the laws of physics.

C.I. Mothershead subscriber 5pts

@Richard Butler

” To all those Venezuelans who rallied for Chavez back in the day I have one question:  How are things working out for you”

Replace Chavez with Obama and get back with me next year.

Greg Shipley subscriber 5pts

Welcome to the Sanders/Warren vision for the U.S.

David Milligan subscriber 5pts

@Greg Shipley  Well, there you go again, picking on native American wannabees, who criticize the rich while humbly accepting $400,000 year from Harvard Law for teaching 1 class a week.  You are culturally insensitive, undoubtedly a homophobe racist, and undoubtedly on the payroll of the New York TImes.

‘wanna meet for beer in a good, blue collar bar, the last bastion of common sense and accountability?

I am still chuckling on your comments, you made an otherwise lousy day end with some humor and hope…..

STELLA FERNANDEZ subscriber 5pts

You can never hand over power over any economy to anyone who never produced anything.

“Leaders” like the Castros, the Chavez, the Maduros, the Putins, and  most in the US government -Dems and Reps alike, ever had to produce an item and take it to market, day in and day out.

These economic brutes cause what they specialize in -brutality.

It is still amazing to me that for the huge government we have, no one cares, like in caring for, our enterprise system to shelter it from the amateurs and the ideologues.

Jorge Fernandez

PAUL DEMBRY subscriber 5pts

Why does the current end-game in Venezuela remind me so much of the last few chapters of “Atlas Shrugged”?

Josef Rosenfeld subscriber 5pts

A socialist paradise (lost.)

Carl L. Bryant Ii subscriber 5pts

Some of the comments suggest that sending BO, Bernie and we don’t want to leave out HRC, to Venezuela so that they could be educated on the results of Chavez’s policies and Socialism. There might be a less than 100th of One percent chance they would acknowledge let alone learn from the results in Venezuela. BO always lets people know he is the smartest one around, HRC & Bernie are right up there as well. They have their lifestyle and the rest of us need to comply with their view of society, which will result in a Venezuela-like life here, if We The People don’t wake up!

Douglas Stephens subscriber 5pts

Hey Bernie and Socialism, excuse me, National Socialism masquerading as Democratic Socialism fans. Take yet another look at life in that system. Notice how the rich are unaffected by the “wealth redistribution” while everyone else is essentially screwed?

MARC JACKOWITZ subscriber 5pts

@Douglas Stephens The rich are not unaffected, unless they are both rich and members of the party, but at least they have food.  Nothing for those who voted for Chavez.  Deep sympathy for everyone else.

Seamus de Mora subscriber 5pts

My wish: That we could send O’bama and a select group of our know-it-all socialist politicos to Venezuela, and require them to start and run a business there in order to survive. It would be similar to the Hunger Games, with a large dollop of reality TV added.

This could also be a crash course on how to avoid burning down the country you’re supposed to be governing responsibly. Do something productive – expand your skill set beyond the moronic title of “community organizer”. I’d vote for a Constitutional amendment requiring this sort of vocational training as a prerequisite to running for office.

And the best part: As the host nation for “Hunger Politics”, the US could pay Venezuela a stipend to just keep on being stupid!

Anthony Aaron subscriber 5pts

@Seamus de Mora

You’re right – except for one thing: BHO just said the other day that being president is NOT reality TV.

Get with the program … no pun intended.                                    😉

In truth, I doubt BHO could invent a toothpick with a sharp knife and a twig.

gabe micchelli subscriber 5pts

I forgot how charming and inspiring is I, Pencil. Go back and read Leo Read’s actual essay. Here’s his summary take-a-ways, with some poetic license taken on my part:

  1. Leave all creative energies uninhibited. Governments should merely organize society to act in harmony with free association and need to satisfy markets for profit.
  2. Encourage society’s legal apparatus to remove obstacles to free enterprise. Permit millions of free peoples’ creative know-how to freely flow.
  3. Have faith that free men and women will respond to the Invisible Hand. This faith is an absolutely essential ingredient for freedom: a faith in free people. Freedom is impossible without this faith.
  4. Beware of those who don’t have faith in free people. Those unaware that millions of tiny know-hows would naturally and miraculously form and cooperate to satisfy a market need, cannot help but reach the erroneous conclusion that only governmental “master-minding” can deliver valuable goods and services to a market.

WILLIAM A TAYLOR subscriber 5pts

This should be required reading at Mr. Sanders’ campaign HQ.  His rise has been enabled by the destruction or our education system.

http://www.scragged.com/articles/science-fiction-and-the-coming-civil-war explains the consequences we can expect if the “free lunch” idea goes too far.  In one form or another, the “free lunch” fantasy has led to millions of deaths, but our young people don’t know that.

It is a quite attractive idea, however.  Convincing people that they’re broke because “the rich” are being selfish is a lot easier than convincing them that the need to get a job and earn whatever they want.  That’s why Mr. Sanders’ message is more popular than Dr. Carson’s was.  It’s also the method by which Democrats have held onto the black vote since the Great Society welfare programs were put in.

ISIS’ “free virgins” fantasy has killed a lot fewer people than the “free lunch” fantasy so far, but they’re working hard to catch up and show that they’re not the JV.

Douglas Stephens subscriber 5pts

@WILLIAM A TAYLOR Great article. Thanks for sharing. F. Paul Wilson puts it another way. KYFHO. “The LaNauge Federation.”

ROBERT HILL subscriber 5pts

too bad our elitists are so arrogant they are convinced in their little minds that it will be different under them. Or  is it –  just a little nibble here and a nibble there and the peasants wont notice their slow death. “Hey, why is our economy barely growing and now we cannot afford our promises and we cant steal anymore from our children – must be a new age – it couldn’t be our policies!”

such arrogant fools.

Luis Gonzalez subscriber 5pts

Another failed Communist/Socialist experiment, just like Cuba and many others, wake up America!

PETER FOLEY subscriber 5pts

@Luis Gonzalez NYC, Chicago, California, San Francisco, and Washington DC….

Tim Iversen subscriber 5pts

Anyone care to write a sequel to Animal Farm?  You can call it Pig’s Place, but be sure to make it known this novel’s antagonist is Hugo Chavez, the gluttonous hog of modern socialism.

Richard Davidson subscriber 5pts

Chavez and his successor were elected.

Do the people now understand what they chose?

Can they figure out that a market economy works better?

Did the Soviet Union not teach any lessons?

North Korea and Cuba were other teachable places.

How ignorant can an entire nation be?

They can elect leaders who understand economics.  So why haven’t they?

Daniel Quintana subscriber 5pts

@Richard Davidson Maybe it’s because new possible leaders are assassinated, which happened two days ago.

Krista Gifford subscriber 5pts

@Richard Davidson I might ask the same questions of voters in this country.

Eleanor Drew subscriber 5pts

@Richard Davidson

…how many times during U.S. conferences do Congressmen or Senators go to visit other countries to learn their experiences? Think of the Affordable Care Act, privatization of Air Traffic Control or the Schengen agreement?

Not Invented Here!

Venezuela is just another failed experiment that no one will learn from.

DENNIS VIDMAR subscriber 5pts

Another day in the Chavez Worker’s Paradise.  The government that is benign enough to take all, it big enough to lose it all.  Bernie Sanders and your supporters, please take note.

Richard Davidson subscriber 5pts

@DENNIS VIDMAR

I agree with your point, but here is mine — Denmark was the example that Sanders uses, and it actually works, at least the Danes are happy with it.

ROBERT F GRAHAM subscriber 5pts

@Richard Davidson

Are there 300,000,000 Danes of many different ethnicities and cultural values, or just a couple?

Carol Graham

Warren White subscriber 5pts

@MARC JACKOWITZ @Richard Davidson @DENNIS VIDMAR

European countries like Denmark evolved, built their wealth and infrastructure as Capitalist christian nations…. the recent overlay of agnostic socialism is working them to decadence, gradually reversing their prosperity…. all the charts show that… business startups are way down…. they are being ruined by unfettered immigration..

MARC JACKOWITZ subscriber 5pts

@Richard Davidson @DENNIS VIDMAR Denmark has fewer than 6 million people.  It is no model for a large industrial economy like the United States.

DAN OAKS subscriber 5pts

Chavez was about Chavez.  All of those accolades from the “chavistas” won’t feed them  now.  The question is?  Are they sitting around or can they remember how to work and earn an honest living.  That high sulfur oil might look good between two pieces of bread if they could find them.  Rest in hell chavez and hopefully maduro.

Erick Matzke subscriber 5pts

Socialism, whether the “Democratic” or “other” will always fail.  It fails to take account of the “human” factors and assumes people can be forced to be good.  Its like cattle farming by assuming cattle act like sheep.

Idiots.

Kevin O’Donnell subscriber 5pts

@Erick Matzke Socialism isn’t “good”.  Capitalism is good.  It allows you and me the most freedom pursue what we each want and need,  Is it perfect? No, but it is the least imperfect.

Warren White subscriber 5pts

@Kevin O’Donnell @Erick Matzke

Alan Charles Kors: “No cause, ever, in the history of all mankind, has produced more cold-blooded tyrants, more slaughtered  innocents, and more orphans than socialism.”

“Socialism …has a record of failure so blatant that only an intellectual could ignore or evade it” Thomas Sowell

“Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.” Winston Churchill

” Capitalism is not an ‘ISM”….it is closer to the opposite of an ‘ism’ because it is simply the freedom of ordinary people to make whatever economic transactions they can mutually agree to” Thomas Sowell

“The inherent vice of capitalism is the unequal sharing of blessings;  the inherent virtue of socialism is the equal sharing of miseries.”    — Winston Churchill.

Kevin O’Donnell subscriber 5pts

These are the internet reported net worths of the valiant champions of Venezuelan socialism who need never go a day without food or toilet paper:

Michael Moore – $50 million

Sean Penn – $150 million

Oliver Stone – $50 million

Hugo Chavez’s daughter – $4.2 billion

GEORGE CAMBRON subscriber 5pts

@Kevin O’Donnell You left out Joseph P. Kennedy III whose family wealth is in the $100s of millions. It is all left in trusts to avoid those nasty estate taxes that the Democrats want to increase on the rest of us. Kennedy was an avid supporter of Chavez and his brand of socialism. I doubt you will find him in Venezuela explaining the benefit of social equality these days.

Christopher Bertman subscriber 5pts

I recently read the “road to serfdom” about the dangers of socialism.  It is amazing how closely what happened in Venezuela was predicted by the book.  Step by Step the country went down the rabbit hole thats now ending in a dictatorship and economic ruin.

I even think that Chavez really did believe that his policies were going to be good for the poor.  But he learned like many socialists before him that Socialism does not work.

David Hall subscriber 5pts

No. He didn’t learn that. He learned he had to keep the big lie going for his family’s sake. And he got a lot of help from his fellow travelers in Hollywood.

Rick Woodward subscriber 5pts

@Christopher Bertman Socialism works for members of the Politburo and their fellow travelers.  Don’t think for a nanosecond that Chavez did not understand that.

GRIF RATLEY subscriber 5pts

Venezuelans feel the Bern!

Jeff Boone subscriber 5pts

Who is John Galt?

Paul Richardson subscriber 5pts

@Bob Acker Read the book. Or don’t, no one really cares.

Bob Acker subscriber 5pts

@Paul Richardson @Bob Acker

Me least of all.

Bob Acker subscriber 5pts

@Ray Wasser @Bob Acker @Paul Richardson

Well, you’ll have to excuse me.  John Galt Comix is not my usual read, not even in the bathroom.

Bob Acker subscriber 5pts

@Jeff Boone

OK, I’ll bite.  Who is he?

Raymond Klett subscriber 5pts

@Bob Acker @Ray Wasser @Paul Richardson

Does that comment mean you are so smart that the philosophy in Rand’s book is not possible in your world.

BTW you asked the same ignorant question on Mat 6th.

Ray Wasser subscriber 5pts

@Bob Acker @Paul Richardson If you dont know who John Galt is, you’re a sad, socialist fool.

PETER FOLEY subscriber 5pts

@Bob Acker @Paul Richardson Caring very little, very unlikely to ever act like Mr. John Galt, who choose apathy, instead of just continuing to be apathetic like yourself.

Douglas Nance subscriber 5pts

@Ray Wasser @Bob Acker @Paul Richardson It’s a barely readable brick.

  1. Tatka subscriber 5pts

Children, children! Didn’t you father tell you to stay away from his laptop?

Paul Richardson subscriber 5pts

@Bob Acker “Me least of all.”

Then you lied! But that IS you.

 

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