Free Markets, Free People


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The wages of Socialism

“Wages” being a euphemistic term in this case:

Home to the world’s worst economy, Venezuela is beset by severe food shortages, riots in the streets and hyperinflation that’s closing in on 700 percent. World oil prices have plummeted — and Venezuela relies on oil for 95 percent of its income.

Agriculture was neglected as Chavez and Maduro placed all their economic chips on crude and elected to import goods from abroad while spending on social programs that rallied the poor behind the government.

But now Venezuela has no cash to import food or other essentials. And because Chavez nationalized so much industry, it has no private sector to compensate.

So Maduro has now issued an executive decree that subjects all workers to being forced to work for 60 days (or more, “if circumstances merit”) in the fields, growing badly needed food.

Economically, the move makes no sense. Morally, it’s barely one step up from government-sanctioned slavery.

And there’s a Senator from Vermont that would love to see the system that is sliding into slavery at work here.  More intriguing is the fact that there are studies out that say that Sanders should have won the primary election that was apparently fraught with fraud and rigged from the beginning.  Think about that for a minute.

What does that say – other than total ignorance – about those who felt it was a good idea to “feel the Bern”?  Not that Bernie would have had much success in passing and implementing his programs.  I’m simply making the point that a significant portion of our population thought this potential tyrant was the best choice because – historic blinders, ignorance or both.  Not that anyone is getting a particularly better deal with the two nominees of record (one a crook and the other a clown).

What continues to puzzle me is how Venezuela, which is in the news every single day and pretty much implemented every one of Bernie Sanders policies and programs, is ignored so resolutely by these people.  How do you do that and call  yourself intellectually honest?

But considering their second choice, honesty – intellectual or otherwise – doesn’t seem to be much of a priority.

So there’s that …


The left wants so badly for socialism to work

And that’s why they were so enamored of Venezuela.  All the leftist illuminati waxed on and on about how Hugo Chavez was a champion of the people and how he was working an “economic miracle” there, as illustrated by the 2013 Salon article by David Sirota.  In it Sirota gloats about how wrong the right is concerning Venezuela.  Headlined “Hugo Chavez’s economic miracle”, the sub-headline on the piece is classic:”The Venezuelan leader was often marginalized as a radical. But his brand of socialism achieved real economic gains.”

In light of Venezuela’s imminent collapse, I’m sure Sirota is cringing today.  As usual, the “economic miracle” Chavez had wrought under his brand of socialism worked swimmingly until they ran out of other people’s money.  Then, well, same crap, different regime.

I had to laugh, in particular, at this paragraph from “gloaty-boy”:

When a country goes socialist and it craters, it is laughed off as a harmless and forgettable cautionary tale about the perils of command economics. When, by contrast, a country goes socialist and its economy does what Venezuela’s did, it is not perceived to be a laughing matter – and it is not so easy to write off or to ignore. It suddenly looks like a threat to the corporate capitalism, especially when said country has valuable oil resources that global powerhouses like the United States rely on.

Well, laughed at his silliness or is it perhaps willful ignorance in not understanding, even when he was calling Chavez’s Venezuela an “economic miracle” what was really going on there.  No one is laughing at the purely predictable and lamentable problems the citizens of Venezuela are going through now because of Chavez.  He sold them a bill of goods and now they’re suffering the consequences.

What’s frustrating though is the useful idiots like Sirota and gang who won’t take the time to learn why socialism doesn’t work and certainly won’t look too deeply into any regime, such as Chavez’s, that shows the possibility of their long held dream of collectivism and central planning working.

If, in fact, they’d do that, there wouldn’t be guys like me, 3 years after the fact, pointing a finger at them and laughing at something they wrote about an economy that was doomed from the beginning.  As most of us noted at the time of the Chavez takeover, it wasn’t a matter of “if” his plan would fail, but “when”.  “When” is now.

Look at the video and the pictures, Mr. Sirota.  They’re not pretty.  They’re not pretty at all.

How does it feel to have been a cheerleader for the kind of desperation and chaos Chavez’s “miracle” has brought?  How does it feel to have wished a stable and thriving nation (it had its problems, but nothing even close to those now) into the state it now endures?  And tell me again why Chavez’s daughter is worth 4 billion?

You must be so proud.


Venezuela: How bad is it?

It’s bad:

Despite breathless coverage of Venezuela’s vanishing supply of condomstoilet paper, and beer, perhaps the country’s most debilitating shortage has been that of food, which appears to be a motivating factor for growing antigovernment sentiment.

“I want the recall because I don’t have food,” one woman told the Venezuelan commentary site Contrapunto, referring to a referendum to recall President Nicolas Maduro that has so far reportedly drawn more than a million signatures in support.

“We want out of this agony — there is too much need in the streets,” another woman told Contrapunto. “We have much pressure because there is no food and every day we have to ask ourselves what we are going to eat.”

Many families have been reduced to one meal a day.  In a verdant and rich country, this is what socialism has brought them too.

And the idiocracy in charge?  Well, they’re reduced to abjectly stupid moves like this in an attempt to forestall the inevitable:

To try to shore up wages, Maduro on Sunday announced a 30% minimum-wage increase, which comes after a 25% hike on March 1 and is the 33rd wage boost since 1999. Beginning this month, workers and pensioners will earn 15,051 bolivars a month — only about $13, based on the black-market conversion rate, according to El País.

That amount may become even more paltry. Venezuela’s inflation rate in 2015 was 180.9%, according to the central bank, and the International Monetary Fund expects inflation in the country to reach 720% this year.

The acquisition of food has become the primary function of Venezuelans:

“I have to leave the house at 5 a.m., facing the risk of being killed, to stand in line all day and only buy two or three products,” Jhonny Mendez said.

Do yourself a favor and look through the pictures of the amount of food several families have in their house in a day that accompany the above article..  

What has happened in Venezuela is criminal … there’s no other word for it.  Chavez was a criminal and his henchman now in charge is also a criminal.  What they’ve done to that country is unforgivable.  And it was all predictable … in fact, it was predicted.  I also have a feeling it isn’t going to end well:

Meanwhile, the return El Niño, a cyclical weather phenomenon, leads to widespread power outages across the country as the authorities’ incompetence and corruption are laid bare. 76 percent of Venezuelans have fallen into poverty and 13 percent eat only twice a day. Maduro’s government is rejected by 85 percent of the population.

Looting last week was contained but the Governor of Lara, Henri Falcón, a former Chavista, noted that “this is a thousand times worse than the reasons that led to the ‘Caracazo.’” He added that, at any moment, the political, social and economic crisis may lead to a conflict of incalculable consequences.


Two real world examples of socialism and big government that leftist voters ignore

It isn’t like you have to go back ages in history to see governing models that don’t work.  The recent end of the Cold War provided perfect examples.  But they collapsed in the ’80s and our younger generation has no memory of the hardships the people of those countries suffered under socialist totalitarian rule.  They also give indications that they think government is the solution for all our problems instead of understanding that for the most part government is responsible for many of our problems.  It seems they think that if we just had big government, everything would be lovely.

The “Feel the Bern” crowd are enamored with “social democracy”.  They like to point to Europe and pretend that the system is a desirable one.  But instead of pointing to Europe, perhaps they should cast their eyes to the south – to Venezuela.  They might find it, oh, I don’t know, enlightening:

In 1999, Venezuela was taken over by Socialist who promised that he would punish big corporations and redistribute wealth to “the people” to provide health care, education, infrastructure, and even out income inequality. (Sound familiar?) The American Left cheered. Celebrities like Sean Penn and Danny Glover praised his Democratic Socialist economic measures. Chavez systematically nationalized the oil, banking, agricultural, food distribution, telecommunications, and power industries in Venezuela; because running them as social democratic communes would eliminate “greed” and give the people lower cost goods and services. The American Left praised him for “democratizing” the Venezuelan economy. When Chavez shut down opposition TV, radio, and newspapers the American Left defended it as necessary to protect the Revolution.

The American Left likes to pretend now that Venezuela isn’t a real example of Social Democracy; but up until the economy collapsed (as every sensible person knew it would) they were Chavez’s biggest cheerleaders, as the links above (or any Google search) shows.

It is, of course, a horrific example of a socialist takeover, but a typical one.  A once well-off country with the most proven oil reserves in the world reduced to literal poverty.  Food shortages, other commodity shortages, you name it, you can’t get it there.  Oh, and about those oil reserves?  Well it seems that Venezuela has an energy crisis.  And the government’s solution?  Well it said everyone should take Fridays off (yeah, screw productivity – that’s a capitalist construct) and this bit of brilliance:

Last week, his government said it was shifting its time zone forward by 30 minutes to save power by adding half an hour of daylight.

Socialism … in Venezuela’s case they’re actually feeling the burn.

Then there is Brazil.  Brazil is the lover of “big governments” wet dream.  Or as it has now become, a nightmare.  Brazil is a failing state and the primary reason that it is failing is because of the premise under which it has operated for decades.  Big government paternalism:

For all its modernist appeal, it was one more expression of the country’s long and troubled attachment to the concept of a giant paternalistic state, responsible for managing the affairs of the entire society, from its biggest companies to its poorest citizens.


“The problem is, from time immemorial, Brazil’s political leaders only see one way forward, the growth of the state,” said Fernando Henrique Cardoso, a former leftist intellectual who sought to reduce the size of Brazil’s government while president from 1995 to 2002. “But you need another springboard for progress, that doesn’t exclude the state but that accepts markets. This just doesn’t sink in in Brazil.”

Many wan’t to blame Brazil’s problems on corruption like the corruption scandal now rocking the nation.  But the corruption arises from the base problem … big, unanswerable government:

While many observers of Brazil’s predicament have focused on the country’s corruption, that may miss the point. Brazil’s deeper problem lies in the failures of its Leviathan state, which has perennially reached for the utopian visions embodied in Brasília but instead has produced recurring cycles of boom and dramatic bust.

Of course there a huge lessons to be learned from these two countries that apply to this country and the current political arguments now being made.  All, to some degree or another (with Socialist Sanders being the extreme) argue for both social democracy and bigger government.  We apparently don’t learn from other countries but insist on learning the hard way, by repeating what has already failed any number of times.

That’s because of arrogance and the belief that the only reason any of this hasn’t worked in the past is the right people weren’t in charge.

With the class of politicians we have running today, Hugo Chavez would be a better choice to run their ideas.

And we all know how well he did.


Venezuela gives new meaning to black (out) Friday

Indeed, not only can you not get any staples at grocery stores in the socialist paradise of Venezuela, now there’s an energy shortage.

Solution!?  Take Friday off for a couple of months (because no one uses electricity at home)!

President Nicolas Maduro said Venezuelans will have “long weekends” in an appearance on state television on Wednesday night, announcing the measure as part of a 60-day plan to fight a power crunch.

“This plan for 60 days, for two months, will allow the country to get through the most difficult period with the most risk. I call on families, on the youth, to join this plan with discipline, with conscience and extreme collaboration to confront this extreme situation,” Maduro said.

Yes, discipline, conscience and extreme collaboration because your government has so screwed the pooch that the poor thing is dying.  And it is your responsibility, dear Venezuelans, to do with out to fix their mess.

You see, they’ve flat run out of yours and other people’s money and they’re now calling on you to sacrifice even more!

And even with Venezuela and Cuba as prime examples of what Senator Sanders is pushing, there is a significant portion of the voting public that is trying to “feel the Bern”.

All the Venezuelans want is to “feel” a little electricity, oh, and milk and toilet paper, and diapers, and vegetables and meat, meat would be nice, and …



How to crash a country

If you want a recent example, try Venezuela where socialism was “installed” and the inevitable happened … the economy finally crashed.  In fact, its so bad that we’re now headed into hyper-inflation territory:

Venezuela is preparing to issue bank notes in higher denominations next year as rampant inflation reduces the value of a 100-bolivar bill to just 14 cents on the black market.

The new notes — of 500 and possibly 1,000 bolivars — are expected to be released sometime after congressional elections are held on Dec. 6, said a senior government official who isn’t authorized to talk about the plans publicly.

Many Venezuelans have to carry wads of cash in bags instead of wallets as soaring inflation and a declining currency increase the number of bills needed for everyday purchases. The situation is set to get worse. Inflation, already the fastest in the world, could end the year at 150 percent, said the official.

The government stopped releasing regular economic statistics in December, when it reported inflation had reached 69 percent.

We’ve chronicled and discussed the failure of Venezuela as a “socialist republic” for a few years.  Of course, as reported earlier this month, not everyone there is poor.  Apparently the daughter of Hugo Chavez is suddenly worth $4 billion.  I’m sure all of that is from Hugo’s army retirement pay.

All of that to say, I’m not sure what sort of example some people need to understand that socialism doesn’t work.  It didn’t work in the USSR.  It hasn’t worked in Cuba. And Venezuela is just the latest example of its failure.

But this is America, where a good portion of the population apparently lives in a fantasy land, is ignorant of the laws of economics or actually believes that the government has money.  And if they don’t believe the government has money, they do believe it has a “right” to yours.  Your progressive agenda from the only progressive Democrat brave enough to call himself what the rest are as well … a Socialist:




We call it the “Venezuela plan”.


Venezuelan government seizes electronics chain over “fair” pricing … or so they claim

If you thought Hugo Chavez was bad, his successor, Nicolás Maduro, is Chavez without the charisma.  But Maduro learned all of Chavez’s tricks to stay in power, and one of them is to claim to be involved in a perpetual war against outside forces who are bent on destroying their socialist paradise.   In this case the “high prices” in Daka stores (equivalent to our Best Buys) gained the ire of Maduro who sent the military in to seize the stores and require them to offer “fair prices” on their electronics:

Members of Venezuela’s National Guard, some of whom carried assault rifles, kept order at the stores as bargain hunters rushed to get inside.


Daka’s store managers, according to Maduro, have been arrested and are being held by the country’s security services. Neither Daka nor the government responded to requests for comment.

Of course, Daka is unlikely to continue to serve Venezuela if it can’t make a profit – something most socialists governments have never understood.  But let’s look at the real reason this is happening:

“I have no love for this government,” said Gabriela Campo, 33, a businesswoman, hoping to take home a cut-price television and fridge. “They’re doing this for nothing but political reasons, in time for December’s elections.”

Maduro faces municipal elections on Dec. 8. His popularity has dropped significantly in recent months, with shortages of basic items such as chicken, milk and toilet paper as well as soaring inflation, at 54.3% over the past 12 months.

Which means:

“This is more like government-sanctioned looting,” said 42-year-old Caracas-based engineer Carlos Rivero. “What stops them going into pharmacies, supermarkets and shopping malls?”

It is exactly like government-sanctioned looting.  And the engineer’s point is telling – what industry in Venezuela can feel safe given the actions of this government?  Why would any foreign entity ever invest or take the chance of establishing itself in Venezuela?  Each election would put them on a target list for seizure depending on how poorly the head of the government viewed his popularity and how much he felt it necessary to boost his reputation.

The one entity whose job it is to protect you from force and fraud is engaged in both “legally”.

Why would anyone feel safe?


Once again socialism is proven to be a lie

The lie – that central planning and a command economy run by enlightened socialists is superior to capitalism.

As usual, that’s been proven to be false … again …  and as irony would have it, capitalism is their savior.

Steve Orlicek, a rice farmer here, is living the American dream. He owns a thriving business; he vacations in the Bahamas.

His good fortune springs from many roots, including an unlikely one: He is a prime beneficiary of the socialist economic policies of Hugo Chávez, Venezuela’s late president and critic of what he called U.S. "imperialism."

I know, you’re just surprised, right?  I mean, Venezuela, pre-Chavez, was pretty much self-sufficient.  And the new, better way that Chavez promised – *cough* socialism *cough* – was going to make Venezuela the economic jewel of South America.  That is, after he stripped the foreign companies of their assets and nationalized or took over the businesses of the home-grown capitalists first, and then put himself in charge of the economy.

And, as usual, the result of that tired old plan played out exactly as it has everywhere else in the world.  It failed miserably:

It is a paradoxical legacy of Mr. Chávez’s self-styled socialist revolution that his policies became a moneymaker for the capitalist systems he deplored. During his 14 years in power, he nationalized large farms, redistributed land and controlled food prices as part of a strategy to help the poor.

But these policies turned Venezuela from a net exporter to a net importer of rice—from farmers like Mr. Orlicek. "The rice industry has been very good to us," Mr. Orlicek said, sitting in his newly renovated home, appointed with a baby grand piano played by his wife, Phyllis.

It isn’t just rice. Production of steel, sugar and many other goods has fallen in Venezuela, leading to occasional shortages. Until recently, Venezuela was largely self-sufficient in beef and coffee. Now it imports both.

In this year’s first half, the U.S. exported $94 million of rice to Venezuela, a 62% jump from a year-earlier, making Venezuela the U.S.’s fourth-largest rice market, according to the Department of Agriculture.

Overall, Venezuelan imports have quadrupled since Mr. Chávez took office, to $59.3 billion in 2012 from about $14.5 billion in 2000, according to Venezuela government figures and economists at Barclays PLC. Exports to Venezuela from the U.S. hit $12 billion in 2011, up 16% from the previous year, the latest U.S. government figures show.

I remember the US bailing out the Soviet Union year after year when its wheat harvests again failed to produce the needed grain.  Socialism fails again.   Command economies have never worked (except in the short periods of warfare).  Complex systems like economies do not lend themselves readily to central control and function properly.  No central authority is able to a) know all the variables that comprise a healthy economy, or b) how to weight them or c) understand their complex interactions.  Healthy economies are true grassroots systems.  They are driven by billions upon billions of buying decisions made by individuals – something the socialists would prefer to ignore. 

Venezuela is just the latest in a long line of countries and economies who have fallen for the utopian promises of socialism and again proven that it is and always will be a leftist fantasy.  Unfortunately, real people end up suffering for the “dream” of something for nothing.  But the belief must be ingrained somewhere in the genetics of our species because time and again a new group falls for the promise and ends up flat on their face while the capitalists are thankfully there to bail them out.


Sean Penn about Hugo Chavez: “I’ve lost a friend”

Hugo Chavez has assumed room temperature.  I’ve always been taught it is bad manners to talk ill of the dead.  In this case I’ll risk it.  It is a huge boon for liberty and individual rights that Hugo is no longer at the helm of the shipwreck he’s made of his country and its economy.

Of course, there are those who feel differently about a man who had no respect for individual liberty, property or rights:

Sean Penn said in a statement to the Hollywood Reporter that “the people of the United States lost a friend it never knew it had. And poor people around the world lost a champion. I lost a friend I was blessed to have. My thoughts are with the family of President Chavez and the people of Venezuela.”

No one ever said our celebrities were particularly bright.  I mean this is Sean Penn who tried to paddle around New Orleans in a row boat in the wake of Katrina to … well, one assumes to prove something.  Instead he just became another problem for those actually doing rescue work.

So it’s not particularly surprising to see him, blinders firmly in place, saying silly stuff about Chavez. Chavez was a dictator, a tyrant, a bully, amoral, violent and singularly ideologically driven. And, in terms of how the world works economically, ignorant as a stump (a common condition for most socialists) – as is Penn.

Hugo Chavez was no “friend of the poor”. He simply used them, by giving them other people’s property, to provide himself with a power base.

With Chavez’s passing, perhaps Venezuela can now recover from the long national nightmare it has undergone during the Chavez years.

Here’s hoping.


Hugo Chavez reportedly has cancer

Venezuelan socialist strong man Hugo Chavez is reported to have had cancer surgery in Cuba (how freakin’ bad is it when you have to go to Cuba for treatment).

The usually vivacious Chavez, 56, confirmed in a stern speech on Thursday he had surgery in Cuba to remove a cancerous tumor and was receiving more treatment. He said he needed time to recover before returning to Venezuela to run his self-styled revolution.

A fiery critic of the United States, Chavez will miss events marking Venezuela’s 200th anniversary of independence from Spain. He had to cancel a regional summit planned for the momentous July 5 date.

Markets have generally reacted positively to news of Chavez’s health problems, on the presumption they improve the chances of a more business-friendly government.

The last sentence says it all.   If ever there’s been a person to ruin the economic health of a country, it is Hugo Chavez.   He’s now vulnerable.  And as the article says, there’s a power vacuum forming and in most cases that’s not a good thing – in this case, it could be a good thing:

"Political vacuums are rarely to be encouraged, but this one could lead to a slowdown in public spending and could raise the likelihood of an opposition victory in the next elections, and thus a less confrontational governing style," said Richard Segal, an emerging markets analyst at Jefferies in London.

An interesting situation.  And the longer he remains in Cuba, the shakier his position in Venezuela becomes.  Nothing would do the world and Venezuela more good than to see another revolution which ousts him from power and returns the country to a real democracy and market based economy.


Twitter: @McQandO


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