Here's What Happens When You Let Crazy, Economically Ignorant Socialists Run the Show

Monday, January 18, 2010 , 5 Comments

We could really learn a lesson from Venezuela, you know.


More worrying is Venezuela's apparent inability to get to grips with persistent inflation, which is now the highest in Latin America, reaching an annual rate of at least 27% in 2009.

Last week, yet again, Mr Chavez merely fuelled the inflationary spiral by raising the minimum wage to compensate workers for their loss of purchasing power.

At the same time, he has attempted to impose price controls which have largely failed to work.

Exito means "success" - but its French owners failed to please Mr Chavez

As a result, he has increasingly resorted to the ultimate economic sanction - confiscating the businesses of those who refuse to curb their prices.

The latest victim of this policy is the Exito supermarket chain - run by a Colombian retailer but ultimately controlled by France's Casino group, which also owns stores in Brazil, Argentina, Mexico and Uruguay.

That makes it the ideal target for Mr Chavez, who has ordered its expropriation as an example of "transnational companies" coming to Venezuela to "speculate with our prices".

Yet there is little evidence that Exito was doing anything other than reflecting the higher costs of imported goods that now have to be paid for with Mr Chavez's devalued bolivars.

I don't see anything in there about nationalizing car companies but shit does that 27% inflation number scare the crap out of me. Ohhh dear Hugo.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Ubu said...

Hugo Chavez has been very entertaining over the past decade; he's like the political equivalent of Lindsay Lohan, that is, he's a train wreck best viewed from a safe distance. I have been watching this slide down the sewer for some time as this buffoon plays at being in charge; this is what would happen in the US if we had a huge population of barely literate, third-world indians who mindlessly elected anyone who promised them free stuff, a new TV, and a government job. His promise to stick it to the man has become an attempt to stick it to everyone who is mildly productive. He'll end up hanging from a wire around his neck, after getting a lot of people killed and setting his country back 50 years.

OldSouth said...

Hmmm...does the name 'Allende' conjure up any memories?

His follies so degraded Chile that Pinochet and his thugs were able to hold forth for quite a while.

Of course, the American left only recites the many sins of Pinochet, never considering who made him possible, and why.

And the lefties just love Chavez! He's their hero!

We had price controls under the Nixon administration. Jerry Ford distributed "WIN" buttons, whip inflation now. What you see today is what I predict for the US, Latin American style inflation, like in Argentina and Venezuela, price controls, foreign exchange controls, denunciation of the wrong parties for "economic crimes", etc. Bienvenidos a Argentina.


Allende pushed inflation up to 1,000% a year in Chile to crush the middle class. Eventually the "Chicago Boys" fixed Chile's economic mess. For a while.


Anonymous said...

Venezuela pumps a type of crude that is known as heavy sour as opposed to light sweet. Most of the oil it produces requires a refining process that isn’t common or cheap. The companies capable of refining such oil are mostly American. On the one hand, you have a recession destroying demand for oil products of many types and on the other hand, more players entering the heavy sour crude production market. Hugo probably thought the days of $150 per barrel oil would never end and budgeted accordingly. My brother was an engineer on heavy ocean ships that transported goods across the oceans – a regular Sinbad was he. He told me once that the crap that they bought for fuel for those big engines had to be cut with distillates so that it could be pumped and flow through the engine and at the time, they bought that stuff for $70 per ton. The cost to dispose of that gooey stuff was so high (both economically and environmentally) that they would sell it for very cheap prices to shipping companies who used lots of it. Ever see an engine as big as a small house? It’s quite impressive.


JDA, still waitin' on that tiny url use tip.