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January 24, 2008
Chavez "Reforms" Include Outright Theft
Hugo Chavez continues his experiment in Petro-Socialism but is getting the same results all socialists have gotten since the ideology was first tried in Soviet Russia more than 90 years ago.
It doesn't matter where it is tried, who is in charge, what tactics are used - the poor country where the experiment is initiated always ends up an economic basket case. And it appears that Venezuela - despite tens of billions of dollars in oil revenue - is suffering the same fate.
The latest evidence can be found in food shortages - the result of low production due to price controls and the outright theft of food by Chavez:
Venezuela's top food company has accused troops of illegally seizing more than 500 tonnes of food from its trucks as part of President Hugo Chavez's campaign to stem shortages. Ed Morrissey offers a penetrating analysis of Chavez's tactics:
The leftist Chavez this week created a state food distributor and loosened some price controls, seeking to end months of shortages for staples like milk and eggs that have caused long lines and upset his supporters in the OPEC nation. ...
"Anyone who is distributing food ... and is speculating, we must intervene and we must expropriate (the business) and put it in the hands of the state and the communities," Chavez said during the inauguration of a new state-run market in Caracas.
Hugo's Zimbabwe strategy continues apace. Instead of directly nationalizing these industries, Chavez has looked for excuses to confiscate property a little at a time. For the record, Robert Mugabe's Zimbabwe currently enjoys an inflation rate of 150,000% and the entire nation is in danger of collapsing into chaos.
With price controls keeping private production low, he has decided to raise prices just as the state enters the market on its own -- and then keeps his cost of production low by simply stealing the product. It's actually more clever than just the simple theft it is on the surface. By forcing producers to sell below cost for so long, he's weakened the production capability of the private sector so that fewer targets remain.
The shortages artificially increase demand and desperation. In raising prices, the root producers now have hope of earning and produce more -- just in time for the state to steal it and take credit for meeting the demand.
What do Venezuelans see from this process? Hugo steals from the rich and gives to the poor, without noting the manipulations necessary for him to succeed in doing so.
I wonder if all those Hollywood types who have groveled at Chavez's feet while fawning all over him would have anything to say about this turn of events?