Why the disaster in Venezuela should matter to you
A friend asked me why I'd written so many pieces on the ghastly collapse of Venezuela. Lots of countries have problems, he said, so why should their problems be of any more interest to Americans than any other country's?
That's a fair question. To begin the answer I need to ask you what you know about "socialism."
Unless you're a historian or a political junkie you probably have only a vague idea of what socialism is. You may know that one of the two Democrats running for that party's nomination is a self-proclaimed socialist. (The other is apparently a socialist in all but declaration.) And you may have heard that Sweden or Norway or Finland or some of those Scandanavian countries are successful socialist states.
Finally, you have a vague idea that socialism shares one or two traits with communism, but you're probably not sure what those are.
Anyone recall what the acronym "USSR" meant? (I'd love to see a video crew tour Harvard and Yale asking students that question.)
If you're under 30 and know the answer, you're unusually well informed: It was the Union of Soviet Socialist Republics.
"Wait, I thought the USSR was the communists. Why would they call themselves socialists if they were communists?"
Oooh, good question! We'll have to leave that for another day. For now, suffice it to say that unless you're really into the nuances of "dialectic materialism" the distinction between the two is extremely small.
So what does this have to do with either the situation in Venezuela, or why we should be concerned?
Because, comrade, Venezuela once had the highest per-capita income in South America. It's a nation with huge natural wealth, like oil. But with the help of a socialist-loving media, a cunning socialist politician was able to win the presidency. Then by fanning the flames of class envy--implying to voters that he would break the rich and give their fortunes to the poor--he was able to use his party's majority in congress to essentially get them to give him unlimited power--i.e. they allowed him to rule by decree.
Ringing any bells? Eh, probably not. At least not yet.
There's a word the U.S. mainstream media always uses whenever there's bad economic news here due to one of the emperor's many idiotic policies: "unexpected." And after this asshole became dictator that's what most liberal media outlets said about everything that followed in Venezuela: It was just so *totally* unexpected.
The first result was that the smartest people, and those who had an entrepreneurial drive and worked hard, left the country in droves.
Oooh, that was unexpected.
The dictator then imposed "price controls:" A government "price commission" would tell every business the maximum price they could put on any product. It even demanded that some businesses sell their goods at cost (i.e. no profit). To the surprise of no one except the dictator and his fellow socialist brain-trusts, businesses forced to do this soon went bankrupt. Again, totally "unexpectedly."
Wow, sure glad our so-called "leaders" aren't that fucking stupid. Oh wait, they are. But of course you've never heard about price controls here in the U.S. They exist. You just don't hear about them, because no one teaches it, and the mainstream media doesn't have any interest in telling you.
As economic activity slowed, tax revenue dropped. People smart enough to read the handwriting on the wall started exchanging the national currency for dollars--making the national currency drop. "Unexpectedly," inflation soared, hitting 100 percent per year, killing the value of savings--and thus the incentive for anyone to save money.
The loss of buying power of the currency, of course, was a clear, open signal to everyone that the rest of the world thought the dictator's policies were disastrous. Oooh, can't have that! So to avoid losing face the dictator decreed that there would henceforth be an "official" currency-exchange rate of something like ten bolivars to the dollar--at a time when the real, international rate was something like 1000 to the dollar. His fellow party members--stupid and deluded--rubber-stamped this move.
If you ran a business and needed dollars to import a product not made in Venezuela, and could get the official rate, everything was fine. Problem was that only the dictator's friends could get the subsidized official rate--everyone else had to pay the unofficial ("real","black-market") rate.
But with the government dictating the selling price of everything, businesses couldn't recover their costs. Which of course meant owners of ordinary small businesses couldn't afford to import anything.
The result--again, totally unexpectedly, eh?--was shortages of *everything*--including the most basic commodities like cooking oil, corn meal, milk and...toilet paper.
In a tropical nation with virtually unlimited scrub trees, you'd think it wouldn't be too tough to build a factory in Venezuela to make...toilet paper. But apparently something's prevented the brilliant government from building one.
Because people were constantly short of everything, those who could shopped every day in case some store might have something they could use or trade. Lines of people waiting to enter grocery stores stretched for over a mile--literally.
Because everything was in short supply, in the rare case when a store got a shipment of, say, canned tomatoes, people would buy as much as they could carry because they could trade with friends later for other goods.
The government called this "hoarding" and responded by issuing ration cards, and requiring shoppers to have their fingerprint scanned at each store to confirm their identity. (!)
You'd think having to give a fingerprint to buy a can of tomatoes would trigger a massive revolution, but the people meekly complied. Then again, when your emperor and his party passed a massive law telling you what kind of health insurance you had to buy, and forcing companies to stop selling health insurance the emperor didn't like, and making it impossible for you to keep seeing a doctor you'd used for 20 years, you'd think there would have been a revolt here. Of course people meekly complied.
Maybe we're not so different from Venezuelans after all.
As Venezuela's descent into hell accelerated, the dictator died of cancer. For his hand-picked successor--another socialist, obviously--this was a miracle, because it let him use the "great tragedy of our beloved leader's death" to revive support for the very same ruinous policies that had destroyed the economy in the first place!
Of course many people simply aren't smart enough--or don't have enough education--to connect cause and effect...which helps explain why they work in jobs that don't pay much. They tend to see things in simplistic terms: you have more than they do, so the system must be unfair. So the solution, as they see it, is to vote for a politician who promises he or she will take what you have and give it to them.
As far as I can see, you couldn't blast them out of this conclusion with high explosives.
In the case of Venezuela, about 54 percent of voters (if you believe the results declared by government counters) elected a cunning socialist, who used his party to give himself the power to make laws by decree. His policies were ruinous, and the economy went straight to hell, in an amazingly short time.
How fast can things go to hell? Consider that last December all mainstream U.S. media were saying inflation in Venezuela was expected to continue at 100 percent per year. Right now--not six months after those predictions--inflation is 5 times higher than the earlier prediction.
The country doesn't even have enough foreign exchange to pay foreign companies to print the billions of additional paper bills Venezuela needs to keep up with inflation.
Starting to get it?
Now, what does Venezuela's ghastly experience--the worst of which we haven't begun to see yet--have to teach us here in the U.S?
For starters we need to recognized that ignorant voters aren't unique to Venezuela: Roughly 54 percent of Americans will vote for the pol who promises to give them the most free stuff.
This is a *huge* problem, because unless by some miracle about 5 percent of voters suddenly wake up and grasp the truth, we're doomed to the same end as Venezuela.
Of course you don't think that could happen here. You think Americans are smarter, or love freedom more, or are different in some crucial way. Really? 52 percent of voters elected a man with a highly unusual past, who spent millions sealing all his records, for a reason no mainstream reporter has even *asked.* A guy who has fanned the flames of race hatred beyond anything seen. A guy who--with the help of his party and an extorted judge on the supreme court--nationalized health insurance, while lying to you about being able to keep your doctor if you wanted to.
A guy who has violated the Constitution repeatedly--not least by refusing to enforce valid U.S. laws. His minions were found to be using the IRS to punish political opponents--a violation of the law--and the IRS responded by claiming to have lost three years of emails from the key figure in the scheme.
And yet astonishingly, 54% of voters (if you believe the "official" results) voted to re-elect the guy.
Still think it doesn't matter?
And now, because Republicans have nominated a flake--and because the Democrats control election commissions in the key "swing states" that decide elections--voters are poised to elect a woman who's just as much a lawbreaker as Obama. A woman who's promised to take the current emperor's policies even farther left.
Friends tell me it's useless to be concerned about corrupt politicians, or pols shredding the Constitution, or voter fraud, or federal regulations from stupid, unelected, corrupt chiefs of federal agencies--regs that allow them to fine a company for not allowing a man to use the woman's restroom.
The arguments for not being concerned (and not acting) are
1) it doesn't affect me or my family, so why be concerned?
2) "politics have always been corrupt"
3) no one can change it in any case, so why get "worked up" about something you can't do anything about?
4) I'm way too busy raising my kids and earning a living to get involved.
I understand. Don't blame ya'. But unless you're willing to let the U.S. follow Venezuela down the bowl, you need to overcome those excuses--good though they are.
If you can't muster the energy to do it for yourself, do it for your kids.