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February 17, 2007

Chavez Tries To Repeal Laws Of Economics

I really don't think that the American government will need to overthrow Hugo Chavez if this sort of crap continues -- the Venezuelan people will string him up by the heels, just like the Italians did with Mussolini.

Faced with an accelerating inflation rate and shortages of basic foods like beef, chicken and milk, President Hugo Chávez has threatened to jail grocery store owners and nationalize their businesses if they violate the country’s expanding price controls.

Food producers and economists say the measures announced late Thursday night, which include removing three zeroes from the denomination of Venezuela’s currency, are likely to backfire and generate even more acute shortages and higher prices for consumers. Inflation climbed to an annual rate of 18.4 percent a year in January, the highest in Latin America and far above the official target of 10 to 12 percent.

Mr. Chávez, whose leftist populism remains highly popular among Venezuela’s poor and working classes, seemed unfazed by criticism of his policies. Appearing live on national television, he called for the creation of “committees of social control,” essentially groups of his political supporters whose purpose would be to report on farmers, ranchers, supermarket owners and street vendors who circumvent the state’s effort to control food prices.

In other words, Chavez wants to ensure that the productive segments of society are not rewarded for their productivity, but are instead punished for trying to get a fair return on their efforts. Indeed, Chavez has already taken initiatives to prevent "hoarding" (refusing to sell product at absurdly low prices set by the government), so this is simply one more step towards economic chaos.

One thing that I find telling in here is that the Venezuelan government has set a planned rate of inflation at 10-12% -- a rate that would be unacceptably high in this country and count the administration in place as a failure. Frighteninly, the Chavez government cannot even meet that unreasonably high target, and instead finds itself with a 18.5% rate of inflation.

The place is going to implode -- hopefully ending this experiment in socialism before it does too much damage tot he once-thriving nation.





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