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Venezuelan Economy Ruined by Socialism

Posted by Steve Markowitz on October 26, 2014

J ChavezVenezuelan strongman Hugo Chavez passed away a year and a half ago.  The Venezuelan economy is not too far behind Chavez’s demise.

The Wall Street Journal reported that Venezuela has joined the failed economies of North Korea and Cuban rationing food and other basic necessities of life.  However, unlike North Korea and Cuba, Venezuela is a resource rich country that exported nearly $115 billion worth of oil in 2013.  Irrespective of this export wealth, the Journal reported that basic necessities of life including cooking oil, Mel and toilet paper are being rationed with shortages we consumers waiting in line for hours to make less than desired purchases.  Even basic public services are now being rationed with some homes having their water shut off for over 100 hours per week.

Venezuela has proven once again that governmental interventions, no matter how popular initially, exasperate economic problems instead of improving them.  This reality is exemplified by comments made by a Venezuela state finance director, Salvador González, who made excuses for the government’s rationing saying: “Our objective is to guarantee cheap food,” he said in an interview.”  In fact, it was Venezuela’s initial manipulation of the markets via price controls on various commodities that directly led to these shortages.

It is remarkable that no matter how often governmental interventions in markets cause economic calamities that this type of solution remains a favored elixir for Progressive politicians and radical economists.   The Venezuela tragedy is an advance notice of what to expect from Obamacare.  This complex intervention designed to lower medical costs will not only fail to meet his basic goal, but will lead to the rationing of healthcare in the United States with poorer Americans taking the brunt of this failed program.

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