Lessons for US in Venezuelan Socialist "Utopia"

In 1999, the Venezuelan people elected socialist/Marxist Hugo Chavez as president. He promised a socialist paradise. Chavez clung to office until his death in 2013.

During his "term," Chavez expropriated property from the rich and redistributed it to the poor, giving them new homes and appliances. Chavez was succeeded by hand-picked Vice President Nicolas Maduro.

Now, three years later, 1.85 million Venezuelans signed petitions to remove Maduro from office. (Nine times the number needed to begin the process!) Maduro's electoral commission refuses to hold the election, claiming fraud! Maduro's approval rating stands at 24.3 percent.

So, what went wrong with the Venezuelan socialist experiment? Its Marxist economy? In short, the money ran out.

The problems did not begin with Maduro. Even in the halcyon Chavez days, when Venezuelan oil sold for $100 a barrel, the nation's debt was rising, and there were food shortages.

Oil accounts for 98 percent of the country's exports; 59 percent of its revenues. When oil dropped to $30 a barrel (it's now about $49), the country's economy tanked.

In 2016, government spending is expected to exceed revenues by 25 percent. The International Monetary Fund projects inflation will reach 4,505 percent by 2021.

The nation's capital, Caracas, has become the world's most violent city. In socialist utopian Venezuela, equality has been achieved; everybody's without hope!

Recently, a plastic bag stuffed with toilet paper rolls sold for 9,000 Bolivars. A bag of fruit and vegetables that could be purchased for 430 Bolivars in April of 2015, now costs 14,000 Bolivars. A Venezuela worker's average monthly salary is 15,000 Bolivars.

To offset the plunge in oil revenues, the government drastically cut imports to 2004 levels.

The result? Across-the-board shortages of milk, razors, cough syrup, toothpaste, toilet paper and baby wipes -- things you now get only on the black market. Hospitals and pharmacies are desperately short of even the most basic medicines, such as amoxycillin. In markets where prices are government controlled, shelves are half-empty.

To make things worse, a prolonged drought has reduced to oversized puddles the Venezuelan lakes which provide water to the country's hydroelectric dams. Less water means less electricity. The government's response? Rolling blackouts, two-day work weeks for public sector workers, and Friday school closings.

Venezuela nationalized profitable private businesses. Managers were replaced to provide jobs for the poor. But because appointees lacked management skills, once-profitable businesses went bankrupt.

-- On Jan. 15, President Maduro declared a 60-day state of economic emergency, allowing the government to seize assets of private companies to obtain essential food and goods.

-- On Feb. 18, Maduro raised the price of gasoline -- frozen for the past 20 years at $0.01 per liter, to $0.60 -- while devaluing the Bolivar and increasing the minimum wage.

-- On April 21, Maduro imposed electricity blackouts to last four hours per day for 40 days in several states.

-- On April 27, Maduro cut the working week for public-sector employees to two days to save electricity.

-- On May 15, the government said their will be no recall vote due to "fraud."

-- On May 18, Venezuelans took to the street, and Maduro responded that he is prepared to escalate the state of emergency.

-- On July 22, President Maduro, issued a presidential decree: "people working in public and private companies can be called upon to join state-sponsored organizations specialized in the production of food. They will be made to work in the new companies temporarily for a minimum of 60 days after which their 'contracts' will be automatically renewed for an extra 60-day period or they will be allowed to go back to their original jobs."
Amnesty International said that "new decree establishing that any employee in Venezuela can be effectively made to work in the country’s fields as a way to fight the current food crisis is unlawful, and effectively amounts to forced labour -- even if paid their old wages."

Forced labor equals slavery.

It has taken Chavez and Maduro 17 years to transition from capitalism to socialism to slavery. President Obama has started a similar process here. Hillary proposes to serve his "third term."


Posted: Wednesday, Sept. 2, 2016 - QCOline.com

Copyright 2016

John Donald O'Shea