Ideas Have Consequences
New York Times: Chávez Threatens to Jail Price Control Violators
Public spending grew last year by more than 50 percent and has more than doubled since the start of 2004, as Mr. Chávez has channeled oil revenues into social programs and projects like bridges, highways, trains, subways, museums and, in a departure for a country where baseball reigns supreme, soccer stadiums.In an indicator of concern with Mr. Chávez's economic policies, which included nationalizing companies in the telephone and electricity industries, foreign direct investment was negative in the first nine months of 2006. The last year Venezuela had a net investment outflow was in 1986.
Shortages of basic foods have been sporadic since the government strengthened price controls in 2003 after a debilitating strike by oil workers. But in recent weeks, the scarcity of items like meat and chicken have led to a panicked reaction by federal authorities as they try to understand how such shortages could develop in a seemingly flourishing economy.
Commissars never learn. Apparently, neither do the people who choose to put them in power.
Entering a supermarket here is a bizarre experience. Shelves are fully stocked with Scotch whiskey, Argentine wines and imported cheeses like brie and Camembert, but basic staples like black beans and desirable cuts of beef like sirloin are often absent. Customers, even those in the government's own Mercal chain of subsidized grocery stores, are left with choices like pork neck bones, rabbit and unusual cuts of lamb.With shoppers limited to just two large packages of sugar, a black market in sugar has developed among street vendors in parts of Caracas. “This country is going to turn into Cuba, or Chávez will have to give in,” said Cándida de Gómez, 54, a shopper at a private supermarket in Los Palos Grandes, a district in the capital.
These repeated experiments in socialism are a tragic result of people not thinking.
Fears that more private companies could be nationalized have put further pressure on the currency as rich Venezuelans try to take money out of the country. Concern over capital flight has made the government jittery, with vague threats issued to newspapers that publish unofficial currency rates (officially the bolívar is quoted at about 2,150 to the dollar).Regardless of efforts to stop illicit currency trading, the weaker bolívar has made imported food, fertilizers and agricultural equipment more expensive. Venezuela, despite boasting some of South America's most fertile farmland, still imports more than half its food, largely from Argentina, Brazil, Colombia and the United States.
Supermarket owners expressed relief when the government this week cut value-added taxes on retail food sales and raised the prices on more than 100 staples in an effort to alleviate the shortages. The announcement included an average 32 percent increase in beef prices and a 45 percent increase in chicken prices.
Following Mr. Chávez's nationalization threat, supermarket owners were cautious in their public statements. "As long as we are complying with the regulations, I don't believe there will be any type of reprisal," said Luis Rodríguez, executive director of the National Supermarket Association.
But many were clearly torn, afraid that their stores could be seized if they complained, but at a loss as to how to continue operating. "If I don't sell at the regulated price they'll fine me, and if I don't sell meat I'll be out of business," said a butcher shop owner here.
Mr. Butcher Shop Owner, they don't care about you. They don't care about profit. They don't care about individuals. Their faith (and I choose that word with precision) is in The Collective and you, frankly, don't matter. Businesses like yours and the people involved in them constitute the energy that feeds their machine.
Venezuela is lost as long as people like these are allowed to exercise their illegitimate authority. Get rid of them.