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Venezuela Economy Falling Over The CliffBack then in 2013 we reported about Venezuela. We described how Venezuela Is the New Workers Paradise. In that article we described how in October of that year, an economic ticking bomb was about to go off. At that time, Venezuelans were in:

  • Electrical emergencies (blackouts)
  • Food emergencies (massive shortages)
  • Health emergencies (health system collapse)
  • Hyperinflation
  • Magnicide attempts (a large number of assassination attempt of key government officials)
  • Infrastructure emergencies (critical decay of roads and highways)

It did (the bomb going off thingy). As a consequence of that, Venezuelans are now "enjoying" the following:

Now they are in:

  • Electrical emergencies (blackouts)
  • Food emergencies (massive shortages)
  • Health emergencies (health system collapse)
  • Hyperinflation
  • Magnicide attempts (a large number of assassination attempt of key government officials)
  • Infrastructure emergencies (critical decay of roads and highways)

Same, but worse, if that is even possible! See the difference? No, right? No matter how bad things are, socialism/communism can always make them worse. Don't believe us? Take a look at the following:

  • Venezuela, the country with the largest oil reserves in the world is importing oil. That's right. Importing
  • There are massive shortages of food, toilet paper, diapers, medicines and anything else you may care to name. Remember the photograph of "empty shelves" from the good old days of the USSR? Welcome to the future, where those shelves are still empty!
  • But that's OK, because Venezuelan citizens have been supplementing their caloric intake by hunting dog, cats, pigeons and basically anything that walks or moves. That will take care of all those pesky pests! No pest control required!
  • But that's OK because the Venezuelan government has been creating wealth out of thin air and Venezuelan people will soon enjoy all the benefits of rich people. As soon as the massive inflation/hyperinflation (of "only" 720% according to "official" figures) which all that "wealth printing" has unleashed, is brought under control.
  • But that's OK because the Venezuelan government does not have enough money to pay for the paper to keep the presses printing Venezuelan Bolivars anyways. You see? Eventually communism finds the solution. Just have to wait long enough.
  • But that's OK because Caracas (Venezuela's capital city) is the most dangerous city to live in because it has climbed to the top of world-wide list of crime rate (about 2 murders per hour - that's right - hour). Call Guiness? Somehow we don't think the Venezuelan government would be too happy.
  • But that's OK because the government is threatening with persecuting, prosecuting and jailing factory owners who do not continue production at a loss. Those evil, evil bastards! How dare they not getting bankrupt for the greater good!
  • But that's OK because if you ever get sick, you can always go to any free government hospital where you will be taken care off. Just don't ask for gloves, soap or… gasp… medicines! because they have all run out long time ago!
  • But that's OK because "communist solidarity" will come to aid those in despair. Like the doctors that Cuba sent… only to see them deserting their posts for lack of… well… everything!
  • But that's OK because in any case, the government only operates two days a week to conserve electricity, which is now so scarce (and expensive to produce) that it cannot be afforded.
  • But that's OK because even if there would be enough electricity in Venezuela, there aren't sufficient refrigerators to keep all the medicines in them. See? Communism in action. Eventually, eeeeeverything gets solved.
  • But that's OK because grocery store looting has now replaced other hobbies and it is fast becoming the new way to grocery shop. Pay for food? Naaaa… we here in the worker's paradise don't need those deprecated concepts. We just go and help ourselves! After all, what's yours is ours… if there is anything left. You know. The famous "redistribution of wealth" thingy.

All of that and more is listed here only to emphasize  the consequences of following communism. Those facts (and you can check them yourself elsewhere) are the net effect of clinical and sterilized notions such as "drop in standards of living". Ask yourself this: would you like to live there? Sure, if you are a sociopath or a social scholar and need a ready-made social experiment… but otherwise… don't think so. And please feel free to correct us if we are wrong.

THE DRIBBLE

All of that and more is anecdotal evidence. Stuff that is interesting to read but it is also "happening". It is "raw intelligence" that needs to be analyzed and interpreted if you want something solid to understand. This understanding is not complicated; communism does not work because it destroys the free market. The consequences of a destroyed free market is that… we have a destroyed market! Obvious, right? And what happens when we have no market? We can't buy anything because there is nothing there to buy. And what happens when we can't buy anything? We are screwed. Say hello to Venezuela. This much and more is also known and has been hashed and re-hashed to death. That's not at the core of this article. The following is.

THE CORE

No, not the movie. The economic core. What is interesting is not that Venezuela is collapsing in a downward spiral of despair (see…we can be poetic when we want), but what the Mainstream Media (aka MSM) keeps saying.

Most media from the left, they are minimizing the whole thing. Surprised yet? Nope.

Most media from the right, are exaggerating the whole thing. Surprised yet? Nope.

What is interesting is the spin which MSM economists (yeah.. those that brought you "good inflation" and "market management") are blaming this debacle on. Hold on to your pants because this really is funny (follow the thread):

  1. Venezuelans enjoyed prosperity, better housing, subsidized food and higher wages after the 1990's "revolution" and that's OK.
  2. Unfortunately Venezuelan exports are…96% oil-related… and after the 1990's "revolution" the Venezuelan government failed to develop a "sustainable economy".
  3. And, the Venezuelan government failed to save anything of the vast amounts of money that was flowing-in at the time, and have they done so, the impact of the current recession (going strong since 2014) would have been "softened".

There. All explained.

THE ANALYSIS

Let's now pause a second or two to think about what MSM economists are saying. Let's. Done.

To begin with, they are OK with prosperity, better housing, subsidized food and higher wages… which… are based on a Ponzi scheme of spending, spending and spending which is based on massive oil reserves and massive oil prices. In other words, they are OK with spending with no end in sight based on ridiculous economic principles. It is the old "spend and impose" tactic; for as long as there is money to burn, you can sustain anything.

But then those genius economic minds, those titans of economic thinking, turn around and blame the Venezuelan government for not "developing" (their word, not ours) a "sustainable economy". Hummm… Let's see. So. A government steals the riches from the people and spends them as it sees fit. There is nothing left for the people. Furthermore, this very same government systematically destroys medical industries, construction industries and food industries through subsides thus driving out of business (and out of the country) all those entrepreneurs (and their capital) who were actually creating those industries in the first place. So. In Venezuela there is no money and not only there are no incentives but entrepreneurship is dis-incentivated by the very same policies that are required for the "redistribution of wealth". See the problem now? It is absolutely impossible to have communism and to develop a "sustainable economy" at the same time. Period. Now, this wasn't so hard, was it? But if we can see it, and you can see it, how is that MSM economists can't? Simple. They don't want to see it. They are not being paid to see it. Period.

And then, having demonstrated this supine level of stupidity, those geniuses blame the Venezuelan government for "not saving" in "good times". Sure. Unlike current governments do. All over the world. And we can see this phenomenon taking place elsewhere because elsewhere in the world governments are not growing their debts as if there is no future after them. No sir. That is not the case at all. For example our article Happy Breakeven Year is a figment of IMF's imagination and their "official" data. Of course. Silly us.

CONCLUSION

What is going on in Venezuela is an outlier. It seldom happens. Normally, economic utter destruction typically takes many, many decades to surface. Add to their problems the 2008 debacle, the current drop in oil prices and the post-2008 debacle and you have a perfect storm. So, not everything is to be blamed on their communist government.

However, and there is always a however, that is not the point. The point is that communism and communism-light (aka socialism) does not work. The point is that MSM economists are in error. The point is that all those so-called "solutions" that MSM economists are recommending for Venezuela ex post facto (i.e. after the fact) do not work either. The point is that your MSM economists are recommending "communism-light" to solve the problems of "communism". Here is a thought. How about we get rid of all kinds of "communism" whatsoever and solve the problem at the root level?

What we are attempting to emphasize in this article is not that Venezuela is in dire economic troubles because of communism (this much is a given), but the fact that the proposed solutions don't work either. This, yes this, is the real danger. That you get "ropped-in" (in professional con terms) into believing that a milder, gentler communism could work and will work. In the famous word of the poet "lasciate ogni speranza, voi ch'entrate" into this concept. The actual point to be made is that communism-light (i.e. socialism) is still communism. It kills. It destroys. Period.

But then again, perhaps you would like to "enjoy" a real "worker's paradise" which is like "heaven" (in Khrushchev's words). If that is the case, then we urge you to move to Venezuela asap before those evil, evil capitalists eventually take over and rise those evil, evil standards of living which are so much to be blamed for the lack of re-distribution of wealth. There. We clarified it for you. Still confused? Oh well… just go to Venezuela and let them explain it to you. We are absolutely sure you will be thoroughly convinced… or jailed… either way.

Note: please see the Glossary if you are unfamiliar with certain words.

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