Tuesday, May 10, 2016

Venezuela: A Harbinger for America's Future

Venezuela Socialism

From PanAM Post

Ramón Muchacho, Mayor of Chacao in Caracas, said the streets of the capital of Venezuela are filled with people killing animals for food.
Through Twitter, Muchacho reported that in Venezuela, it is a “painful reality” that people “hunt cats, dogs and pigeons” to ease their hunger.
People are also reportedly gathering vegetables from the ground and trash to eat as well.

Though Venezeula has a turbulent history, it was from 1958 until 1986 the most prosperous country in South America. It sits on enough oil to become a world class economy with a first world standard of living. Venezuela's transformation has a disturbing similarity to the current transformation of the United States.

A little bit of history.

The 1970s oil crisis caused a spike in demand, and caused prices to soar. Venezuela nationalized its oil companies in 1976 in an attempt to control prices. When the boom went bust in 1986, the Venezuelan government printed money to meet its financial obligations. The resulting inflation caused poverty and rampant corruption exploded among the two ruling parties in the Venezuelan Parliament, culminating in two coup attempts by a third party called the Radical Cause, led Hugo Chávez.

Though he failed to take the country by force, Hugo Chávez was elected in 1998, as a result of division between the makers and takers. He rose to prominence and power on a platform aimed at upending a corrupt two-party system, while promising heavy wealth redistribution and regulation of business.

The economy was not fully nationalized at first - the official ideology of Bolvarism was modeled on the "halfwayness" of Democratic Socialism - but the regulations and taxes further impoverished Venezuela. In 2002 there was a coup attempt against Chávez that resulted from disastrous policy, but he accused the USA of plotting the coup and the failing oil industry of financing it, and he ordered the military to take over the oil industry and fire thousands of workers for political reasons. In 2004, there was a recall election, but by this time, the takers outnumbered the makers and he remained in power.

Though Chávez died in 2013, his successor, Nicolás Maduro, has carried on the socialist policy with dictatorial powers, destroying what little remains of Venezuela's economy to wage what he believes is an "economic war" against the USA. This, along with rampant inflation - currently the world's highest - has caused severe shortages of basic necessities and an explosion in crime. Socialism has all but destroyed a country that could be very prosperous.

How it parallels the USA.

The housing bubble burst in 2007, creating the worst economic downfall since the Great Depression. The bubble itself had its roots in government intervention, when the government sought to increase home ownership among the poor and minorities, but that is largely forgotten. Both the Republicans and Democrats have sunk money into the big banks, and have printed money in an attempt to offset the bubble burst. This has only created stagflation, with prices outpacing sluggish and near-zero growth. This has been amplified by additional taxes and regulations, such as those created by the Affordable Care Act.

Though the political situation is not quite as physically perilous as in Venezuela (yet), Venezuelan history is repeating itself in a fashion in the USA: there is a similar division between the makers and the takers.

The USA is right now at a similar stage in the evolution of socialism that Venezuela was in 1998. Bernie Sanders has risen to prominence on promises of a socialist utopia, while Hillary moves even further to the left (than she already is) to compete with Sanders. The Republicans have very little to offer, having never opposed the socialist agenda of Obama. Regardless of who controls congress and the whitehouse by 2017, eventually the takers will eventually outnumber the makers, unless there is a massive social change.


  1. Hi SOL.Have you read " the creature from Jekyll island"? I started it the other day and it's crazy what they have find manipulating the currency. One of our fellow bloggers recommended it to me and I got the audible version to listen to during my commute. You should check it out.

    1. I have never read it but I have heard a song based on it:


      I will read it though.

    2. I read the lyrics. Yup it's an eye opener! I'll check out the song. :-)

    3. It's awesome. The band is a side project of Iced Earth guitarist Jon Schaffer and is all about freedom.