So how’s that socialism working out?

The pressure on both firms may signal a tougher line by the government against foreign companies in politically sensitive industries such as food. The increasing scarcity of staples such as milk, chicken and eggs is denting Mr. Chávez’s popularity and might worsen the political climate for food companies.

In a sign of how serious the shortages have become, looters last week ransacked government food warehouses in Mr. Chávez’s hometown of Sabaneta. About 100 soldiers and police were sent to restore order, according to the Associated Press.

Empresas Polar, Venezuela’s largest food producer, responded yesterday to nationalization threats, saying it has had no role in the country’s chronic food shortages. Mr. Chávez said Sunday that Polar was "a clear example" of a company that could be nationalized if it were caught hoarding food.

Shortages have become a problem because of price controls implemented by Mr. Chávez in an effort to stem galloping inflation caused by Venezuela’s oil-fueled spending. Companies in many industries complain official prices don’t leave room for profits. Mr. Chávez accuses the companies of hoarding food.

If nationalizing industry causes shortages and inflation, fix it by nationalizing more industries.  Brilliant.  After the Soviet Union, North Korea, communist Eastern Europe, Cuba and many other examples, you’d think people would come to understand that socialism, in spite of all the flowery talk about it being "for the people", is really all about the government and its power.  (Remember that when you hear the about all the "free" goodies you’ll supposedly get from Democrats this election year.)

No human or committee of humans can ever hope to manage something as incredibly complex as a national economy.  Regulate, yes.  Nudge, yes.  Manage, no.  If a business can’t make a profit, it won’t stay in business, and won’t provide the goods or services it was providing. 

Now, Chavez ain’t no dummy.  He knows that all this bullying of corporations gives him street cred as a "man of the people", but even that sheen is beginning to dull as reality sets in. 

Tell ya’ what, though.  I’ll bet Sean Penn, Harry Belafonte and the other glitterati that visit Venezuela won’t have to stand in those lines.  Bad for Hugo’s PR machine, dontcha’ know?

[tags]Venezuela,Hugo Chavez,socialism[/tags]

Filed under: DougEconomics & TaxesGovernmentLiberalVenezuela

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