Venezuela Implodes

Despite its vast natural resources and abundant wealth potential, Venezuela is imploding from the authoritarian socialism imposed upon it by corrupt former President Hugo Chavez and continued by his successor former Vice President Nicolas Maduro who seized power after Chavez’s death from cancer in 2013.

Rich in agricultural commodities such as coffee and cocoa, Venezuela was one of the founding members of OPEC in 1960 due to its vast petroleum reserves. In fact, Venezuela’s proven oil reserves surpass even those of Saudi Arabia making it the world’s leader. With the rise in oil prices around 2001, Venezuela looked set to recover from the oil glut of the 1980s which forced down prices and led to severe economic crises due to its heavy dependence on oil exports to underpin the Venezuelan economy, but President Hugo Chavez diverted these increasing revenues into social spending which eventually led to a downward spiraling of the economy.

Initially focused on improvements in education and infrastructure, Chavez’s social spending soon accelerated into massive government giveaways as he sought to prop up his socialist government and quell opposition unrest. Chavez launched the Bolivarian Revolution upon his election as president in 1998, which began with the drafting of a new constitution in 1999 that granted Chavez enormous power to control the Venezuelan government. As leader of this Bolivarian Revolution, or “People’s Democracy,” Chavez employed massive propaganda to mislead Venezuelans about his programs and distract attention from government corruption due to his appointment of family members and close friends to high government positions.

The long term success of a country’s economy is dependent upon strong property rights, sound currency, and the rule of law. Venezuela has the weakest property rights in the world according to the Heritage foundation and the Wall Street Journal, scoring just 5.0 on a scale of 100, and expropriation without compensation is not uncommon. Heavily dependent on petroleum exports, Venezuela’s economy suffers from Dutch Disease, an economic condition in which a primary economic sector crowds out investment in other sectors causing a country’s currency to escalate in value and exacerbate the economic decline of these other sectors. Venezuela’s petroleum sector accounts for a third of GDP, 80% of exports, and over half of government revenues at the expense of the manufacturing and agriculture sectors.

The combination of weak property rights and overdependence on petroleum exports is difficult enough for any country to manage, but the addition of socialist policies promulgated by Chavez has been the final nail in the Venezuelan economy. Rampant inflation has destroyed the value of the Venezuelan Bolivar, and Venezuelans have been reduced to scrounging for basic necessities as store shelves sit empty, reminiscent of scenes from the former Soviet Union. The communist/socialist model has been a total failure everywhere it has been imposed, but its siren song continues to seduce the gullible despite ample evidence of the destruction it leaves in its wake.

Those politicians guilty of promoting socialism as the cure for a nation’s ills commit a most atrocious act of treason by placing their own self-indulgent political ambitions above the needs of the populace. They employ the alluring prose of propaganda to paint their socialist schemes as a panacea for those inhabiting the lower rungs of the economic ladder all while neglecting the details required in their implementation or the consequences to follow. Their only thought is to entrench themselves in power as firmly as possible to ensure their survival when the eventual collapse occurs. Caught up in their own cult of personality, some leaders truly believe their socialist experiment will work, or at least work out to the point where its implosion is manageable.

American progressives led by President Obama are convinced their form of socialism, designed as it is to entrap the American middle class into government dependence with the insidious lure of government entitlements, will succeed because of their naïve belief that Americans will not act in the same manner as victims of other socialist failures have by refusing to cooperate with leaders demanding their allegiance to and participation in a system that no longer benefits them. The basic failure of communist/socialist systems is the fact that it is useless to citizens for everything to be free when there is nothing left to give away. Citizens would rather have an economy that requires them to pay for goods that are available rather than a system where unavailable goods are free. After all, it’s not free if it’s not available.

Venezuela is yet another poignant example of the failure of socialism and the chaos which results from its implementation. Americans face a stark choice this election in deciding whether to continue the socialist policies of the progressive Democrats and their establishment Republican acolytes, or to abandon socialism as the failure it has always been and restore the free market principles upon which America was founded and which are responsible for its ascendancy as the world’s lone superpower in less than four hundred years.

We’ve witnessed President Obama more than double America’s debt to the unfathomable amount of over twenty trillion dollars while wasting vast amounts of resources enriching his political cronies through dubious social programs. President Obama and the progressives have placed America on the exact same trajectory as President Chavez placed Venezuela, and we can expect the exact same set of chaotic circumstances to unfold as the American economy collapses under the weight of unsustainable socialist policies. An implosion of the American economy will lead to a breakdown in society promulgated by massive civil unrest as desperate Americans fight over basic necessities.

Progressives will continue to claim that this could never happen to America with her vast natural resources and wealth, but one need only look to Venezuela as a case study in the pernicious ability of socialism to destroy wealth and destabilize a country rich in natural resources. Government troops are already taking up positions around Caracas to stave off the civil unrest arising from the breakdown of Venezuelan society as her people fight over basic necessities such as food and water. Americans shocked at the spectacle of empty store shelves and civil unrest in a country with such wealth potential are absorbing this lesson while preparing to vote this fall. Weary of President Obama and his progressive policies which have been such an unnecessary economic drag and led to the disruption of so many lives, political momentum had already shifted toward Donald Trump, and the situation in Venezuela is only serving to increase that momentum.

The communist/socialist faction is adept at employing propaganda to disguise their true motives, but Americans are starting to catch on to their lies. The global warming hoax was perpetrated as doom-and-gloom sky-is-falling prediction of world catastrophe brought about by industrialization which has led to an unprecedented rise in the standard of living around the world. Its true motives are coming to light as a ploy to seize political power over the energy industry and shift trillions in wealth from first-world countries to third-world dictatorships. Unemployed coal miners in West Virginia are among the first victims of this cruel hoax with many millions more to follow as energy prices are artificially driven up for political gain.

Control of the energy industry would allow progressives to limit American exploration and production, thus driving up the cost of foreign energy and American dependence on foreign energy sources. This aligns with the progressive goal of eliminating the concept of American exceptionalism and reducing America to the level of third-world countries in true communist ideological form. Progressives chafe at the notion that America should be more powerful and prestigious than other countries, and loathe the idea that America achieved this power and prestige due to her adherence to free market principles while these third-world countries sank under the failure of communist/socialist schemes enacted by powerful dictators. They prefer to advance the false narrative of American colonialism as the cause for third-world ills while conveniently ignoring the European colonialism responsible for so much exploitation of third-world countries.

The reduction in American prestige and power is evident in the neglect President Obama gives to serious attempts to replace the American dollar as the world’s reserve currency. China has worked for years to replace the dollar with a market basket of currencies as a first step to the eventual adoption of the renminbi as the reserve currency. President Obama plays down the dollar decline with misleading explanations that being the world’s reserve currency is not a big deal and brings America nothing as a result. Nothing could be further from the truth as being the world’s reserve currency means that America is not forced to pay exchange costs to acquire a different currency for international trade which would drive up the costs of both imports for American consumers and exports for American businesses.

The drive to replace the dollar as the reserve currency is driven by the desire of China and other countries to avoid these exchange costs necessitated by the acquisition of American dollars as a prerequisite to international trade. Losing the dollar’s status as the world’s reserve currency also means a tremendous loss of international prestige, and the undermining of the dollar as a stable currency upon whose value the world can rely. America would become just another country sinking into international oblivion exactly like other world powers before her. Great Britain once commanded an empire so vast that it could be said that the sun never sat on the British Empire and her currency was accepted as the standard of value around the world. Mismanagement caused Great Britain to lose her empire and shrink from the world stage dependent upon the military might of one of its former colonies for her protection, and the pound sterling is just another currency among the currencies of the world.

The European Union was born out of an envious attempt to compete with the might of the United States but lacking a rigorous honesty which would have recognized the underlying structural problems inherent in such an arrangement which are even now destabilizing its creation. Europe has relied upon American military might for its defense through NATO allowing European countries to slash their defense budgets below the 2% of GDP threshold required for NATO membership. Proponents of the European Union also ignored the unwillingness of European countries to slash their debt below the 5% of GDP threshold required for membership. The ongoing Greek debt crisis has been a huge undertow threatening dissolution of the European Union as wealthier countries like Germany and France chafe at being forced to rescue Greece from its profligacy while the Greeks thumb their nose at their rescuers by refusing to consider any reforms which would place it on a more stable financial footing. European socialism continues to destabilize the European Union as it arrogantly demands more military protection from America while seeking to topple her from atop the world pyramid.

Meanwhile, President Obama continues his apology tours for imagined past sins taken completely out of the context of the times and so damaging of America’s reputation as a beacon of moral authority for the export of democracy and freedom. Obama’s refusal to lead has succeeded in making America appear as a tired old country no longer up to the task of being a world power and undermined domestic support for her involvement on the international stage.

The situation in Venezuela foreshadows America’s future if progressives are left unchecked to incrementally advance their agenda at our expense. It won’t be long before those stories of hyperinflation, empty store shelves, and civil unrest are about conditions in the United States instead of Venezuela. Unless an immediate turnaround is undertaken, beginning with a purge of the progressives and their failed communist/socialist platform, this is a very real possibility for the future of the United States.

Advertisements
This entry was posted in Economics and tagged , , , , , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s