Tag Archives: Redistribution of Wealth

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Chavez marches Venezuela down the road to serfdom at gunpoint

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CNN reports that Chavez has devalued the Venezuelan bolivar.

In the wake of his decision to devalue Venezuela’s currency, President Hugo Chavez on Sunday said he would put the military on the streets to ensure that business owners don’t raise prices.

Speaking on his weekly television program, “Alo Presidente,” Chavez railed against merchants who re-price their items in reaction to Friday’s announcement that the Venezuelan bolivar currency, which had been fixed at 2.15 to the U.S. dollar since 2005, was devalued to 4.3 to the dollar. For food and medicine, Chavez announced a second fixed exchange rate for these “necessity” goods at 2.6 bolivares to the dollar.

“I want the national guard in the streets, with the people, to fight speculation,” Chavez said, calling re-pricing a form of robbery.

[…]He encouraged people to publicly denounce businesses where prices increase and threatened to expropriate businesses that do.

The government would transfer ownership of such businesses to the workers, Chavez said.

Yes, attacking and nationalizing businesses with the Venezuelan army will do a lot to create jobs and increase competition among product and service providers. Surely lower prices and increased quality will result from this consumer-friendly policy. And foreign investors will be rushing to Venezuela to invest so they can take 700 million Euro losses in a split second.

Investors Business Daily explains the result of devaluing a currency.

For starters, it’s a tax. “The government has decided to recognize the massive accumulated inflation in the country and is trying to increase the purchasing power of the (dwindling) dollars it has . .. (by selling) dollars to the private sector at a higher price,” explained Hausmann. “In the short run, this is like a tax on the sale of dollars.”

[…]”The poor have no way to protect themselves from devaluation,” said Johns Hopkins University’s Steve Hanke, who has advised previous Venezuelan leaders about currency. “Their only means are awkward and inefficient.”

Meanwhile, the “tax” on dollars “means a transfer of resources out of the private economy to the government’s coffers,” said Hausmann. “As a consequence, the rest of society will have less income.”

Teachers and doctors, already in short supply among the poor, will likely be hard hit, along with small businesses.

Worse, inflation’s likely to surge, another burden for the poor.

Inflation was already on its way to 30% before Friday’s devaluation. Food, which makes up 80% of what the poor buy, has been hit with a 20% immediate increase in price. This effectively lifts inflation for the poor to a devastating 50%.

Costs for other goods, such as car tires, will rise by 100%. A banker in Caracas tells IBD this will push average inflation to 60% — adding to accumulated inflation of 600% over the past decade, a brutal tax on poor Venezuelans.

The very complexity of the new currency scheme will be a nightmare for the poor, says Hanke.

“More regulations will lead to repression,” he said, citing the weakening freedom to spend money. More controls mean shortages.

I think that people who elect communists like Chavez need to be more careful about listening to honeyed words about the benefits of wealth redistribution. When you attack the rich, they stop hiring workers. And if you attack them enough, they leave your country. Communism causes poverty and famine. It always has, and always will. If you want to know where it ends, look at Cuba and North Korea. That’s where Venezuela is headed.

More on this story from Fausta here and here. ECM sent an article about scheduled blackouts here.

Is Obama any different from Chavez on economic policy?

Here they are shaking hands:

Is there such a thing as a secret handshake for communist dictators? Just asking. Not saying that Chavez or Obama are communist dictators. Just wondering if communist dictators have a secret handshake. A communist dictator handshake conducted by communist dictators to congratulate themselves on how well their ignorance of economics “helps” the poor to starve to death.

Here is the currency graph of the US dollar versus the Canadian dollar. A decline of about 20% in 12 months. (The current exchange rate is 1.03301)

How many Canadian dollars is 1 US dollar worth?
January     1.22664 CAD   (21 days average)
February    1.24684 CAD   (20 days average)
March       1.26275 CAD   (22 days average)
April       1.22697 CAD   (21 days average)
May         1.15311 CAD   (21 days average)
June        1.12458 CAD   (22 days average)
July        1.12350 CAD   (23 days average)
August      1.08796 CAD   (21 days average)
September   1.08182 CAD   (22 days average)
October     1.05427 CAD   (22 days average)
November    1.05978 CAD   (21 days average)
December    1.05366 CAD   (22 days average)

I wonder which one knows the least about economics. Chavez? Obama? Or my keyboard? Hmmmmn.

Here is my previous story about energy rationing in Venezuela.

News

Unemployment rate among men aged 25-54 is 19.4%

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Check out this post over at Dinocrat. (H/T ECM)

Excerpt:

According to an analysis done by TIME Magazine’s Justin Fox, almost 20% of 25-54 year old men are unemployed today, a receord since the Bureau of Labor Statistics started keeping track of the data just after World War II. An unemployment rate of 20% among men in their prime is shocking. Absent the substantial government transfer payments today and the large labor force participation by women, the 20% male unemployment figure would be regarded as a national emergency.

Rome is burning. And yet Congress and the administration fiddle with crooked healthcare deals, tomfoolery such as AGW, perverse nonsense like cap and trade, imaginary “green” jobs, the treating of enemy combatants as mere crooks, etc. — and their policies towards hostile powers are even more ill-informed and provocatively weak. It’s hard to imagine a government more out of step with the people.

Here’s the graph from the Bureau of Labor Statistics showing the decline since 1948. (H/T Time Magazine)

This is actually important to me, and something I am thinking a lot about. I have come to realize that marriage is really an incubator for passing on values to children that are often different from those of the state. Scholars like Stephen Baskerville and Jennifer Roback Morse have argued that the family is a buffer against the power and influence of the state. This is especially true for Christian men and women whose values are definitely not those of the secular leftist state. But where do families come from? How do they start?

In order to have a family, a man marries a woman who agrees with his worldview and values, and then they have children. It’s the man’s role to lead the family by protecting and providing for his wife and children. But that man needs a job so that he can have confidence that he can fulfill those responsibilities. The earning of money is what gives a man the respect and authority in the home so that he can lead his wife and children. Any challenge to the man’s role as protector and provider diminishes his authority to lead.

Already, I am concerned about how the massive tax burden placed on working men causes them to have their authority whittled down, since the state confiscates much of a man’s money and then provides services that he really should be providing himself. Often the services provided (abortion, etc.) are not compatible with Christianity at all! But this new statistic about 19.4% of men in their prime being unemployed is even worse, because now men are earning no money at all! How can they start a family with no income?

There really isn’t much thought going on today about the problem of how to get men to marry and stay married. Instead, people are more focused on dealing with a variety of of grievances from victim groups. I’ve blogged before about the problems that men are having in the schools today, largely due to the application of feminist theory to education. No one seems to be concerned about whether men are doing well in school, and whether they are being raised in families with actual fathers, instead being raised by government subsidies.

I think that young people really need to stop and think about what they want out of life. There seems to be a tendency today among young people to think that relationships are about fun, and that it isn’t necessary to be careful about your choice of mate because the government will always be there to take care of you if you get into trouble, (e.g. – unplanned pregnancy, abusive spouse, etc.). This must stop. We need to stop looking at the government as a substitute for making solid, long-term choices about sex and marriage.

At some point we are going to have to ask ourselves whether we are ready to abandon the family entirely and just substitute sperm donations and government checks for men. If the state is the source of money in a child-producing unit, then the state is the one who calls the tune about what the children will believe. And make no mistake – academics on the secular left are salivating at the thought of pushing their values onto the next generation of children. That is why they are hostile to voucher programs and private schools.

Related stories

Some stories from last year about just a few the problems men are facing.

There are actually many other problems that men are facing that I could have brought up, but my focus today is on education and jobs. These are serious problems and they have serious consequences.

News

Communist Venezuela introduces energy rationing in 2010

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Story here from Breitbart. (H/T ECM)

Excerpt:

Oil-rich Venezuela ushered in 2010 with new measures rationing electricity use in malls, businesses and billboards, as Hugo Chavez’s government aimed to save power amid a crippling drought.

The new regulations came into effect January 1, with businesses required to comply with reduced consumption limits and authorities warning of forced power cuts and rate hikes if the measures are not followed.

[…]The power crunch is expected to have an impact on a wide variety of businesses, including cinemas, casinos and bingo halls.

Establishments failing to comply with the measures could face outages for a period of 24 hours, and up to 72-hour suspensions “in case of recidivism,” according to the decree.

The regulation also orders businesses to institute savings plans aimed at shedding consumption by at least 20 percent, a measure that will be evaluated monthly by the newly-created ministry of electricity.

Tariff surcharges of up to 20 percent could be imposed on violators.

Rationing is also to apply to lighted advertisements.

[…]In 2009 there were four nationwide blackouts, with daily failures common in several cities.

Communism produces economic decline by encouraging entrepreneurs to flee or to stop producing, since the state views what these producers produce as something to be seized and distributed to buy votes. If no one wants to start any businesses, then there won’t be any jobs for the people. People end up depending on the state for bread, with all that that entails. The left wants equality of life outcome regardless of choices, (except for themselves).

I don’t see any difference between the intelligence and policies of Hugo Chavez and Barack Obama. Hugo is just further along the road to serfdom, in my opinion. Obama just has more capitalism and Judeo-Christian morality to undo. After Obama passes government-controlled rationing of health care, he’ll probably move on to government-controlled rationing of energy. By then, Chavez should be rationing births, housing, food and water.