Tag Archives: Redistribution

Venezuela solves hunger by banning bread lines, and solves crime by banning self-defense

Two socialists shake hands: Barack Obama and Hugo Chavez
Two socialists shake hands: Barack Obama and Hugo Chavez

First, let’s review who has been running Venezuela, and what they’ve been doing in the last few decades.

Here is an article from March 2013 from the radically leftist Slate. The headline is “Hugo Chavez’s economic miracle: The Venezuelan leader was often marginalized as a radical. But his brand of socialism achieved real economic gains”. The author is “a senior writer for the International Business Times”.

He writes:

Chavez became the bugaboo of American politics because his full-throated advocacy of socialism and redistributionism at once represented a fundamental critique of neoliberal economics, and also delivered some indisputably positive results. Indeed, as shown by some of the most significant indicators, Chavez racked up an economic record that a legacy-obsessed American president could only dream of achieving.

What did Chavez do, precisely, that caused the Venezuelan economic to boom? Well, he nationalized private industry and redistributed wealth from job creators and entrepreneurs to the poor.

As The Week correctly put it, while “Chavez’s policies of redistribution and nationalization of oil assets endeared him to Venezuela’s working class” and produced many laudable results, the country’s “oil-centric economy has taken away resources from other areas that are badly in need of development.”

It’s a miracle! Yay for socialism! Well, that’s what leftists thought – this time, for sure, the laws of economics would be suspended and unicorns would fly.

Reason.com reports on what happened next:

The tragedy of Venezuela continues unabated, but that doesn’t mean the government of President Nicolás Maduro has stopped trying to fix problems like the devastating scarcity of food which has led to malnutrition, riots, food truck hijackings, vigilante lynchings of petty thieves, and the starvation of zoo animals.

No, Maduro hasn’t admitted the failure of Chavismo — the brand of Bolivarian socialism imposed on the oil-rich country by his late predecessor Hugo Chavez — instead, Venezuela’s embattled leader has launched a war on “anxiety.”

The National Superintendency of Fair Prices has reportedly instituted a policy of fining bakeries that allow lines to stretch out their front doors, according to PanAmPost. The head of this particular bureaucracy, William Contreras, claims the lines aren’t a true indicator of a severe shortage of bread, but rather, a political “strategy of generating anxiety.”

[…][T]his is indicative of the magical thinking of Venezuela’s socialist government: the breakdown of the economy couldn’t possibly because of failed economic policy, and scarcity must be the result of a greater conspiracy.

Fine, so they solved the problem of not enough bread by banning line-ups for bread. Great. But what about Venezuela’s astronomically high murder rate? What will they ban to solve that?

Easy, peasy: by seizing the guns of law-abiding people, just like Hillary Clinton wants to do.

Daily Wire reports:

Venezuela is descending further into the misery of socialism, as their government confiscated 2,000 pistols, shotguns and other firearms on Wednesday.

Reuters reports that the firearms were “crushed and chopped up” at a square in Caracas and ammunition was registered through laser technology as part of Interior Minister Nestor Reverol’s recent initiatives to further disarm the Venezuelan citizenry.

“We are going to bring disarmament and peace,” Reverol declared.

Venezuela currently has the second highest murder rate in the world, and Caracas is the most violent city in the world. In 2012, dictator Hugo Chavez completely banned private gun ownership, and yet crime rose.

Naturally, taking away the guns of law abiding people increases the rate of violent crime. In the UK, where the ban on handguns resulted in the doubling of violent crime in the four years after the ban. This is known by anyone who has spent more than two minutes studying the history of these laws in other times or places.

In my last post, I reported about how Venezuela had resorted to forced labor (slavery) to grow more food.

Here’s what CNBC reported:

The government of Venezuela has issued a decree that “effectively amounts to forced labor” in an attempt to fix a spiraling food crisis, according to a new report from Amnesty International.

A Venezuelan ministry last week announced Resolution No. 9855, which calls for the establishment of a “transitory labor regime” in order to relaunch the agricultural and food sector. The decree says that the government must do what is “necessary to achieve strategic levels of self-sufficiency,” and states that workers can be forcefully moved from their jobs to work in farm fields or elsewhere in the agricultural sector for periods of 60 days.

It’s so bad that Venezuelans are breaking into zoos to kill and eat the animals. Now that’s real progressive animal rights for you. But they can solve this by banning the eating of meat.

Slavery, food lines, lousy health care, crime sprees, confiscating guns from law abiding citizens. All to be expected when Democrat party policies go into effect. If Democrats wins the House, Senate and Presidency, we’ll see the same here – we’re not any better than any other country. Nothing magic about the United States, if we get away from our Constitution.

Related posts

What is the difference between capitalism and socialism?

Over 100,000 Venezuelans pouring into Colombia from the Venezuela in order to buy food
Over 100,000 Venezuelans cross into Colombia in order to buy food

(This photo H/T Prager University)

One country that has done a good job of implementing socialism is Venezuela.

Here is an article from March 2013 from Slate, a web site that strongly favors socialism. The headline is “Hugo Chavez’s economic miracle: The Venezuelan leader was often marginalized as a radical. But his brand of socialism achieved real economic gains”. The author is “a senior writer for the International Business Times”.

He writes:

Chavez became the bugaboo of American politics because his full-throated advocacy of socialism and redistributionism at once represented a fundamental critique of neoliberal economics, and also delivered some indisputably positive results. Indeed, as shown by some of the most significant indicators, Chavez racked up an economic record that a legacy-obsessed American president could only dream of achieving.

What did Chavez do, precisely, that caused the Venezuelan economic to boom? Well, he nationalized private industry and redistributed wealth from job creators and entrepreneurs to the poor.

As The Week correctly put it, while “Chavez’s policies of redistribution and nationalization of oil assets endeared him to Venezuela’s working class” and produced many laudable results, the country’s “oil-centric economy has taken away resources from other areas that are badly in need of development.”

OK, so that’s pretty much what the Democrat party wants to do in the United States as well. Nationalize the energy sector, nationalize health care, etc. Let the government take over the private sector industries in order to eliminate “inequalities”. Raise taxes, and redistribute the money to the low income people via social programs, also known as welfare.

So, how does it work? Is socialism really an “economic miracle”?

Here is the latest from Venezuela, as reported by CNN Money. (H/T William)

Excerpt:

Venezuelans cried at the sight of fully-stocked supermarket shelves in Colombia.

Pregnant women, children and even elderly Venezuelans crossed into Colombia on Sunday after the border was temporarily reopened, allowing them to buy basic foods and toiletries — rare commodities in their home country.

Tearful Venezuelans had gone weeks without basic food items like milk, flour and toilet paper. It’s a sad but common part of daily life today in crisis-ridden Venezuela, a country that has the world’s largest proven reserves of oil. Colombian officials estimate that about 100,000 Venezuelans crossed the border.

Venezuela is expected to dive deeper into the abyss this year, according to new projections published Wednesday by the International Monetary Fund.

The IMF forecasts Venezuela’s economy will shrink 10% this year, worse than its previous estimate of 8%. It also estimates that inflation in Venezuela will catapult to 700% this year, up from the earlier guess of about 480%.

“Venezuela’s economic condition continues to deteriorate,” says Alejandro Werner, chief Latin America economist at the IMF. The estimates for growth and inflation are the worst worldwide.

The numbers are just the tip of the iceberg. Venezuela is deep into a humanitarian crisis — people are dying in ill-equipped hospitals and many live without basic food items. Venezuela can’t pay to import goods because its government is desperately strapped for cash after years of mismanagement of its funds, heavy spending on poorly-run government programs, and lack of investment on its oil fields.

[…]It’s all even more tragic given that despite Venezuela’s oil abundance, its state-run oil company, PDVSA, is broke. Venezuela’s oil production fell to a 13-year low in June, according to OPEC, of which it’s a member.

That’s what you get when you let the government take over the free enterprise system, or even when you just stifle the free market with burdensome regulations and high taxes. That’s what socialists in Venezuela did. That’s what the Democrat party would do. They’re  two sides of the same coin.

Dennis Prager

Dennis Prager put out a good video recently explaining the problems with socialism:

Why would anyone prefer a system that encourages some people to feel entitled to what other people create and earn? We want a system that is focused on serving your neighbor – not stealing from them.

Arthur Brooks

If you would like a very brief introduction to capitalism, also known as the free enterprise system or the free market system, then you can watch the videos below, featuring Arthur Brooks, president of the American Enterprise Institute.

Here is the first one, which explains the myths that most Americans are taught about capitalism in school and in the culture:

An important advantage of capitalism is that it lifts people out of poverty. The poorest people in America live much better than the wealthy in Venezuela.

And the second video explains what capitalism offers to individuals for their fulfillment, which socialism does not:

Earned success makes people happier, which is at least as important as the wealth benefit.

We can compare the results of each system by looking at where it’s been tried. Capitalism lifts people out of poverty – all the people in the society who are willing to work are lifted out of poverty. Even the people who can’t work in a capitalist society enjoy the benefits of charity from their neighbors – when people do well, they give more money away. Socialism drives those who work and those who don’t work into poverty, and eliminates charity. No one has anything to share when everyone is poor.

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New study: Taxing top earners will not reduce wealth inequality

Lets take a closer look at a puzzle
Lets take a closer look at a puzzle

New study! Here’s a report on it from Real Clear Markets:

The top 10% of Americans control roughly three-quarters of the nation’s wealth, and the minority of Haves are continuing to accumulate more than the majority of Have-Nots.

This is wealth inequality in the United States. And though it doesn’t attract as much attention as income inequality, it’s arguably far more important, imposing economic instabilities and social strife.

To decrease wealth inequality, pundits, politicians, and economists often suggest raising income tax rates on top earners to as high as 50, 70, or even 90 percent.

The idea sounds plausible, but according to a new study published to PLoS ONE it probably won’t work in practice.

[…]In their model, income inequality was tied to a metric called the Gini index, a statistical measure of inequality used for decades. They found that altering income inequality to a Gini index of 0.1 (very low inequality) resulted in the top 10% controlling 78.6% of wealth in 2030, while raising income inequality to a Gini index of 0.9 (very high inequality) resulted in the top 10% controlling 79.3% of wealth in 2030, hardly a significant difference.

Do you know what does work to help people – growing the economy so that everyone can find work. It’s actually been done before.

The conservative Heritage Foundation describes the effects of the Bush tax cuts from 2001 and 2003.

Excerpt:

President Bush signed the first wave of tax cuts in 2001, cutting rates and providing tax relief for families by, for example, doubling of the child tax credit to $1,000.

At Congress’ insistence, the tax relief was initially phased in over many years, so the economy continued to lose jobs. In 2003, realizing its error, Congress made the earlier tax relief effective immediately. Congress also lowered tax rates on capital gains and dividends to encourage business investment, which had been lagging.

It was the then that the economy turned around. Within months of enactment, job growth shot up, eventually creating 8.1 million jobs through 2007. Tax revenues also increased after the Bush tax cuts, due to economic growth.

In 2003, capital gains tax rates were reduced. Rather than expand by 36% as the Congressional Budget Office projected before the tax cut, capital gains revenues more than doubled to $103 billion.

The CBO incorrectly calculated that the post-March 2003 tax cuts would lower 2006 revenues by $75 billion. Revenues for 2006 came in $47 billion above the pre-tax cut baseline.

Here’s what else happened after the 2003 tax cuts lowered the rates on income, capital gains and dividend taxes:

  • GDP grew at an annual rate of just 1.7% in the six quarters before the 2003 tax cuts. In the six quarters following the tax cuts, the growth rate was 4.1%.
  • The S&P 500 dropped 18% in the six quarters before the 2003 tax cuts but increased by 32% over the next six quarters.
  • The economy lost 267,000 jobs in the six quarters before the 2003 tax cuts. In the next six quarters, it added 307,000 jobs, followed by 5 million jobs in the next seven quarters.

The timing of the lower tax rates coincides almost exactly with the stark acceleration in the economy.

Please note: revenues actually went up as a result of the tax cuts, because more economic growth means more taxes are collected on the income that is generated.

Whenever people with savings take risks to grow their wealth, there will be jobs created. The solution to helping the poor isn’t giving them someone else’s money. The solution to helping the poor is to let productive job creators keep their own earnings, so that they use their money to create more jobs. That way, people who want to work have multiple job offers and can pick the best one. Productive people are not the enemy. Productive people give you money to work for them. That’s good for you.

Desiring God asks: is socialism in conflict with Christianity?

Bible study that hits the spot
Bible study that hits the spot

My friend Kevin sent me this amazing article about socialism, which appeared at Desiring God (!!!), of all places. It was authored by Phillip Holmes, who – I see from his picture -has dark skin like me, which is awesome!

In the past, I have given Desiring God and John Piper a lot of heat for not connecting Christianity to the real world. This was especially annoying to me during elections, or when legislation of interest to conservatives was being debated. But I’ve noted that Piper is now much better than he was before.

Anyway, here’s the intro to the article:

Socialism is trending in the minds of many Americans. Some love it, some hate it, and others are indifferent to it. Some Christians argue that it’s evil, while others argue that it’s morally good or neutral. Those that argue for its wickedness often fail to condemn the crony capitalism and corporate welfare that is widespread in the United States; therefore, their arguments often fall on deaf ears with socialist sympathizers. The arguments for its moral good or neutrality typically appeals to emotion, rather than evidence, which is considered insufficient for those that oppose it.

Then they quote John Piper for the definition of socialism – and it’s a great definition, it really captures what is interesting for us as Christians about socialism:

A social and economic system that through legal or governmental or military coercion — in other words, you go to jail if you don’t do this — establishes social ownership at the expense of private or personal ownership and/or you could say where coercion is used to establish social control — if not ownership, at least control of the means of production in society. And thus, through control, you effectively eliminate many of the implications and motivations of private ownership.

In other words, Socialism borrows the compassionate aims of Christianity in meeting people’s needs while rejecting the Christian expectation that this compassion not be coerced or forced. Socialism, therefore, gets its attractiveness at certain points in history where people are drawn to the entitlements that Socialism brings, and where people are ignorant or forgetful of the coercion and the force required to implement it — and whether or not that coercion might, in fact, backfire and result in greater poverty or drab uniformity or, worse, the abuse of the coercion as we saw in the murderous states like USSR and Cambodia.

F. A. Hayek says that the rule of law and private property are the foundations for all other rights, even religious liberty. So, Piper’s focus on property rights is right on the money. This is what we should care about when it comes to socialism, because it impacts our other liberties. The more free the free market is, the most Christians can follow their consciences. But the more the government takes hold of private industry, the harder it is for Christians to earn a living without toeing the secular government’s line. Take a look at what is happening to doctors and nurses in socialist countries like Canada. They are forced to perform abortions, they are forced to assist with assisted suicide. Why? Because government is running the health care system, and there is no other company you can run to that will respect your views. There is no escape when a secular government takes over large parts of the private sector.

This part is my favorite part, the author quotes my favorite economist, Thomas Sowell:

Despite the good they seem to do in some cases, I can’t in good conscience embrace them as a necessary means to escaping poverty. In my experience, I’ve witnessed it hinder more families than it has helped. We give social programs too much credit and the importance of family and faith too little. As a matter of fact, some economists assert that it was during the welfare state the condition of a particular group of its recipients began to decelerate. As the black economist Thomas Sowell pointed out:

The black family, which had survived centuries of slavery and discrimination, began rapidly disintegrating in the liberal welfare state that subsidized unwed pregnancy and changed welfare from an emergency rescue to a way of life.

Sowell continues to attack the myth that social programs improved the conditions of blacks in America:

The economic rise of blacks began decades earlier, before any of the legislation and policies that are credited with producing that rise. The continuation of the rise of blacks out of poverty did not — repeat, did not — accelerate during the 1960s.

The poverty rate among black families fell from 87 percent in 1940 to 47 percent in 1960, during an era of virtually no major civil rights legislation or anti-poverty programs.

Evidence seems to suggest that the families that have eliminated the poverty cycle while on social programs would have very likely done the same without the programs. While there have been numerous instances of grave injustices towards minority groups in our country that have hindered progress (slavery, Jim Crow), social programs don’t seem to be the cause of any significant improvements. Therefore, I want to humbly provide three practical reasons, based on my Christian worldview, why more social programs could actually substitute the family, empower the government, and hinder the church.

This is correct. Attempts to help the poor by redistributing wealth from those who produce to those who cannot or will not actually make things worse – by drawing more people “on the margin” into dependency.

One last snip:

Social programs are a slippery slope that could lead to unjust governments, more broken homes, and dead churches. Therefore, I simply can’t embrace them. A free society under a just government gives us plenty of options. We love our neighbors by starting non-profits, building hospitals, and opening schools that address the needs of the people without using the force of the government. What I’m proposing is not easy, but it is a biblical alternative that will require sacrifice, vision, newfound conviction, and a radical shift in how we view church, family, and government.

See, he sees private, voluntary charity as an option to government-run redistribution. An option that encourages economic growth, while safeguarding liberty and conscience for Christians.

I really love this article. The problem with me is that I don’t think enough about how to make my views palatable to well-meaning people on the other side. The author of this article does know how to defuse potential objections gently and graciously.

How well does socialism work in countries and cities that adopt it?

Socialism in Venezuela
Socialism in Venezuela

I noticed this article by Frank Luntz in USA Today, which talks about the political views of young people.

Excerpt:

If you want to understand today’s young Americans, consider this: 58% of them think “socialism” is the most compassionate political system, compared with just 33% who pick “capitalism.”  Heck, 9% even voted for “communism.”

That’s right: Two-thirds in a poll I did last month say socialism or communism is more compassionate than capitalism.

[…]In our recent national survey of 1,000 first- and second-time voters ages 18 to 26, Republicans weren’t just off on the wrong track. They were barely on the radar with this Snapchat generation, as it is sometimes called.

[…]The younger generation and the Republican Party simply see the world, and America, very differently. For instance, 58% in our poll say that “America isn’t any better or worse than most other countries,”compared with a 42% minority that believes “America is exceptional. It’s better than every other country in the world.

So how to respond to this? Well, I think it is important for us to be aware of how other countries are doing, especially the ones that are implementing socialism.

Socialism abroad

Take Venezuela for example. They’ve had socialism for a good long time under Hugo Chavez, and now his socialist successor Nicolas Maduro.

The left-leaning The Economist explained what’s happening there:

The regime has greatly compounded the damage with policies that, though designed to favour the poor, end up impoverishing them and the state. Price controls—along with the shortage of foreign exchange—have led to acute shortages of basic goods, forcing people to queue for hours to buy necessities. Inflation is officially running at 141% as of September last year (the latest available figure). Analysts believe the true figure is at least 200% a year; some predict hyperinflation in 2016. The massive budget deficit, which the Central Bank finances by printing money, contributes to that risk.

[…]Recent surveys have shown that alongside the economy and shortages, security is a major concern. The government stopped publishing comprehensive crime statistics in 2005, though it does admit there is a problem. The attorney-general has said that Venezuela’s murder rate last year was 62 per 100,000 people, ten times the global average. The Venezuelan Violence Observatory, an independent research institute, says the rate is higher. The murder rate in Caracas is the highest in the region for a country’s biggest city. Countrywide, 90% of murders go unpunished.

Radically leftist NPR notes:

Last week, opposition lawmakers in Venezuela declared a “food emergency.” That’s because Venezuela is facing widespread shortages of milk, meat, bread and other staples. Critics blame the government’s socialist economic policies. But instead of changing course, President Nicolás Maduro is calling on Venezuelans to help feed themselves — by starting urban gardens.

[…]In addition, falling prices for oil — Venezuela’s main export — mean the government has fewer dollars to import food. There’s also a severe shortage of imported farm machinery and supplies, says Vicente Perez, director of FEDEAGRO, Venezuela’s main farm organization.

“There is nothing — just like there’s no food, there are no seeds, no herbicides … and no medicines to vaccinate farm animals,” says Perez.

Phil Gunson, who is based in Caracas for the International Crisis Group, warns of a pending humanitarian crisis.

“At least one in 10 people is eating two meals a day or less. There isn’t starvation. We are not talking about famine,” Gunson says. “But we are talking about malnutrition, particularly in the case of children.”

If you’re looking for a country that’s embraced socialism, you can’t do much better than Venezuela. Maybe Argentina, but they are also in serious economic trouble. Do you know any young people who are not being told about that?

Well, what about closer to home? How are the major cities in the United States doing?

Socialism at home

This article from Investors Business Daily takes a look at it.

Excerpt:

America is awash with troubled, dysfunctional cities that have been electing Democratic mayors for decades.

  • Detroit last elected a Republican mayor in 1957. It is now the model of urban failure — it’s recognized more for its poverty, crime, rot and bankruptcy than the great cars that it turned out into the early 1970s. It is the poorest big city in the nation, with almost 40% of the population living below the poverty line. The website Law Street actually ranks Detroit ahead of Flint as the country’s most dangerous city. Either way, it’s clear that both cities have institutionalized crime problems.

Detroit is also a pit of political corruption. Just in recent years, one mayor, Kwame Kilpatrick, was convicted of corruption and sent to federal prison for 28 years, while building inspectors have been indicted on federal felony bribery charges and a former city council member was investigated in a bribery and kickback scandal.

  • Chicago’s last GOP mayor was elected in 1927. The nation’s third-largest city is home to some of the worst inner-city violence imaginable. More than 2,300 people were shot there last year, and nearly 400 lost their lives to homicides.

Its finances are just as grim. “Chicago is so broke,” IBD contributor Stephen Moore explained months ago, “that its bonds are junk status, and Mayor Rahm Emanuel had to go hat in hand last week to the state capital, Springfield, for bailout money to pay the bills.” Things have been rotten enough, Moore said, to send “a record number of people … fleeing Cook County, home to Chicago.” Only a little more than half of the city’s pension liabilities are funded.

  • St. Louis has been electing Democratic mayors since 1949. The Gateway to the West has become the gateway for crime. Law Street says that it’s the fourth most dangerous city in the country, Forbes says it’s the second. It had the sixth-highest poverty rate among big cities in 2014.
  • The last GOP mayor of Philadelphia left office in 1952. A few years ago, Moore identified it as a favorite to follow Detroit into bankruptcy.
  • Both Baltimore and Oakland had Republican mayors as late as the 1960s. In the era of Democratic rule, both are now more well known for their crime and poverty problems than for their charm and character.
  • Newark, N.J., hasn’t had a GOP mayor in more than a century. It was ranked as the fifth-worst city to live in in 2015. Detroit, of course, was first.

When Democrats are in control, cities tend to go soft on crime, reward cronies with public funds, establish hostile business environments, heavily tax the most productive citizens and set up fat pensions for their union friends. Simply put, theirs is a Blue State blueprint for disaster.

If you want to know how well Democrats do at running things, why not look to the places where Republicans have been out of power for decades and decades?

If you don’t tell the young people you know about socialist countries and socialist cities, then how will they ever learn how socialism actually works in practice? They are learning that socialism is wonderful from their unionized public school teachers, Hollywood elites, the mainstream media, artists and musicians and Democrat politicians. Are you doing your part to educate them with real facts?