Monday, January 18, 2010

Hugo Chavez: The Mickey Mouse Presidente

 Hugo Chavez: The Mickey Mouse Presidente

As much as we enjoy criticizing the US government and its economic policies, from time to time we do like to remind ourselves how much worse things could be.  Case in point: Venezuela.  Hugo Chavez is doing his best to run that country into the ground and looks to be succeeding.

On January 8th we learned that Venezuela devalued its currency:

The government devalued the bolivar by half on Friday and imposed a 4.3 bolivars per dollar rate, putting an end to the VEF2.15 rate which had been in place since 2005.

The Venezuelan people responded (somewhat) rationally the next day as Nervous Venezuelans buy TVs after devaluation:

Shouting "buy, buy, the world is going to die," Venezuelans went on a frantic shopping spree on Saturday following a sharp currency devaluation that is expected to drive up prices.

"I've been lining up for two hours outside to buy a television and two speakers because by Monday everything is bound to be double the current price," said Miguel Gonzalez, a 56-year-old engineer standing in the tropical sun outside a popular store.

State run television and radio stations avoided using the word "devaluation," preferring the word "adjustment." One pro-Chavez radio station responded to critics of the measure by playing a popular Argentine song called "Imbecile."

Inflation, the highest in the Americas, at 25 percent last year, reached 103 percent in 1996 after a previous president lifted exchange and price controls.  

The title of the article is idiotic.  What the heck would the author do if their money was losing 25%+ of its value per year?  If the author was rational, they would rush to dump cash for goods as soon as possible, just like these people.  Of course, it would probably be smarter to spend money on food (or perhaps a visa to leave the country) than to buy TVs but these are the people that voted for Chavez so what can one expect?

What do I do now?

In response to his people's rush to buy goods, Chavez decided to enforce price controls:

President Hugo Chavez denied that a devaluation of a five-year-old foreign currency peg will lead to a hike in consumer prices and warned that his government will hunt down retailers and companies that raise their prices.

"At this moment there isn't any reason for anyone to increase their prices," Chavez said Sunday during his television show. Shoppers have flooded stores purchasing televisions and home appliances fearing that prices will increase following a devaluation of the bolivar announced by Chavez on Friday.

"I don't understand why people are standing in line. They are victims of terrorist media campaigns creating fear that prices will rise," he said.

Hugo Chavez being undoubtedly baffled by something

What a buffoon. Price controls always lead to shortages.  ALWAYS.  This man is criminally stupid.  The article continues...

Chavez called on the National Guard to help the government fight speculation and price increases, saying without giving details that he wanted it deployed on the streets to hunt down speculators. The government, Chavez said, will "seize any businesses and shops that are participating in speculation."

True to his word, yesterday Venezuela nationalized a French owned retailer:

Venezuela's socialist President Hugo Chavez on Sunday nationalized a chain of supermarkets controlled by France's Casino (CASP.PA) on charges of price gauging after the government devalued the bolivar currency.

"Because of multiple violations of Venezuelan laws the Exito chain will now belong to the republic, there is no way back," Chavez said on his weekly television show.

In his 11 years in office, Chavez has nationalized large swathes of the economy, including major oil projects along with electricity and telecommunications companies.

In what must be merely a coincidence, today came news that a Venezuela natural gas auction closed with no offers.  Imagine the audacity of those greedy capitalists not showing up with their money.  It is as if they think they are above doing business with people who do not respect property rights or contracts.  What a bunch of elitists.

In a truly stunning development for an energy rich country, Venezuela has been hit by power outages:

Venezuela has been hit by unplanned power cuts which the government blames on a drought hitting hydro-electricity.

The government announced this week that the entire country would be affected by energy rationing, with rolling blackouts in different areas on different days.

Yes, it was the damned weather's fault.  Of course, the government could not even enact rolling blackouts without messing that up.  The article continues...

Venezuelan President Hugo Chavez has reversed his decision to ration electricity in Caracas a day after nationwide power cuts were announced.

Mr Chavez said there had been mistakes in introducing rolling blackouts in the capital, and people did not know when their neighbourhoods would be affected.

It's their fault

Meanwhile, we learn that President Chavez has taken time out of his already busy schedule to denounce Playstation games:

Those games they call 'PlayStation' are poison. Some games teach you to kill. They once put my face on a game, 'you've got to find Chavez to kill him'.

Games, said Chavez, "promote the need for cigarettes, drugs and alcohol," adding "That's capitalism, the road to hell."

What is poison is Hugo Chavez's economic policies.  He would do the world and the Venezuelan people a huge favor by stepping down and leaving everyone alone but you know that won't happen.  It is others who are to blame for the problems facing Venezuela and he will do his best to fix things.
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