Venezuela

Venezuela Spends Millions on Incredibly Dumb Things While Its Economy Collapses

Bolivarian socialism apparently means financing things like lousy race-car drivers while the people lack medicine, food, and toilet paper.

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Oliver Stone and Hugo Chavez
Nicolas Genin via Wikimedia Commons

Venezuela is on the verge of both economic and social collapse, and the Bolivarian socialist government headed by President Nicolás Maduro is lashing out at any everyone from "whingeing" factory owners (who lack the raw materials they need to produce anything of value) to the U.S. government, who he accused of formenting a coup when he extended the nation's state of emergency last Friday

The style of socialism introduced to the oil-rich country by Maduro's predecessor, the late Hugo Chavez, was credited by Salon's David Sirota with creating an economic miracle as recently as 2013. But the disaster currently unfolding is more than just a failure of socialism

Venezuela has been spending a fortune on unnecessary and ridiculous expenditures for years. That is, when government officials haven't been (allegedly) stealing billions in oil profits and pocketing the cash outright.

Despite sitting on the world's largest oil reserves and having nationalized oil production, Venezuela spends $45 million a year on Pastor Maldonado — an undistinguished Formula One race car driver with a predilection for crashing a lot — who essentially serves as a walking billboard for the country's oil company. Wasting taxpayer money on sponsoring a loser athlete is bad enough, but what could possibly be the justification for spending that kind of cash to advertise the national oil company, which by definition has no competition?

The waste and graft surrounding sports doesn't end with Maldonado. Formula Freak reports that following Chavez's death in 2013, "Alejandra Benitez, the Venezuelan minister of sports, found that her falsified signature had moved over 65 million in sporting-fund dollars to places in which it did not belong."

In 2007, as part of Chavez's ambition to "combat American cultural hegemony," he forked over nearly $18 million for "scripts, production costs, wardrobe, lighting, transport, makeup and the creation of the whole creative and administrative platform" of a prospective Danny Glover-helmed film project about a Haitian slave revolt. The film never went into production

Pro-free market types enjoyed a good laugh when the country's largest beer company ceased production last month, as a direct result of a lack of access to foreign currency and a domestic currency now more useful as toilet paper than legal tender, but the situation in Venezuela grows more tragic by the day.

Though supermarket shelves are pretty much empty these days, for the past two years the government has been fingerprinting shoppers to prevent "hoarding," which itself was also made illegal. As could be completely expected by such scarcity of basic items needed to live, much less live in any semblance of comfort, Bolivarian socialism has spawned a thriving black market.

 "In a system that mirrors the rationing implemented across communist countries last century," Andrew Rosati writes in Bloomberg, "Venezuelans are allotted certain days of the week that they can purchase goods deemed most essential by the government." The hole in the marketplace is now filled by entrepreneurs known as bachaqueros, who in turn "have developed their own ecosystem, rules and regulations."

Though Maduro would classify any unauthorized transaction as emblematic of the "economic war" he imagines himself fighting, the economic realities his movement has created have led to "Doctors and accountants moonlight[ing] as cooks at restaurants" and everyday survival the only matter of concern to the populace. 

Electricity has been rationed and the workweek has been cut to two days. The government, never known for its tolerance for dissent dating back to Chavez's earliest days in office, recently tried to get a U.S. court to shut own a website advertising favorable exchange rates in towns along the Colombia-Venezuela border. 

In The Wall Street Journal, Mary O'Grady wrote of how the hunger of the Venezuelan people can be directly pinned on the arrogance and incompetence of the government:

Chávez confiscated the country's most-productive farms and turned them over to chavistas who don't know how to farm. Even on farms that were not seized, planting is diminished. Most seeds used in Venezuela are imported and without dollars cannot be had. Farmers are reluctant to plant when the costs are high and the harvests are price-controlled. Dairy farms are also less productive now that daily power outages shut down electricity-powered milking machines. Trucks carrying food cargo are often hijacked.

Venezuela has had "free health care for all" since 1999, and has long relied on imported Cuban doctors to make good on that promise to the people, but these days basic medical items like gloves, soap, and intravenous fluids are nearly impossible to come by, to say nothing of medicine and equipment such as X-Ray and dialysis machines. 

China will likely help Venezuela stay afloat during its self-created inflation crisis with a $5 billion loan, but with babies dying for lack of basic medical care, riots and looting born of sheer desperation, and the very real and growing risk of a military coup, stability may be a luxury Venezuela can't afford for a long time to come.

In 2013, Mark Weisbrot (the co-writer of the Oliver Stone-directed Hugo Chavez hagiography South of the Border) wrote in The Guardian that "Venezuela has sufficient reserves and foreign exchange earnings to do whatever it wants, including driving down the black market value of the dollar and eliminating most shortages. These are problems that can be resolved relatively quickly with policy changes."

In a recent article in The Atlantic by Moises Naim and Francisco Toro, the story of an unnamed Venezuelan factory owner — besieged on all sides — demonstrates the silliness and naivete of Weisbrot's assertion that any of Venezuela's problems could be "resolved relatively quickly."

The factory owner is bound by a collective bargaining agreement with his union employees to keep the factory stocked with toilet paper lest he face a strike and the seizure of his factory by the government. But whenever he was able to supply the plant with toilet paper, his workers would steal it and take it home. So the factory owner resorted to the black market, only to have the secret police uncover his stashed toilet paper and accuse him of hoarding.

It wasn't a completely unhappy ending for the factory owner, he was able to avoid jail with a bribe to the police of "a few tens of thousands of dollars," negotiating down from an opening demand in the "high hundreds of thousands of dollars."

But few in Venezuela have the means of this factory owner, and untangling this tragic mess of corruption, artificial scarcity, poverty, violence, and illness will not be "resolved relatively quickly."

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  1. RE: Venezuela Spends Millions on Incredibly Dumb Things While Its Economy Collapses
    Bolivarian socialism apparently means financing things like lousy race-car drivers while the people lack medicine, food, and toilet paper.

    1. Not to worry citizens of Venezuela. Oliver Stone has shook hands with Comrade Chavez, so all will be well.

    2. Since when does the people of Venezuela need anything but the love of their wise leaders ruling and enslaving them?

    3. Don’t the people of Venezuela know it is the purpose and mission of their government slavers to spend millions on incredibly dumb things instead of fixing the economy? I mean, what next? Letting the little people decide for themselves how the government should be run? The very idea!

    1. Don’t the people of Venezuela know it is the purpose and mission of their government slavers to spend millions on incredibly dumb things instead of fixing the economy? I mean, what next? Letting the little people decide for themselves how the government should be run? The very idea!

      Sounds like a Trump supporter….

      1. Anyone who has read my posts recognize I can’t stand Trump the Grump any more than socialism.

    2. ” I mean, what next? Letting the little people decide for themselves how the government should be run? The very idea!”

      To which I give you the State of California. Being by far the most Democratic (policy, not party) state in the Union, they decide exactly how the government is run through referendums. How exactly is that working out for them?

      1. Unless they don’t like the result of the referendum, and have the court strike it down.

  2. Clearly it’s the capitalists’ fault.

    Funny how this never happens in market economies.

    The leftists either never learn, or they are evil and they know their model is full of crap. It’s good to be on top though

    1. Funny how this never happens in market economies.

      What? Spending tax money on stupid shit?

    2. It’s the former. I know many leftists, and most of them think their policies are humane without understanding the long-term implications of those policies. (“That which is seen, that which is not seen.”)

      Education is key. And by education, I mean the real thing, not the brainwashing that you get in your average union-controlled government school.

  3. China will likely help Venezuela stay afloat during its self-created inflation crisis with a $5 billion loan<?I

    Dammit, I thought China was a non-interventionist libertopia?

    1. Got an early start on the whining today. Take it easy. You don’t want to run out of steam before you can whine all over the PM links.

      1. Wouldn’t “whingeing” be more appropriate in this thread?

      2. Replace “Venezuela” with “The United States”, and the headline is still true.

    2. Were you born a whiny, dickless piece of shit or did you have to work on it?

      1. dickless

        Transphobe. And didn’t Cracked tell you Walter Peck was the real hero?

        1. So, born that way.

      2. Republican infiltrator detected.

  4. …who he accused of formenting a coup when he extended the nation’s state of emergency last Friday.

    Looks like this president…

    [dons sunglasses]

    …needs a drink.

  5. Imagine how bad things would be in Venezuela if it WASN’T governed by kind, concerned socialists!

    1. Human sacrifice, dogs and cats living together, mass hysteria!

  6. Are we (read: IMF/World Bank) going to backstop Venezuela when it turns really ugly and Maduro orders thousands of protesters killed? I’m thinking we will because humanitarian capitalist cliche reasons.

    1. We’ll find out when oil begins its march downward again.

  7. Anyone check out http://www.venezuelanalysis.com for you chavista apologia? They do have a link to a Mark Weisbrot arguing that Maduro just needs a floating exchange rate…

    1. Wow. That’s almost as nutty as the DPRK websites.

    2. I have enough fun listening to progressives try to explain away their failure in Baltimore by blatantly lying about whether the past four decades ever happened.

    3. I like that they claim to be “independent” (which makes them libertarians according to Gary Johnson, Welch and Gillespie) but all their links are to pro-Chavista sites. And anti-war.com….

  8. Formula One race car driver

    Isn’t there a saying about how this a sure fire way to make a small fortune from a big one?

    1. I thought that was vineyards?

      1. I’ve only ever heard it said about airlines.

    2. Owning racehorses?

  9. They should just print more, and raise taxes.

  10. Does anyone know how close they are down there to some actual, Romania 1989-style violence against the government?

    1. Not sure, I feel like someone at vice is there though.

    2. I forget where I saw it but it doesn’t seem like people have very much to eat – one or two missed meals and it gets ugly.

      1. Yeah, something like a month’s average wage is enough to buy food for a week.

      2. Five’ll get you ten non-gubmint guns are illegal there and ammo scarce. But they can beat on pans.

    3. Does anyone know how close they are down there to some actual, Romania 1989-style violence against the government?

      Instead of firing squad, and given Maduro’s previous career, I hope they throw his fat ass under an actual bus.

    1. Posted in another thread. We can co hat tip in the pm links.

      1. Less than a year after leading Burlington College into massive debt, Ms. Sanders resigned, taking with her a $200,000 severance package.

        And a golden parachute FTW!

        1. The sane people who support bernie also hate golden parachutes.

          1. “The sane people who support bernie”

            Uh, not a possible linking of words.

            1. I suspect it’s a typo for “same.”

          2. The sane people who support bernie also hate golden parachutes.

            To be fair, a sub-million dollar payout is not quite golden parachute by Goldman standards.

            More like golden reserve ‘chute, or perhaps an unusually large gilt handkerchief.

    2. Um, sell the fucking land?

      1. Probably paid too much. $320K an acre in Burlington?

        1. Eh, houses in the city are going up. There’s not much land for sale in the town. Value could be close.

          1. I have a really, really hard time believing any vacant land in Burlington is worth $320K an acre.

            1. On the water is very valuable. Not to anyone sane, the water is cold and there are no real beaches. But to the south is industrial, or Shelburne, where homes start above a million. Northeast is winooski, a town who has a worse reputation than the north end in Burlington. Poor, dilapidated, and drug filled.

              1. It’s a Tale of Two (Little) Cities up there!

              2. They have aspirin AND insulin?

      2. Plant a sprig of hemp on it and watch socialist prohibitionists nationalize it through asset forfeiture?

    3. If this were in fiction I wouldn’t believe it. Fucking scripted. I wonder if other small liberal arts colleges are also buckling under debt. Will we see a tidal wave of similar issues?

    4. At the end of 2010, Ms. Sanders took out $10 million in loans on behalf of Burlington College to purchase a 32-acre swathe of land from the Roman Catholic diocese, which put the land up for sale to help cover the costs of a $17 million sexual-abuse settlement.

      I applaud her disaster capitalism, but I wonder what tiny-ass Burlington College was going to do with 32 acres of pedoland.

      1. Build their own Neverland?

    5. They’re such a cute couple. Made for each other, really.

  11. LIGHT THE AM-SOC SIGNAL!

    1. Hi loki,
      Smug mcsmug Smug. Derp Smug derp. Ad hoc. Ad hom. Ad hom. Condescending derp.
      Thanks.

      1. Not bad, but you left out the inevitably begged question. Also, the “condescending derp” includes conclusions based on faulty assumptions, yes?

        1. Yeah that was my thought.

          1. Indeed Am-Soc’s serial mendacious douchery knows no bounds. We can all take heart that when the Glorious Sandernista Revolution comes, he will be in the second wave of purges due to his membership on this “reactionary” website.

  12. These are problems that can be resolved relatively quickly with policy changes.

    If only the right people were in charge we could do anything!

  13. Michael, no one care about sponsored comments.
    We’re busy being evil capitalists.

    1. There is nothing evil in declining to buy a product who’s marginal value over a virtually free product is not worth the price.

      1. *Boom^^^

  14. has long relied on imported Cuban doctors to make good on that promise to the people

    In Cuban English, is “doctor” how you spell “slave”?

    1. I think it’s spelled C-U-B-A-N.

    2. “Slave” is a harsh, inaccurate word.

      “Subject” is much closer to the mark. People in Cuba are Subjects of the State, by which we mean The Party. Party members are also Subjects, to the Party members above them.

      It sounds feudal, but communist societies almost always are. Stalin: Court of the Red Tsar really highlights that. Some Game of Thrones-level shit.

      1. Slave isn’t all that inaccurate. Subject, Serf, Slave — it’s all a matter of PR and the Misery index.

        1. it’s all a matter of PR and the Misery index.

          And how much of the rape is figurative versus literal.

          And how much you enjoy it.

      2. Court of the Red Tsar was an excellent freaking book!

  15. Maldonado no longer is in F1. After his team, Lotus, went tits up at the end of last year, he was supposed to drive for the semi-reconstituted team under Renault, but got shitcanned for Kevin Magnussen.

    He’s some mid-level test driver now.

    To be perfectly honest, whether it was Lotus’ craptastic performance, or Maldonado’s relative anonymity, I hardly recall him other than when they were reading out the grid positions before the race or when he crashed into someone/thing. The world feed (which NBCSN uses religiously with their own commentary crew) rarely showed him or his sponsorships.

    1. So, Maldonado didn’t get decapitated?

  16. It’s really weird. I don’t see any recent comments from Oliver Stone, Sean Penn or Danny Glover about how great Venezuelan socialism is….

    It’s almost as if they’re unbelievably dumb fucks who went all-in for a murderous, criminal, kleptocratic regime.

    Now, a decent person would at least express shame. But my assumption is that they’re not even smart enough or moral enough to be ashamed.

    1. They simply misjudged him – he wasn’t the right Top. Man.

      1. No, no, he was definitely the right TOP. Man. He just died too soon.

        /Maduro or Wreckers and Kulaks FTW

  17. In 2007, as part of Chavez’s ambition to “combat American cultural hegemony,” he forked over nearly $18 million for “scripts, production costs, wardrobe, lighting, transport, makeup and the creation of the whole creative and administrative platform” of a prospective Danny Glover-helmed film project about a Haitian slave revolt.

    When a leftist regime can’t even pull off propaganda…

    1. Uh, if you have Danny Glover running things, even Trump could lose money on it.

  18. Check out Weisbrot’s twitter. He’s blaming the media and the US, of course, for Venezuela, saying that the country better than the media reports, and that the US is using its influence to bring down the country.

  19. Check out Weisbrot’s twitter. He’s blaming the media and the US, of course, for Venezuela, saying that the country better than the media reports, and that the US is using its influence to bring down the country.

  20. no comment joe?

  21. So China will create a North Korean style sex farm ruled by power hungry thugs who will show off their ‘latest missile technology’ every month. Good for them, I hear the Venezuelans are a fine looking people.

  22. “…credited by Salon’s David Sirota with creating an economic miracle as recently as 2013.”

    So Sirota has apologized and gone on to his true calling emptying porta-potties, right?

    1. That’s still too much responsibility for his stupid ass. Go lower.

  23. Socialism as even Democrats could understand. Remember, a vote for funny is a vote for freedom! http://www.funnyordie.com/vide…..illennials

  24. Stupid Venezuela. They should have said Scandinavia three times before they implemented socialism and it would have turned out better.

  25. Truth to tell the DemoGOP kleptocracy is largely to blame for Venezuelan reaction against These States’ fascist mixed economy. It is so bad that Republican voters are struggling to dismember their entire party leadership. Associating Republicans and Democrats with any economic system would work to the detriment of that system–even when the association is a blatant lie (such as suggesting they favor liberal democracy or capitalism).
    Venezuelans watch up close when Reagan-Bush prohibitionism completely took over Colombia–even backing gangs to murder elected politicians. They also watched These States send men with guns to invade and take over Panama in efforts to enforce sumptuary laws favored by US fanatics. One doesn’t make friends by invading neighbors, telling them who to elect and ordering them to pass asinine laws.

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    1. Is that Venezuelan currency?

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  29. It’s almost as if socialist officials are ambulatory piles of shit!

    But that couldn’t be right, could it?

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  31. This is exactly the goal of socialism. Also the goal of the IMF/World Bank – promoting socialism so the government (read top people) have absolute control over the people and money. Looks to me like Venezuela is the leading indicator of good things to come.

    The 1944 meeting in Bretton Woods, New Hampshire, at which the world’s most prominent socialists established the International Monetary Fund and the World Bank as mechanisms for eliminating gold from world finance; the hidden agenda behind the IMF/World Bank revealed as the building of world socialism… The Creature for Jekyll Island by G. Edward Griffin

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  36. What? No mention of subsidized gasoline for all the lucky Venezuelan people? Wouldn’t you just love to pay less than the current $0.002 per US gallon that residents of this socialist paradise pay? That’s right, they price of gasoline is two tenths of a US penny. Just think of all the “cruising the strip” they can do with cheap gasoline! Oh, I forgot …. they can’t idly cruise about …. they’re too busy driving to the Columbian border to barter for necessities with the siphoned gasoline. What a life!

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