The Perils of Socialism

[discocrisco01]

In the United States, we see everyday how the excessive of capitialism. We see rampant inequality, massive austerity, and lack of investment of critical thing such as basic research, education, and infrastructure.

However, there is a lesson to be learned by looking at Venezuela when we let socialism go unrestrained. From the Cato Blog

The story of the Venezuelan economy and its troubled currency, the bolivar, can be summed up with the following phrase: “From bad to worse”—over and over again. Yes, the ever deteriorating situation in Venezuela has taken yet another turn for the worse.

In a panicked, misguided response to the country’s economic woes, Venezuelan president Nicolas Maduro has requested emergency powers over the economy. And the Maduro government recently announced plans to institute a new exchange rate for tourists in an attempt to quash arbitrage-driven currency smuggling.

These measures will likely prove too little, too late for the Venezuelan economy and its troubled currency, the bolivar. Indeed, the country’s economy has been in decline since Hugo Chavez imposed his unique brand of socialism on Venezuela.

For years, Venezuela has sustained a massive social spending program, combined with costly price and labor controls, as well as an aggressive annual foreign aid strategy. This fiscal house of cards has been kept afloat—barely—by oil revenues.

But as the price tag of the Chavez/Maduro regime has grown, the country has dipped more and more into the coffers of its state-owned oil company, PDVSA, and (increasingly) the country’s central bank.

Since Chavez’s death, this house of cards has begun to collapse, and the black market exchange rate between the bolivar (VEF) and the U.S. dollar (USD) tells the tale. Since Chavez’s death on March 5, 2013, the bolivar has lost 62.36% of its value on the black market, as shown in the chart below the jump.

In the United States, we need to have significant investment in infrastructure, basic research, and education if our nation is going to compete in this global economy. However, the goal is not to go in the path in the Venezuela, but rather for the government to be an active investor in the economy by investment things that involve a public good. Trying to interfere too much with the private market has devastating effects like we see in Venezuela.

Unlike Venezuela, the US suffers a lack of public investment, which leads to deflationary activity. However, too much public investment and too much interference with the private sector results in what is happening in Venezuela .

Progressives needs to see what is happening in Venezuela as reminder of the consequences when socialism goes too far. There is a balance between free-market capitalism and government investment in the economy and in Venezuela's case, it went too far.

[Moliere]

1. Troll much?

Citing the Cato institute doesn't lend you much if any credibility. Maybe throw in a few AFP & ALEC quotes while you're at it?

[cali]

2. Uh, we don't generally welcome right wing crap like the Cato Institute

here at DU.

And it's laughable to use Venezuela as a cautionary tale. There is virtually no chance, due to any number of factors, of the U.S. going the route of Venezuela.

[ForgoTheConsequence]

3. The CATO institute?

What the fuck? This board has really fallen off. I thought the person who posted Dennis Miller quotes was bad.

[tjwash]

4. Cato institute?

Are you freaking kidding me?

[rocktivity]

5. The deterioration of regulation in capitalism

is what's periling America.


rocktivity

[HughBeaumont]

6. You is on da WRONG fuckin board, man.

Cato Institute. COME on.

[freshwest]

7. Nailed it.

[Half-Century Man]

8. The greatest peril of socialism is migraine headaches

caused by arguing with fanatical idiots.

If a society wants to band together and help the less fortunate and chooses to do so via their own government (the action arm of that society) instead of using a parasitic method (for profit anything), that is a good thing.

baka

[RainDog]

9. Venezuela is a straw man example

Latin American political history includes decades of interference by U.S. interests because of the fear of communism and socialism. This interference has often been of the sort that put Saddam Hussein in power (select a leader who can be bought, dictate certain policies, ignore torture, abuse, etc.) and enrage the majority of the population by this undemocratic interference.

Better examples of mixed economies (social democracies) are the nations of northern and western Europe. These nations have all had stable govts. since the end of WWII and have implemented policies based upon the majority of voters to create a strong social safety net, educational system, safeguards for workers in the form of retraining when industries change, and these nations all use redistribution of wealth via taxation to achieve national goals. All these nations still have very wealthy people and people who are not wealthy - but they do not suffer.

These nations all have better health care systems and outcomes for citizens than the U.S. Lower rates of infant mortality. Lower rates of unplanned pregnancies. Better health for the living.

These nations all have greater social mobility for citizens than the U.S.

These nations all have better rankings for education than the U.S. Religion does not try to tell science what to teach. Such agitators would be laughed off the tv screen, rather than lauded by one of the two major political parties.

These nations have not seen the middle class suffer, as has been the case in the U.S. In the U.S., one party talks of the middle class as takers and fluffs their own masturbatory fantasies of themselves as someone other than an ass kisser for political contributors. I can't imagine any western European politician being such a dumb fuck that he or she would talk about poorly written fiction as economic policy. Atlas Shrugged - too bad Atlas didn't fuck off.

So, the real concern is this: When we know redistribution of wealth is a benefit to a democracy because of social outcomes (and because this redistribution removes some power from the wealthy, which is greatly needed in the U.S. at this time) - why is our government so dysfunctional that such changes cannot be made?

Free market economics without regulation is like creationism or a failure to accept that climate change is an issue to address... reality doesn't matter.

What matters is someone's ability to buy the vote of a politician and thus stop progress in this nation.

Maybe we're more like Venezuela than I originally thought.

But the solutions to our problems have already been enacted in this nation before. When they were, the same pissy plutocrats screamed about their privilege. The American people told them to fuck off.

That's what the American people need to tell the current plutocrats, as well, and the first step is to get rid of as many Republicans as possible, and marginalize as many southern democrats as possible.

Then Congress can fix the problems that decades of living in Reagan's economic delusion have caused.

[Chathamization]

12. Yep, the Nordic Model is arguably the best example so far

and should be what the rest of us work towards.

[quaker bill]

10. In that the price of Gold dropped at the same time

and about the same amount, we must clearly conclude that Maduro is a very powerful guy. Alternately we might conclude that their currency is nearly stable against the price of gold, and that the dollar is simply strong at the moment.

(ps) you can also see it at the gas pump....

[DireStrike]

11. The one actual statistic there is "the value of the VEF on the black market"??

And somebody else pointed out about the gold drop as well.

Man, the capitalists are gonna have to dig a little deeper for propaganda spending if this is their best. Unfortunately this shit would probably be A-OK on Youtube or something like that.

[JaneyVee]

13. Ah, the perils of socialism. Like that time when socialism saved capitalism back in

2008. The rich love them some socialism.

[Starry Messenger]

14. Libertarian think tank hates socialism, news at 11.

[Gravitycollapse]

15. Obvious troll is obvious. CATO institute? Seriously?

[eridani]

16. Yes--teh FAIL is strong in that one n/t

[Mika]

17. Worse than all of that, Chavez, and now Maduro are friends with ....

Wait ...











... for ....











... it...














are you ready?.......

















Castro ((((((gaSP)))))) !!111!!!!111!!!1111!!!!111111

[TBF]

18. Perils? I'm rooting for them comrade.

At least someone in this world isn't letting capitalism run amok.