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realclearworld

In Venezuela, as elsewhere, socialism comes with shortages

The Editorial Board of Investors Business Daily:

In Venezuela, As Elsewhere, Socialism Comes With Shortages
http://www.investors.com/image/ISS2__140321_345.jpg.cms

Waving rolls of Peruvian toilet paper and shouting, protesters demonstrate against Venezuela's man-made shortages of such products at that country's embassy in Lima, Peru, last month. AP

Hemisphere: Venezuela's price and currency controls have wrought what they always wreak: monster shortages. And it stinks, literally, with toilet paper, diapers, soap and deodorant joining drugs on the list.

That shutoff from global standards is what prevents willing buyers from acquiring goods from abroad, the source of 80% of Venezuela's consumer staples. No foreign currency, no purchases.

Further down the line, price controls have driven more shortages as costs to produce in an economy with a 56% inflation rate have made it impossible to turn a profit. The latest idiocy? A 30% "ceiling" on profits — profits, of course, being evil. And never mind the inflation that eats away at them.

Shortages are found wherever the Venezuelan government has a hand: flour, sugar, cooking oil, milk and butter, according to a report from National Public Radio. Food shortages in fact now run at 47.7% of what's demanded, according to a survey by Datanalisis reported by El Universal.

In the auto industry, shortages of tires and spare parts are so severe that Toyota and Chrysler shut down operations last week, stating they can't restart until they can secure supplies. The Ford plant said it would be operating just three days a week.

More broadly, there are shortages of water and electricity, the direct result of utility nationalization in the name of "the people," leaving domestic industry in tatters.

Continue reading HERE.

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