The Disaster That Is Venezuela (or The NY Times says price controls cause problems)

By Tim Padgett. He reviews "THINGS ARE NEVER SO BAD THAT THEY CAN’T GET WORSE: Inside the Collapse of Venezuela" by William Neuman (a New York Times correspondent). Tim Padgett is the Americas editor at the Miami NPR affiliate WLRN and Time’s former Latin America bureau chief. Excerpts:

"For Venezuela, 2012 was the eve of the worst national collapse in modern South American history.

Hugo Chávez, the red-bereted firebrand who’d brought his socialist Bolivarian Revolution to power in 1999, would win another presidential term that October. But by March 2013, he’d be dead of cancer, and you could feel something malignant about to lay waste to his country’s social and economic body.

Spiraling inflation, widespread corruption and ludicrous financial thinking were erasing Venezuela’s historic oil boom. Through the decade, gross domestic product would free-fall almost 80 percent and malnutrition would stalk the population. In 2015 the capital, Caracas, would suffer the highest homicide rate of any city in the world."

"A fifth of Venezuela’s 30 million people would flee abroad."

"In the 21st century, Chávez’s authoritarian regime, known as Chavismo, turned that Venezuelan delusion into demolition. It did steer petro-riches to the poor for once; many barrios saw their first schools, clinics and potable water pipes. But when the price of oil skyrocketed from less than $8 a barrel at Chávez’s inauguration to more than $100 a barrel shortly before he died, insane economic malpractice and malfeasance ensued."

"“Chávez’s socialism was all means and no production,” he writes. “It was showcialismo,” an endless bacchanal of multibillion-dollar projects — like a national electricity monopoly, Corpoelec — that were essentially left to rot after the ribbon-cuttings. As Venezuela gorged on imports and prices ballooned, Chávez and his handpicked successor, the witless ideologue Nicolás Maduro, kept forcing price controls that further discouraged domestic industry, spawning huge shortages and extortionate black markets."

"Using fraudulent contracts and invoices, Chavista mandarins and their business cronies gamed the chasm between the official and black-market bolívar-to-dollar exchange rates. They reaped Mafia-grade profits; they also bled the state-run oil monopoly, PDVSA, of cash and robbed Venezuelans of urgent necessities like food, housing and energy infrastructure."