- The Washington Times - Monday, May 20, 2013


Socialism has finally hit the fan in Hugo Chavez’s Venezuela, though he checked out just in time to miss it. He left millions of Venezuelans struggling to clean up the mess.

Government price controls have the country’s shopkeepers trying manfully to stock their shelves with everyday necessities, including toilet paper, which everyone remembers only as a blast from the past. The socialists in charge are trying to import as many as 50 million rolls to relieve pent-up demand. The shortages have become so widespread that long queues form on the merest of rumors that a store has acquired a supply. “I’ve been looking for it for two weeks,” said Cristina Ramos to the Associated Press. “I was told that they had some here and now I’m in line.”

True to form, President Nicolas Maduro, the former bus driver chosen by Mr. Chavez on his deathbed to carry the flag of the “Bolivarian revolution,” says dark and mysterious anti-government forces created the shortages to destabilize the country. Some people suspect George W. Bush, having learned that certain gringos in the north blame him for everything else. Or it might be them lyin’ newspapers. Commerce Secretary Alejandro Fleming says the toilet paper crisis is the result of “excessive demand” led by “a media campaign that has been generated to disrupt the country.” Mr. Fleming promised to flood the market with toilet paper as soon as he can find it, and then people can “calm down.”

Venezuela’s uncomfortable situation was entirely predictable. When Mr. Chavez set out to create his own discount version of the “worker’s paradise,” like the one in Cuba, he replaced the free market of goods and services with centralized controls. Currency controls keep money from flowing freely, and the government helped itself to valuable businesses and assets through seizure and nationalization. Policies limited importation of goods into the country, and price controls made it unprofitable for domestic manufacturers to produce basic staples, such as milk, coffee and flour — and toilet paper. It turns out, to the surprise of Venezuelan economists, that people work for money, not because El Comandante tells them they should.

The briefest look at a history book, or even the morning newspaper, could have given them a clue. Price controls didn’t work in the Soviet Union, nor did they succeed under President Nixon. They’re destined to fail in America when they kick in as a part of Obamacare. As the battered consumers of Venezuela can attest, the only thing price controls do is create shortages, rationing, declines in quality, black markets and severe economic distortion.

This is so because governments are always clueless about determining what the price of goods will be, whether of beans, toilet paper or health care. If a government is unable to properly set prices for something as simple as toilet paper, it certainly won’t be capable of regulating something as complex as health care. Service will be the first thing flushed down the drain.

The Washington Times

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