Government by Looting

from Investor's Business dailY

Venezuelan troops storm a local electronics retailer in the name of enforcing "fair prices," brazenly blaming the private sector for state policies. Sounds familiar — and not just because it's a communist takeover.

With municipal elections just around the corner on Dec. 8, it's no surprise to see Venezuela's failing socialist government turning to pork-barrel handouts to lure voters — as it always has.

Shovel the goodies to the red-shirted low-information voters and gain just enough votes in upcoming elections to claim a dictatorship is really a democracy.

Not coincidentally, President Nicolas Maduro declared that Venezuela would celebrate the beginning of Christmas in October — to distribute goodies.

But there's a new twist here: Venezuela is out of money to shovel pork. Its foreign reserves have fallen to $21.4 billion as oil prices slump. Instead of using its vast oil earnings to buy votes, as in the past, Venezuela's Marxist government is now making do by stealing from Venezuela's battered private sector.

Which is what brought the bizarre spectacle of the Venezuelan military occupation of Daka — the country's five-store equivalent of Best Buy, loaded with the flat-screen TVs, computers and smartphones favored by looters everywhere.

As troops stood by, crowds looted one Daka store, stripping its shelves bare. Call it government by looting.

Or in reality, call it communism. Because such destruction of private property in the name of redistribution has been a feature of every communist takeover from Russia to China, to Vietnam, to Cuba.

Defending his government-of-looters, Maduro officially blamed the store for charging "unfair prices," a preposterous statement since Daka's prices weren't inconsistent with the official inflation rate of 56% in an economy that must pay for 90% of its goods imports, including consumer electronics, with dollars.

There is even some speculation, by bloggers such as Miguel Octavio of the Devil's Excrement, that the viciousness of the government action could be due to the company engaging in high-profit arbitrage on the country's two-tier exchange rates.

There's also no doubt the government was sending a message to other retailers not to raise prices by making an example of one of them. Message received.

But the bottom line is, horrendous government policies forced retailers to do what they have. It wasn't Daka that created price controls or a corrupt two-tier exchange system that made the resulting inflation.

The black market currency rate is now 10 times higher than the official rate, meaning they're on the verge of hyperinflation due to a government that can't stop spending. This explains why imported basic commodities, such as chicken, milk and toilet paper, are now scarce, just as in the old Soviet Union, or in today's Cuba.

Were Venezuela a true democracy, such a destructive economic record would bring down the ruling party.

But this is Venezuela. It has benefited not just from having the U.S. as its top oil customer and consumer goods supplier, but also from a lot of White House love — from President Obama's and Secretary of State Hillary Clinton's embrace of late strongman Hugo Chavez at a 2009 summit, to ex-President Jimmy Carter's dishonest endorsement of Venezuela's fraudulent 2004 recall, which the Bush White House meekly accepted.

And now the results: Venezuelan troops occupy electronics retailers while yelling about "fairness."