How in the hell did things get so bad in Venezuela?

Socialism. It looks great on paper, but in practice it fails miserably. " Absolute power corrupts absolutely"

No it doesn't look great on paper. It looks shit on paper. Nothing is as unfair as total equality.

Believing the gov' has your best interests in mind

Oil prices tanked and government policies fucked them. The influential people who support him haven't turned yet, but there are a few cracks. I've been reading some good stuff on it and actual talked with a guy whose wife's family lives in Venezuala. It's bad there.

Let me create a little word diagram because I think this is an important economic lesson:

Nationalize private industry ----> state-run industry unable to efficiently produce goods and services ---> country imports goods and services that can no longer be sufficiently produced domestically, including food -----> sole source of revenue suffers global price collapse ----> with no private industry remaining, national revenue collapses, causing a cash shortage -----> turn on the printing press to pay bills, including for foreign imports and state wages ------> create hyper inflation ----> to stem inflation, enact price controls, causing even more severe supply shortages and starvation.

Maduro, being a raging, uneducated ignoramus, committed every mistake that every banana republic dictator makes when facing economic hardship. And like most dictators, Maduro is too proud--too arrogant--to admit he made a mistake, so he'd rather his people starve to death than to accept foreign aid or modify policies. He'd literally rather die at the hands of an angry mob than admit he made mistakes.

Socialism isn't so fun when you run out of other people's money to spend. High oil prices allowed their government to survive despite being utterly corrupt and incompetent, but that's changed.

Harambe never would have let this happen....

The average Venezuelan lost 20 lbs due to food shortages. Factoring in per capita income, a pound of raw beef would be like us Americans paying $350/lb.

I always joke with girls who aren't in tip top shape that I'll exile them to Caracas for a month- all expenses paid. So far, no takers. I'll keep you posted.

Despite the shortages of essential goods, widespread malnourishment, deteriorating public systems - all caused by abysmal economic mismanagement - people are too scared to do anything about it.

Maduro has the military in his pocket. And the military has discovered that it can profit from the chaos. Maduro understands this, and probably allows it to happen in order to keep the soldiers on his side.
Read this to get a better understanding: http://www.newyorker.com/magazine/2016/11/14/venezuela-a-failing-state

so sad, have some Venezuelan friends (many moved to Buenos Aires) and have heard some of the crazy stories (one of my best friends was kidnapped TWICE), sounds like such a beautiful country AND people that i've met are so nice.

Well, by living in South American, I can tell for sure that the collapse of the entirely continent is due to socialists politics.

Brazil, now, has more than 14 million people unemployed, thanks to Lula and Dilma. Argentina, now, is founding its path with the good politics of Macri, but they were a mess before. Venezuela was the state responsible for funding the socialist's movements across south america.

The worst part of all is that here, in Brazil, the media (Bernie Sanders left wing kind), the media doesn't report all the situation as it is. The government is failling to condemn the situation (a bunch of left wings parties, as PT, PSOL, etc., actually, support the Bolivarian government of Venezuela).

What really pisses me off, is seeing Americans and Europeans defending socialists politics... For someone who leaves in a very socialist country, it sounds craziness...

This is what socialism looks like, kids. Don't try it at home.

This is always how it ends.

The U.S. doesn't care about what happens in Venezuela or Latin America for that matter. They rather send the troops to Syria.

I wish that all of the socialist leaning kids on college campuses today were forced to do a study on Venezuela, populism, socialism and corruption.

speaking of Venezuela, hottest women in Latin America

1. Venezuela
2. Colombia
3. Argentina
4. Brasil
5. Costa Rica
6. Mexico

Communism doesn't work.

It kills any motive for the individual to improve his life. Equal opportunities never meant forced equality.

I hear condoms sell for $1000 a pop down there...

https://www.nytimes.com/2017/05/14/world/americas/venezuela-collapse-an…

^this is the shit that pisses me off - 2,000 word expose by the NYT titled 'How Venezuela Stumbled to the Brink of Collapse' and the article doesn't use the word socialism / communism (or any other variant thereof) even once.

GTFO with your fighting fake news bullshit.

I didnt read all the comments, but i can assure you the problems started before maduro got into power. low oil exacerbated the speed of things, things were corrupt with Chavez, only difference was oil was higher so they could afford all of the social welfare programs (which kept the votes coming in for him). Its by no means a "this oil rich company is falling to pieces over a matter of years, its much more complicated than that, Gasoline was heavily subsides (i believe less than 15 cents a gallon) and now electricity is rationed, there was a time the government didnt work on fridays (to save electricity) and many other strange things.

ive had friends' businesses be seized by the government, houses taken by the government (if you cant produce the actual deed to your home it can be confiscated), its a terrible reality that 30 million people have to call "life".

my 2 cents

To another worry, our failed state has a lot of weapons in the hands of a poorly trained, corrupt military. A couple of years ago the US was worried about some Sukhoys they bought (those are probably rusting somewhere), but I really, really worry about the AKs and portable missiles they have.

I agree with pretty much everything @Dances with Dachshunds" said. Capitalism needs a bit of socialism to work (to keep the poor masses from revolt), these countries seem to have it the other way around where they think socialism with a bit of capitalism works. Regarding learning from their lessons, don't we see the same exact thing with France? They keep believing their woes are due to immigration and the EU not their overly socialist policies. It's hard to get the plebs to understand free stuff ain't really free. Additionally, their vice president is an international drug trafficker with terrorist ties, how the fuck did that happen lmao.

p.s. South America is a case study on how to squander vast resources through socialism and corruption. At least the prominent African countries have war/ growing pains from imperialism & tribalism to blame for their fuck ups ( for example Nigeria has to deal with a 50/50 Muslim and Christian population fractured by 100s of tribal languages and just became independent in like 1960)

I feel horrible for the people in Venezuela. I lived there in the early 2000s (2001-2003), as a Mormon Missionary. Being a missionary, we got to meet with all types of individuals and families of differing socioeconomic classes, and really see how people were living. Being a 19-20-something kid from the US, it was eye opening. They were not a third world country at the time, they were just poorly managed (and coming from someone raised in Louisiana, that is saying a lot).

How did Venezuela get to this point? I have a few ideas:

1) Let’s start with the brain drain. If you are smart, and had opportunities to leave the country, you take them. It is no different from young people in Louisiana moving to Texas, kids in the NE moving to NYC, or folks in states close to California eventually moving to CA. You go where the opportunities are, and in Venezuela, they were not creating opportunities, if anything they were killing them by not being friendlier to International Business. Therefore, you have the smart and talented people leaving.

2) Political unrest leads to economic uncertainty. Are you going to buy a home to live in if that home is located next to a meth lab, and concert venue? No, that would give you a negative ROI, and you would be up all night with breaking bad and breaking Benjamin. That is Venezuela. Chavez was the head of the movement, and Maduro was his bedside bitch, but those men got to power first by the sword, and then the pen and all of did with it by making promises to the poor and uneducated. Their markets could not take what the government was doing, and that threw the Bollivare (Venezuelan currency) out of whack. During my time in Venezuela, the day that Chavez was exiled from the country, the Bollivare went from 900:1 dollar, to 2500:1 dollar. When he came back two days later, it changed again to 3500:1. The political unrest and uncertainty of its future has killed that country.

3) Oil prices dropping kills the economy. There are three things that Venezuela produces: Miss. Universe winners, Baseball players, and oil (...I would say heat too, but they have the Andes). Two of those things the government can legally package and sell. The problem is, nobody is buying oil. Sure people are buying oil, but two years ago, a bucket of chicken from KFC cost more than a barrel of oil. Oil prices being, as low as they are and the government not reinvest and diversifying oil money into other resources when oil was at its peak has killed the country. If oil prices do not bounce back, Venezuela will have to look into human trafficking beautiful women, and people with amazing slugging percentages to make ends meet.

4) Kind of goes back to #2, but how are you going to protest when you don't have any food? When I was in Venezuela, the government went into Pepsi's regional bottling plant and took control of the whole thing. They did this with several US based companies, because fuck the US, we are Venezuela, and this is how we send messages. It was a complete shit show. I recall them taking over some oil rigs in Lake Maracaibo, and they spilled so much oil, that it would have made BP blush. But the government didn't just want to send a message to US based companies, they wanted to send a message to anyone with means, so they started clamping down on store owners, bakeries, and the damn farmers sending our necessary resources to make food...I think the only company that hasn't been hit is Polar (the country's favorite beer company). However, with fewer people producing food, that means longer lines, and more black markets. When I was in Venezuela I remember people from Columbia coming over to buy food because resources were scare in their country, now it is the complete opposite, Venezuelans are crossing over to Colombia to get food and drugs.

Until they can fix those four things, Venezuela will continue to be a mess. However, the thing is, to fix those four things they only need to get elected officials who are not as queer as a $3 bill.

I have lived in Venezuela many years and still go there to see relative and friends once every two year for couple of weeks and the press tend to always exaggerate the situation. It's like in Venezuela you can't go outside your home or gangsters will cut you in small pieces or in Venezuela everyone is dying as if it were Somalia. It is true to say that the country chaotic, dysfunctional, suffers from shortage and big security problems but portraying the country as a new Somalia is not accurate.

Recently the situation has gotten worse and worse but none of the people I know there do suffer from starvation - and I don't know only well-off people, but also "normal" people. I'm not saying the story of the WSJ is a lie, I'm just saying, that you can't extrapolate and say that everyone is basically dying like it's the Horn of Africa. Recently I have read similar stories about Greece explaining the poorest people couldn't feed their kids properly or afford basic medical treatment but it does not make Greece a new Darfour.

Just an example of how the press can get sensational and dramatic. The last time I went (last year) everyone was saying in the press that you basically couldn't find any toilet paper or shampoo and that people were queuing everywhere to desperately get some. Needless to say I was wondering how I would manage this before going so I packed a massive amount of tissues. There was some truth to it in that when you went to the shop you had just one or two brands of shampoo/toilet paper but to my relief I never struggled to find some (and the price was far from extortionate). Unfortunately saying "in Venezuela right now you don't get a huge choice of toilet paper brands" does not sell as much as saying "People are desperately queueing to find anything to wipe their asses".

Also saying that people are defending Maduro because of fear is just not knowing the country. Maduro is not popular and people are not afraid to say it. Venezuela is NOT North Korea. If you switch on the local TV most of the channels are highly critical of the government and probably more so than even the NYT is tough on Trump. I communicate with my relatives through Facebook and no one is afraid to post publicly posts that are openly against the government or even calling for revolt. Now there is a segment of the population that still supports Maduro because you have to understand that for decades the poor felt completely left out and during 20 years of Chavist government someone was at last talking to them and spending money on their ghettos, schools etc. Even though now they are caught in chaos like everyone else they might not forget that so easily.

Now back to the "why" the country fell into chaos.

The country has almost no industry other than oil. While the oil prices were high Chavez used the dollars accumulated to increase social spending. It did yield some results because the poorer part of the population got access to some healthcare and education. The main issue is that no one developed other areas of the economy. So you were in a situation where Venezuelans were importing basically EVERYTHING they were using. Once the oil boom ended the imbalances just got unleashed and Venezuelans woke up with no other sector to support their economy and government spending.

Apart from that there is a lot of corruption that I have seen myself so it's likely that some of the money actually harvested by the government is not spent as it should be and is therefore wasted, making the crisis much worse.

Lastly the elites and middle class/upper middle class are partly to blame because, while they criticize the major imbalances of the economy, they used them to make tons of money from any loopholes they could find (and due to some bizarre things such as the dual exchange rates put in place by the government it was very easy to find loopholes).

One quick example: The fact that you had two exchanges rates would mean you could get up to something like $3000 (I don't remember the exact amount) at a discounted government rate in bolivars. Everyone who had the means to do it would basically pay for the dollars at the (insanely) discounted rate and go to neighbouring Panama to buy stuff and resell the goods at the black market dollar rates. Basically you could get 3000$ for almost nothing and sell the goods at the "market driven" rate at a much higher prices. This was not only individual behaviours- at a higher level local businesses would resort to the same tricks. For example, some airlines (not the government owned one Conviasa obviously) would ask the government dollars for imports at the discount rate, and sell the tickets at the blackmarket rate. The consequence is that it drains dollars out of the country's vault and worsen the local prices distortion. I've also seen that when travelling to Argentina a couple of years ago when they still had the fixed rate policy that I think they ditched in the meantime, the only difference being that Argentina has a more diverse economy and a labor force which is more educated so it can more easily cope with a messy exchange rate while Venezuela can't.

Also there is such a high inflation rate that it's really tempting to store your goods and wait for prices to go up... which in turn makes the inflation worse.

It's all them anacondas y'all. Shit be scary.

It's a typical politician story. A politician comes in, starts feeding into a divide, and chooses a side to further deepen the divide. Spreads hatred in the country by making each side emotionally angry at the other. Leverages this emotional hatred for his own power by being aggressive on the other side. Reaches the top, and then pretends to kill off the side he "was against". Really doesn't and keeps them around so that when problems arise, he can blame the other side, so his people keep staying mad at the other side, and not at him. Once he's at the top he runs a socialist government to keep his power up and blames his people's problems (which he created) on his enemy ("capitalist pigs" is the term he uses I believe. At least we can eat bacon tho).

Political Divide is the way to get into power. Do you really think Democrats are scared about Donald Trump? No, they fucking rejoiced when he was elected because this was the way for new Congress members to launch into the political spotlight. They just have to start hurling out insults at Trump, and they become powerful. Hell, even comedians On the flip side, do you think Republicans actually care that Hilary Clinton used a private e-mail server? No, they don't they just want to get their supporters so enraged, so that they can promise "change", and keep their power. Fuck Politics. Just a group of people who are good at nothing but winning popularity contests.

The good thing is that the United States doesn't allow these dumbasses to actually do anything catastrophic. The Fed is separate and the Judicial System is actually quite spectacular. It's like letting a baby steer the steering wheel, with the engine turned off and the car in the drive way. With politicians being the baby and the country the car. But with Venezuela, it's like they dropped a baby 5 times, and then let him fly a fucking Boeing 747.

I hope I can bring some perspective to this discussion as I am from Venezuela and my whole family still lives there. Although much has been said about how Venezuela got to where it is now, the most crucial part of the country's demise has been omitted, separation of powers. You could sit here and discuss socialism vs capitalism all day long and you will never reach a conclusion because each side can articulate valid points. However, a point in which we can all agree is that an effective democracy needs separation of powers. When the executive branch gets complete autonomy over who manages the other branches of government they loose any type of accountability. No system regardless of its political inclinations can function without accountability, that why even corporations have a board of directors. Back to the point, after the executive branch was able to seize the other branches of government they where able to establish mechanisms to first protect their power at any expense (killing people, imprisoning political enemies, etc, etc), second debilitate the private sector, and enrich themselves at the expense of the country . Add to this the most incompetent mismanagement of the public sector in the history of humanity and you have an unsustainable economic model. It lasted so much because it coincided with one of the largest oil booms in history but now that the tide has fallen it has become apparent to their support base that they were swimming naked.