Venezuela once had one of the strongest economies in the world. The liberal media has cited a number of reasons for its downfall, corruption, mismanagement, falling oil prices, even blaming the United States.
Yet corruption and mismanagement were the direct result of increased government control of the economy—socialism. Lower oil prices and U.S. sanctions have little to do with the crisis.
Instead, the mass starvation and exodus faced by Venezuelans are the natural consequence of the socialist policies implemented by dictators Hugo Chavez and Nicolas Maduro.
Venezuela took over the utilities, private businesses, crude oil and food production. The outcome was that they ran out of everything.
Since California now has a power crisis due to a government managed utility let’s see how it all started in Venezuela.
From 1992-1996 power outages were occasional. Twenty years of socialist revolution brought about glaring mismanagement and underinvestment in the power grid. The electric sector then was fully nationalized in 2007, which led to bigger outages.
On March 7, 2019 Venezuela achieved a low point in their modern history. Many areas lost power for thirty hours, rebounded with twelve hours of power and then darkness for another thirty hours.
Governor’s Brown and Newsom would have blamed Global Warming or utility mismanagement or Trump but it was the government at fault. Venezuelan President Maduro blamed the incident on America. He said it was an “electronic coup,” a “cyber-attack.”
Christian Caruzo says, “Caracas felt like a ghost town. You couldn’t hear a single thing, not even gunfire and car alarms — quintessential sounds that one often hears through the night. It was as if we were all collectively going through a bizarre mass solitary confinement.”
“Water distribution was disrupted, people desperately sought for it, even in sewer drains. Telecommunications, as well – we were essentially disconnected from the world. We couldn’t even access our money since the banking network was offline. In Zulia, all hell broke loose.”
Power continues to be erratic including a second period of long black-outs. It has been 3 years since the nation has had a constant supply of water and electricity. Caracas, the seat of military power, has been spared interruption. However, elsewhere regions get water 36-48 hours each week. From March 25 to April 5 there was no water.
When available, water is collected in buckets to make it through power / water outages. Power is often out for 18 of 24 hours each day.
Nationalization destroyed production in affected industries because no government has the capacity to run thousands of businesses or the profit motive to run them efficiently. Instead, government officials have incentives to please voters by selling products at low prices and hiring more employees than necessary, even when that’s the wrong industry decision. Welfare was expanded without any accountability.
Venezuela’s food production fell 75% in two decades, while the country’s population increased by 33%. This created shortages and economic disaster. After agriculture, the regime nationalized electricity, water, oil, banks, supermarkets, construction, and other crucial sectors. In all industries, the government increased payrolls and gave away products at low cost, resulting in days-long countrywide blackouts, water service interruptions, falling oil production, and bankrupt government enterprises.
In California, PGE predicts black-outs for a decade. Farmland hasn’t been taken from farmers yet but has been forced out of production by government-mandated water rationing. The Gig economy has now been banned to be instead government managed. California socialists are on the move.
Back in Venezuela socialists may be learning it doesn’t work and free stuff comes with a price. Newsom and his people haven’t a clue yet.
(Get Lou’s podcast at “No Hostages Radio” and his articles at nohostagesradio.com)
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