The Socialists Making the Poor Poorer

Generali

....but at least the socialists are getting rich off the back of FX controls.

http://www.economist.com/blogs/graphicdetail/2016/01/graphics-political-and-economic-guide-venezuela

The current oil slump would be painful, whoever was in power. The regime has greatly compounded the damage with policies that, though designed to favour the poor, end up impoverishing them and the state. Price controls—along with the shortage of foreign exchange—have led to acute shortages of basic goods, forcing people to queue for hours to buy necessities. Inflation is officially running at 141% as of September last year (the latest available figure). Analysts believe the true figure is at least 200% a year; some predict hyperinflation in 2016. The massive budget deficit, which the Central Bank finances by printing money, contributes to that risk........

Venezuela has three legal exchange rates, including one that values the bol!var at 6.35/$. Venezuelans with connections in the government can obtain dollars at this ridiculously cheap rate, a major source of corruption. But in the unofficial market the bol!var is worth around 130 times less. The market dollar value of most Venezuelans' pay is thus pitifully low. Although the official price of goods is correspondingly cheap, many are available only at inflated prices in the black market.

Most disgracefully in a period when rates of people experiencing genuine and debilitating poverty has fallen even as the populations in the poorest countries has risen, Venezuela has managed to keep poverty at the same rate despite a massive boon from rising oil prices. (Poverty is defined in this case as not being able to meet basic needs of food, shelter, medical care and clean water).



Once again, Socialists are killing their own people while enriching themselves.

mwpt

I cannot understand why with so many real world examples of the spectacular failure of hard core socialism, the hard left is still intent on inflicting it on the rest of us at any cost. And they have the nerve to accuse the moderate/slightly right policies of austerity (read: spending what you earn) as being ideology rather than economical.

Jason74

I think that's very true MWPT. But then, in political terms, "hard core" anything tends to end badly. A total free market in everything with no state influence on (for example) who gets access to education or healthcare would be a pretty rubbish society too.

Evidence from around the world suggests that the best outcomes tend to come from having a broadly capitalist approach, with some state provision of essential services alongside government checks and balances to smooth out the worst of capitalism's excesses. It's a system that has largely worked well in the UK and Western Europe for decades now, and that would probably work well elsewhere.

antrobus

They also had an election in Venezuela just before Christmas. The socialists lost, and the opposition gained a two-thirds majority in parliament.

The result. Maduro has declared an 'economic emergency' and suspended parliament for a couple of months.

Graham_Devon

Slightly off topic, but still regarding socialists, I was watching a programme on BBC2 last night and was surprised to find out that Bono syphons all his profits through the EU as to avoid (yes, that's tax avoidance) paying tax.

His main office was in Amsterdam. Literally a building with tens of other offices in it, but no desks, no people, and no room for 10 offices, let alone 10's of offices.

Moby

Jason74 wrote: »

I think that's very true MWPT. But then, in political terms, "hard core" anything tends to end badly. A total free market in everything with no state influence on (for example) who gets access to education or healthcare would be a pretty rubbish society too.

Evidence from around the world suggests that the best outcomes tend to come from having a broadly capitalist approach, with some state provision of essential services alongside government checks and balances to smooth out the worst of capitalism's excesses. It's a system that has largely worked well in the UK and Western Europe for decades now, and that would probably work well elsewhere.

Yes well put Social Democracy is the best mix. Both unfettered free market capitalism and socialism have major problems. I didn't know that 40 million Americans lived below the poverty line until I heard Bernie Sanders on the Democratic debate last night:eek:

Generali

Moby wrote: »

Yes well put Social Democracy is the best mix. Both unfettered free market capitalism and socialism have major problems. I didn't know that 40 million Americans lived below the poverty line until I heard Bernie Sanders on the Democratic debate last night:eek:

How is that poverty line drawn? I could say that 7,000,000,000 live below the poverty line because they are in the bottom 50% of owners of wealth.

TheNickster

mwpt wrote: »

I cannot understand why with so many real world examples of the spectacular failure of hard core socialism, the hard left is still intent on inflicting it on the rest of us at any cost. And they have the nerve to accuse the moderate/slightly right policies of austerity (read: spending what you earn) as being ideology rather than economical.

Many economists argue that during a recession or times of very low growth (like now) running a deficit, or the right kind of government spending to be more precise, is necessary to kick start the economy that will more than pay for itself in the long term. Why pick now to experiment with austerity unless it is ideological.

Venezuelan 'socialist' policies in no way relate to policies advocated by any major party in the UK.

kinger101

Graham_Devon wrote: »

Slightly off topic, but still regarding socialists, I was watching a programme on BBC2 last night and was surprised to find out that Bono syphons all his profits through the EU as to avoid (yes, that's tax avoidance) paying tax.

His main office was in Amsterdam. Literally a building with tens of other offices in it, but no desks, no people, and no room for 10 offices, let alone 10's of offices.

I just watched the same programme on iPlayer. Very interesting on the lack of ability of the HMRC to challange the pricing of IP. I wasn't surprised by Bono. He's a sanctimonious ****. His tax avoidance has been known for some time.

What it highlights is the tax avoidance can only really be reduced through international co-operation. The EU facilitates this to some extent. We're not allowed to declare the Netherlands a tax haven (and impose withholding taxes) because of non-discrimination rules.

TheNickster

kinger101 wrote: »

The EU facilitates this to some extent. We're not allowed to declare the Netherlands a tax haven (and impose withholding taxes) because of non-discrimination rules.

So will Cameron try to renegotiate this as part of his EU renegotioniations?

I see that Google has agreed to pay £13m a year for the last 10 years in corporation tax. Experts say this is no way near enough.

michaels

TheNickster wrote: »

Many economists argue that during a recession or times of very low growth (like now) running a deficit, or the right kind of government spending to be more precise, is necessary to kick start the economy that will more than pay for itself in the long term. Why pick now to experiment with austerity unless it is ideological.

Venezuelan 'socialist' policies in no way relate to policies advocated by any major party in the UK.

Really? I thought Corbyn's main man MR Livingstone was rather partial to a bit of Venezuela style socialism...and of course Venezuela's problems are not of their own making but all part of an international capitalist conspiracy....