The Day Venezuela is Fully Nationalized Approaches

The economic implosion of Venezuela is interesting insofar as the voters have repeatedly chosen Hugo Chavez and his anointed successor Nicolas Maduro despite them consigning the country to economic oblivion. Populist policies may have won votes as redistribution continues, but we are fast approaching a point when there is nothing left to nationalize or place under state watch. What then?

Venezuelan President Nicolas Maduro says he plans to extend price controls to all consumer goods, if he is given powers to govern by decree. In a televised address, Mr Maduro said that he wanted to set legal limits on businesses' profit margins. His announcement followed the seizure on Saturday of shops accused of selling electronic goods at inflated prices.

The National Assembly is expected to vote this week on his request to govern temporarily by decree. The president demanded there be "zero tolerance with speculators" in his speech broadcast on Sunday. "This is beyond usury, this is theft," he added...[t]he president announced that he would next turn his attention to stores selling toys, cars, food items, textiles and shoes. 

When all production comes under government control--as things will be at this rate--there will be no one left to blame other than the government. It will be at that point when the full extent of the government's mismanagement--galloping inflation, pathetic reserves despite being one of Latin America's leading energy exporters, and the evisceration of a functional economy--becomes apparent even to Chavez/Maduro voters:

Opposition leader Henrique Capriles said the move proved that the president "is a failed puppet of the Cuban government". "Every time he opens his mouth, he scares away the investments that create employment, and he worsens the crisis," said Mr Capriles, who narrowly lost to Mr Maduro in April's presidential election.

Official figures suggest inflation is running at more than 50%. Price hikes have become an important issue in next month's local elections.

For now, Maduro's perverse strategy involves creating artificial shortages by persecuting all forms of private industry as "speculators." Faced with a steadily deteriorating business environment, the rational thing to do would be to cut production (or flee the country if you're a foreign investor). The resulting government-induced shortage is then blamed on your "hoarding" ways, and the government then claims to "act" by slapping price controls on everything to hopefully win elections.

It will likely take Venezuela taking a turn for even worse before the Bolivarian socialists are ejected. Oftentimes, it takes things to deteriorate before they get better to get the attention of those who have been deluded for quite some time.