The View From 1776
Saturday, January 09, 2010
Chavez Devalues Venezuelan Currency
The poisonous and repressive effect of inflation.
Venezuela’s liberal-progressive dictator has devalued his nation’s currency 50%, to combat rapid deterioration of local economic conditions. The idea is to make imports cheaper to offset declining local production of almost all goods, under the impact of a centrally managed, liberal-progressive economy of the sort that President Obama is endeavoring to impose upon the United States.
Chavez was praised earlier by President Obama, in part because the socialist “reforms” Chavez imposed upon Venezuela are of the same variety as those intended by Obama for the United States. Chavez is also widely lauded by liberal-progressives in Hollywood, prominent among them actors Kevin Spacey, Danny Glover, and Sean Penn. As was the case with the Soviet Union from 1917 until the 1980s, liberal-progressives ignore the real-life repression necessitated by collectivized, secular government and dreamily focus upon the heaven-on-earth promises of liberal-progressive-socialism.
Chavez’s action underscores the destructive effect of inflation, which our Federal Reserve is busily supporting here. Devaluation of the currency, since the earliest historical records we have, always has been, sooner or later, a tactic employed by profligate dictators to combat public unrest and to shore up their regimes.
The usual sequence is developing shortages of food and other goods, resulting from nationalization and threats of nationalization of major industry, along with strangling regulation and imposition of high taxes upon merchants and manufacturers to support government welfare-state give-aways intended to buy votes of lower-income citizens. When revenues from higher tax rates decline, because of declining business activity and lower profits, liberal-progressive dictators turn to the stealth tax of inflation.