Tuesday, May 31, 2016

Why Venezuela is in Crisis

Take a look at this picture, and you can see the entire story:

Image result for venezuela economy

There are two obvious problems, and one not obvious, which is the most important problem.  The first obvious problem is a soldier is protecting the merchandise.  The second is the shelves are sparse.  The third, not obvious problem is the store is first world, modern, mass merchandise.

Since that store exists, the neighborhood bodega, with its creative and unitive functions, disappeared.  That modern store exists because Venezuela could borrow malcredit against future oil revenues, until its credit ran out.  It ran out.

Before then, the powers that be, anyone in a position to borrow massively, did so wiping out the smaller stores with their discount prices.  Since banks could lend credit, there was false prosperity as far as the eye could see.  Politicians promised free $#!+ forever, whether they were left or right wing, they just promised different people different things.

Sound familiar?

On one hand Macy's got rid of loss prevention, on the other hand Safeway has rent-a-cops standing in their doorways.  Since so much of Macy's is leased departments, let the vendors suffer the loss.  In the meantime, Macy's is permanenrtly on sale, and like Newsweek magazine, even at $1, no one wants it (pension liabilities made Newsweek worthless.).  Like a Detroit home at $50, the taxes and upkeep and liabilities are more than it is worth.

Walgreens is taking out shelving and spreading them, filing what is left with beach balls and styro coolers, large space, slow moving, low ticket items.

Other stories out of Venezuela refer to vigilante justice.  This too echoes Detroit.

Hegemons select bad ideas from all those on offer to maintain their power: discord needs a hegemon.  Sometimes those bad ideas get out of control.  A lot of Venezuela's problems are USA interference, but USA tries to interfere with many other places, like Hong Kong, to little effect.  Good ideas are an immunization to bad ideas.  What hegemon's ultimately run into is chaos:
The public prosecutor opened 74 investigations into vigilante killings in the first four months of this year, compared to two all of last year. And a majority of the country supports mob retribution as a form of self-protection, according to polling from the independent Venezuelan Violence Observatory.
The revenge attacks underscore how far Venezuela has fallen, with the lights flickering out daily, and food shortages fueling supermarket lines that snake around for blocks. As the plunging price of oil has laid bare years of mismanagement, the economy has come apart, and with it, the social fabric.
Venezuela now has one of the highest murder rates in the world, and it's hard to find a person who hasn't been mugged. In the general haze of violence, Bernal's killing didn't stand out enough to make the front pages or provoke comment from local politicians.
There are too many long stretches of peace and prosperity in history with no king, because of no king, for us to fail to recognize anarchy as a preferred option.

Their economy, the hegemon's, cannot recovery.  It's over.  Now the only task is to decide who pays for the damage done during the boom, and no one needs to hurry this process up, since the victims are not going anywhere.  The process is informed by elections, of course.  Just as elections are auctions, going into booms, so they are going out.   It is sort of a reverse auction, "Vote for me and I'll burn you less!" There will be blood, the elected will decide whose blood.  In USA the hegemony originally offered warmonger or warmonger as the options, but Americans are truly sick and tired of war.  Trump is anti-war.  So now we are allowed warmonger vs anti-war.  This does not mean if Trump wins there will be no war, just we got to vote, or at least cast a ballot.

A new economy will emerge, what it looks like, who knows?  You and I can help shape that economy by starting businesses.  Ethical, true economy businesses, and then what comes else we are at least a segment there of.

As a side but important point, there is massive excess product, not only massive excess production capacity.  That exceess product needs to be redistributed, books, cars, furniture, clothes, etc... any given retailer ought to have used products alongside the new, until the economy recovers.  You'll know when the recovery starts, it is at the bottom of the real estate market.  The bottom is not low prices, the bottom is no sales of real estate.

Feel free to forward this by email to three of your friends.