Why are Venezuela’s supermarkets so empty?

[brooklynite]

Washington Post:

...snip...

But why can't an oil-rich country even keep its stores stocked? Well, it's the price controls, stupid. They always and everywhere create shortages. Here's why they have done so in Venezuela.

1. The government is running a massive deficit, around 14 percent of GDP, that it's financing with the printing press. The problem, of course, is that money is worth less when you create more of it to pay your bills. So it's not surprising that Venezuela's inflation is officially 60 percent, and might actually be as high as 300 percent.

2. But the government thinks it can wish away this inflation with currency and price controls. Here's how they work (or don't). There's an official exchange rate of 6.3 bolivares per U.S. dollar that only the government and its cronies have access to. Then there's a second tier for the slightly less connected at 10 bolivares per dollar. A third one at 50 bolivares per dollar for those even more on the outside. And finally, there's the black market exchange rate—emphasis on the word "market"—that tells us it should really be something like 68 bolivares per dollar. In other words, political insiders can get dollars for ten times cheaper than almost everybody else.


3. Now, anytime you try to suspend the law of supply and demand like this, you'll get shortages. Venezuela imports most of its basic goods, so it's only profitable to sell them at the official prices if you can buy them overseas with dollars you got at the official exchange rate. Businesses that have to pay 60 bolivares for one dollar aren't going to spend it on things the government will only let them sell for, say, 20 bolivares. They'll leave their shelves empty instead.

[Donald Ian Rankin]

1. Venezuela is a striking example of how "nominally left-wing" doesn't always translate into "good".

In most situations, a knee-jerk "left good, right bad" will put you on the same side of a political debate as actually thinking about it.

Venezuela is one of the few counter-examples - although calling the government there "left-wing" is slightly iffy; obviously it's far-left economically, but it's strikingly illiberal.

[MADem]

3. Totally illiberal--gay hating, anti-choice, authoritarian fanatics.

But hey, it's the land of Saint Hugo, whose memory is kept burnished by Flag Fondling Maduro, who is watched over, like a viper just waiting for a chance to strike, by Diosdado Cabello.

They're like the gang that couldn't shoot straight. A buncha mendacious buffoons.

Not their finest hour: http://www.thedailybeast.com/articles/2013/08/18/venezuela-s-anti-gay-politicians.html

[snooper2]

4. It's curious how the same folks here love Maduro just as much as Pootie

[MADem]

2. It's not just the price controls--if you don't PAY for goods you've already received, your supplier

is not inclined to send along MORE.

That's Business 101.

Maduro and his cronies are not only gaming the system, they aren't PAYING THEIR BILLS.