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Venezuela: Cheap Television Sets For All!
solareagle writes "Venezuelan President Maduro has declared war on 'bourgeois parasites' by taking over Daka, an electronics retailer similar to Best Buy. USA Today reports, 'National guardsmen, some of whom had assault rifles, were positioned around outlets of [Daka] ... Maduro has ordered to lower prices or face prosecution. Thousands of people lined up at the Daka stores hoping for a bargain after the government forced the companies to charge "fair" prices. "I want a Sony plasma television for the house," said Amanda Lisboa, 34, a business administrator who waited seven hours outside a Caracas store ... "It's going to be so cheap!" "This is for the good of the nation," Maduro said, referring to the military's occupation of Daka. "Leave nothing on the shelves, nothing in the warehouses Let nothing remain in stock!" Maduro said his seizures are the 'tip of the iceberg' and that other stores would be next if they did not comply with his orders.'"
People said that the characters in Atlas Shrugged were two-dimensional cardboard cutouts and that real life is totally not like that... I guess they never went to Venezuela.
They also said that Ayn Rand would leave us in some sort of post-apocalyptic world with no police, firemen, schools, or anything basic services. Who knew that the entire city government of Detroit for the last 40 years were all a bunch of secret Ayn Rand worshipers who have finally put her dreams into action!?!?!?!??
AntiFA: An abbreviation for Anti First Amendment.
Yes. Source: I live in Venezuela.
Oblivion Awaits
'National guardsmen, some of whom had assault rifles, were positioned around outlets of [Daka] ...
FIRE! Sale
Yes and as stupid as it sounds. This will work for a short while. Every person of means is probably desperately trying to leave. Once the "bargains" are gone, there will be no more product. Price controls drive growth into the ground and set the stage to inflation when they are released. Next comes wage control, then shortages, rise in crime (fueled by black markets), persecution of the wealthy, then hollowing out the middle class, and finally riots and needless death.
Yeah. It's real. And the ironic part is that Chavez died at just the right time that a lot of people are going to look back on his rule as the good ole days. The path he laid out was utterly unsustainable, but was pleasant in the sort term for a lot of the people who ended up on the right end of his ultimately self-defeating economic policies. A lot of what he did was paying for things on credit against oil that wasn't even pumped yet. The wheels would have come off the bus eventually, but now they're going to come off while Maduro's driving, not Chavez. And people will blame Maduro (not that he doesn't have it coming as well, as is obvious from this article).
Prices are so high in Venezuela because of inflation and exchange control. A dollar is worth 6.30 Bs according to the government but it's nearly impossible to get them, so you have to search in the black market where it goes for at least 60 Bs. This store (Daka) though wasn't importing merchandise, so the prices were not just, but since it was allied with the government, it was allowed to sell at whatever prices: something happened, either they screwed up or this is just an election ploy (there are elections next month). Now, the rest of the affected stores ARE importing, and why would they do it now? Since Venezuela's production is nearly zero, this will only lead to broke merchants, and less market fluidity. And these "cheap television sets"? They are being sold at three or four times their price in the black market. As ussual, Chavists are breaking this country apart.
Oblivion Awaits
Thanks. Fortunately, it is, but at some point this madness will hit everything in the country.
Oblivion Awaits
Thailand last non-elected Prime Minister tried to buy popularity in a similar way, by capping sugar prices very low. The penalty he introduced was 7 years in prison!
Sugar producers smuggled the sugar and sold it across the border, others abandoned crops since it wasn't worth the cost of the fertilizer.
There was a sugar shortage after that.
(comment snipped due to NSA surveillance).
Without Zimbabwe, I'd never have achieved my dream of becoming a Trillionaire.
Suck on that, Bill Gates.
There's a profit to bringing in illegal drugs, as there's a market for the drugs that isn't state-regulated and when state-seized, are destroyed rather than sold.
By contrast, since companies, importers, what have you, expect to and need to make money on their importation of products, this grab will show that there's no good in above-board importing into that country. If they can seize and sell electronics, they can seize and sell anything . It's not safe to do legitimate business in Venezuela anymore.
What I expect to happen is that grey-market and black-market importers will smuggle products in, sell them for considerably more money than they should even go for legitimately, and attempt to hide their revenue, indeed much like drug smugglers do here.
Do not look into laser with remaining eye.
can you then tell are the "fair" prices high enough that they can restock or did venezuela just fuck up over-the-table electronics retailing for good in the country?
if the prices are't high enough then it's a short term robbery solution really..
I mean who the fuck would officially import ANYTHING to the country after this if they might e forced to sell the inventory at a lower price than what they paid for it...
world was created 5 seconds before this post as it is.
Sarcasm: Requesting permission to buzz the tower.
ArchieBunker: Negative Ghostrider, the pattern is full.
AntiFA: An abbreviation for Anti First Amendment.
I remember all the morons on Slashdot who thought Chavez was the best thing since sliced bread and wanted the U.S. to follow in his footsteps.
Hello from Australia.
Minimum wage here is $16.37 AUD ($15.23 USD).
Seems pretty prosperous.
Without food, you won't need toilet paper. Problem solved!
Get free satoshi (Bitcoin) and Dogecoins
It's enough if you exchange the Venezuelan currency to dollars at the official exchange rate. Of course only a complete fool would exchange dollars for bolivars at the official exchange rate. If you do at the rate people who actually do have dollars will agree to, then the store is only getting like 10% of what they paid for the electronics.
He forgot to add: " If you like your current TV set, you can keep your current TV set. "
I'm an American. I love this country and the freedoms that we used to have.
Venezuela sells oil to the world and receives US dollars in exchange. Dollars are NOT freely available for the common citizen. They are granted through much bureaucratic processes (institutions named CADIVI, SICAD and so on). Foreign exchange controls have set an official rate of 6,3 BsF per 1 US dollar, which are hardly obtainable as previously mentioned. A black market that widely operates outside the foreign exchange controls have set the price at around almost TEN times that amount (60,00 BsF as of today). Since Venezuela's inflation rates are going through the roof, people want to protect their money by obtaining dollars instead. Small businesses have imported goods using black market dollars [again, dollars are seldom available to the common folk], thus having to inflate prices ten times to protect their investments. This workaround upset the government and a crackdown ensued. Thus, many of these businesses are forced to sell at ludicrously low prices and subsequently shut down for good. Protip: there's a hefty election day in less than a month. With a raging food shortage that has been going on for many months, this was seen as a populist move to turn the balance back on their favour at the expense of dozens of legit businesses that got caught in this loop. Greetings from warm, sunny, and recently HDMI'zed Venezuela.
I read the article, which claimed that this was to set an example. Also, retailers are attempting to price their products based on the hyperinflation that the country is experiencing, and the government is attempting to force them to stop doing this.
Are you prepared to invest your money in a business venture to import consumer goods into Venezuela?
Do not look into laser with remaining eye.
What's really going to make this thing sting is that it is illegal to fire or lay people off in Venezuela. I guarantee you that this is going to cause their profits to dry up really fast. What happens when there's no money to pay the workers? The management gets sent to jail? Executed? I'm sure that will work out real nice.
Entrepreneurism is well known to be what drives economies. What's going to happen when people realize that starting a business in Venezuela is a bad idea? (Hell, they probably already do at this point; Venezuela will probably see foreign investment dry up very fast as a result of this, assuming it hasn't already.)
Careful with names containing L slashdot.org/~AiphaWolf_HK slashdot.org/~AlphaWoif_HK slashdot.org/~AiphaWoif_HK
Oh, they will... Take it from a USSR survivor, there will be two groups of importers: official and otherwise.
The officially-imported electronics will be available in the government-run stores — for Sean Penn and other supporters of Socialism to see. No, ordinary people would not be able to buy anything there — you'd either need to have a special pass to enter the store, or have hard-currency (or some sort of government-issued coupons). Though the prices will be denominated in Bolivars, you'll have to exchange your foreign currency right there — at the official rate...
The unofficially imported stuff will be sold on the black market, which the government will fight tooth and nail — thus providing law-enforcement with easy side-income (that is likely to exceed their official salary). The corruption will, well, corrupt the entire population — and the law-enforcement in particular — for generations to come. The actual businessmen bothering with such imports will be denounced as "speculators" — by contrasting their prices with those of the government stores (described above).
A grey area will be represented by people, who purchase their own stuff abroad. They would, probably, be allowed such items — perhaps, after paying some customs fee — and even permitted to sell them (used). As long, as of course, they don't attempt to profit from such sales...
In Soviet Washington the swamp drains you.
And they also robbed Exito, the Colombian grocery store chain, and 65 percent of the food imported comes from Colombia. Thank god I do not live there.
The Revolution Will Not Be Televised
It's enough if you exchange the Venezuelan currency to dollars at the official exchange rate. Of course only a complete fool would exchange dollars for bolivars at the official exchange rate. If you do at the rate people who actually do have dollars will agree to, then the store is only getting like 10% of what they paid for the electronics.
No, you didn't read the story. Importers specifically said they could not purchase replacements of the TVs Washers/Dryers at the official exchange rates.
Importers complain that there is such a shortage of dollars they are having to buy them on the black market to import inventory at a good price. If they were to charge clients based on obtaining the dollars at the official rate, they say they would make no profit.
If you buy on the black market with dollars, you can get a washer/dryer cost $650, which is about what you would pay in the states shopping at the low end devices at Lowes or Sears. But at the official exchange rate, re-sellers can't survive.
So, the importers will simply not import. It really is that simple.
Its a political ploy by a party facing an election, and the currency will be devalued shortly after the election is held. For all the oil money Venezuela makes, they have never gotten a grasp of basic economics. If they want a command economy, they are going to have to start manufacturing their own goods, because nobody will sell to their importers at dictated prices.
Sig Battery depleted. Reverting to safe mode.
Except Australia could be doing better, in particular the poor. Here's a quick recap of studies by Stossel on minimum wage in Australia. I also recommend you check out the Roy Morgan polls and studies regarding unemployment and under-employment in Australia.
Quote:
In a 2004 study published in the Australian Economic Review, economist Andrew Leigh looked at what happened after Western Australia increased its minimum wage compared to the rest of Australia.
He found: "Relative to the rest of Australia, the [percentage of people employed] in Western Australia fell following each of six [minimum wage] rises." (Study here [1], update here [2].)
Another Australian economist, John Humphrey, summarizes [3] the findings this way:
"[Leigh found] that for each 1 percent increase in the minimum wage we can expect... [to lose] 96,000 jobs" in Australia.
[1] http://andrewleigh.org/pdf/Minimum%20Wages%20(AER).pdf
[2] http://andrewleigh.org/pdf/Minimum_wages_reply.pdf
[3] http://www.abc.net.au/unleashed/4064106.html
These comments are mine; I do not speak for my employer.
Siding with the rich works better? Sometimes, sometimes not. The Indian Moghuls were rich and secure... and for decades the foreigners were the lesser party, until they weren't. I don't think the 1% realise how their short-sighted policies are hastening their own fading, though they'll keep saying it's everyone elses fault even as the ship sinks. Sure, join them switching off bilge pumps to power the 1st class suite.
A minimum wage doesn't destroy prosperity but it doesn't create it either. A minimum wage simply raises the price of all goods and services, nullifying its intended benefit [of raising the living standards of the lower to lower-middle class]. Think someone working for minimum wage can afford property in Sydney? Ever compared the cost of goods and services there to the USA? Or compared the prices of US cities with a high minimum wage, such as San Francisco? (even before the tech boom).
bummer.
i've been to venezuela many times. it is a great place. the last time i was there the black market exchange was Bs.7 to $1. that was just 3 years ago. now it is Bs.60 to $1. a country with vast oil reserves should be investing not spending!
With this Maduro is killing the last vestiges of business. Nobody will start one because the government will just call them thieves and seize everything. Maduro is digging his own grave.
A feeling of having made the same mistake before: Deja Foobar
Don't worry, they still do. Socialists never let a little reality get in the way of their ideals.
No, you didn't read my comment.
Hence the "only a complete fool would exchange dollars for bolivars at the official exchange rate" in my comment.
No, it's the an excerpt from Atlas Shrugged. Don't worry though, Francisco D'Anconia blows up all the Venezuelan Best Buys before anyone gets to loot them.
I live in Caracas. Parent is utter and complete bullshit. NO media in Venezuela is owned by foreign companies, and certainly not by US ones. Actually, the government owns more than half of all media companies, and constantly threatens privately-owned media with closure if they don't toe the official line. That is a threat that they've actually followed thru with more than once. Look it up yourself if you don't believe me. Parent is a Maduro shill or worse.
In 30 years, current Venezuela will be held as the prime example of how they ran a thinly-veiled dictatorship while the rest of the world looked the other side and refused to call a spade a spade. It takes lots of guts to call "democracy" a country where critics of the government never appear on live, unedited TV. It takes lots of guts to call "democracy" a country where the president forcefully takes control of the media airwaves every day. It takes lots of guts to call "democracy" a country where the government openly threatens its workers with dismissal if they're found to be voting "for the counter-revolution". It takes lots of guts to call "democracy" a country where the next election day (Dec.8) has been officially declared "Day of Fealty to Chavez".
Why? He's doing an EXCELLENT job of flushing the country down the drain. All by his widdle lonesome self.
Eventually the people in his own country are going to wake up to the consequences of his policy of thuggery and theft.
At that point, if he actually survives the coup, it'll be a miracle.
Chas - The one, the only.
THANK GOD!!!
No, it has been in a death spiral for a while now.
The country is spending money like crazy while keeping their money printing presses running around the clock. Read the line in the article, "Venezuela's central bank said the country's money supply grew 70% in the past year." The currency is collapsing due to stupidity and power-grabs in government.
Many countries have seen this sort of thing happen, and it is not pretty. Wheelbarrows of money to buy bread, only accepting payment in foreign currency, and financial collapse are common with this scenario that is playing right now.
Zimbabwe did this about a decade ago as the currency collapsed. Collectors picked up the trillion dollar notes that were printed at the end of the collapse and worth practically nothing. I hope it doesn't happen but part of me thinks it would be fun to collect a billion bolivar note from the country if/when the collapse happens.
//TODO: Think of witty sig statement
Venezuelans cannot by dollars from the government for any number of Bolivars. It's illegal for them to have any currency other than Bolivars.
Many fell for Chávez et al.'s socialist act, especially since out there you don't have enough tidbits to glean and see their true colors: authoritarian, bald-faced liars, sore losers, sectarian... It's all been a gradual power grab with "boiled frog" written all over it.
But you cannae change the laws o' economics, and the whole farce was teetering before Chávez died (officially on March 5, but his voice hadn't been heard since early December). Maduro's ineptitude as a statesman is more evident than Chávez's only because of his frequent blunders (Bush 43 shines by comparison), but the collapse was a matter of time:
* Local production of goods has waned, in good part because of ridiculous controls and destructive expropriation of businesses, increasing the demand for foreign goods and the currency to buy them.
* Venezuela barely exports anything beyond oil and some steel.
* The state oil company was run into the ground by bad management and direct social spending (by presidential mandate); even less dollars coming in.
Venezuela owes some $215bn (60% of GNP), and Maduro had to go in person to China to negotiate the latest $5bn loan. 12-month inflation is 54%, likely to increase as December rolls in. Nope, not looking good.
This post contains no rudeness or derision of any kind. All arguments are friendly. Terms and exclusions may apply.
Just like what happened to Mugabe in Zimbabwe. While I'm not willing to predict that there won't be a takeover, I wouldn't be so quick to assume that his goose is cooked. Despots have a habit of surprising the free world with their brutality.
Funny how the definition of socialism changed over the years. First it was social ownership of everything with no private property. Then it was central planning of the industry with some made up price system that never worked like the various schemes Soviet Union came up with (usually followed by a famine). Then it was the "third way" of countries like Yugoslavia (at the time it was briefly prosperous before the collapse) with a mix of state owned industry and some small scale private enterprise. Now it's basically a capitalist economy like Sweden with a slightly higher taxes than in the US and more welfare spending. Pretty soon you guys will finally be driven all the way to the right and call laissez-faire capitalism "socialism".
Negative moral value of force outweighs the positive value of good intentions.
And did Venezuela stop being able to import groceries after they seized El Exito? Was the country ruined?
Actually a lot of Venezuelans would answer "pretty much" to both questions. Major shortages of basic goods, like flour, sugar, cooking oil and toilet paper started around the time and continue to this day. The collapse of the economy and the skyrocketing crime make living in Venezuela very harsh now.
Hunger and poverty have gone down significantly since 1999. Even the anti-Chavez people accept this.
Chavez's only merit was to be lucky enough to rise to power just in time for the biggest boom in oil prices in the History of Venezuela. The governments of the 80s and 90s never had nearly as many resources as Chavez had. The governments of the 70s were close, and they were MUCH better at reducing poverty (without the violence and hate Chavez brought).
Chavez also seized the oil companies, and stopped Venezuela's biggest resource being a cash cow for foreign companies.
Plain false. Oil industry was nationalized in 1976, over 30 years before Chavez. If anything Chavez has led to Venezuela's biggest resource to be a huge cash cow for Cuba and China.
I've never been there. It's probably the country I most want to visit, and one of the main reasons is because it's so hard for a foreigner to know what the country is really like. I just read the Venezuelan newspapers and talk to Venezuelans sometimes here in Europe (mostly rich Venezuelans who don't like Chavez).
Please do. Venezuelan malandros eat naive, easily-deceived first-worldies like you for lunch.
Who's to say that everything shouldn't be free?
I guess no one...
But what I can say is that if my hard work is now "free", then I won't work hard anymore.
If you don't compensate people for what they do, they'll stop doing it, unless you enslave them and use brute force. It works for awhile, until it doesn't.
Sorry for pissing on your righeous parade, but Sweden is a social democrat state, and social democracies are still a form of socialism. In fact, it's further to the left than a textbook social democracy, because Sweden still forces some sectors of the economy to be centrally planned and managed, such as housing and licquor selling. In fact, the swedish government has a ministry dedicated to managing Sweden's housing and construction.
Where would you fit a ministry dedicated to housing and construction in your laissez-faire capitalism idea?
That's not exactly a policy which is to the right of Europe's typical social democracies, is it?
The slippery slope nonsense is nonsense, and you're only showing off your ignorance.
Point being, he was saying the same essential thing originally. You misunderstood his post, then proceeded to write a fairly informative summation of the incentives, so honestly I was too confused on how to mod you. :)
Or if there is more than everybody could possibly consume, and nobody needed to produce it.
This is why I like robots.
Help I am stuck in a signature factory!
Everyone will be piss poor.
The saddest part is that is never quite what happens.
Private property is the most fundamental component of freedom and democracy. Strong private property rights both in the form of society won't allow a strong man to just smash and grab and society does not appropriate property at will are key. Add to that a currency and you get a form of democracy. One mans money is as good as the next and if you want more of it you'll have to get offer him something he will consider a fair trade for it.
What you get in the face of communism/socialism is political currency becomes a new sort of exchange. Politically important people still find a way to concentrate wealth in their hands. Even shortly after the Russian revolution while perhaps most people were hungry and being forced to share what had been single domiciles because nothing could get built or maintained, loyal party members got to eat tea-biscuits and watch the ballet. Sixty years later when it all comes a part a small group of people who'd managed to get into the right government roles managed to walk away with lots of formerly state property giving themselves quite the leg up in the new economy.
Marxism might be a nice ideal but it completely ignores human nature. Whenever anyone really tries to implement you don't get your Marxist workers paradise you instead get something that is a lot more tribal; an oligarchy where a few guys share power with their sons, nephews, and old army buddies who live very comfortably, a little more equal if you will, and everyone else who gets to support it.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
Unfortunately, that's not a good plan either. If you look at the place in which it's succeeded the most, the US, you'll still see lots of undesirable byproducts of unregulated business, like major income inequality and, consequently, a higher prison population. Not to mention the decline the US has been experiencing due to relying on unsustainable exponential growth. What I mean to say is that we're fucked either way, embracing or extinguishing the free market.
The prison growth has nothing to do with unregulated business, there is not even a correlation between regulation and prison population, or it would be decreasing. One of the few things that does correlate with prison population is single parent households. When children of single parents are corrected for there is little difference in crime rates between blacks and whites, 70% of children in juvenile prisons are from simple parent households, 80% of inmates are from single parent households. Many of these studies were done in the 90's when only 25% of children were raised by single parents, while now the number is over 40%, which would correlate with the growth in prison population. CEO's making 6 or 7 figure salaries are not causing it there is not evidence to even correlate it.
Knowledge = Power
P= W/t
t=Money
Money = Work/Knowledge so the less you know the more you make
You see, I'm not even solid middle class, though I have a degree that took me 8 years to get because I had to work to pay for college. I have a job and I *still don't make as much money* as some leech that's living off welfare. I am angry because despite working my ass off and getting an education I can't get off the ground. Instead, we get laws that protect criminals, leeches and corrupts. Chavistas have been "attempting to do something" for 15 years by now. Obviously, they have no idea what they are doing, and in the process we live in a country which minimun wage is around 50 bucks. An underage girl who gets pregnant by a killer who's in jail and lives with her grandmother makes more money than, say, an engineer. I understand she might need it, but this country is raising a generation of people who don't want to work for a living, because they want to suck off the government, who, fishing for votes, encourages it. TL;DR: I'm not, and you're talking bullcrap you have no idea about.
Oblivion Awaits
Yeah, 35 billion is nothing. That's half the budget, annually, for California. If they have these reserves and pull them out then the country truly is at rock bottom. It will be heading there as the attack on Daka demonstrates only state owned stores will flourish and they likely won't have anything in stock because nobody wants to sell to Venezuela and be paid in toilet paper Bolivars. It'll be like the good old days in Soviet Russia - where you sell your neighbor for a pair of blue jeans.
A feeling of having made the same mistake before: Deja Foobar
Many Americans and Europeans may have trouble with the idea of "official" and "real" exchange rates. You can go in to any bank and purchase or sell currency, you can trade larger amounts on foreign exchange markets. You find the price never varies much place to place at a given time, because you can always go elsewhere. If Citibank wants more for Euros than Deutsche Bank, well you can buy them from Deutsche Bank even if you are in America. The currencies truly float, their value against each other varying all the time based on trading.
This is not the case in a place with a fixed currency like Venezuela. The government says "You can buy X amount of our currency for Y amount of foreign currency," with the foreign currency usually being US Dollars. Ok, easy enough to understand, and generally the government is happy to sell you as much of their currency as you want at that rate. The problem is when you try to go the other way. The government won't buy their currency back and give you dollars. In and of itself that makes sense, governments generally sell their currency to other people, they don't buy it back, since they are the ones who generate and control it.
So you say ok, well I'll sell that currency on the foreign exchange markets. Ahh well here's where your problem comes in: Those markets don't value the currency the same as the government that sold it does. You have to give them a whole lot more of it to get the same amount of dollars (or other currency). So you have two rates: The real one and the official one. The real one being the rate things actually trade for on markets.
Well government who implement currency controls don't like this. That is why they are implementing currency controls, to try and fix prices (it doesn't work, but they are still trying). Hence they usually restrict or ban trading like this. That then of course leads to a black market, where things are even higher, since the people involved are skirting the law.
This is just the kind of thing that happens with fixed currencies/price controls. While it might seem to be workable internally, it doesn't work on a global scale since other countries don't value your currency the same and they don't sell goods directly in your currency.