Venezuela fails its economics lessons

The effect of price controls in socialist Venezuela is clear. The economy is tanking. “The result is staggering economic disarray in what was once Latin America’s richest country,” the Post’s editorial notes. “Basic goods — cooking oil, rice, coffee, sugar, corn flour and even toilet paper — have become scarce, even as inflation soars above 60 percent. Venezuelans routinely line up for hours outside stores in the desperate attempt to obtain food and other essentials.” This is important because it represents a real threat to regional stability. Oil prices are falling, and due to Saudi Arabia’s decision last week to keep up production, those prices aren’t going up anytime soon. That means things will get worse for the Venezuelan economy and for ordinary citizens there. As Venezuelan economist Angel Garcia Banchs told NBC News recently, “What’s coming to Venezuela is chaos that will probably lead to barbarity and people looting.” In the past, the Venezuelan government has responded with military crackdowns. We can hope for restraint this time. More…