Why a “Billionaire” Wealth Tax Would Hurt the Working Poor and the Middle Class

https://fee.org/articles/why-a-billionaire-wealth-tax-would-hurt-the-working-poor-and-the-middle-class/

Why a “Billionaire” Wealth Tax Would Hurt the Working Poor and the Middle Class

Although the wealth tax was drafted with the poor in mind, its passing could cause them more harm than benefit.

By Mark Hornshaw

October 4, 2019

Vermont Senator Bernie Sanders wants to tax billionaires out of existence, or at least make them an endangered species. His proposed wealth tax of up to 8 percent per year would mean “the wealth of billionaires would be cut in half over 15 years,” he says.

The progressive tax would start at 1 percent on retained wealth over $32 million, rising to 2 percent over $50 million, and so on, reaching to the top rate of 8 percent on wealth over $10 billion. Whatever is left would be taxed again the following year, and every year until it was gone.

Let’s assume for the sake of argument that you don’t have an ethical problem with taxing people a second time on wealth that has already been taxed. And let’s set aside the issue of whether billionaires would simply leave their wealth on the table for Sanders to take, rather than fleeing to places with less ambitious governments. Let’s posit for the sake of argument that the tax achieves its aims.

The question then becomes, would it be beneficial for the working poor who Sanders is appealing to? Would it leave them better off or worse?

Net Worth Isn’t What You Think It Is

Amazon founder Jeff Bezos has a net worth of $109 billion, according to Bloomberg. If you think you can get a decent abode for $1 million, then it seems like he could buy 109,000 plush houses. Does anybody need that much wealth? Wouldn’t it be better off going to people who need it more? How does leaving that corporate wealth in private hands help the average person? This is the simplistic way that Sanders wants you to think about the situation. But this is not a true reflection of the situation at all.

In pre-capitalist feudal times, wealth was acquired by conquest and subjugation. The Duke in the castle was there because his group was militarily the strongest, having defeated the previous band of marauders, who defeated everybody else in the area. A Duke’s castle might be sacked by the army of another Duke, but the common person’s lot in life would be the same, albeit with a new master.

In this system, nearly all production was for the benefit of the wealthy “strongman.” The tailor-made fine clothes for the Duke. The blacksmith shod the Duke’s horses, the woodworker made the Duke’s furniture, and so on. For everybody else, virtually nothing was produced at all apart from meager subsistence. It was not possible to “become” wealthy in such a society—there was no peaceful process by which it could occur.

Sanders and many others would like you to view the world in that paradigm. But that is not how a market economy works.

Sure, the rich still appreciate their custom furniture and fine clothes—and you can make a modest living as a craftsman or tailor. But you don’t become a billionaire yourself from those activities. You become a billionaire in a market economy by producing products for millions, or even billions of people.

The people who started Amazon, Google, Walmart, Apple, Microsoft, and Disney got rich through their unparalleled level of service to the masses. They were “voted rich” through the voluntary choices of millions of people.

Amazon is one of the most amazing engines of poverty reduction and enhancement of living standards the world has ever seen. They literally make the working poor less poor, by offering them goods and services they like at prices they can afford. (Not to mention the opportunities Amazon creates by empowering and encouraging entrepreneurs to start new side businesses at very low start-up cost.)

The Problem with a Wealth Tax

I’m sure Bezos has some nice houses (as does Sanders) and other luxury items that would make our minds boggle. But not $109 billion worth. Most of the wealth of people like Bezos consists of shares in the companies they started, which were initially worth zero. It is other people’s recent valuations of those shares on the stock exchange that we are quoting. The figures come from multiplying the last traded parcel of shares by the total number of shares owned – not from any realistic offer to purchase the whole company.

Somebody like Bezos does not normally keep a spare $8 billion under the mattress, just in case Uncle Sam asks for it. In order to raise that money, he would have to sell down some of the stock of his company, and probably much more than $8 billion worth at the current valuation. But who would buy them?

When you credibly threaten to confiscate wealth, valuations can plummet. Not to mention the fact that all other billionaires (at least American ones) would be in the same predicament, being forced sellers of large portions of their own stocks.

Perhaps during the initial rounds of the tax, there may be some small investors, small enough to be flying below Sanders’s radar for the time being. But if these shareholders thought they could do a better job running those companies, they could just buy those shares on the open market right now. By not doing so in an un-coerced market, they are indicating that they feel less competent than the current owners.

So over time, it would be unlikely that any new Amazons or Apples would be started, and existing firms would be placed in ever less capable hands, with ever lower valuations as the wealth tax works its way down the line from billionaires to millionaires.

Sanders would either have to tax a vastly diminished pie or ask foreign investors to buy up US firms or, more likely, just confiscate shares directly and nationalize the companies. After a very short time, these companies would end up being majority-owned by the state – a veritable “trillionaire.”

Who’s Best Suited to Run a Business?

But perhaps you agree with Sanders that billionaires should not even exist, so it is still worth it anyway, regardless of how much tax is raised. The key question is, would the state do a better job running those companies than the entrepreneurs who started them or the investors who may have voluntarily bought them?

This is an important question, since these companies were started to provide goods and services to the masses, so it is the poor and middle class who will suffer if they do not operate efficiently. But now, instead of being run by competent, productive, future-oriented billionaires, these companies would be managed by an incompetent, non-productive, ultra-short-term-oriented trillionaire institution.

A billionaire businessperson could, if they wanted to, spend their fortune building statues of themselves. But that would only be a drain on the wealth they had acquired through previous rounds of serving customers. They would quickly find that it does not generate new income, and would promptly stop, choosing instead to invest in ways that expand the business by serving even more people. There is an effective feedback loop to weed out unproductive choices and reward productive ones.

But the state, for its entire existence, has had the privilege of being able to just confiscate any resources it wants and order them to be used in any way its rulers direct. It can choose to build statues, pyramids, or whatever it wants, whether or not it serves real consumer needs. Neither does it have to worry about competition from new entrants doing a better job; it can just ban them. Since nobody gets to choose whether to commit the resources or buy the finished goods, there is no way of knowing whether those resources were spent wisely or poorly.

This does not mean people in government don’t make any good decisions. They will stumble upon some good ones over time. But the people involved do not bear any direct consequences for their bad decisions, and neither are they directly rewarded for their good decisions. They have less effective mechanisms for weeding out the bad decisions and doubling down on the good ones. There is more incentive for managers and employees to make their own job more comfortable and less demanding, and there is less consequence for leaving customers twisting in the wind.

In short, a wealth tax means state-owned enterprises, and a state-owned enterprise can get away with being unresponsive, self-absorbed and lazy.

If you dislike productive billionaires, you ought to be 1,000 times more suspect of confiscatory trillionaires.

October 6, 2019. Tags: , , , , , . Bernie Sanders, Communism, Economics. Leave a comment.

Bernie Sanders said it’s a “good thing” when people have to wait in line for food. Meanwhile, in the real world, this is what it’s actually like to wait in line for food in Venezuela.

Bernie Sanders said that it’s a “good thing” when people have to wait in line for food.

These are his exact words:

“It’s funny, sometimes American journalists talk about how bad a country is, cause people are lining up for food. That’s a good thing! In other countries people don’t line up for food: the rich get the food and the poor starve to death.”

You can see him saying it in this video:

https://www.youtube.com/watch?v=zJBjjP8WSbc

Meanwhile, in the real world, this is what it’s actually like to wait in line for food:

(more…)

August 8, 2019. Tags: , , , , , , , , , , , . Bernie Sanders, Communism, Economics, Social justice warriors, Venezuela. Leave a comment.

How Wealth Is Created

https://www.youtube.com/watch?v=n6v81VH6k4A

April 22, 2019. Tags: , , , . Economics. Leave a comment.

Maxine Waters is proof that when you support socialism, you never have to take responsibility for your actions

On March 21, 2010, U.S Congressional Representative Maxine Waters (D – California) voted for the Health Care and Education Reconciliation Act of 2010.

The bill was signed into law by President Obama on March 30, 2010.

This new law transferred the responsibility for overseeing student loans from private banks to the U.S. government.

In other words, it’s what we call socialism.

Since the passage of this bill, student loan debt has skyrocketed. Many borrowers who chose to major in worthless subjects and ended up working at Starbucks have demanded that their debt be forgiven.

Despite the fact that Rep. Waters voted to nationalize student loans in 2010, in 2019 she blamed private banks for the student debt crisis.

You can see her doing so in this video:

https://www.youtube.com/watch?v=ORRAqBK-RNs

Maxine Waters’ comments in the above video are proof that when you support socialism, you never have to take responsibility for your actions.

April 12, 2019. Tags: , , , , . Barack Obama. 1 comment.

Bernie Sanders in the 1970s urged nationalization of most major industries

https://www.cnn.com/2019/03/14/politics/kfile-bernie-nationalization/index.html

Bernie Sanders in the 1970s urged nationalization of most major industries

March 14, 2019

Bernie Sanders advocated for the nationalization of most major industries, including energy companies, factories, and banks, when he was a leading member of a self-described “radical political party” in the 1970s, a CNN KFile review of his record reveals.

Sanders’ past views shed light on a formative period of his political career that could become relevant as he advances in the 2020 Democratic primary.

Many of the positions he held at the time are more extreme compared to the more tempered democratic socialism the Vermont senator espouses today and could provide fodder for moderate Democrats and Republicans looking to cast the Democratic presidential candidate and his beliefs as a fringe form of socialism that would be harmful to the country.

Aspects of Sanders’ plans and time in the Liberty Union have been reported before, but the material taken together, including hundreds of newly digitalized newspapers and files from the Liberty Union Party archived at the University of Vermont, paint a fuller portrait of Sanders’ views on state and public-controlled industry at the time.

In a statement to CNN, Sanders campaign spokesman Josh Orton said, “Throughout his career, Bernie has fought on the side of working people and against the influence of both the powerful ultra-rich and giant corporations who seek only to further their own greed. The record shows that from the very beginning, Bernie anticipated and worked to combat the rise of a billionaire ruling class and the exploding power of Wall Street and multinational corporations. Whether fighting to lower energy prices or expand access to capital for local development, Bernie’s first priority has always been — and will always be — defending the interests of working people across the country.”

After moving to Vermont in 1968 several years after graduating college, Sanders became an active member of the left-wing Liberty Union Party. Under the Liberty Union banner, Sanders, then in his early 30s, ran for governor of Vermont in 1972 and 1976 and as a candidate for US Senate in 1972 and 1974. Sanders, also served as chairman of the party from 1973-1975. During this time, Sanders and Liberty Union argued for nationalization of the energy industry, public ownership of banks, telephone, electric, and drug companies and of the major means of production such as factories and capital, as well as other proposals such as a 100% income tax on the highest income earners in America. Sanders also rejected political violence and criticized the anti-democratic nature of communist states such as the Soviet Union.

“I favor the public ownership of utilities, banks and major industries,” Sanders said in one interview with the Burlington Free Press in 1976.

In his career as a US Senator, Sanders has backed away from such ardent calls for nationalization, but maintained similar rhetoric on wealth inequality.

In one 2015 speech, he said he didn’t want the government to take over private business or “own the means of production.” But his early views are notable because they are far to the left of the current Democratic party and most candidates running for office.

Sanders left the Liberty Union Party in 1977, over what he said was the party’s lack of activity between elections. Sanders said in his farewell that workers would need to take control for the country to be sustained.

“The function of a radical political party is very simple,” he said. “It is to create a situation in which the ordinary working people take what rightfully belongs to them. Nobody can predict the future of the workers’ movement in this country or the state of Vermont. It is my opinion, however, that if workers do not take power in a reasonably short time this country will not have a future.”

The energy industry

In 1973, during his time as chairman of the Liberty Union Party, Sanders took to a Vermont paper to oppose Richard Nixon’s energy policy and oil industry profits, calling for the entire energy industry to be nationalized. Consumers at the time had been facing steep price increases and heavy shortages as a result of the OPEC oil embargo.

“I would also urge you to give serious thought about the eventual nationalization of these gigantic companies,” Sanders wrote in a December 1973 open letter to Vermont Sen. Robert Stafford that ran in the Vermont Freeman. “It is extremely clear that these companies, owned by a handful of billionaires, have far too much power over the lives of Americans to be left in private hands. The oil industry, and the entire energy industry, should be owned by the public and used for the public good — not for additional profits for billionaires.”

Electric and telephone utilities

Efforts to push for public ownership of Vermont’s utilities like telephone and electric companies played prominently in Sanders’ political career in the 1970s. Sanders ran for Senate in a January 1972 in the special election and governor in that year’s November election, registering in the low single digits in both races.

When he launched his first campaign for the Senate in 1971, Sanders said state utilities needed to be run by the state of Vermont on a nonprofit basis and that if revenues exceed expenditures they could be used to fund government programs and lower property taxes. In 1976, Sanders went even further: calling for the state to seize ownership of Vermont’s private electric companies without compensation to investors. He defended his proposals routinely by pointing out that municipally owned utilities, not uncommon throughout the country, often had lower consumer prices.

Utilities like the Green Mountain Power company and the New England Telephone company had been steadily pushing, successful and unsuccessful at times, for approval from state regulators for rate increases. Sanders was particularly incensed by a proposed 27% rate hike by the New England Telephone company, and it became a rallying cry for his political campaigns.

In 1973, as chairman of the Liberty Union Party, Sanders had organized boycotts to stop proposed rate increases from New England Telephone company. Sanders’ efforts through the “The Vermont Telephone Boycott Committee” — a committee he coordinated that year — proved successful in blocking NET rate increases. Newspapers commended Sanders for efforts when the rate increases were blocked by the state’s utility regulators.
Sanders would declare for the Senate again the following June in 1974 and for governor in 1976, and Vermont’s utilities would remain a major focus point of his campaigns and Liberty Union Party. Sanders’ rhetoric was strongest during his 1976 campaign for governor of Vermont, his last before he left the Liberty Union Party.

In a press release on his policy positions, Sanders campaigned on the public ownership of the state’s electric companies, without compensating the banks and stockholders.

“I will be campaigning in support of the Liberty Union utility proposal which calls for the public ownership of Vermont’s private electric companies without compensation to the banks and wealthy stockholders who own the vast majority of stock in these companies,” he said in a July 1976 press release. “I will also be calling for public ownership of the telephone company — which is probably the single greatest rip-off company in America.”
Sanders argued utility companies engaged in “economic blackmail,” saying the state gave the companies the right to charge “outrageous” rates for utilities or have consumers suffer from poor service.

Sanders’ comments went beyond the Liberty Union’s proposal for public takeover of state utilities, which said investors and bondholders with more than 100 shares would have to convert their holding to non-voting stock and income bonds which carry no fixed claim to dividends or interest payments.

Public ownership of banks, corporations and the major industries

Sanders’ policy proposals that year also included an ambitious plan to deal with companies attempting to leave towns.

“We have got to begin to deal with the fact that corporations do not have the god-given right to disrupt the lives of their workers or the economic foundation of their towns simply because they wish to move elsewhere to earn a higher rate of profit,” Sanders said in a press release in August 1976.
Sanders’ plan would require large businesses attempting to leave cities to get permission from the towns and the workers in them. If the company did not get that approval they would be required by law to pay a guaranteed two years of severance for workers and 10 years of taxes for the town.
Nationally, Sanders said, legislation corporations leaving cities would have to be dealt with by turning the means of production over to the workers.
“In the long run, the problem of the fleeing corporations must be dealt with on the national level by legislation which will bring about the public ownership of the major means of production and their conversion into worker-controlled enterprises,” he said.

Campaign literature that year from Sanders, including a 1976 brochure for the party, said, “I believe that, in the long run, major industries in this state and nation should be publicly owned and controlled by the workers themselves.”

Public control of the economy would become the key issue in his race. Speaking at one forum, Sanders called for workers to control of capital, factories, banks and corporations.

“There is a handful of people sitting at the head of the main banks controlling the destiny of underprivileged nations, the country as well as Vermont’s economy,” Sanders said. “That is not tolerable. That control cannot be held by them. We need public control over capital; and the capital must be put to use for public need not for the advancement of those who made the investments.”

In an interview with the Burlington Free Press, Sanders argued the richest two or three percent should not control capital.

“I favor the public ownership of utilities, banks and major industries. In Vermont we have some $2 billion of deposits in our banks,” Sanders told the paper. “In Vermont, as well as nationally, it is not tolerable to me that the control of capital would remain in the hands of the richest two or three percent of the population to do with it as they like.”

Sanders called that year in a policy paper for Vermont’s banking laws to be “radically” revised, so that the public and the state “determine in what manner our savings are invested so as to make Vermont a better place to live.”

Socialized medicine and public ownership of drug companies

Asked about healthcare, Sanders said there would need to be publicly-controlled drug companies.

“I believe in socialized medicine, public ownership of the drug companies and placing doctors on salaries. The idea that millionaires can make money by selling poor people drugs that they desperately need for highly inflated prices disgusts me,” he said.

Taxing assets at 100%

Heavy taxation of wealthy people played prominently into Sanders’ plans to pay for expanding government services.

In February 1976, Liberty Union put out a state tax proposal calling for a radical revamping of the system, including the removal of all taxes of sales, beverages, cigarettes, polls, and the use of telephones, railroads or electric energy. Tax rates for those earning more than $100,00 would be 33.47%, $50,000-$99,999 would be 19%, $25,000-$49,000 would be 13.56%, and $10,000-$14,999 would be 4%. Anyone earning less than $10,000 would pay no state income tax.

But Sanders’ rhetoric at times went much further.

During his 1974 Senate run, Sanders said one plan to expand government included making it illegal to gain more wealth than person could spend in a lifetime and have a 100% tax on incomes above this level. (Sanders defined this as $1 million dollars annually).

“Nobody should earn more than a million dollars,” Sanders said.

March 16, 2019. Tags: , , , , . Bernie Sanders, Communism. Leave a comment.

Where did Alexandria Ocasio-Cortez get her sweet potatoes?

http://tennesseestar.com/2019/02/27/commentary-where-did-alexandria-ocasio-cortez-get-her-sweet-potatoes/

Where did Alexandria Ocasio-Cortez get her sweet potatoes?

by Jeffrey A. Tucker

February 27, 2019

https://www.youtube.com/watch?v=5SUDG7FIFK8

https://www.youtube.com/watch?v=-haN_2oztvw

Alexandria Ocasio-Cortez was trying to explain to me that the world is going to melt, we are all doing to die, and probably we shouldn’t be having any more children, but I was distracted by the dinner she was preparing on camera. She was carefully cutting sweet potatoes before putting them in the oven.

She put salt and pepper on them. Salt was once so rare that it was regarded as money. Ever try to go a day with zero salt? Nothing tastes right. That was the history of humanity for about 150,000 years. Then we figured out how to produce and distribute salt to every table in the world. Now we throw around salt like it is nothing, and even complain that everything is too salty. Nice problem.

Sweet potatoes are not easy to cut, so she was using a large steel knife, made of a substance that only became commercially viable in the late 19th century. It took generations of metallurgists to figure out how to make steel reliably and affordably. Before steel, there were bodies of water you could not cross without a boat because no one knew how to make an iron bridge that wouldn’t sink.

As for the oven in her apartment, it was either gas-powered or electric. In either case, she didn’t have to chop down trees and build a fire, like 99.99 percent of humanity had to until relatively recently. She merely pushed a button and it came on, a luxury experienced by most American households only after World War II. Now we all think it is normal.

I also presume that her house is warm in the dead of winter and that this is due to indoor thermostatically controlled heat. There are still people alive today who regard this invention as the greatest in the whole course of their lives. They no longer had to work two days to heat a house for one day. Again, one only needs to push a button and, like magic, the warmth comes to you.

The more interesting question is where she obtained those sweet potatoes. The store, I know. No one grows sweet potatoes in Washington, D.C. But where did the store get them? For many thousands of years, the sweet potato was trapped in distant places in South America; it somehow made its way on boat travels to the Polynesian islands, and finally landed in Japan by the late 15th century.

Only once boating technology and capital expenditure for exploration grew to reveal the first signs of prosperity for the masses of people did the sweet potato make it to Europe via an expedition led by Christopher Columbus. Finally, it came to the U.S.

But this took many thousands of years of development — capitalistic development — unless you want to see this root vegetable as the ultimate fruit of colonialism and thus to be eschewed by any truly enlightened social justice warrior.

Even early in the 20th century, sweet potatoes were not reliably available for anyone to chop up and bake, especially not in the dead of winter. Today Americans eat sweet potatoes grown mostly in the American South but also imported from China, which today serves 67 percent of the global sweet potato market.

How do we obtain them? They are flown on planes, shipped on gas-powered ocean liners, and brought to the store via shipping trucks that also run on fossil fuels. If you are playing with the idea of abolishing all those things by legislative fiat, as she certainly is, it is not likely that you are going to obtain a sweet potato on the fly.

I admit the following. It drives me crazy to see people so fully enjoying the benefits from private property, trade, technology, and capitalistic endeavor even as they blithely propose to truncate dramatically the very rights that bring them such material joy, without a thought as to how their ideology might dramatically affect the future of mass availability of wealth that these ideologues so casually take for granted.

To me, it’s like watching a person on IV denounce modern medicine — or a person using a smartphone to broadcast to the world an urgent message calling for an end to economic development. It doesn’t refute their point, but the performative contradiction is too acute not to note, at least in passing.

Now to this question about whether there should or should not be a new generation of human beings. After all, she points out, no one can afford them anymore because young people are starting careers tens of thousands of dollars in debt from student loans. She says there is also the moral issue that we need to take care of the kids who are already here rather than having more.

Truth is, she doesn’t really explain well why she is toying with the idea that it is a bad idea that people have kids. Let me suggest that it is possible that she is drifting toward the path of countless environmentalists before her and finally saying outright what many people believe in their hearts: humankind is the enemy. Either we live and nature dies, or nature lives and we die. There must be some dramatic upheaval in the way we structure society to find a new way. It’s the application of the Marxian conflict fable to another area of life.

Maybe.

In any case, those are big thoughts — too big, really, for a delightful cooking session after which a fancy meal beckons. We’ll get back to what AOC calls the “universal sense of urgency” following dessert.

March 4, 2019. Tags: , , , , , , , , , , , . Alexandria Ocasio-Cortez, Economics, Environmentalism, Food. Leave a comment.

Tapper to Ocasio-Cortez: “I’m assuming I’m not going to get an answer for the other $38 trillion”

https://www.youtube.com/watch?v=6CWUgPWRhxU

February 9, 2019. Tags: , , , . Alexandria Ocasio-Cortez, Economics. Leave a comment.

I have four questions for Alexandria Ocasio-Cortez, Bernie Sanders, and anyone else who calls themselves a socialist

I’m curious to hear what Alexandria Ocasio-Cortez, Bernie Sanders, and any other self-described socialists think of these four things:

1) After President Reagan cut the top income tax rate, all of the other OECD countries did the same thing. What do you think of that?

2) Sweden abolished its inheritance tax, after a study showed that the tax did not reduce inequality. What do you think of that?

3) This is what happened as a result of France’s wealth tax. What do you think of that?

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010.html

Old Money, New Money Flee France and Its Wealth Tax

July 16, 2006

Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.

4) The following rich liberals have all used legal tax shelters to legally lower their own taxes. What do you think of that?

Debbie Wasserman Schultz

The Weekly Standard reports:

Disclosure forms reveal that Democratic National Committee chair Debbie Wasserman Schultz, a member of Congress from Florida, previously held funds with investments in Swiss banks, foreign drug companies, and the state bank of India. This revelation comes mere days after the Democratic chair attacked presumptive Republican presidential candidate Mitt Romney for holding money in Swiss bank accounts in the past.

Nancy Pelosi

The Daily Caller reports:

According to Pelosi’s 2011 financial disclosure statement, the Democratic House Minority Leader received between $1 million and $5 million in partnership income from ”Matthews International Capital Management LLC,” a group that emphasizes that it has a “A Singular Focus on Investing in Asia.”A quick trip to the company website reveals a featured post extolling the virtues of outsourcing.

Valerie Jarrett

fireandreamitchell.com reports:

Top Obama adviser and BFF Valerie Jarrett has a line of credit from a Bermuda insurance company valued between $100,000 and a quarter of a million dollars.

Barack Obama

Fox News reports:

President Obama and his wife, Michele, gave a total of $48,000 in tax-free gifts to their daughters, according to tax records made public on Friday.The president and his wife separately gave each daughter a $12,000 gift under a section of the federal tax code that exempts such donations from federal taxes.There is nothing illegal about the president’s taking advantage of this tax shelter, but it does raise eyebrows given that he has lamented the myriad tax exemptions used by the wealthy—“millionaires and billionaires” like himself—to pay less in taxes.

Noam Chomsky

The Hoover Institution reports:

One of the most persistent themes in Noam Chomsky’s work has been class warfare. He has frequently lashed out against the “massive use of tax havens to shift the burden to the general population and away from the rich” and criticized the concentration of wealth in “trusts” by the wealthiest 1 percent. The American tax code is rigged with “complicated devices for ensuring that the poor—like 80 percent of the population—pay off the rich.”

But trusts can’t be all bad. After all, Chomsky, with a net worth north of $2,000,000, decided to create one for himself. A few years back he went to Boston’s venerable white-shoe law firm, Palmer and Dodge, and, with the help of a tax attorney specializing in “income-tax planning,” set up an irrevocable trust to protect his assets from Uncle Sam. He named his tax attorney (every socialist radical needs one!) and a daughter as trustees. To the Diane Chomsky Irrevocable Trust (named for another daughter) he has assigned the copyright of several of his books, including multiple international editions.

Chomsky favors the estate tax and massive income redistribution—just not the redistribution of his income. No reason to let radical politics get in the way of sound estate planning.

When I challenged Chomsky about his trust, he suddenly started to sound very bourgeois: “I don’t apologize for putting aside money for my children and grandchildren,” he wrote in one e-mail. Chomsky offered no explanation for why he condemns others who are equally proud of their provision for their children and who try to protect their assets from Uncle Sam.

John Kerry

The Boston Globe reports:

Documents obtained by the Globe detail John Kerry’s 1983 investment of between $25,000 and $30,000 in offshore companies registered in the Cayman Islands. The document below, signed by Kerry, shows his pledge to purchase 2,470 shares of Peabody Commodities Trading Corp. through Sytel Traders, registered in the Caymans.

Barney Frank

National Review reports:

When Massachusetts cut its top tax rate to 5.3 percent in 2001, it let guilty liberals pay the old 5.85 percent rate if they wished… Pro-tax U.S. Rep. Barney Frank (D., Mass.) spurned the higher rate. “No, I won’t” pay some $800 extra, Frank told Boston radio host Howie Carr in April 2003.

Michael Moore

ihatethemedia.com reports:

Moore’s most recent effort, Capitalism: A Love Story, took aim at businesses that used shelters to avoid paying taxes and took government bailouts during the market crash.

The thing is, Moore used similar tactics, taking advantage of a Michigan tax break to fund the making of his film–which raked in millions, by the way. Michigan taxpayers–already hit hard with the collapsing auto industry–were left holding the funny money bag for that one.

Bill Clinton

USA Today reports:

Former president Bill Clinton once made public a tax return on which he deducted $2 apiece for donated underwear.

February 8, 2019. Tags: , , , , , . Alexandria Ocasio-Cortez, Bernie Sanders, Economics. Leave a comment.

Venezuelans Send Message To Americans Who Want Socialism

https://www.youtube.com/watch?v=CJhRMEW-5ws

February 8, 2019. Tags: , , , . Communism, Venezuela. Leave a comment.

Elizabeth Warren doesn’t seem to know that France’s wealth tax caused a REDUCTION in tax revenues

This is what the Washington Post wrote about France’s wealth tax:

http://www.washingtonpost.com/wp-dyn/content/article/2006/07/15/AR2006071501010.html

Old Money, New Money Flee France and Its Wealth Tax

July 16, 2006

Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.

Anyone who looks at the above numbers would know that all of that capital flight means less income tax, less capital gains tax, less sales tax, less social security tax, and less of many other taxes too. Whatever tax revenue France gets from its wealth tax is more than dwarfed by the reductions in other taxes.

And Warren’s proposed wealth tax rate is actually higher than France’s, so its potential for harm is actually bigger as well.

That doesn’t sound like a good idea for anyone who wants to increase the amount of tax revenue that gets collected by the government.

On the other hand, if Warren’s real goal is to appeal to Democratic primary voters who feel envy and jealousy, and who don’t understand math or the concept of capital flight, then her proposal is a brilliant strategy. Her horrible proposal could very well get her elected President in 2020.

January 28, 2019. Tags: , , , , , , , , , , , , , . Economics. Leave a comment.

Trying to figure out the real reason Alexandria Ocasio-Cortez bans reporters from her town hall events

The New York Times reports that Alexandria Ocasio-Cortez has banned the media from two of her town hall meetings.

Ocasio-Cortez tweeted the following explanation for the ban:

“Our community is 50% immigrant. Folks are victims of DV, trafficking, + have personal medical issues.”

“This town hall was designed for residents to feel safe discussing sensitive issues in a threatening political time.”

“We indicated previously that it would be closed to press.”

Ben Jacobs, a reporter for The Guardian, responded with the following tweet:

“And how does the presence of reporters make people feel unsafe?”

I think Jacob’s question is an excellent one.

I’d also like to point out that all of the other Congressional districts also have constituents who are “victims of domestic violence” and who have “personal medical issues,” but that the Congressional representatives and candidates of those other districts haven’t banned the media from their town hall events.

In the video below, YouTuber Styxhexenhammer666 says that one possible reason for Ocasio-Cortez’s media ban is that any illegal aliens in attendance would – justifiably – worry about being filmed by the media. However, he then goes on to say that Ocasio-Cortez could ask the media to keep their cameras focused on her and not the audience, and that they would likely comply.

Styxhexenhammer666 then goes on to say that he thinks her real reason for banning the media is that there might be a constituent in attendance who asks her a tough question about economics that she can’t answer. Specifically, he says that she doesn’t seem to understand that the only reason that democratic socialism in countries like Norway works is because there is a strong, healthy private sector to pay the taxes to fund it. Take away that strong, healthy private sector, and your country ends up like Venezuela.

I agree with him on both of these points.

https://www.youtube.com/watch?v=qkk1_J6tucQ

August 18, 2018. Tags: , , , , , , , , , , , , , , , , . Alexandria Ocasio-Cortez, Economics, Venezuela. Leave a comment.

Does Alexandria Ocasio-Cortez agree or disagree with the Democratic Socialists of America’s New York City chapter’s call to “abolish profit”?

This is a link to a recent tweet from the New York City chapter of the Democratic Socialists of America.

And this is a link to an archive of the same tweet, in case the original ever gets deleted.

The tweet states:

“Abolish profit”

I’d also like to point out this link to the constitution and bylaws of the Democratic Socialists of America, where they write:

“we reject an economic order based on private profit”

So both the national organization and the New York City chapter both support getting rid of profit.

If anyone wants to see the real world results of what happens when a country tries to stop businesses and corporations from making a profit, I suggest read this lengthy, well sourced blog post that I wrote four months ago, which is called, “The Maduro diet: How most Venezuelans lost an average of 19 pounds in 2016, plus another 24 pounds in 2017.”

One would think that the lessons of the 20th century would have taught people that getting rid of profit also means getting rid of incentive. But one would be wrong. In Venezuela, during the 21st century, presidents Hugo Chavez and Nicolas Maduro did everything they could to stop businesses and corporations from making a profit from growing and selling food, and the results have been disastrous.

In New York City, a self described “socialist” named Alexandria Ocasio-Cortez just beat long term incumbent Joseph Crowley in the Democratic primary election for a seat in the U.S. House of Representatives. Unless something really weird and unexpected happens, there is a near 100% chance that Ocasio-Cortez will be elected to the U.S. Congress in November.

Since Ocasio-Cortez is a member of the Democratic Socialists of America, I would like to know if she agrees or disagrees with their proposal to “abolish profit.”

I would also like to know if Ocasio-Cortez supports or opposes the policies of Venezuelan presidents Hugo Chavez and Nicolas Maduro, which I describe in great detail in this blog entry.

Chavez referred to his policies as “21st century socialism,” and he was constantly saying that it was wrong for businesses and corporations to make a profit. He set price controls on food, seized more than 10 million acres of farmland, and had the government take control of many food processing plants and supermarkets. Before Chavez died in 2013, he had appointed Maduro as his successor. Since Chavez’s’ death, Maduro has continued Chavez’s policies. Because the profit motive to grow and sell food has been eliminated in Venezuela, there has been a very severe, long term, chronic shortage of food. Most Venezuelans lost an average of 19 pounds in 2016, plus another 24 pounds in 2017.

I would like Ocasio-Cortez to please read my blog post, please check out all the links to the sources that I cite to prove that everything I wrote is true, and then please state whether she supports or opposes the policies of Hugo Chavez and Nicolas Maduro that are in my blog post.

 

July 1, 2018. Tags: , , , , , , , . Alexandria Ocasio-Cortez, Communism, Economics, Venezuela. 1 comment.

The Maduro diet: How most Venezuelans lost an average of 19 pounds in 2016, plus another 24 pounds in 2017

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March 10, 2018. Tags: , , , , , , , , , , , , , , , , , , , , , , , . Communism, Economics, Food, Military, Police state, Politics, Social justice warriors, Venezuela, War against achievement. 2 comments.

Here’s how most Venezuelans lost an average of 43 pounds in two years

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February 23, 2018. Tags: , , , , , , , , , , , , , , , , , , , , , . Communism, Economics, Food, Military, Police state, Politics, Social justice warriors, Venezuela, War against achievement. Leave a comment.

Venezuelan government tells doctors and hospitals not to list starvation as cause of death for babies and children who starve to death

For a detailed explanation of how Venezuela went from being a rich well fed country, to a poor country with severe shortages of food, please see this previous blog post that I wrote, which is called “Here’s how most Venezuelans lost an average of 19 pounds in 2016, and how to make sure it doesn’t happen again in 2017.”

Now the latest news.

The New York Times just published this article about the situation in Venezuela.

According to the article, even though large numbers of babies and children are starving to death, the government is telling doctors and hospitals not to list starvation as the official cause of death.

In addition, the Times kept track of 21 pubic hospitals over a period of five months. During that time period, the Times was unable to get any kind of official starvation counts from any of those hospitals. However, doctors at nine of those hospitals told the Timed that they had kept at least a partial count, and that of these partial counts at nine hospitals, nearly 400 children had starved to death. The cause of these deaths was not listed as starvation in the hospitals’ official records, but the doctors know that starvation was their true cause of death.

The Times also reports that the food shortages are so severe that even most hospitals do not have enough baby formula to meet the needs of their patients.

And it’s not just food that’s in short supply. The Times also reports that many of these hospitals don’t have enough of basic supplies such as soap, syringes, gauze, diapers, and latex gloves.

Please keep in mind that before Hugo Chavez implemented price controls and seized farms, factories, businesses, and other private property, the country was quite affluent and had a first world standard of living.

There’s a huge lesson in all of this.

No matter how well off and prosperous a country is, it simply cannot maintain anything even remotely close to such levels of prosperity when it adopts communism.

(more…)

December 18, 2017. Tags: , , , , , , , , , . Communism, Venezuela. Leave a comment.

My new book “The Maduro Diet” is ranked #1 in the amazon sales category Books > History > Americas > South America > Venezuela

My new book The Maduro Diet is ranked #1 in the amazon sales category Books > History > Americas > South America > Venezuela

Here’s a partial screen capture:


Full title: The Maduro Diet: How three-quarters of adults in Venezuela lost an average of 19 pounds in 2016

https://www.amazon.com/dp/B075W2LXT8


September 24, 2017. Tags: , , , , , , , , , , , . Books, Communism, Economics, Venezuela. 2 comments.

Some Venezuelans have not had a full meal in days

http://abcnews.go.com/International/wireStory/hungry-venezuelans-turn-colombia-plate-food-49206924

Hungry Venezuelans turn to Colombia for a plate of food

Associated Press

CUCUTA, Colombia — Aug 14, 2017

Under a scorching sun just a short walk from Colombia’s border with Venezuela, hundreds of hungry men, women and children line up for bowls of chicken and rice — the first full meal some have eaten in days.

An estimated 25,000 Venezuelans make the trek across the Simon Bolivar International Bridge into Colombia each day. Many come for a few hours to work or trade goods on the black market, looking for household supplies they cannot find back home.

But increasingly, they are coming to eat in one of a half-dozen facilities offering struggling Venezuelans a free plate of food.

“I never thought I’d say this,” said Erick Oropeza, 29, a former worker with Venezuela’s Ministry of Education who recently began crossing the bridge each day. “But I’m more grateful for what Colombia has offered me in this short time than what I ever received from Venezuela my entire life.”

As Venezuela’s economy verges on collapse and its political upheaval worsens, cities like Cucuta along Colombia’s porous, 1,370-mile (2,200-kilometer) border with Venezuela have become firsthand witnesses to the neighboring South American nation’s escalating humanitarian crisis.

According to one recent survey, about 75 percent of Venezuelans lost an average of 19 pounds (8.7 kilograms) last year.

The Colombian government has crafted contingency plans in the event of a sudden, mass exodus, but already church groups and nonprofit organizations are stepping in, moved by images of mothers carrying starving babies and skinny men trying to make a few bucks on Cucuta’s streets to bring back home.

Paulina Toledo, 47, a Colombian hairstylist who recently helped feed lunch to 900 Venezuelans, said seeing how hungry they were “hurt my soul.”

“Those of us here on the border are seeing their pain,” she said.

People living on either side of the Colombia-Venezuela border have long had a foot in both countries: A Colombian who lives in Cucuta might cross to visit relatives in San Cristobal; a Venezuelan might make the reverse trip to work or go to school.

In the years when Venezuela’s oil industry was booming and Colombia entangled in a half-century armed conflict, an estimated 4 million Colombians migrated to Venezuela. Many started coming back as Venezuela’s economy began to implode and after President Nicolas Maduro closed the border in 2015 and expelled 20,000 Colombians overnight.

Oropeza said he earned about $70 a month working at the Ministry of Education and selling hamburgers on the side — twice Venezuela’s minimum wage but still not enough to feed a family of four. Once a month his family receives a bundle of food provided by the government, but it only lasts a week.

“So the other three weeks, like most Venezuelans, we have to make magic happen,” he said on a recent afternoon.

Desperate for money to feed his family, he left his job and traveled to the Venezuelan border town of San Antonio. He wakes up at 4 a.m. each morning to be among the first crossing the bridge into Cucuta, where he earns money selling soft drinks on the street.

He goes straight to the “Casa de Paso,” a church-run shelter that has served 60,000 meals to Venezuelans since opening two months ago. On an average day, 2,000 Venezuelans line up for meals, getting a ticket to reserve their spot and then waiting four hours for a meal served at outdoor plastic tables.

Workers stir gigantic metal pots filled with chicken and rice set on the bare dirt floor. Volunteers hand out boxes of juice to tired-looking children. Adults sit quietly, savoring their bowl of food as chickens waddle between them.

“Every day I have to remind myself why I am here,” said Oropeza, dressed in a faded striped collared shirt. “I try to repeat it to myself so that I won’t, you know, so those moments of weakness don’t affect you so much.”

When he’s not helping out or waiting in line at the shelter kitchen, Oropeza sells malted soft drinks for about 50 cents each. He’s been able to bring money back to his family and has earned enough to buy a cellphone, which he’d lacked for two years.

Jose David Canas, a priest, said his church will continue to serve food “as long as God allows.”

“Until they close the border,” he said. “Until everything is eaten or until the province tells us that they no longer have lunches to give out. And then it’s the end.”

August 16, 2017. Tags: , , , , , , , . Communism, Economics, Venezuela. Leave a comment.

Here’s how most Venezuelans lost an average of 19 pounds in 2016, and how to make sure it doesn’t happen again in 2017

(more…)

February 21, 2017. Tags: , , , , , , , , , , , , , , , , , , , , , . Communism, Economics, Food, Military, Police state, Politics, Social justice warriors, Venezuela, War against achievement. 4 comments.

Venezuelan jail reveals emaciated prisoners left starving to death (two minute video)

https://www.youtube.com/watch?v=Cks4OBHGG5U

October 29, 2016. Tags: , , , , , . Communism, Venezuela. Leave a comment.

Venezuelans wait in line for five hours for one pound of bread

http://www.nytimes.com/2016/09/21/world/americas/venezuela-oil-economy.html

September 20, 2016

One hundred people waited in line for five hours in June to buy a ration of about a pound of bread from a small bakery in Cumaná.

five-hours

September 20, 2016. Tags: , , , . Communism, Economics, Venezuela. Leave a comment.

Venezuelan government arrests people because they were waiting in line for food

https://www.washingtonpost.com/world/the_americas/in-a-hungry-venezuela-buying-too-much-food-can-get-you-arrested/2016/09/14/b20276d6-755f-11e6-9781-49e591781754_story.html?wpisrc=nl_headlines&wpmm=1

In a hungry Venezuela, buying too much food can get you arrested

September 15, 2016

BARQUISIMETO, Venezuela – The hunt for food started at 4 a.m., when Alexis Camascaro woke up to get in line outside the supermarket. By the time he arrived, there were already 100 people ahead of him.

Camascaro never made it inside. Truckloads of Venezuelan troops arrived in the darkness, arresting him and nearly 30 others seemingly pulled from the queue at random, according to his lawyer. Camascaro, 50, was charged with violating laws against interfering “directly or indirectly” with the production, transportation or sale of food. He has been in jail for three months, awaiting a hearing.

“I went to see the prosecutors and explained that he was just buying some food for his family. He’s not a bachaquero,” said Lucía Mata, Camascaro’s attorney, using the Venezuelan term for someone who buys scarce, price-capped or government-subsidized goods to resell on the black market.

Camascaro was snared in a new crackdown on Venezuelan shoppers, part of President Nicolás Maduro’s attempt to assert greater control over food distribution and consumption. Maduro blames this oil-rich country’s chronic scarcities on an “economic war” against his government waged by foreign enemies, opposition leaders, business owners and smuggling gangs.

Many economists attribute the shortages to simpler, less conspiratorial factors. Price controls and excessive regulation, they say, have discouraged domestic production, making Venezuelans ever more dependent on imported food. With petroleum prices slumping, though, hard currency for imports is lacking, leaving supermarket shelves bare.

Deadly food riots have exploded in several Venezuelan cities this year, and Maduro in recent weeks has faced rowdy pot-banging protests. In July, he gave Venezuela’s defense minister extraordinary powers to oversee the government’s elaborate system of price controls and consumer regulations, including the fingerprint scanners used to ensure that Venezuelan shoppers don’t exceed their purchase limits.

The enforcement campaign appears to be sweeping up a significant number of ordinary shoppers, many of them poor, while achieving a kind of vertical integration of economic blame.

‘Dracula’s Bus’

In a country with one of the world’s highest homicide rates, and where carjackings, muggings and kidnappings often go unpunished, the Venezuelan government has arrested or detained at least 9,400 people this year for allegedly breaking laws against hoarding, reselling goods or attempting to stand in line outside normal store hours, according to the Venezuelan human rights organization Movimiento Vinotinto. Many were taken into custody by the Venezuelan troops assigned to police the checkout aisles and the long lines snaking from supermarkets.

Ismary Quiros, a deputy director at Movimiento Vinotinto, said the law doesn’t define exactly what constitutes illegal hoarding, smuggling, or reselling goods. She said the government’s real goal is to find scapegoats for the scarcities.

The queues typically materialize whenever high-demand, government-subsidized items arrive, such as corn meal or sugar. Those goods are among the few basics that remain affordable to ordinary Venezuelans who are paid in bolivares, the country’s increasingly worthless currency. Other supermarket items that aren’t price-capped are typically better stocked but out of reach to most families.

According to the Caracas-based rights group Provea, national guard troops have periodically carried out a mass-arrest operation nicknamed “Dracula’s Bus” to round up Venezuelans trying to wait in line overnight for groceries, now a banned practice. More than 1,000 people were loaded onto buses in such sweeps last year and accused of being black marketeers, Provea researcher Intis Rodríguez said.

The operations appear to be expanding. Over one weekend in June, more than 3,800 people were detained in Barquisimeto, a city west of Caracas, for attempting to spend the night outside supermarkets, according to news reports.

Officials at Venezuela’s justice ministry did not respond to requests for information about the crackdown.

In other Venezuelan cities, pro-government mayors have ordered alleged bachaqueros — named after a jungle ant that can carry loads many times its weight — to perform community service or clean the streets. “These people were not only denied their due process rights, but also they were also given punishments that aren’t even established under Venezuelan law,” said Rodríguez, whose organization has documented 60 such cases in the state of Yaracuy.

‘All of them normal people’

The crackdown began with Maduro’s 2014 decree, the Law of Fair Prices, which was aimed at punishing businesses he said were “destabilizing” the Venezuelan economy. But few expected the government to apply the law broadly to ordinary consumers.

Clara Ramírez, an attorney in the state of Táchira along the border with Colombia, said since the beginning of the year she has represented six clients arrested after allegedly buying goods for resale on the black market. “All of them were normal people, men and women with families who were just looking for food to feed their children,” she said.

Ramírez said her clients were typically released after a few days. But in a country where people who are awaiting a court hearing account for more than half of the prison population, many of the accused get stuck in jail for weeks or even months.

Some of those arrested in the crackdown were caught in possession of goods without receipts, or proof of how they obtained excess quantities of items such as rice, toilet paper or deodorant. Others had what soldiers deemed suspicious amounts of cash. Some, like Camascaro, aren’t even sure exactly what they are accused of doing.

Raymar Tona, 34, was arrested on a Friday in May while waiting to buy diapers for her baby.

A national guardsman pulled her out of the supermarket line, burrowed into her purse and found 10,000 Venezuelan bolivares, she said. In the past, it would have been a lot of cash, but in today’s Venezuela, which has the world’s highest inflation rate, her bank notes added up to about $10.

“It was my salary for two weeks,” said Tona, a receptionist at a medical clinic. She was accused of selling spots in line, a common practice.

After spending the weekend in jail, Tona said, she decided to plead guilty and was released.

Maduro’s decrees establish prison terms of up to 14 years for the worst black-marketeers. In June, he announced that he was creating a special jail “where we will imprison all those who are responsible for bachaquero crimes.”

According to Venezuelan economist Sary Levy, as much as half of the country’s workforce has come to depend on black market income to survive — selling food, moonlighting at second jobs, or hawking goods on the street. With annual inflation running at more than 700 percent, “it’s normal that formal jobs become unattractive,” she said, and people try to sell whatever they can to get by.

With prescription drugs and hospital supplies also running low, Venezuelans in desperate straits have found themselves accused of hoarding medicine.

Isaura Pérez, 66, said she traveled three hours to Barquisimeto in July to deliver hard-to-find drugs for her 38-year-old diabetic cousin, Georgina Delgado, who was in intensive care. National guard troops arrested Pérez at the hospital entrance for allegedly trafficking medical supplies, she said.

The drugs were confiscated by the soldiers, Pérez said. Her cousin died three days later.

 

 

September 15, 2016. Tags: , , , , . Communism, Economics, Venezuela. 1 comment.

A growing, catastrophic food crisis sows unrest in Venezuela

https://www.youtube.com/watch?v=yJApHJAkGG8

September 14, 2016. Tags: , , , . Communism, Economics, Venezuela. Leave a comment.

Venezuela Food Shortages Claim Lives of Malnourished Children

https://panampost.com/sabrina-martin/2016/08/26/in-venezuela-scarcity-comes-between-mothers-and-their-children/

Venezuela Food Shortages Claim Lives of Malnourished Children

August 26, 2016

When 18-month-old Royer Machado died from malnutrition in Zulia, Venezuela, the authorities did not arrest his mother.

The child had gone more than 72 hours without eating, but his mother lived in extreme poverty and couldn’t get the resources she needed; that was just the nature of Venezuela today.

The boy’s mother told officers she ran out of money, and then out of food. The baby continued to cry, so she wrapped him in a rag, gave him water and rocked him to sleep. After several days, the crying stopped. He was no longer breathing.

Officers interrogated the boy’s mother, looking for any sign of violence or mistreatment, but there was none.

“She really had no food,” one officer said.

This isn’t the only case of malnutrition taking the life of a small child over the last two months.

Ligia González, 8 months, and Elver González, 2, died from critical malnutrition in Guajira, on the west side of the country.

Hospitals in Venezuela are struggling to handle the amount of malnutrition cases coming through their doors.

At least every four days, a malnourished child arrives unconscious to the Central Hospital in San Felipe. Others tell doctors they no longer eat three times a day.

A survey conducted earlier this year by Venebarómetro showed that almost 90 percent of Venezuelans buy less food than before, and 29 percent of them are fed less than three times a day.

The study also revealed 70 percent of Venezuelans assess their economic situation as “bad,” while 89.7 percent do not have enough money to dress themselves. Seventy-nine said their income is insufficient for buying food and medicine.

Seven protests for food took place just this last July, adding to the 209 for the year. That’s an increase of 70 percent compared to July 2015, according to a study of the Venezuelan Observatory of Social Conflict.

September 14, 2016. Tags: , , , , , , , , . Communism, Economics, Venezuela. Leave a comment.

How sad. This guy from Milwaukee doesn’t seem familiar with the concept of earning money.

A guy who has lived in Milwaukee, Wisconsin his entire life complains that rich people aren’t giving money to poor people.

I feel so sad for this guy. Apparently, it never occurred to him that a person could obtain money by obtaining education and job skills and earning the money.

Who taught him to think the way he does? Was it his parents? Was it his teachers? Whoever it was that taught him to think like this, they were wrong.

I hope for this young man’s sake that he will eventually come to realize that what these people taught him was wrong.

https://www.youtube.com/watch?v=e1Ex5NZKvCg

August 15, 2016. Tags: , , , , , , , , , . Black lives matter, Economics, Racism. 6 comments.

Venezuelans make 36 hour round trip to Brazil just to go grocery shopping

http://uk.reuters.com/article/uk-venezuela-brazil-idUKKCN10L1KE

Venezuelans flood Brazil border in 36-hour grocery run

August 10, 2016

Government employee Jose Lara this month used some vacation days to take a long scenic bus ride through the verdant plateaus and sweeping savannas of southern Venezuela, but the trip was anything but a holiday.

It was a 36-hour grocery run.

Lara took an overnight bus and then a pick-up truck to get across the border to neighboring Brazil to buy food staples that have gone scarce in Venezuela’s crisis-stricken economy.

“Workers can’t even enjoy vacation anymore. Look where I am! Buying food for my children,” said Lara, 40, who was preparing to load 30-kilo (66-pound) packages of rice and flour onto a bus to complete a journey that takes close to 36 hours.

Venezuelans seeking to escape their socialist economy’s dysfunction are flooding into the remote Brazilian town of Pacaraima in search of basic goods that are prohibitively expensive or only available after hours in line.

Shoppers have been coming for months, primarily from the industrial city of Puerto Ordaz – already a 12-hour bus ride – but lately they’re also arriving from even more far flung regions across the country.

Venezuelans spend hours in supermarket lines. Many increasingly complain that they cannot get enough food to eat three meals per day.

Low oil prices and massive debt-servicing costs have left the country without foreign exchange to import goods, while price and currency controls have crippled domestic companies’ capacity to produce locally.

President Nicolas Maduro says the government is the victim of an “economic war” led by the United States.

‘THE LINE’

Under pressure from local residents after Maduro shut the western border with Colombian border in 2015, Venezuelan authorities allowed several temporary openings for similar shopping excursions in July. Colombia last month halted those trips after more than 100,000 people crossed in a single weekend.

The more remote Brazilian border was never closed.

In the Pacaraima, known to Venezuelans as “La Linea” or “The Line” because it is immediately across the border, cramped shops are now piled high with sacks of rice, sugar, and flour.

Products piled to waist height stand at the entrance of convenience stores, auto parts shops and even a farm supply store.

“It’s good business, but the price of everything is going up in Boa Vista,” said Mauricio Macedo, 26, who works at a family business that sells artisanal decorations such as clay figurines but for three months has been primarily focused on food items.

Venezuelan regulations require that staple products be sold for a pittance – a kilo of rice is set at the equivalent of $0.12. But obtaining goods at those prices requires waiting in long lines that are increasingly the site of robberies or lootings. That leaves Venezuelans reliant on the black market, where the same bag of rice fetches the equivalent of $2.20.

In Pacaraima, sugar and rice sell for about 40 percent to 45 percent less than what they would cost on Venezuela’s black market. The discount is worth it despite the cost of the trip.

Shoppers usually take a 12-hour overnight bus ride from Puerto Ordaz to the town of Santa Elena de Uairen. They then travel roughly 15 minutes by van or pick-up truck to La Linea. They spend the morning and much of the afternoon shopping, then head back across the border to catch another overnight bus.

“We’re in an economic crisis and I have to come to another country to buy food,” said Juan Sansonetti, 31, standing under the sun with a large sack of flour on his shoulder. “There isn’t much more to say, is there?”

 

August 10, 2016. Tags: , , , , , , , , . Communism, Economics, Venezuela. 1 comment.

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