Monday, January 4, 2010

Eco-Socialism Continues to Fail

In this article from we can see that Venezuela will be rationing electricity. The fact that Venezuela is an oil producing country is significant. Venezuela is, of course, headed by noted socialist Hugo Chavez. Since the nationalization of Venezuela's oil production has fallen by 2.1million barrels daily.

However, the country uses primarily hydroelectric plants to provide electricity internally. So in addition to punishing the oil extraction companies by stealing their property, Chavez also punishes the people of Venezuela by not expanding energy production that would help to make his country more independent. Instead he leaves the populace hostage to the vagaries of rainfall, for electric power. Of course, Chavez is also rationing water.

Evidently, Chavez antipathy to business, has led him to cut services to businesses. So the people providing the largest tax base, are the ones punished first.Is it any wonder that Venezuela is having problems? Punish those who invest by stealing their property, and punish them more when government policies cause shortages.
This will likely be mirrored in the near future in the US.

Much of our recent legislation has added more burdens to business people. Even when legislation does not have any direct cost to a business, there is the cost of complying with any changes, and the cost of finding out which, if any, changes apply to your business. Combine the cost of regulation, with the expiration of the Bush tax cuts, the added burden to businesses of the proposed energy taxes (and the money we've pledged at Copenhagen to fight 'climate change'--all of which must be borrowed from China), and we can expect businesses to fair poorly in the coming year.
I think it is obvious, that small businesses will have to pay a larger percentage of their income to comply with regulations. As small businesses provide 70% of the jobs in the US, the burden of compliance falls more heavily on the employment practices of the small business. We won't see employees who are never hired due to the added costs to an employer. Nor will we see the small businesses that don't open due to the increased start up costs caused by the regulations (which primarily protect businesses that are larger or already licensed).
So, as the anti-profit governments work to defeat the profit motive of business people, we will continue to see shortages across the spectrum: energy, food, and employment to name a few. And, as more businesses close and more people become unemployed, we will see more houses foreclosed on, combined with higher food and energy prices as demand puts pressure on the short supply.
I would urge people to become as independent of the system as their life permits. You may not be able to find the food and power that we so easily have access to now.

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