Chavez: You will buy my arepas! AP
Politics: One might be tempted to think there's no
comparison between Democrats' health care overhaul and Hugo Chavez's orgy of
class warfare on Venezuela's private sector. But consider Chavez's new public
eateries.
Last week, Venezuela's Hugo Chavez announced he would start a chain of
government-run "areperas" to sell arepas — filled white-corn patties, similar
to tacos — at state prices.
Slinging hash at a grand opening in Caracas, Chavez announced his new firm
would be called Comerso, the "Socialist Corporation of Markets," to counter
the private restaurants he claims are charging too much. With arepas selling
for 20 bolivars at private eateries, Chavez was going to dish his out at five
— to keep eateries "honest."
It's no different from the public option House Democrats are proposing in
their 2,074-page bill now being reconciled in Congress.
Unlike the Democrats however, Chavez makes no bones about what he's up to:
driving the private sector out of business with his "public option" for these
taco stands.
"We'll show them what a real market is all about, not those speculative,
money-grubbing markets, but a market for the people," the caudillo claimed.
"Private individuals in sales can still sell, but they'll have to compete with
us and with a people who are now fully aware."
It's remarkably similar to what Democrats have argued in their insistence
on a "public option" of state-run health insurance for their health care
overhaul bill now being reconciled in the Congress.
"One of the best ways to bring down costs, provide more choices and assure
quality is a public option that will force the insurance companies to compete
and keep them honest," President Obama said just last October.
"If a vigorous public option is not included, it would be a major victory
for the health insurance industry," said House Speaker Nancy Pelosi this
December.
"I think it's the fairest way to go," said Senate Majority Leader Harry
Reid in October.
To both Chavez and Democrats, prices charged by private firms, whether
health insurance companies or areperas, are too high and need government
intervention. What's more, they aren't high because of conditions of supply
and demand, but out of pure malice.
That obscures the reasons why health care costs are high in the U.S. and
arepa prices are soaring in Chavez's Venezuela.
Three factors stick out in Venezuela: Chavez has instituted price and
capital controls to "discourage speculation" on foreign currency, which makes
hard cash a lot scarcer than it should be.
Because of this, importers can no longer buy as much imported food for a
nation that has always imported food. White corn, a staple of Venezuelan
cuisine, must be imported from Argentina or South Africa because it doesn't
grow well in the local climate. Net result: Store shelves go bare and prices
rise.
Chavez also has been confiscating private farms in the name of "the people"
and has added more food shortages, as well as driven up prices even further.
Lastly, he's already set up a network of government-run stores in the
shantytowns, called Mercal, which quickly runs out of goods every time it's
stocked because of its artificially low prices. This is unfair competition
with the established private sector, which has suffered.
"Buhoneros" (poor street vendors) buy up the goods in bulk and sell them on
the street or at fairs at higher prices consistent with Venezuela's inflation
rate — which runs around 30%. That's the highest in Latin America.
In that atmosphere, inflation, food shortages and the withered private
sector are tightly linked to government intervention. It is little different
from the kinds of controls that have hurt the U.S. insurance industry, which
has been battered by Congress' controls against companies selling policies
across state lines and hundreds of capricious mandates.
There may not be much that can be done for Venezuela, but in light of these
results, we can pretty well tell what Democrats are up to with their "public
option." And it's going to have the same result.