Venezuela's Socialist Undoing

A story out today from Reuters is another in a recent slew detailing the calamitous fall of the socialist state. The article is derived, in part, from the U.N. human rights office and deals with extrajudicial killings by security forces. To no one's surprise the Venezuelan dictator Maduro blames the United States for his country's disastrous situation.

The unpopular Maduro has cast the release of dozens of opposition members as a peace gesture following his re-election to a new six-year term last month, which was condemned by most Western nations as an undemocratic farce. His government denies the detainees are political prisoners.

From Forbes Magazine

The despotic Maduro can blame the U.S. for it's problems till the cows come home. The truth is not hard to find. In another story from Reuters we learn that the true culprit is PDVSA Venezuela's state run oil producer. Capitalism is by no means perfect but the successes of state run anything could probably be counted on one hand.

Crude exports are Venezuela’s main source of revenue, but the OPEC member has seen deliveries fall sharply in the last few months, dropping to 1.17 million barrels per day (bpd) in May from 1.24 million bpd in April, according to Thomson Reuters trade flows data.

Citgo can process up to 749,000 bpd of crude in three U.S. refineries. In the past, PDVSA supplied as much as 40 percent of Citgo’s crude requirements, but volumes have been slowly declining for years.

Maduro and his regime point to U.S. sanctions that according to almost everyone are purely symbolic. The U.S. sanctions apply to oil exported to U.S. markets. PDVSA has been unable to fill contracts to many of it's customers and the reason for this traces right back to the problems of socialism. A smart company re-invests profits to ensure it can meet market demands. A state run outfit like PDVSA turns over its revenues to the state and as you can see in this story the results have been disastrous.

The problem of export capacity has become so acute that PDVSA is demanding customers send ships that can handle ship-to-ship loadings, since there is a backlog of ships trying to load up at the country’s decrepit ports. PDVSA is even considering declaring force majeure on contracts that it will be unable to fulfill. The upshot is that PDVSA might have only 694,000 bpd available for export in June, which is less than half of the 1.495 mb/d that it is contractually obligated to deliver this month.

That quote from the OilPrice website pretty much sums up the situation. Did you catch the part about decrepit ports? Ship to ship transfers of oil risk a environmental hazard. This is a desperate measure that results directly from the failures of a socialist system. Free market systems operate very differently.

A robust U.S. economy boosts the country's consumer appetite. In recent years our ports have not been able to handle all of the incoming freight so it has been sent to Mexico where it's offloaded and sent into the U.S. by rail. Around the country port authorities and states have lobbied the government for funds to expand our own capabilities. Let me point out there is no lobbying in a socialist state.

Work to deepen the Savannah River channel from 42 feet to 47 feet to accommodate larger cargo ships from the expanded Panama Canal reached its midway point earlier this year.

Georgia’s inland and coastal ports are vital cogs in the state’s economy. A study released in March by the University of Georgia found that maritime trade accounts for $44 billion of the state’s gross domestic product and the ports directly or indirectly touch more than 439,000 jobs.

Those quotes are from a Atlanta Journal article you can read here. The state of Georgia and concerned industry leaders lobbied our government for funding.  This is how capitalism and our government work. As I said earlier, it's not a perfect system. It does get results. When I hear some left-wing academic demonize capitalism in order to pontificate on the virtues of socialism I have to do the eye roll. The least little bite of the socialist apple may very well doom our republic.

I began with extrajudicial killings by Venezuelan security forces. Britain has taken more than a little taste of that socialist apple. It should be noted that I was unable to contact Tommy Robinson for this story.

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