To vaguely paraphrase Mike Tyson, "everyone has a plan for a socialist utopia, until they run out of toilet paper."
This is just what happened to Venezuela, where in the image vacuum left following the death of leader Hugo Chavez, things are rapidly falling apart for the oil-rich country. And just like in the US, it's Bush's fault, or at least the local such equivalent.
AP reports: "First milk, butter, coffee and cornmeal ran short. Now Venezuela is running out of the most basic of necessities — toilet paper. Blaming political opponents for the shortfall, as it does for other shortages, the embattled socialist government says it will import 50 million rolls to boost supplies. That was little comfort to consumers struggling to find toilet paper on Wednesday. “This is the last straw,” said Manuel Fagundes, a shopper hunting for tissue in downtown Caracas. “I’m 71 years old and this is the first time I’ve seen this.” One supermarket visited by The Associated Press in the capital on Wednesday was out of toilet paper. Another had just received a fresh batch, and it quickly filled up with shoppers as the word spread. “I’ve been looking for it for two weeks,” said Cristina Ramos. “I was told that they had some here and now I’m in line.”
All of this this is quite surprising: because while one may not be able eat gold, one may certainly use fiat, especially fiat of any regime in the last throes of economic collapse and where staggered currency devaluation is now a periodic fact, as precisely the noted commodity in short supply.
Artist's conception of what the country's TP (single-ply) may soon look like: all it would take are a few more sequential devaluations.
Economists say Venezuela’s shortages stem from price controls meant to make basic goods available to the poorest parts of society and the government’s controls on foreign currency.
“State-controlled prices — prices that are set below market-clearing price — always result in shortages. The shortage problem will only get worse, as it did over the years in the Soviet Union,” said Steve Hanke, professor of economics at Johns Hopkins University.
President Nicolas Maduro, who was selected by the dying Hugo Chavez to carry on his “Bolivarian revolution,” claims that anti-government forces, including the private sector, are causing the shortages in an effort to destabilize the country.
The government this week announced it would import 760,000 tons of food and 50 million rolls of toilet paper.
Commerce Minister Alejandro Fleming blamed the shortage of toilet tissue on “excessive demand” built up as a result of “a media campaign that has been generated to disrupt the country.”
“The revolution will bring the country the equivalent of 50 million rolls of toilet paper,” he was quoted as saying Tuesday by state news agency AVN. “We are going to saturate the market so that our people calm down.”
Finance Minister Nelson Merentes said the government was also addressing the lack of foreign currency, which has resulted in the suspension of foreign supplies of raw materials, equipment and spare parts to Venezuelan companies, disrupting their production.
“We are making progress … we have to work very hard,” Merentes told reporters Wednesday.
Many factories operate at half capacity because the currency controls make it hard for them to pay for imported parts and materials. Business leaders say some companies verge on bankruptcy because they cannot extend lines of credit with foreign suppliers.
Merentes said the government had met the U.S. dollar requests of some 1,500 small- and medium-sized companies facing supply problems, and was reviewing requests from a similar number of larger companies.
Chavez imposed currency controls a decade ago trying to stem capital flight as his government expropriated large land parcels and dozens of businesses.
Anointed by Chavez as his successor before the president died from cancer, Maduro won a close presidential election April 14 against opposition candidate Henrique Capriles, who refused to accept the result, claiming Maduro won through fraud and voter intimidation. He filed a complaint to the Supreme Court, asking for the vote to be annulled, though that’s highly unlikely to happen since the court is packed with government-friendly justices.
Still, central planning refuses to be defeated in the face of the TP crisis:
Fleming, the commerce minister, said monthly consumption of toilet paper was normally 125 million rolls, but that current demand “leads us to think that 40 million more are required.”
“We will bring in 50 million to show those groups that they won’t make us bow down,” he said.
Alternatively, if the government is not merely paranoid, and if indeed this is just another CIA-inspired tactic to overthrow the government, then the Langley brain trust will have redeemed itself for the recent humiliation in Russia by showing the world it can truly think outside of the toilet box.