Venezuela, the new vanguard of Socialism, whose leader gets advice from Chavez who has been reincarnated in the form of a bird and sleeps next to his coffin, is currently leading the world in nationalizing toilet paper factories, used cars go for twice the price of new cars and no one can get a plane ticket.
Socialism. It’s for smart people.
If you live in Venezuela and want to fly abroad, get in line. Flights are booked solid months in advance, not from a new interest in exotic destinations but because locals are profiting from a play on the nation’s tightly controlled currency market.
“It’s like you’re trapped here,” said travel agent Doris Gaal, telling a customer he would be better off taking a boat to a Caribbean island because the daily flights are fully booked. “It’s all because of these stupid dollars!”
After a decade of currency controls set up by late socialist leader Hugo Chavez in 2003, the disparity between the official and black-market rates for the local bolivar currency is higher than ever. Greenbacks now sell on the illegal market at about seven times the government price of 6.3 to the dollar.
There are strict limits on the availability of dollars at the 6.3 rate, but Venezuelans are cashing in on a special currency provision for travelers. With a valid airline ticket, Venezuelans may exchange up to $3,000 at the government rate.
That’s the fun thing about Socialism. It breeds an incredible amount of ingenuity as people struggle to find loopholes in the system.
No matter what Obama or Maduro think, people aren’t automatons. They don’t do what they are told. They pursue their own interests. Every planned economy fails to achieve its goals because the distortion of humans being humans sets in.
Some are not even flying, leaving many planes half empty.
“It is possible to travel abroad for free due to this exchange rate magic,” said local economist Angel Garcia Banchs.
The profit is realized from an arbitrage process known locally as “el raspao,” or “the scrape.”
Credit cards are used abroad to get a cash advance — rather than buying merchandise. The dollars are then carried back into Venezuela and sold on the black market for some seven times the original exchange rate.
The large profit margin easily absorbs the cost of flights and accommodation for a trip.
“I’ve been able to buy new clothes and give some cash to all my closest family members!” said one delighted Venezuelan lady, just back from a trip to Europe.
“It was really easy. There was a guy in a hotel room with 10 point-of-sale machines who swiped my card for $1,000 each day,” said a Venezuelan pensioner, also asking not to be named as he described his trip to a Caribbean island.
Who said that there isn’t such a thing as a Socialist paradise? All you have to do is find a way to hit the black market.
As a result of the high level of unused seats, some airlines are beginning to overbook at much higher rates than usual.
Capitalism. It works.
Maduro recently set up a new telephone hotline, 0-800-SABOTAGE, for Venezuelans to report illegal economic activity.
Socialism. The only things it can fill are prisons.