March 6, 2019

LATE-STAGE SOCIALISM: Hyperinflation Shatters Venezuelan Manufacturing. “Giuseppe Cordivani’s factory on the outskirts of the capital used to make nearly 300 pairs of women’s shoes a day, from pumps to high-heeled dancing shoes that sold nationwide. With hyperinflation biting, he’s making just 20 today.”

More, from behind the WSJ paywall:

Manufacturing’s fall reflects broader economic devastation. Venezuela’s economy has halved during President Nicolás Maduro’s six years in office, and is expected to decline another 30% this year as new U.S. sanctions on oil hit. The country’s GDP, at $80 billion, is now smaller than General Electric . Oil production, the most vital income source, has dropped 64% under Mr. Maduro, according to AGPV Asesores Económicos, a Caracas-based consulting firm. Imports have caved by 72%, the firm says.

“The fall in consumption is so big that plants work at volumes so low that they can’t maintain themselves and sustain their infrastructure, to keep machinery functioning and be able to pay their workers,” said Juan Pablo Olalquiaga, president of an industry group, Conindustria. “You have to be God to maintain all of these balls in the air.”

Instead of trying to do the impossible — and inadvertently propping up the Maduro regime — manufacturers would be smarter to go Galt.

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