A Stitch in Haste

Call it the Willie Sutton theory of political economy:

Venezuelan President Hugo Chavez on Thursday warned he would nationalize the country's banks and largest steel producer if they persist with what he described as unscrupulous practices.
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Coming alongside recent moves to nationalize telecommunications, electricity companies and the oil sector, the warning was yet another sign that Chavez is serious about deepening his socialist revolution.

"Private banks have to give priority to financing the industrial sectors of Venezuela at low cost," Chavez said. "If banks don't agree with this, it's better that they go, that they turn over the banks to me, that we nationalize them and get all the banks to work for the development of the country and not to speculate and produce huge profits."

Just as Chavez and his mindless, soulless drones think that the only factor of production in an oil refinery are the oil and the refinery -- but not entrepreneurship -- so too do they think that the only asset in a bank is the money -- not the banker.

They will be proven wrong, as central planners and dictators always are. The only question is how much misery, poverty, starvation and death will occur in Venezuela in the meantime.

One cannot default against reality -- it will always foreclose on you if you try.