In all the hype about the McChrystal story and the focus on the Gulf spill, you may have missed this story about Hugo Chavez’s continued destruction of the Venezuelan economy:
Venezuelan army soldiers swept through the working class, pro-Chavez neighborhood of Catia in Caracas last week, seizing 120 tons of rice along with coffee and powdered milk that officials said was to be sold above regulated prices. “The battle for food is a matter of national security,” said a red-shirted official from the Food Ministry, resting his arm on a pallet laden with bags of coffee.
How dare they not heed price controls? Meanwhile, in the ultra-efficient state machine bureaucracy, things are going swimmingly:
Critics accuse him of steering the country toward a communist dictatorship and say he is destroying the private sector. They point to 80,000 tons of rotting food found in warehouses belonging to the government as evidence the state is a poor and corrupt administrator.
120 tons confiscated. 80,000 tons allowed to rot. You can do the math.
“We are bringing order to prices,” Trade Minister Richard Canan told Reuters during the Catia raid. “There are traders who are taking these products to the black market … That is a crime and our government will continue to target these stores.”
Food prices are up 41% this past year. Price controls. If you don’t think you’re paying enough now, try them.
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I just can’t help it – not that this is surprising or unexpected.
Venezuela’s economy is in trouble despite the country’s huge oil reserves. Blackouts plague major cities. Its inflation rate is among the world’s highest. Private enterprise has been so hammered, the World Bank says, that Venezuela is forced to import almost everything it needs.
This is socialism working again. Yes, yes, we’ll hear the naysayers claim that it “really isn’t socialism”, but of course, it is and, like all other attempts throughout the world and history, it is a dismal failure which has made the lives of the citizens of Venezuela worse, not better. Venezuela’s economy has contracted 3.3% in the past year.
Jose Guerra, a former Central Bank economist, says state intervention in private businesses is hitting the economy hard.
“The government is nationalizing, expropriating, or confiscating,” he says. “They are not creating new wealth; this is wealth that was already created.”
And, as expected, the government is badly mismanaging what it confiscates and nationalizes. Cities endure 4 hour blackouts daily, many during business hours.
This is not the way it was supposed to be. Venezuela is one of the world’s great energy powers. Its oil reserves are among the world’s largest and its hydroelectric plants are among the most potent.
But these days, Venezuela is being left behind: The rest of Latin America is expected to grow at a healthy rate this year, according to the World Bank.
Guerra, the former Central Bank economist, says the government must reconsider its policies — and drop the statist socialist model that Chavez adopted.
“The government has to consider that the socialist point of view is not so good for the economy,” Guerra says. “Chavez believes in the old-fashioned socialism. This kind of socialism is dead, definitely dead, it doesn’t apply to any country in the world.”
Of course it should be “dead, definitely dead” to the world, but it isn’t. Ignorant people like Chavez always believe that the myth of socialism and the supposed “social justice” it promises are workable solutions to what are the inequities and unfairness they see in a capitalist system. And when they finally grab power, they attempt to impose the promises of the myth with predictable results.
Of course, when committed this deeply, you don’t expect such a person to admit they’re wrong, but, instead to double down. Hugo Chavez doesn’t disappoint:
In a recent speech, Chavez acknowledged the economic troubles, but he said he wasn’t worried.
Instead, he spoke of a worldwide capitalist crisis, which he said provided a marvelous opportunity for Venezuela to push a new model.
Oh yeah, given the wreck that was Venezuela’s economy before the “capitalist crisis”, I’m sure there are untold numbers of countries just can’t wait to sign on to the “Venezuelan model” and all it promises:
The grill at Landi Nieto’s burger joint still works: It runs on gas. But customers eat in the dark, Nieto says, if they venture out at all in the first place.
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Thomas Friedman is at it again. He finds our method of governance just too cumbersome and one which mostly yields “sub-optimal” results. I mean, look at the Chi-coms:
TOM BROKAW: Tom, are we at a kind of turning point in America in terms of being able to make this a functioning country again, or are we dysfunctional?
TOM FRIEDMAN: Well this is what worries me. I’ve been saying for awhile Tom, there’s only one thing worse than one-party autocracy, the Chinese form of government, and that’s one-party democracy. In China, if the leadership can get around to an enlightened decision it can order it from the top down, OK. Here when you have one-party democracy, one party ruling, basically the other party just saying no, every solution is sub-optimal. And when your chief competitor in the world can order optimal and you can only produce sub-optimal? Because what happens, whether it’s health care or the energy bill, votes one-through-fifty cost you a lot. Fifty to fifty-nine cost you a fortune. And vote sixty: his name’s Ben Nelson! And by the time you’ve made all those compromises, you end up with the description David [Brooks] had of the health care bill, which is this Rube Goldberg contraption. I really hope, I hope personally it passes. I hope it works. But I can’t tell you I think it’s optimal.
Well, of course mandating one child and one child only was certainly considered to be “optimal” by the leadership. The polity didn’t agree. And now the mostly male generation which has since grown up and is experiencing a vast shortage of women doesn’t either. Damn law of unintended consequences – it always tends to screw up “optimal” top-down decisions, doesn’t it?
And as I recall, they certainly considered the “Great Leap Forward” to be “optimal”, didn’t they? What are a few million, er 14 to 20 million deaths, when the “top down” solution is so, uh, “optimal”. Indeed, with those 14 to 20 million deaths, the plan ended up working rather well – except for those cases of cannibalism – because there was more for those who were left.
And the “Cultural Revolution” was pretty “optimal” as well, wasn’t it?
It was certainly “optimal” for Stalin to declare the Kulaks “enemy of the people” wasn’t it? It allowed him to essentially steal their farms and “collectivize” them while deliberately starving millions of those “enemies” of his “optimal” plan to death in 1933. Yup, very “optimal” if you’re Joe Stalin and you get to make those “top down” decisions, isn’t it?
I assume Hugo Chavez thought it was an “optimal” solution to nationalize the oil industry Venezuela. None of that sloppy law and democracy stuff for him, by George. And that’s worked out so well, hasn’t it?
Would someone buy Mr. Friedman a one-way ticket to China please? There he can forever bask in the goodness of top-down “optimal” decisions and glory in them like so many millions have already done there since the imposition of “optimal” top-down decisions.
That would be an “optimal” result for me.
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Hollywood provides the grist for today’s bit of outrageous verbiage in the words of Sean Penn (I know, I know, shocka). He’s upset about how his buddy and virtual dictator of Venezuela is being treated here he’s ready to jail everyone who speaks out against him. Talking on Bill Maher’s show he said:
Because every day, this elected leader is called a dictator here, and we just accept it! And accept it. And this is mainstream media, who should – truly, there should be a bar by which one goes to prison for these kinds of lies.
Sounds like someone who’d be very comfortable in the Venezuela of today because there they do have a bar by which one goes to prison – but not necessarily for “lies”. Instead it can be for simply speaking out against that kind and benevolent dictator, Hugo Chavez. Tell you what Sean – go down to Venezuela and try to start a media outlet in opposition to the Chavez regime and tell us what happens, mmkay?
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You may remember the post I did entitled “Haiti: Let The Conspiracy Theories Begin” where I jokingly cited a website which immediately blamed the initial Haiti earthquake on the US (supposedly it was aimed at Cuba and missed). The supposed instrument of this US attempt is its HAARP facility in the area. HAARP is an antenna array. The acronym stands for “High Frequency Active Aural Research Program”. It explains itself like this:
HAARP is a scientific endeavor aimed at studying the properties and behavior of the ionosphere, with particular emphasis on being able to understand and use it to enhance communications and surveillance systems for both civilian and defense purposes.
A antenna array aimed at the ionosphere is able to create earthquakes at will according to the black helicopter crowd.
However, they aren’t the only ones, apparently, who buy into this conspiracy theory. Of course you have to understand – believing in such nonsense isn’t particularly hard for someone who thinks authoritarian socialism is superior to freedom, capitalism and democracy. And Hugo is just such a believer:
Chavez is blaming the US for causing the 7.0 magnitude earthquake in Haiti as part of testing a “tectonic weapon” that can cause eco-type disasters, according to Russia Today. The Latin American leader added that the US should “stop playing God.”
Chavez said these “weapon earthquakes” would eventually be used against Iran and be taken over by the US military.
Chavez says these weapons can alter the climate and set off earthquakes and volcanoes remotely through the use of electromagnetic waves.
Although Chavez did not reveal his source, Press TV reports the Venezuelan media are reporting the earthquake may be associated with the High Frequency Active Auroral Research Program (HAARP), which has been accused of generating violent and disastrous changes in climate.
So far the foreign policy initiative of reaching out to all of these little tin pot dictators who don’t like the US is paying off handsomely, I’d say.
Sometimes an anti-American whackadoodle is just that. And it is never in their best interest to mend fences since being anti-American is critical to their retention of power.
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Or at least the French minister in charge of humanitarian relief, Alain Joyandet is making that claim:
“This is about helping Haiti, not about occupying Haiti,” Mr Joyandet said.
Well, yeah, but it’s also about coordinating the flow of traffic in and out of a single runway airport, something which is bound to get a few hackles up. And that’s caused Joyandet’s outburst. He’d apparently been in a scuffle in the control tower of the airfield with the US commander there over a French evacuation flight. It seems he came out on the short end of the confrontation, thus the outburst.
But he’s not the only one complaining:
Geneva-based charity Medecins Sans Frontieres backed his calls saying hundreds of lives were being put at risk as planes carrying vital medical supplies were being turned away by American air traffic controllers.
See previous commentary about the one runway airport. Perhaps a little coordination with those at the airport concerning the arrival of such flights might help integrate them into the landing plan vs. just showing up and demanding a priority for landing?
Just a thought. Of course, my bet is had we relied on the UN, the airport still wouldn’t be functioning. And had the French taken over the aiport, the same criticisms leveled against the US would be leveled against them. In this case, given the situation, they’re just inevitable.
And someone else is having his usual say about the US:
Speaking on his weekly television show, [Hugo] Chavez opined that the U.S. mission in Haiti was a ruse to initiate military occupation.
“I read that 3,000 soldiers are arriving, Marines armed as if they were going to war,” Chavez said. “They are occupying Haiti undercover.”
President Obama signed an executive order to send 7,000 U.S. troops to the ravaged country as aid organizations attempt to distribute food and water to the survivors.
Chavez, a frequent critic of American intervention, praised the humanitarian effort in Haiti but questioned the need for so many troops.
“Doctors, medicine, fuel, field hospitals – that’s what the United States should send,” Chavez said.
Of course the US has sent doctors, medicine, fuel and field hospitals. But there has to be security as you push these assets out into the community to ensure the lawlessness which has been seen in various areas doesn’t effect the efficiency of the rescue operation. 7,000 troops to provide that sort of security is not a large force (about 1 BCT plus).
Haiti, however, has provided Baby Hugo with another opportunity to break out the anti-Amerianism.
I’ve got to tell you, with the reaction of France and Venezuela to a freakin’ humanitarian rescue mission, it doesn’t seem as if the Obama global, bowing, scraping and apologizing tour produced much goodwill. This doesn’t sound any different than the carping heard when that other guy was around.
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Because, like kids, they say the damnedest things. Take Alec Baldwin who would like to be our Energy Czar (or something):
Energy policy is the lynch pin of nearly all of our other economic problems. And our dependence on oil is the tragic path that we are are still on, two wars in the Middle East in twenty years later, in order to deliver oil. Oil that costs so much more than what you read at the pump. You factor in both of those wars, the deaths of our brave soldiers, and the looming bill that our society will have to pay for our lack of maturity, foresight and courage on this front, the costs are incalculable.
Putting a major oil company out of business. That’s a war worth fighting.
The formulaic nod to the military, while holding on to the liberal canard of wars for oil (and thereby implicitly dissing the military). The shot at the lack of “maturity, foresight and courage” the rest of the “society” displays by using a readily available, cheap and efficient means of producing energy that isn’t to his liking. And finally, his rather incredible and short-sighted wish that a major oil company would somehow fail and go out of business. Of course he’s talking about private oil companies. Obviously he has no clue as to how little private companies control in terms of reserves in this world, and just as obviously doesn’t care to learn. You can bet he doesn’t care one whit about the jobs that would be lost or the ripple effect in other areas of employment it would have. It is a politically incorrect industry. His job is to demonize it.
The good news is Baldwin may get his wish – a major oil “company” may go out of business soon. The bad news for him and his Hollywood cronies is it is most likely to be the nationalized Venezuelan oil company, PVDSA taken over by his buddy Hugo Chavez. And that would mean Citgo would go right down the toilet. That would be a fitting irony, wouldn’t it?
Then there’s our old buddy Ezra Klein. Reporting on the House and Senate negotiators considering new Medicare tax, he cites a report by Martin Vaughan and Laura Merckler that lay it out. He then adds his own commentary:
Currently, the Medicare tax applies only to wages, without any limits. The 2.9% tax is divided in half, with workers and employers each paying 1.45%. The health bill passed by the Senate would raise the worker contribution to 2.35% for individuals making more than $200,000 a year and couples making more than $250,000 a year.
Under the proposal now being considered, people making more than those amounts would also pay the Medicare tax on dividends and other income from investments, the people familiar with the talks said. Income from pensions and retirement accounts, including 401(k) accounts, would be exempt.
A version of this that was previously introduced by Sen. Debbie Stabenow raised more than $100 billion over the first 10 years, so there’s significant money to be found here. Why Democrats prefer a new Medicare tax to, say, capping the itemized deductions rate at 28% for taxpayers making more than $250,000 is, however, beyond me. And if you did that, you’d have more than $300 billion in new money to play with.
Being a member of the juice-box mafia and having little or no experience outside of college and writing opinions based on, well, opinion, waving away the hard earned money of others as “$300 billion in new money to play with” isn’t difficult at all. And it points to a mindset that essentially says the it’s the government’s money to begin with so taking as much back as necessary to do what the “smart kids”, aka the elite, want to do is just hunky dory with the Klein’s of the world. It’s also why he thinks the VA system is great without ever having experienced it, and that just about anything that can be put under the umbrella of government sounds good to him as well. But he’d also tell you he’s all for “freedom and liberty” I’d bet.
Life with liberals – just full of yuks, isn’t it?
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I’m not sure how you could call this anything else:
Venezuelan President Hugo Chavez said that businesses have no reason to raise prices following the devaluation of the bolivar and that the government will seize any entity that boosts its prices.
Chavez said he’ll create an anti-speculation committee to monitor prices after private businesses said that prices would double and consumers rushed to buy household appliances and televisions. The government is the only authority able to dictate price increases, he said.
“The bourgeois are already talking about how all prices are going to double and they’re closing their businesses to raise prices,” Chavez said in comments on state television during his weekly “Alo Presidente” program. “People, don’t let them rob you, denounce it, and I’m capable of taking over that business.”
Not only is he “capable” of taking the business over, but he’s turning out the army to monitor all of this. And he’s promised to “transfer the ownership” of any business raising prices “to the workers”. We’ve all seen how well those sorts of takeovers have worked out in the past.
To review, he’s devalued the bolivar which had been fixed at 2.15 to the U.S. dollar since 2005, to 4.3 to the dollar. He then declared that businesses – which own stock under the old currency value and which will have to restock using the devalued currency – must keep their prices at the old price and let consumers buy that stock with the devalued currency or lose their business. A unilateral decision on his part and the refusal, again unilaterally, to allow those who own the goods they’re selling to react to his decision.
Where I come from, that’s called totalitarianism.
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Hugo Chavez, incompetent manager of the Venezuelan kleptocracy, er, Bolivarian Revolutionary state, has decided outside car makers just aren’t pulling their weight:
Venezuela’s President Hugo Chavez has told car companies they must share their technology with local businesses or leave the country.
Mr Chavez gave the ultimatum to Toyota, Ford, General Motors and Fiat during a public address.
If the demand isn’t met, he said: “I invite you to pack up your belongings and leave. I’ll bring in the Russians, the Belorusians, the Chinese.”
Chavez’s homegrown auto industry is building cars that remind one of the ’50s (you’d think they’d sell well in Cuba – oh, wait, they have no money either). Obviously, the control freak in charge of Venezuela would love to have the technology Ford, Toyota or even Government Motors could offer his industry. So he’s decided they can just “share” their technology or leave.
And one more thing:
Mr Chavez attacked Toyota in particular, saying it was not producing enough four-wheel drive vehicles, which are used for public transport, and ordered an investigation.
Mr. Command Economy has decided that Toyota just doesn’t understand his market.
Of course his own domestic auto industry, the one he “commands” managed all of 135,000 vehicles last year. Why? Because of the bangup job he’s done running the place:
Currency controls in Venezuela mean the industry is struggling to get enough money to import parts and pay off debts.
So if he can’t actually produce them domestically, he’ll threaten and hector the existing one’s to save his rear-end or invite in a bunch of others to do so. Sounds like a typical socialist paradise to me.
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Gallup’s latest poll says it is:
President Hugo Chavez’s popularity among Venezuelans has waned in recent years. Less than half of Venezuelans (47%) in August 2009 said they approved of Chavez’ job performance — down from 61% in late 2006 when he was elected to a second six-year term.
That’s not a good sign for a
dictator “president for life”. And what’s even worse is his inability to do much about what is causing that decline but attempt to distract attention by stirring up an existential threat (Colombia).
The reasons for this decline in popularity aren’t hard to figure out. Again, Gallup:
This year, 30% of Venezuelans said economic conditions in their city or area are improving, down from 47% in 2008 and 63% in 2007. Electricity and water shortages have become frequent, and violent crime is rampant in much of the country. This year, 23% of Venezuelans said they feel safe walking alone in their areas at night, the second-lowest figure among the 67 countries in which Gallup asked the question.
Politicians, whether socialist or capitalist, are held responsible for their country’s ability to provide the basics in life – especially when in the past those basics were cheap and plentiful. And, politicians are also held responsible for providing basic security. In all areas the socialist “Bolivarian revolution” is failing. And, because of actions by Chavez over the years to nationalize many industries, Venezuelans who supported Chavez are now beginning to see his government as more of a threat to them:
Conversely, concern about the heavy hand Chavez has demonstrated in the recent wave of nationalizations may be growing. The proportion of Venezuelans who said people in the country can feel very confident their private property will be respected by the government has dropped to 40% this year, from 52% in 2007. And 44% of Venezuelans currently agree that life is very hard for those who oppose the government, up from 36% in 2008.
As Megan McArdle points out, Chavez was able to paper over much of this when the price of oil was high and revenue plentiful, but at the present price and faced with the fact that because he diverted money from the state run oil company PDVSA to fund social programs, his golden goose is on life support. And Chavez has been forced to impose some unpopular restrictions:
President Hugo Chávez has been facing a public outcry in recent weeks over power failures that, after six nationwide blackouts in the last two years, are cutting electricity for hours each day in rural areas and in industrial cities like Valencia and Ciudad Guayana. Now, water rationing has been introduced here in the capital.
The deterioration of services is perplexing to many here, especially because the country had grown used to cheap, plentiful electricity and water in recent decades. But even as the oil boom was enriching his government and Mr. Chávez asserted greater control over utilities and other industries in this decade, public services seemed only to decay, adding to residents’ frustrations.
With oil revenues declining and the economy slowing, the shortages may have no quick fixes in sight. The government announced some emergency measures this week, including limits on imports of air-conditioning systems, rate increases for consumers of large amounts of power and the building of new gas-fired power plants, which would not be completed until the middle of the next decade.
Combine that with growing food shortages and rampant inflation and the picture is not pretty for our boy Hugo. And while his popularity remains slightly north of the critical 50% mark, his job approval rating of 46% portends a fall for that as well. Chavez, like all socialists, is finding out the hard way that they call them the laws of economics for a reason. You just wonder if we’ll learn something from his inevitable decline.
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