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The Wreck of the Venezuelan Economy
Sustained by high oil prices and broad support amongst the country's poor, Venezuelan president Hugo Chavez has embarked on audacious plan to wreck the Venezuelan economy. From Bloomberg, via the IHT:
The Venezuelan economy, under the direction of President Hugo Chávez, is starting to unravel in the currency market.While Venezuela earns record proceeds from oil exports, consumers face shortages of meat, flour and cooking oil. Annual inflation has risen to 16 percent, the highest in Latin America, as Chávez tripled government spending in four years.
(Why, when so many party apparatchiks are cruising Caracas in Hummers, are there shortages of meat, flour and cooking oil? You guessed it: Price controls!)
Exxon Mobil and ConocoPhillips are pulling out after Chávez demanded that they cede control of joint venture projects. The bolivar has tumbled 30 percent this year to 4,850 per dollar on the black market, the only place it trades freely because of government controls on foreign exchange. That compares with the official rate of 2,150 per dollar set in 2005. Chávez may have to devalue the bolivar to reduce the gap and increase oil proceeds, which make up half the government's revenue.
"This has been the worst-managed oil boom in Venezuela's history," said Ricardo Hausmann, a former government planning minister who now teaches economics at Harvard University. "A devaluation is a foregone conclusion. The only question is when."
So what has the Jefe Maximo done to combat inflationary pressure? His government promised to lop off three zeros from the exchange rate and rechristen its currency the "bolívar fuerte"—the strong Bolivar. It is a move, the New York Times observed, that has "baffled economists." And don't forget the symbolic reintroduction of the 12 ½ bolivar coin.
And don't expect any of this nonsense to end anytime soon. On Sunday's edition of Alo Presidente, explaining the need to eliminate term limits, Chavez told viewers he "needed more time in the presidency to finish this" revolution. "We are only beginning. Maybe until 2020 or 2027."
|9.4.07 @ 12:09PM|#
Fools.
There's nothing quite like an incumbent running for re-election in
a bad economy to put pretty illusions to bed.
Marcvs|9.4.07 @ 12:15PM|#
Ah, there's nothing like a real socialist to show how socialism doesn't work. Not like those wimpy democratic socialists in Europe that only ruin their economies slowly.
Episiarch|9.4.07 @ 12:33PM|#
But...but...he made a brimstone joke about Bush. He must know what he's doing.
Garth|9.4.07 @ 12:38PM|#
All this really takes me back to the 70s and 80s. It's the same old schtick that ruined Latin American Economies time and time again. You would think that having been there and done that before, this would not be happening.... But this is Chavez we are talking about.
TLB|9.4.07 @ 12:50PM|#
By constantly moving the clocks forward one half hour per week, VZ will be able to catapult ahead of naysayers such as this site.
|9.4.07 @ 12:53PM|#
John Perkins (author of "Confessions of an Economic Hitman" and "The Secret History of the American Empire") is absolutely and completely correct. The bankers who own and control our system of government, the Federal Reserve, have bankrupted our nation with their fiat monetary policy and enslaved every working American with the 16th Amendment. These global elite control our "elected" officials and own the majority of the mega-corporations. Who are the primary shareholders of the Fed? The Rockefellers (Big Oil, etc) and Rothschilds (World Bank, Central Banks). Because of their insatiable desire for power they have condemned all of humanity to certain doom - unless WE THE PEOPLE of this planet ascend upon our political leaders and RESTORE THE REPUBLIC! "When fascism comes to America, it will be wrapped in the flag and carrying a cross". -Sinclair Lewis ...We have been conditioned into complacency in America and it is our military-industrial complex that is being used as the "weapon of choice" to overthrow, destroy and assimilate the people and countries of the world. How long will we allow this genocide to continue? ASK QUESTIONS - SEEK TRUTH... RESTORE THE REPUBLIC!
wsdave|9.4.07 @ 1:01PM|#
"By constantly moving the clocks forward one half hour per week,
VZ will be able to catapult ahead of naysayers such as this
site."
You may be on to something. If he moves the clocks ahead enough, he
could actully trade on next weeks stock market today.
|9.4.07 @ 1:02PM|#
If socialists were given control of the Sahara desert, they would soon be stricken by a shortage of sand.
wsdave|9.4.07 @ 1:05PM|#
JL Wallace,
"Because of their insatiable desire for power they have condemned
all of humanity to certain doom - unless WE THE PEOPLE of this
planet ascend upon our political leaders and RESTORE THE
REPUBLIC!"
Um, right. And to see how well WE THE PEOPLE can run our own
affairs, please see the latest issue of Reason (on newsstands now!)
and read "The 4 Boneheaded Biases of Stupid Voters".
|9.4.07 @ 1:21PM|#
Government officials dismiss any problems with price
controls, while state TV has begun running tickers urging the
public to "denounce the hoarders and speculators" through a
toll-free phone number.
"The weight of the law will be felt, and we demand punishment,"
Information Minister Willian Lara said Wednesday.
Because socialism works so well if we can just put
left-statists the right people in power and punish
those who try to establish a free market black market
-- right, joe?
|9.4.07 @ 1:28PM|#
Guys, whatever his faults, joe is not a supporter of
Chavez.
Argue with the real joe, not the one in your heads.
|9.4.07 @ 1:30PM|#
Ah, Chavez implements the Mugabe economic plan. I'm sure it will work as well in Venezuela as it did in Zimbabwe.
Chavez is a thug|9.4.07 @ 1:31PM|#
"Guys, whatever his faults, joe is not a supporter of
Chavez.
"
Hahaha, yeah sure he isn't. I heard Karl Rove wasn't a supporter of
George Bush either.
Chavez is a thug|9.4.07 @ 1:33PM|#
"Fools.
There's nothing quite like an incumbent running for re-election in
a bad economy to put pretty illusions to bed."
No, joe, must people realized the truth about Chavez years ago.
Where the fuck have you been? Oh, that's right, you've been busy
defending him on these boards.
|9.4.07 @ 1:47PM|#
Really? Mr Chavez is a thug?
Except for critizing how the U.S. govt responded to the coup
against Chavez, when did joe defend Chavez on these boards?
The only things I remember him posting were predictions that
Chavez's policies would be a disaster. Perhaps you could provide
some links and enlighten me?
|9.4.07 @ 1:56PM|#
tarran's right, Joe hasn't ever defended Chavez as far as I can remember. Any links?
|9.4.07 @ 1:58PM|#
Guys, whatever his faults, joe is not a supporter of
Chavez.
joe isn't a supporter of Chavez, he is a defender of Chavez. An
example would be that I was a Clinton defender when he was being
impeached, even though I wasn't a Clinton supporter. The big
difference, is that Clinton was accused of having his dick sucked,
not being a dick-tator.
And, I haven't been tracking joe's posts (nor do I have the time or
inclination to do so), but a lot of the current group of Chavez
defenders were once Chavez supporters. Most of the left have gone
from being hardcore Chavez lovers, to nervous Chavez defenders...
and soon they will all pretend that they were always against Chavez
and that Bush and the CIA backed Chavez. So people are guilty of
making false assumptions about joe the individual, based on true
generalizations of leftists in general.
The truth is that the left are quick to fall in love and defend
horrible dictators that give lip service to leftist politics. It
doesn't really matter if joe as an individual is smarter than that,
or not. The voice of the Chavez lovers on the left are much louder
than the voice of joe, so joe isn't doing much to dispel our
feelings that the left still love Chavez.
|9.4.07 @ 2:47PM|#
. The voice of the Chavez lovers on the left are much louder than the voice of joe, so joe isn't doing much to dispel our feelings that the left still love Chavez.
So because the fact that many leftists are not following the lead
of a leftist that hangs out on an obscure (to leftists anyway)
libertarian board is joe's fault?
Damn, if that's not a classic case of guilt by association, I don't
know what is. :)
|9.4.07 @ 3:06PM|#
You know, Chavez is following the socialist paradise handbook so
closely, it's almost laughable.
Pretty soon, he's going to piss enough people off that they will be
able to overwhelm his regime.
He'll be lucky if he or any of his family are alive by 2020, let
alone in power...
|9.4.07 @ 3:09PM|#
prolefeed, Chavez is a thug,
Don't you think it makes you look rather foolish to attribute a
position to me exactly the opposite of the one I actually
expressed?
Or, in brief, *ha ha!*
|9.4.07 @ 3:14PM|#
Garth, Taktix,
There was a story out a week or two ago about Chavez putting
forward a statement of economic principles aimed at avoiding
exactly what you're talking about. He referenced the problems with
Cuba's economic system, and talked about how the economy needed to
remain responsive to the demands of international commerce, while
still pursuing socialist ideals.
It's interesting for two reasons - first, because Chavez has never
allowed any daylight to show between him and Castro before, and
second, because the speech was pretty much a pie-in-the-sky
statement of how socialist and market values need to work together,
and the inevitable conflicts that occur when the rubber hits the
road will have to be worked out somehow.
|9.4.07 @ 3:15PM|#
He'll be lucky if he or any of his family are alive by 2020,
let alone in power...,/i>
Oh, no. We can't possibly trust Venezuelans to make reasonable
judgements about their political leadership based on evidence from
their own lives. They need us to swoop in and save them, just like
we did in Iraq.
Anyone who says otherwise hates democracy and is a commie.
Dammit.
|9.4.07 @ 3:22PM|#
joe,
If I were you I'd switch to the blockquote tag. Maybe you'll have
better luck with that one.
|9.4.07 @ 3:25PM|#
Oh, no. We can't possibly trust Venezuelans to make
reasonable judgements about their political leadership based on
evidence from their own lives. They need us to swoop in and save
them, just like we did in Iraq.
Uh, joe...
You must have missed the sentence before the one you quoted:
Pretty soon, he's going to piss enough people off that they will be able to overwhelm his regime.
Taktix® is talking exactly about Venezuelans, not
"us".
|9.4.07 @ 3:29PM|#
joe,
While there is a chance that statement was in earnest, it smacks of
more of a propaganda piece designed to give Chavez defenders
ammunition.
All the Sean Penns of the world can say "duh, Chavez isn't
anti-free market." But as his economic policy shows, he clearly has
no respect for free markets.
I'm guessing his solution to the "inevitable conflicts that
occur...will have to be worked out" will be less "work" and
more "out" for free market principles.
P.S. I am in no way calling you a Chavez-ista in the first
paragraph.
|9.4.07 @ 3:32PM|#
Mike P,
That was sarcasm. I was attempting to mimic the thought process of
those who fancy themselves uber-democrats because they, uh, support
a military coup against Chavez.
|9.4.07 @ 3:34PM|#
MikeP, joe,
That is what I meant, my apologies for the ambiguity. I would NEVER
advocate for a U.S.-led invasion of Venezuela for the purpose of
regime change.
|9.4.07 @ 3:37PM|#
Taktix,
I suppose that's possible, but I'm also open to the possibility
that a leader who's entire economy and political position is
dependent on foreigners buying his oil so he can fund social
spending is going to be somewhat conginzant of the need to keep the
money rolling in.
BTW, I wrote "market" not "free market." The "free market"
political ideology is, obviously, not going to be playing much of a
role in Venezuelan economic policy for the time being. But as the
Chinese demonstrate, one can be quite fond and cognizant of what
markets can do without turning into Ron Paul.
|9.4.07 @ 3:38PM|#
Taktix,
I realize that you, personally, are neither a coup supporter nor a
demogogue.
|9.4.07 @ 4:32PM|#
prolefeed, Chavez is a thug,
Don't you think it makes you look rather foolish to attribute a
position to me exactly the opposite of the one I actually
expressed?
Or, in brief, *ha ha!*
joe, please read my 1:21 post. I did not say you supported Chavez.
What I said was, "Because socialism works so well if we can just
put left-statists the right people in power and punish
those who try to establish a free market black market
-- right, joe?"
At this point, you'd have to be insanely far left-wing to defend
Chavez, given the ruinous consequences he's inflicted upon his
subjects. What I was trying to do was reiterate the point Marcvs
made in his 12:15 pm post ("Ah, there's nothing like a real
socialist to show how socialism doesn't work. Not like those wimpy
democratic socialists in Europe that only ruin their economies
slowly"), that the politicians and policies you support would
slowly drag us down into Chavezdom -- the same point Hayek made in
"The Road to Serfdom".
My apologies that I didn't make that point clearer, and that I
wrote things that could be misinterpreted as saying you currently
support Chavez. Mea culpa.
|9.4.07 @ 4:36PM|#
It was on these pages that somebody proposed that the U.S.
response to Chavez's socialism should be "Go for it. See if you can
make it work." No embargos, no trade repercussions, not even an
official Tsk Tsk.
Some people still think that socialism is a viable economic system
and require another lesson. Let it be Venezuela.
|9.4.07 @ 4:44PM|#
What I said was, "Because socialism works so well if we can
just put left-statists the right people in power and punish those
who try to establish a free market black market -- right,
joe?"
Yes, prolefeed, and what I actually wrote was Fools.
There's nothing quite like an incumbent running for re-election in
a bad economy to put pretty illusions to bed.
What part of calling them "fools" and predicting that their
policies would lead to "a bad economy" led you to conclude that I
was endorsing their economic program?
|9.4.07 @ 4:56PM|#
Taktix,
I realize that you, personally, are neither a coup supporter nor a
demogogue.
joe knows this because he never saw you at any of the meetings.
|9.4.07 @ 5:38PM|#
MikeP,
That's because I always attend the meetings wearing a false
mustache and glasses...
A very silly false mustache and glasses...
Juan|9.4.07 @ 6:17PM|#
"It was on these pages that somebody proposed that the U.S.
response to Chavez's socialism should be "Go for it. See if you can
make it work." No embargos, no trade repercussions, not even an
official Tsk Tsk.
Some people still think that socialism is a viable economic system
and require another lesson. Let it be Venezuela."
Sounds like a plan. However, what happens to us poor Venezuelans
who already know socialism is a house of cards? :-(
|9.4.07 @ 6:24PM|#
"you'd have to be insanely far left-wing to defend Chavez, given
the ruinous consequences he's inflicted upon his subjects."
What nonsense! We're not insane, and we're moderates, not
left-wingers. Yet we prudly defend Chazez!
First, the bourgeois media is exaggerating the economic crisis in
Venezuela.
Second, it isn't Chavez's economic program which caused the
problems in Venezuela, but the CIA, oil companies, and CIA-funded
saboteurs who are wrecking this excellent program. Plus bad
harvests.
Third, the only reason Chavez initiated his economic program in the
first place is because Kark Rove tricked him into it. We have
documents!
Fourth, what about Iraq? And tax cuts for the rich?
|9.4.07 @ 7:04PM|#
Sounds like a plan. However, what happens to us poor Venezuelans who already know socialism is a house of cards? :-(
You're screwed, Juan. My sympathies.
|9.4.07 @ 7:21PM|#
CPfC
You missed the part about the oil companies manipulating the prices
to make them high and force Venezuela to waste huge amounts of
cash.
|9.4.07 @ 7:33PM|#
All I can say is, thank goodness Mexico didn't elect that idiot López Obrador. He would have turned Mexico into the Venezuela of the North and then we'd have a real immigration crisis on our border!
|9.4.07 @ 10:58PM|#
Nothing like an authoritarian socialist to really bring out the poverty. How sad for the Venezuelan folks.
|9.5.07 @ 12:07PM|#
So, any non-made up folks defending Chavez?
I think it's down to Harry Belafonte and Sean Penn.
|9.6.07 @ 7:21PM|#
Re: jim
They're not all going to Miami. When Chavez appoints his cronies to
run PDVSA, they basically fired ALL manager, engineers who didn't
pass the loyalty test. Fortunately for the Alberta oil industry,
Venezuela's crude's texture resembles the Alberta's oil sand.
Alberta is also quite short on qualified petro-engineer who can
work on this stuff, so ist's a win-win for them.
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