Venezuela Archives

A Winning Economic Policy

Over my Christmas vacation, while I wasn’t blogging much, I was still watching the news and bookmarking articles to cover later on.  Today I’m using one of those bookmarks.  While the original story itself is a bit stale, the concept is what I want to focus on.

From “Investor’s Business Daily” on December 4th:

Chile is expected to win entry to OECD’s club of developed countries by Dec. 15 — a great affirmation for a once-poor nation that pulled itself up by trusting markets. One thing that stands out here is free trade.

(And they did, as this the OECD website notes.)  So how did they do it?

Chile is the first country in South America to win the honor, and in a symbolic way its OECD membership card seals its exit from the ranks of the Third World to the First.

For the rest of us, it’s a stunning example of how embracing free markets and free trade brings prosperity.

It’s not like Chile was born lucky. Only 30 years ago, it was an impoverished country with per capita GDP of $1,300. Its distant geography, irresponsible neighbors and tiny population were significant obstacles to investment and growth. And its economy, dominated by labor unions, wasn’t just closed, but sealed tight.

In the Cato Institute’s 1975 Economic Freedom of the World Report it ranked a wretched 71 out of 72 countries evaluated.

Today it’s a different country altogether. Embracing markets has made it one of the most open economies in the world, ranking third on Cato’s index, just behind Hong Kong and Singapore. Per capita GDP has soared to $15,000.

Besides its embrace of free trade, other reforms — including pension privatization, tax cuts, respect for property rights and cutting of red tape helped the country grow not only richer but more democratic, says Cato Institute trade expert Daniel Griswold.

But the main thing, Griswold says, is that the country didn’t shift course. “Chile’s economy is set apart from its neighbors, because they have pursued market policies consistently over a long period,” he said. “Free trade has been a central part of Chile’s success.”

Free trade and free markets.  Chile is on the economic rise, while Venezuela, deep into Hugo Chavez’s socialist experiment, has been left to rationing, lately of water and electricity.  It’s quite clear that capitalism is beating out socialism handily, and yet we in the US keep trying to move closer to the losing side of the ledger.

I think one of the reasons we’re doing this is because of the concept that the perfect is the enemy of the good.  Because things are not perfect, we try to make them that way, via government, rather than let the market (i.e. the people) work things out themselves.  In the US, those on the Left saw that people were not getting health care in some cases, so they decided that government must step in to do it.  Never mind that charitable organizations exist to handle much of this, and never mind existing laws that guarantee health care even to those who can’t pay; it wasn’t up to the par they expected, so, by their lights, government must step in.

When government keeps stepping in like this, you get Venezuela.  My concern, borne out by so many reports of sub-par health care in Canada and the UK, and evidenced by Canadians who come here for care when theirs fails them, is that our overall level of care in our country will fall while we give government more and more power over our lives.  While the poor in Venezuela may have marginally more social care given to them by the government, overall, the socialist approach to anything leads to what Churchill described as “shared misery”.

The result is further from perfect than the previous good was for the people as a whole.

Chile, however, has lifted itself up with free markets and free trade.  Congratulations to them.  I hope the world is watching.

The Real Impetus Behind Copenhagen

Do you want to know the real reason behind all the meeting and agreements and doomsaying being done at the Copenhagen climate change confab?  Listen to the applause.

First, the warm-up act, so to speak, with hints of what was to come.

But before [Australian climate change minister Penny Wong] rose to speak the conference proceedings were interrupted by people with whistles and sirens chanting “stop green capitalism” – a sign of the anger in the developing world that the Danish host government is trying to wrest the process from the professional negotiators, who have failed to make any progress, and hand it to politicians, who might have some chance of achieving something before we all leave on Saturday.

And then the headlining act hit the stage.

Then President Chavez brought the house down.

When he said the process in Copenhagen was “not democratic, it is not inclusive, but isn’t that the reality of our world, the world is really and imperial dictatorship…down with imperial dictatorships” he got a rousing round of applause.

When he said there was a “silent and terrible ghost in the room” and that ghost was called capitalism, the applause was deafening.

But then he wound up to his grand conclusion – 20 minutes after his 5 minute speaking time was supposed to have ended and after quoting everyone from Karl Marx to Jesus Christ – “our revolution seeks to help all people…socialism, the other ghost that is probably wandering around this room, that’s the way to save the planet, capitalism is the road to hell….let’s fight against capitalism and make it obey us.”  He won a standing ovation.

Ladies and gentlemen, that is the primary purpose of the Copenhagen conference and those like it.  It’s the elites getting together to bring capitalism down and raise socialism up so that they can exert more power.  It’s a power grab, plain and simple and unashamed. 

You may have your reasons for wanting to see less carbon in the air, but those in politics and government clearly have their own agenda.  Is it yours?

Hollywood, are you listening?  Liberals who think at least Chavez isn’t the monster he’s often portrayed as, are you paying attention? 

President Hugo Chávez has risked international ire by lauding Carlos the Jackal, the Venezuelan terrorist notorious for a series of bombings, kidnappings and hijackings across Europe, as a "revolutionary fighter" unjustly imprisoned for trying to defend the Palestinian people.

The leftist Venezuelan leader praised Carlos — whose real name is Ilich Ramirez Sánchez — as "one of the great fighters of the Palestinian Liberation Organisation", denying he was a terrorist and claiming his lifetime imprisonment in France was unfair.

"I defend him," he said during a speech on Friday night. "It doesn’t matter to me what they say tomorrow in Europe."

Of course, this is now in addition to all his other BFFs.

The fiery anti-American leader sought to defend leaders he said were wrongly branded "bad guys", heaping praise on Iranian President Mahmoud Ahmadinejad, who is to visit Venezuela later this week, and the Zimbabwean leader Robert Mugabe, who he called "brothers".

He drew the wrath of Ugandans after casting doubt on the crimes of the Ugandan dictator Idi Amin. "We thought he was a cannibal," said Mr Chávez of Amin, whose regime was notorious for torturing and killing suspected opponents in the 1970s. "I have doubts … Maybe he was a great nationalist, a patriot."

Hat tip: Betsy Newmark, who wonders if those Hollywood leftists who have made common cause with Chavez will ever get asked about this latest news.  Yeah, probably not.  After all, it is the leftist media most likely to do any interviewing.

Paging Michael Moore

Ah, the benefits of socialism.

Residents of the Venezuelan capital face cuts in water service for as much as 48 hours per week, after the government imposed rationing to stem a 25 percent shortfall in the city’s supply, officials said Monday.

Officials said cuts in water service were to be staggered throughout Caracas through the duration of the current dry season, which is not expected to end until May 2010.

Heap this on top of all the other shortages that Venezuela is suffering under (including electricity, also noted in the article).  But "socialism" means never having to say, "My fault."

Weather forecasters blame the "El Nino" weather phenomenon, saying the periodic weather system has markedly reduced rainfall and created drought conditions.

Others blame the shortage on poor government management of the country’s water resources, while President Hugo Chavez faulted the excesses of capitalism.

"What will the rich fill their swimming pools with?" the country’s leftist leader asked recently.

"With the water that is denied inhabitants in the poor neighborhoods," he said, blaming the lack of sufficient water on "capitalism — a lack of feeling, a lack of humanity."

Don’t blame the weather for a resource shortage if blaming capitalism and demonizing rich people will do just as well, especially if you’re the one managing the resource.

Say what you will about the profit motive and market forces; they do a better job of distribution than any central authority.

Moving in the Opposite Direction

As the US government takes steps like government controls of major industries and attempting to hijack 1/5th of the economy via health care reform, another country is moving in quite the opposite direction during this global recession.

Cuba’s workplace cafeterias are closing, President Raúl Castro keeps saying the well-off shouldn’t get the same subsidies as the poor, and now there are rumblings that one of the stalwart vestiges of the revolution — the ration booklet — has outlived its usefulness.

As the Cuban government struggles through a deep recession, its leaders have begun picking away at socialism in order to save it. But experts say the latest buzz by the Cuban government is simply another desperate fix to stem the slide of a failed economy that buckled long ago.


Since he took office early last year, Raúl Castro has been saying that the country’s severely battered economy needs fixing. In a widely quoted August speech, Castro said Cuba was spending more than it made.

“Nobody, no individual nor country, can indefinitely spend more than she or he earns. Two plus two always adds up to four, never five,” he said. “Within the conditions of our imperfect socialism, due to our own shortcomings, two plus two often adds up to three.”

In the 18 months since he took office, Castro restructured the nation’s agricultural system to give idle land to farmers, hoping they would revive a deeply troubled state-run agricultural industry plagued by inefficiency. He also allowed taxi drivers to have private licenses; many were working illegally anyway.

How do you get farmers to do more farming?  Create an incentive to do so, like a profit motive, long reviled by liberals and one of the reasons they believe health insurance needs reform.  Socialism costs more than the benefits to society.

Hugo Chavez was, no doubt, convinced that the oil profits he absconded with would pay for his socialist paradise, but that very socialism chases away the people he soaks off of.  Combined with the global recession, food shortages continue in Venezuela’s “paradise”.

The profit motive gives people an incentive to put their own time & money at risk to provide a service to those who need it.  If not enough folks need it, it’s not subsidized by the government (or shouldn’t be); it folds.  If it is useful to enough people, it prospers, and, rightfully, so does the owner who bore the risk.  Wealth is created in this system, not simply “spread around”, as Obama infamously said to Joe the Plumber.

Wealth was spread around in Venezuela, Cuba, and even Sweden, and now the piper must be paid.  In the latter two, changes are being made in a more capitalist direction.  Let’s hope Venezuelans learn that lesson.

Heck, let’s hope American Democrats learn it.

Is This "Making the World Like Us Again"?

The blog "Stop the ACLU" has a run-down of just the recent cases of countries doing things in a manner that doesn’t exactly say they like us again.  Cuba and Venezuela opening up their airfields to Russian bombers.  Ecuador (Ecuador!) expelling US diplomats for the second time this month.  Iran continues its nuclear ambitions (and blames economic isolation for their pushback).  North Korea threatens to test a ballistic that some believe could hit the US west coast. 

Hillary Clinton did, however, use the strongest possible terms to denounce that missile test, saying that such a launch would be "very unhelpful". 

Yeah, that’ll teach ’em.

Venezuela Scraps Term Limits

Which means that Hugo Chavez is free to run his country into the ground provided he can continue to finance his programs of "free" services and goods to the voters with oil money.  54% of the country have decided that they prefer the handouts.  It took 2 tries, but Chavez got his wish.

We’ll see if the Venezuelans get theirs.

Venezuela’s Horse Not As High

The plunging oil prices over the past few months have brought to light a failing of socialism that Hugo Chavez is now having to deal with.  When he was awash in oil revenues, he could afford to give it away and pretend that his utopia was working, and the inefficiencies could be smoothed over.  However, reality set in, and he had his hat in hand, returning to the evil capitalists for what might be called a bailout.

President Hugo Chávez, buffeted by falling oil prices that threaten to damage his efforts to establish a Socialist-inspired state, is quietly courting Western oil companies once again.

Until recently, Chávez had pushed foreign oil companies here into a corner by nationalizing their oil fields, raiding their offices with tax authorities and imposing a series of royalties increases.

But faced with the plunge in prices and a decline in domestic production, senior officials here have begun soliciting bids from some of the largest Western oil companies in recent weeks — including Chevron, Royal Dutch/Shell and Total of France — promising them access to some of the world’s largest petroleum reserves, according to energy executives and industry consultants here.

It’s like that whole idea of government control isn’t working out for them.  Odd, that.

Post-Vacation Catch-up Links

During my Thanksgiving vacation, I didn’t do any blogging but I did still read the news.  I’ll have long posts about some of the items later on, but just wanted to do a quick hit of some bits I found interesting:

* Tying up some loose ends, the state agency director that pried into Joe "the plumber" Wurzelbacher’s confidential information will be punished, if by "punished"  you mean "one month unpaid leave".  I think that qualifies more for "lightly tapped on the wrist". 

* The singles dating service eHarmony had chosen not to match same-sex couples.  The reason shouldn’t matter, as its a private business, but psychologist Neil Clark Warren, who started the site, had done his personality studies on heterosexual couples and didn’t think that, scientifically, he could extrapolate his findings to homosexual couples.  Disagree if you want, but it was his business and he can run it the way he wants to.

Well, perhaps not.  eHarmony has just caved to a lawsuit by a gay man, and now has a new site for same-sex matches.  Coming next; meat-eaters suing vegetarian restaurants.  So much for "tolerance".

* Archaeologists have found new evidence that they have indeed found King Herod’s tomb

* A funny little list that has made the rounds on why public schooling is better than homeshooling.

* Opposition parties gained ground in Venezuela against Chavez. 

* Academia’s assault on Thanksgiving is descending into self-parody, where a pair of public schools decided to stop a long-standing tradition of having kids from one school dress up as pilgrims and the other as American Indians and come together for Thanksgiving.  When opponents of this celebration of a very bright spot in our nation’s history protest it with signs saying "Don’t Celebrate Genocide", you know that either they are just full of anger or are simply products of the public education system.  Or both.

* Academia’s assault on Christmas is descending into self-parody (sensing a trend here?) with one school banning, not just Jesus, but even Santa.  When Jews and Wiccans are standing up for Christmas, you know you are light-years over the line.

* Salvation Army bell-ringers considered noise pollution?  Now, while I rang those bells as a kid growing up, and even in college, I just gotta’ say that this is serious over-sensitivity.  Bell ringers have been at malls for decades; it’s not all that loud.  If the bell-ringer can handle the "noise", the kiosk merchants should be able to.  And let’s not forget that the Christmas song "Silver Bells" was inspired by those bell-ringers.

Especially in Venezuela.  A few links from the past couple of weeks regarding the socialist "utopia".

When oil prices fall, suddenly Hugo Chavez can no longer afford to buy big guns, to finance terrorism, and to spread the wealth around.

Awash in oil, Hugo can’t even keep the lights on; electricity shortages to go along with food shortages.  As Pejman Yousefzadeh puts it, "I would delight in the Schadenfreude, but after having read this story, I feel more sorry for the people of Venezuela than I do happy to see yet another indication that the regime of Hugo Chavez is failing to provide basic services."

And when Hugo gets cranky, he starts to ponder jailing the opposition.  Without any specific charges, Chavez said of his former presidential rival, "I am determined to put Manuel Rosales behind bars. A swine like that has to be in prison."  Yup, now there’s a freedom fighter.

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