Venezuela Archives

Not so well, it appears.  For starters, it’s a much more dangerous place to live in.

Venezuela now has more murders than Colombia – despite its neighbour being officially at war against Marxist guerillas.

Venezuela endures 48 murders for every 100,000 people each year. Britain, by contrast, has 2 per 100,000.

In Caracas the official rate is 130 per 100,000, a number which the Investigative Institute of Co-existence and Citizen Security, a think thank dedicated to the study of crime, insists is closer to 166, making Caracas twice as dangerous as Cape Town.

And the US rate is between 5 and 6 per 100,000.  So much for the "utopia" part.  Chavez, of course, blames the US.

And then there’s this, regarding Venezuela’s oil output.  Apparently, state planning isn’t all that efficient.  And apparently, bribing other countries with cheap oil is backfiring as well.

The state oil company, PDVSA, produced 3.2 million barrels per day in 1998, the year before Mr Chavez won the presidency. After a decade of rising corruption and inefficiency, daily output has now fallen to 2.4 million barrels, according to OPEC figures. About half of this oil is now delivered at a discount to Mr Chavez’s friends around Latin America. The 18 nations in his "Petrocaribe" club, founded in 2005, pay Venezuela only 30 per cent of the market price within 90 days, with rest in instalments spread over 25 years.

The other half – 1.2 million barrels per day – goes to America, Venezuela’s only genuinely paying customer.

Meanwhile, Mr Chavez has given PDVSA countless new tasks. "The new PDVSA is central to the social battle for the advance of our country," said Rafael Ramirez, the company’s president and the minister for petroleum. "We have worked to convert PDVSA into a key element for the social battle."

The company now grows food after Mr Chavez’s price controls emptied supermarket shelves of products like milk and eggs. Another branch produces furniture and domestic appliances in an effort to stem the flow of imports. What PDVSA seems unable to do is produce more oil.

The irony here is that Chavez routinely demonizes the United States, but without us he’d be just another tin pot despot, and his people would be much, much worse off than they are, which isn’t all that great.  So much for the "socialist" part.

Lessons in "The Market"

Learned by Josh Marshall, lefty blogger at Talking Points Memo.  First, he starts out the post being inspired.

I happened yesterday on this article in The Atlantic by Jonathan Rauch about the Chevy Volt. GM is throwing tons of resources into a breakneck schedule to produce an electric powered car that is dramatically more advanced than the hybrids currently on the market. The question is whether they can have the technology developed in time for release date.

It’s sort of inspiring to see an American company try something so ambitious.

American companies try ambitious things all the time.  Energy companies might try this more often, if there wasn’t the ever-present concern that their return-on-investment might get sucked away by the government as "windfall profit".  The freedom to innovate while keeping the fruits of your labor, and responding to needs by the consumer, is a feature of what we call "the market".  Familiarizing oneself with the concept would be very helpful in the current economic climate. 

Josh then finds in himself a newfound concern about alternative energy sources.  Despite his upbringing, he says, he was never really focused on it much.

But that’s changed over the last several months: most of the key issues that face us today, from environmental issues proper, to our geostrategic position vs. other great powers and the future of our economy, all turn on our reliance on fossil fuels. Not just ‘foreign’ ones, all of them.

And what has likely contributed heavily to this rediscovered concern?  How about the gas prices that have been rising quickly over "the last several month"?  But that’s nothing to be ashamed of.  The price of an item is an amazing bit of information that gives suppliers knowledge of short-term future demand, gives consumers an incentive to buy more or less of a product, and, depending on the price itself, gives innovators an incentive to come up with new and better way to supply the need.  This is a feature of what we call "the market".  (Detect a pattern here?)

This is instead of nationalizing the particular industry or forcing the price to an artificially lower value which could easily bring about shortages (just ask Venezuelans) and stifle innovation.  I  mean, a new source of a product just may cost a bit more as it’s getting ramped up, and forcing existing prices lower make consumers less likely to make the transition, unless you force them to do so.  The keyword here, which must be used over and over again, is "force".  And when your government is forcing all of your economic decisions on you, this is a feature of what we call "socialism". 

Would Marshall know the free market it if jumped out and bit him?  I think it just did, but according to the title of his post, he’s "shocked, shocked".  Likely that’s an intentional pun on the Chevy Volt subject, but his surprise at seeing American innovation, and his lack of understanding of his changing attitudes tells me that he apparently doesn’t recognize the source of those teeth marks.

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Chavez Tightens His Grip

Paging Mr. Belafonte, Mr. Penn, Ms. Sheehan, et. al. Please call your office.

President Hugo Chávez has used his decree powers to carry out a major overhaul of this country’s intelligence agencies, provoking a fierce backlash here from human rights groups and legal scholars who say the measures will force citizens to inform on one another to avoid prison terms.


The new law requires people in the country to comply with requests to assist the agencies, secret police or community activist groups loyal to Mr. Chávez. Refusal can result in prison terms of two to four years for most people and four to six years for government employees.

“We are before a set of measures that are a threat to all of us,” said Blanca Rosa Mármol de León, a justice on Venezuela’s top court, in a rare public judicial dissent. “I have an obligation to say this, as a citizen and a judge. This is a step toward the creation of a society of informers.”

The sweeping intelligence changes reflect an effort by Mr. Chávez to assert greater control over public institutions in the face of political challenges following a stinging defeat in December of a package of constitutional changes that would have expanded his powers.

Looks like his powers are expanding in spite of the voters. Again, yet another predictable step towards totalitarianism from a government that the Hollywood Left finds common cause with. Ignorance of history is no excuse.

(Can we use the term “dictator” now?)

UPDATE:  Chavez has revoked the law, which is great to hear.  Thousands of protesters combined with an upcoming election probably changed his mind.  Not a good idea to get the people in an uproar so close to voting.  Is this a case of Chavez listening to the people?  I hope so.  History still suggests keeping a watchful eye, though.

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History Continues to Repeat Itself

But is the Left noticing?  While I was gone on Spring Break, a number of news stories came through showing both Hugo Chavez’s desperation for power and popularity in Venezuela, while the standard of living is predictably spiraling downward.

First, in response to a housing shortage, he declared that he’d nationalize the cement industry.  The first thing that happened as a result was that Cemex, the largest domestic supplier of cement in Venezuela, dropped almost 4% in Mexico’s stock market.  Apparently investors know a losing proposition when they see it.

Then, he renationalized the largest steelmaker in the country.  Their stock dropped 9% in New York.

And during all of this, the people are suffering.

Grimacing from contractions, expectant mother Castuca Marino had more on her mind than birth pangs. She was nervous about whether she and her newborn child would make it out of the hospital alive.

Interviewed as she stood in the emergency room of Concepcion Palacios Maternity Hospital here last week, Marino had heard news reports of six infant deaths there over a 24-hour period late last month. She knew that since the beginning of February, six mothers had died in the hospital during or after childbirth.

"What are poor people going to do?" said Marino, 20, as she was being admitted to this sprawling complex where, on average, 60 babies are born a day. "I’m just hoping that there are no complications and that everything goes well."
Palacios, Venezuela’s largest public maternity hospital and once the nation’s beacon of neonatal care, has fallen on hard times. Half of the anesthesiologists and pediatricians on staff two years ago have quit. Basic equipment such as respirators, ultrasound monitors and incubators are either broken or scarce. Six of 12 birth rooms have been shut.

On one day last month, five newborns were crowded into one incubator, said Dr. Jesus Mendez Quijada, a psychiatrist and Palacios staff member who is a past president of the Venezuelan Medical Federation.

The deaths of the six infants "were not a case of bad luck, but the consequence of an accumulation of circumstances that have created this alarming situation," Mendez said.

He and others say the problems at Concepcion Palacios are symptoms of a variety of ills that have beset the public healthcare system under leftist firebrand President Hugo Chavez. Cases of malaria nearly doubled between 1998, the year before Chavez took office, and 2007. Incidents of dengue fever more than doubled over the same period.

Chavez is trying to counter this with his own, parallel, socialized medicine program, but he’s keeping prying eyes away from the innards.  "Please ignore the man behind the curtain."

Inaugurated nationwide in 2003, Barrio Adentro initially was so popular with the poor that it helped Chavez win a crucial 2004 referendum and hold on to power. It has brought basic healthcare to the barrios, providing free exams and medicine as well as eye operations that have saved the sight of thousands.

But the system siphons resources and equipment away from the public hospitals, which have four-fifths of the nation’s 45,000 hospital beds and where the public still goes for emergency and maternity care, as well as for most major and elective surgeries.

The finances and organization of Barrio Adentro are "a black box and not transparent, so it’s impossible to analyze it for efficiency," said Dr. Marino Gonzalez, professor of public policy at Simon Bolivar University in Caracas, the capital.
A lack of openness has affected other facets of public health too. After the medical establishment blamed him for an outbreak of dengue fever last summer, Chavez halted weekly publication of an epidemiology report that for 50 years had tallied occurrences of infectious diseases nationwide.

Former Health Minister Rafael Orihuela says the loss of the weekly report has deprived the government of information needed for a quick response to outbreaks of disease.
"I am not talking about a failure of the government to adopt innovations in healthcare," said Orihuela, a Chavez critic. "I am talking about a failure to maintain basic healthcare standards."

And in the meantime, Chavez’s poll numbers are approaching George W. Bush lows…

Public support for President Hugo Chavez’s government has significantly declined, according to two polls published on Tuesday.

Some 34% of Venezuelans surveyed said they support Chavez’s government, down from a high of 67% in early 2005, to the lowest level in five years, a quarterly survey of 2,000 Venezuelans by Caracas pollster Datos found.

…and the economy is tanking.

Polls have consistently shown that rampant crime is a major concern to Venezuelans. Double-digit inflation has also accelerated, and sporadic shortages of milk and other food products persist.

While these polls are not as open as those in the US, they do show a general malaise among Venezuelans.  Bruce McQuain at Q&O believes that the power grabs are specifically because of the poll numbers.  Whether or not that’s true, the narrative of The Socialist Utopia(tm) and the bill of goods it sells continues on course, to the detriment of the Venezuelan people, and to the ignorance of Chavez’s buddies in the US.

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When In Doubt, You Know Who To Blame

Trying again to deflect attention from the man behind the curtain, pulling lever and pressing buttons to make people believe he’s a wizard, Hugo Chavez continues the Blame Game.

Venezuela’s socialist President Hugo Chavez blamed the United States for violent protests in Tibet during the last two weeks that he said were aimed at trying to destabilize China.

In comments reported by his press office on Sunday, Chavez said the protests were an example of the U.S. "empire" "going against China" and trying to divide the Asian powerhouse.

Communist China has occupied Tibet, a Buddhist region previously ruled by monks, since a military invasion in 1950.

In other news, Chavez blames Bush for Vietnam, the Boxer Rebellion, and Adam and Eve’s disastrous choice of trees.  Honestly, protests about Tibet are nothing new, and there may just be a less paranoid explanation.

China has been widely criticized for a crackdown against the demonstrators ahead of August’s Olympic games to be held in Beijing.

Could those same Olympic games be the reason the monks thought this would be a good time to call attention to their situation?   Yes, but Chavez wasn’t done with the deflection.

Chavez is a relentless Washington critic who says he favors a multipolar world to balance U.S. dominance.

Yes, what the world needs now is another Evil Empire to balance things out.  Wonder if he’s bucking for that position.

He also refuses to recognize Kosovo as an independent republic, saying the new European state is a U.S. imposition.

"Look over there!  And look over there!  Just please, don’t look over here, where the food lines are getting longer."

Not-So-Free Press in Venezuela

“Give them an inch, and they’ll take a mile.” In Venezuela these days, that venerable saying could be morphed to, “Give Hugo a company, and he’ll take the industry.” Not content with RCTV, Chavez is gunning for one of the last independent voices in Venezuela.

President Hugo Chávez is trying to whip up public support to close down Globovision, the remaining Venezuelan television channel critical of his administration.

Chávez has called Globovision “an enemy of the Venezuelan people,” and fervent government supporters want the national tax office to investigate the station. Hundreds of them rallied outside of Globovision last month.

The threats against Globovision come less than a year after Chávez knocked RCTV, the country’s most popular television station, off the commercial airwaves. RCTV had broadcast unflattering news coverage of Chávez for years.

Alberto Ravell, a Globovision part owner who runs the 24-hour news channel, has come under personal attack.

“Ravell: Fascist, coup plotter, murderer, liar,” read signs held by Chávez supporters at one of the president’s speeches late last year.

One thought is that Chavez won’t really nail Globovision because, as Ravell notes, he needs the station as a foil; someone to blame and accuse. In fact, just accusing them of being an enemy of the people and reducing their credibility with rhetoric may be all he needs to do to marginalize them and effectively take them out of, or minimize their impact on, the equation.

Another thought is that Chavez is looking for a distraction from the (predictable) shortages that his utopia is failing to curb.

The tension between the news station and Chávez comes as the leftist president appears to have lost some of his popular support.

The pollster Datos, in a quarterly survey of 2,000 Venezuelans last month, found that some 34 percent said they support Chávez’s government, down from a high of 67 percent in early 2005, and the lowest level since 2003, the Associated Press reported.

Another survey, by Venezuelan pollster Alfredo Keller, found that 37 percent of Venezuelans queried identified themselves as Chávez supporters in February, down from 50 percent in mid-2007, AP reported.

I honestly hope that the Venezuelan people are turning against Chavez for something other than just not enough “free” amenities from this socialist experiment. Hopefully, this dose of authoritarianism, along with Chavez’s penchant to blame everything else but his economic policies, will help the people to see what a mistake they made.

But one of the most dangerous things in the world is an authoritarian who feels like he’s losing his authority. I am concerned for them.

Open Question for Venezuela

So how’s that socialism working out?

The pressure on both firms may signal a tougher line by the government against foreign companies in politically sensitive industries such as food. The increasing scarcity of staples such as milk, chicken and eggs is denting Mr. Chávez’s popularity and might worsen the political climate for food companies.

In a sign of how serious the shortages have become, looters last week ransacked government food warehouses in Mr. Chávez’s hometown of Sabaneta. About 100 soldiers and police were sent to restore order, according to the Associated Press.

Empresas Polar, Venezuela’s largest food producer, responded yesterday to nationalization threats, saying it has had no role in the country’s chronic food shortages. Mr. Chávez said Sunday that Polar was "a clear example" of a company that could be nationalized if it were caught hoarding food.

Shortages have become a problem because of price controls implemented by Mr. Chávez in an effort to stem galloping inflation caused by Venezuela’s oil-fueled spending. Companies in many industries complain official prices don’t leave room for profits. Mr. Chávez accuses the companies of hoarding food.

If nationalizing industry causes shortages and inflation, fix it by nationalizing more industries.  Brilliant.  After the Soviet Union, North Korea, communist Eastern Europe, Cuba and many other examples, you’d think people would come to understand that socialism, in spite of all the flowery talk about it being "for the people", is really all about the government and its power.  (Remember that when you hear the about all the "free" goodies you’ll supposedly get from Democrats this election year.)

No human or committee of humans can ever hope to manage something as incredibly complex as a national economy.  Regulate, yes.  Nudge, yes.  Manage, no.  If a business can’t make a profit, it won’t stay in business, and won’t provide the goods or services it was providing. 

Now, Chavez ain’t no dummy.  He knows that all this bullying of corporations gives him street cred as a "man of the people", but even that sheen is beginning to dull as reality sets in. 

Tell ya’ what, though.  I’ll bet Sean Penn, Harry Belafonte and the other glitterati that visit Venezuela won’t have to stand in those lines.  Bad for Hugo’s PR machine, dontcha’ know?

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Live by the Asset Seizure…

…die by the asset seizure.

Exxon Mobil Corp has moved to freeze up to $12 billion in Venezuelan assets around the world as the U.S. company fights for payment in return for the state’s takeover of a huge oil project last year.

The company said it has received court orders in Britain, the Netherlands and the Netherlands Antilles each freezing up to $12 billion in assets of Venezuela state oil firm PDVSA. An Exxon spokeswoman said the total that could be frozen worldwide was $12 billion.

Exxon also won a court order from the U.S. District Court for the Southern District of New York in December freezing more than $300 million belonging to PDVSA, as Exxon argued it would have little chance to recoup its investment from PDVSA should it win its arbitration.

A taste of his own medicine that Chavez may find does not agree with his pallet. But somehow, socialists always seem to think that grabbing up whole industry sectors is the way to utopia. He’s been threatening to do it with the food sector as well because of food shortages caused by price controls.

And that is the lesson here, taught many times over the centuries but lost on socialists; price controls don’t work. And since that’s one of hallmarks of a socialist government, determined to control an economy down to every little detail, then socialism is doomed to fail as well.

A committee cannot hope to manipulate an economy to the degree that Chavez wants to. The sooner the people of Venezuela understand that, the sooner they can remove him from power before he starts expropriating that, too.

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The Script Keeps Playing Out

You know, the one where the socialist dictator does whatever he can to stifle dissent and prop up the failing socialist economy? How many times does it need to be repeated?

First off, Chavez v. farmers.

President Hugo Chavez threatened on Sunday to take over farms or milk plants if owners refuse to sell their milk for domestic consumption and instead seek higher profits abroad or from cheese-makers.

Venezuela’s President Hugo Chavez pours powder milk on his desk during his weekly broadcast.

With the country recently facing milk shortages, Chavez said “it’s treason” if farmers deny milk to Venezuelans while selling it across the border in Colombia or for gourmet cheeses.

“In that case the farm must be expropriated,” Chavez said, adding that the government could also take over milk plants and properties of beef producers.

“I’m putting you on alert,” Chavez said. “If there’s a producer that refuses to sell the product … and sells it at a higher price abroad … ministers, find me the proof so it can be expropriated.”

Addressing his Cabinet, he said: “If the army must be brought in, you bring in the army.”

Hugo calls anything that goes against his socialist vision “treason”. So here we see that central planning of the economy is failing, there are shortages, farmers are trying to get the best price for their product, and the government is ready to send in the army. Yeah, a socialist paradise.

Well, if you don’t believe that it is, you’d better not say that to loudly. Here is Chavez v. dissent.

Judge Monica Fernandez, a Venezuelan human rights advocate, was shot on January 4 in what police ruled a botched car robbery. The night before, she was branded an enemy of the state on state television. Coincidence?

For those who still have this belief that George W. Bush is the real dictator and the worst terrorist, please open your eyes and see what real creeping totalitarianism looks like.

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Chavez Gets First Defeat

And an important defeat it is.

Humbled by his first electoral defeat ever, President Hugo Chavez said Monday he may have been too ambitious in asking voters to let him stand indefinitely for re-election and endorse a huge leap to a socialist state.

“I understand and accept that the proposal I made was quite profound and intense,” he said after voters narrowly rejected the sweeping constitutional reforms by 51 percent to 49 percent.

I will admit to being (pleasantly) surprised at the outcome. I thought that Chavez’s attempts at vote buying in the constitutional changes (more “free” money to the people) would clinch it for him. Apparently, enough people have had their eyes opened and saw what Chavez did with the power he already had and didn’t like it. I am a bit concerned, though, that this was a razor-thin margin of victory, and that simple turnout may have been the deciding factor. But it wasn’t the slam-dunk that other Chavez elections have been, so that is encouraging.

Chavez knows he overplayed his hand, and realizes he has to move more slowly. He’s even making nice to those he called “traitors” just days ago.

Chavez told reporters at the presidential palace that the outcome of Sunday’s balloting had taught him that “Venezuelan democracy is maturing.” His respect for the verdict, he asserted, proves he is a true democratic leader.

In a matter of days, these “traitors” have become proponents of a democracy that is “maturing”. Like the joke about the nature of diplomacy, sounds to me like he’s saying “Nice doggy” until he can find a rock to throw at it.

Some will no doubt point to this first defeat in years for Chavez and claim that democracy is alive and well in Venezuela. But if the ruling party in the United States were only to lose one election or, in this case, referendum in 10 years, people wouldn’t necessarily say the same thing, but that’s a double-standard the US lives with all the time. I won’t even begin to consider that democracy is still alive in Venezuela until the checks and balances that their Congress temporarily eliminated, letting Chavez rule by edict, expires.

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