Venezuela, Corbyn, and Brexit

Dan Hannan, MEP for SE England, on Venezuela, via Conservative Home. Good Stuff.

To grasp the full extent of Venezuela’s tragedy, consider just one statistic. In 1959, GDP per head in Venezuela was 10 per cent higher than in the United States. That’s right. Venezuela wasn’t just the richest country in Latin America; it was one of the richest countries on the planet.

When I was growing up in Peru in the 1970s, Venezuela was the place people aspired to emigrate to. Not just from South America, either. People came in their tens of thousands from southern Europe in search of a better life.

One man, even during those plentiful years, fretted about the future. Juan Pablo Pérez Alfonzo, a former Venezuelan energy minister and a founder of OPEC, pronounced what now looks like a spookily apt prophecy in 1976: “Ten years from now, 20 years from now, you will see, oil will ruin us.”

In the event, he was out by 20 years: the ruin came in the 2000s. And for once the word “ruin” is literally accurate. Inflation in Venezuela is running at ten million per cent. There are verified deaths from malnutrition. Far from importing immigrants, the country has lost three million people since Hugo Chávez’s Bolivarian revolution, the worst refugee crisis in the history of the Western hemisphere.

What caused a collapse on this scale? Was it the “resources curse”, the name economists give to Pérez Alfonzo’s theory that unearned wealth wrecks an economy? Was it, as Corbynistas are now claiming, external sabotage? Or was it something else?

It is certainly true that oil can have a devastating effect on a country’s political system. Think of Iraq, Iran, Nigeria or Russia. Politics becomes a scramble for what Pérez Alfonzo called “the devil’s excrement”. To be more precise, the politicians who can place themselves between oil reserves and oil companies can make such vast fortunes that they can buy elections with their loose change.

But the “resources curse” is not inevitable. It did not destroy democracy in, say, Norway or Alberta. Several Gulf states – perhaps because they are aware of Pérez Alfonzo’s gloomy thesis – are now careful to place some of their oil bonanzas in sovereign wealth funds, aimed at diversifying their economies.

In the case of Venezuela, the spike in the cost of a barrel of oil during the early Chávez years had the effect of temporarily masking the worst effects of his policies. “There are no good or bad presidents,” Venezuelans say, “only presidents when the oil price is high, and when it’s low”. Chávez, needless to say, did not use his oil bonus to diversify the economy or build up reserves. He used it to cover the massive costs caused by his imposition of price controls, nationalisation and exchange controls. Anything he had left over went to backing Leftist insurgents elsewhere in Latin America. It was during those early years that the international Left (not only Momentum types) lectured the rest of us about how the rest of us ought to copy the Venezuelan example.

When the oil boom ended, the calamity of the command economy caught up with Venezuela. Like every other socialist strongman in human history, Chávez had made people poorer. Much poorer. Stories of hunger and emigration spread, opposition groups were harassed or closed down, but overseas Leftists still wanted to support the regime. So they began to claim that US sanctions were to blame. In fact, the only US sanctions in place before August 2017 were asset freezes and travel bans aimed at a handful of Chavista politicians and their cronies. (Many of the children of Venezuela’s socialist élite have scandalised their countrymen with their conspicuous consumption at luxury resorts around the world, and Chávez’s daughter is said to be worth four billion dollars.) There is no way that such personalised micro-sanctions could conceivably have harmed the Venezuelan economy as a whole. Even after 2017, eight years into the economic crisis, the sanctions were extended only to a ban on buying government bonds or bonds in state-owned enterprises.

He goes on to show how Jeremy Corbyn and the Labour party still worship at Maduro’s feet, it’s both true and sad. It’s also one reason that Teresa May remains Prime Minister, very few people can stomach the thought of Corbyn as PM, nor does anyone appear willing to take on May in the Tories. In short, they’re stuck between a rock and a hard place.

Sad, not least because it functions as a spanner in the gears to properly negotiating Brexit as well. Yes, I know not everything is Brexit, and yet Brexit is so fundamental, to Britain moving forward, that almost everything is.

Hump Day Pot Pourri

Some odds and ends today that have been hanging about but, never quite developed into full on posts.

Dan Hannan would like to know if the EU is why there is peace in Europe for the last few decades.

His points are valid, and yet I know some people that would answer with four words. The United States Army. Which may not be entirely fair but it ain’t entirely unfair either, I think.

Carly Fiorina would like to remind us that “titles are not accomplishments.”

She’s tight, of course. Carly is not my all time favorite candidate, mostly because I wasn’t all that impressed with her work at HP. but hey howdy, it was actual work and some accomplishments were made, the company is still around.

The Daily Telegraph has a nice article about the reenactors that stated the Battle of Waterloo on it 200th anniversary. It’s here: Portable loos and Belgian officiousness: When ‘war’ breaks out at the Battle of Waterloo, 2015.

And two articles from The Federalist on all the noise about the Battle Flag, both are good.

First: Congratulations! You Oppose The Confederate Flag. Now What?

and Second: Let’s Not Get Trolled On The Confederate Flag.

And finally, my friend Geoffrey Sales wrote this morning on AATW on what is going wrong in the Roman Catholic (as well as many others) Church. As always. worth your time: Buying and selling.

There a few out of the files and back out where you can enjoy them.

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