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.

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Venezuela, and Maduro

On Saturday, Secretary of State Mike Pompeo addressed the United Nations Security Council on the situation in Venezuela. He was beyond outstanding, as he spoke very clearly indeed.

The UN, being its normal useless self, has, of course, ignored the situation, as SECSTATE says

“My former colleague, Ambassador Haley, lobbied for a year to get the council to address Venezuela but her pleas fell on deaf ears. This meeting is long overdue. And you all know why it’s overdue.” 

He also spoke of how bad it really is down there:

Maracaibo, Venezuela. Credit: pixabay. Free for use.

“Today nine out of ten citizens live in poverty. Millions lack access to drinking water and food. Three out of four hospitals have been abandoned. Three million Venezuelans have been forced to flee their homeland thereby flooding the region and threatening international peace and security.”

Then there clattered very loudly a gauntlet thrown on the floor, by the United States

“And now it’s time for every other nation to pick a side. No more delays, no more games. Either you stand with the forces of freedom or you’re in league with Maduro and his mayhem.

Some countries have publicly taken former President Maduro’s side. China, Russia, Syria, and Iran are just four of them. . . .”

And to be fair, some, especially in Europe, reluctantly picked it up, Spain, France, Britain, and Germany voting for a free Venezuela. Not, of course, that (other than Britain, perhaps) they’ll be of any real use. But at least they didn’t vote with Russia.

Scott Johnson over at PowerLine says he the best Secretary of State since George Schultz. I have no argument with that.

In something that may prove significant Venezuela’s military attache to the United States, Col. José Luis Silva issued a statement Saturday, as well.

“As the Venezuelan defense attaché in the United States, I do not recognize Mr. Nicolás Maduro as president of Venezuela.”

“My message to all armed forces members, to everyone who carries a gun, is to please let’s not attack the people. We are also part of the people, and we’ve had enough of supporting a government that has betrayed the most basic principles and sold itself to other countries.” [adding]

“Captains, commanders: Think about everyone who suffers. Don’t forget that your wives also can’t find milk for your children. Don’t forget that your mothers and fathers also can’t find pills for their [blood] pressure.”

In the meantime, the Russians sound like the Soviets with their warmed over rhetoric. I mean, really?

“Venezuela does not pose any threat to peace and security. The intention of the United States is to orchestrate a coup d’etat.” 

Washed up, repetitive and past their sell-by date, that’s the Russian Confederation. The world moves on, and they simply aren’t that effective a threat anymore. See ya around, Vlad.

And now I see that former Reagan administration Assistant Secretary of State Elliott Abrams is appointed our new special enjoy for Venezuela.  Excellent.

 

Venezuela: Socialism Fails Still Again

So, just how bad is Venezuela? Bad enough that the AP is gone. From John Hinderaker at PowerLine.

The time comes when a country has spiraled so far downhill that it is no longer safe for journalists to cover its demise. That time has arrived in Venezuela. Hannah Dreier, who has been the Associated Press’s reporter in Venezuela since 2014, writes that she is going home: “Departing AP reporter looks back at Venezuela’s slide.” While her article doesn’t say this, it sounds like she won’t be replaced.

I don’t know Ms. Dreier, and I assume you have to be left-leaning to work for the Associated Press. But Dreier’s reporting from Venezuela has been clear-eyed and at times harrowing–appropriately so for a country in the last stages of socialism.

Dreier’s farewell article begins with her apprehension by a pair of Maduro’s thugs:

The first thing the muscled-up men did was take my cellphone. They had stopped me on the street as I left an interview in the hometown of the late President Hugo Chavez and wrangled me into a black SUV.
***
“What should we do with her?” the driver asked. The man next to me pulled his own head up by the hair and made a slitting gesture across his throat.

Well, they didn’t which is a very good thing, the rest of her article is a retrospective of her time there, and it’s pretty good.

I came to Caracas as a correspondent for The Associated Press in 2014, just in time to witness the country’s accelerating descent into a humanitarian catastrophe.

Venezuela had been a rising nation, buoyed by the world’s largest oil reserves, but by the time I arrived, even high global oil prices couldn’t keep shortages and rapid inflation at bay.

Life in Caracas was still often marked by optimism and ambition. My friends were buying apartments and cars and making lofty plans for their careers. On weekends, we’d go to pristine Caribbean beaches and drink imported whiskey at nightclubs that stayed open until dawn. There was still so much affordable food that one of my first stories was about a growing obesity epidemic.

Over the course of three years, I said good-bye to most of those friends, as well as regular long-distance phone service and six international airline carriers. I got used to carrying bricks of rapidly devaluing cash in tote bags to pay for meals. We still drove to the beach, but began hurrying back early to get off the highway before bandits came out. Stoplights became purely ornamental because of the risk of carjackings.

There was no war or natural disaster. Just ruinous mismanagement that turned the collapse of prices for the country’s oil in 2015 into a national catastrophe.

No doubt there was mismanagement, it’s a given if humans are involved (even in the programming). But, really, that merely means that no one is capable of managing the economy, no matter how brilliant they are. It simply can not be done. The only thing that works is everyone acting in what they perceive as their own interest, however they perceive that. Dreier seems to vaguely recognize that.

As things got worse, the socialist administration leaned on anti-imperialist rhetoric. The day I was put into the black SUV in Chavez’s hometown of Barinas coincided with a government-stoked wave of anti-American sentiment. The Drug Enforcement Administration had just jailed the first lady’s nephews in New York on drug trafficking charges, and graffiti saying “Gringo, go home” went up around the country overnight. An image of then-President Barack Obama with Mickey Mouse ears appeared on the AP office building.

The government of President Nicolas Maduro blames the U.S. and right-wing business interests for the economic collapse, but most economists say it actually stems from government-imposed price and currency distortions.

There often seemed to be a direct line between economic policy and daily hardship. One week, the administration declared that eggs would now be sold for no more than 30 cents a carton. The next week, eggs had disappeared from supermarkets, and still have not come back.

The collapse has been so quick that the trappings of flusher times have not yet disappeared. The capital is still filled with fine restaurants, though tables are often empty. Luxury car dealerships still line the streets and lure people with access to dollars or who have gotten rich off corruption.

John wraps up with this:

Do I really need to link to this one more time? Socialists are the most greedy and corrupt people on Earth. Hugo Chavez’s daughter and his finance minister are both multi-billionaires, as we wrote here and elsewhere. Socialists are not more moral than the rest of us. On the contrary, they are greedier and more cynical.

Socialism is evil, and must be ostracized as such. Venezuela’s collapse is just the latest in a long series of stories that remind us that the only path to freedom and prosperity is free enterprise.

Yep, you know that, as I do, and as most of us do. So why do those such as Bernie Sanders, Jeremy Corbyn, and so many others keep pushing this nightmare. Could it be that in their corrupt souls they know they have nothing that would keep them in their desired station, so like the corrupt cronies in Caracas, they will attempt to steal it from those that earned it. Just like Lenin and Stalin. Just like Hitler and Mussolini. And just like Mao and Castro, and their hero Che Guevara. What was it Einstein said about doing the same thing over and over the same way and expecting a different result?

Do read the linked articles, there’s more there.

Any further questions? I thought not.

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