Venezuela - Updated Chronicles in Socialist Success Stories!

[arkirk]

I tend to agree that Socialist nations in the Western hemisphere do develop a paranoia.

They are under so many real attacks in so many ways from the CIA they tend to think any opposition is another US attack.

It makes it hard to govern.

The real question is why does the US attack and try to undermine any socialist experiment and prop up any third rate dictator it can?

Why is foreign policy nothing but protecting foreign investments?

The foreign businesses are bailing out in droves and are taking huge write-downs on their Venezuelan assets by marking them to 0 value. If you consider this protection, remind me to never hire you as a financial controller or an asset protection manager.

"Yes boss, we are marking the value of our investments down to zero. Aren't you glad you hired me to do nothing but protect our investments?"

Foreign...that's a good word for these "businesses. Trade is a funny animal. Sometimes it is pure exploitation. Your constant chirping about the evils of socialism is so damned predictable and also SO WRONG.

 

[Jayjay]

I think the socialist countries are about as much under threat from CIA as capitalist countries are from KGB or its successors. Which is to say, not so much.

CIA and America are just a convenient external enemies they can blame for their own shortcomings.

 

[untermensche]

I think the socialist countries are about as much under threat from CIA as capitalist countries are from KGB or its successors. Which is to say, not so much.

CIA and America are just a convenient external enemies they can blame for their own shortcomings.

The CIA runs a worldwide torture program and a drone assassination program.

Economic warfare is child's play.

 

[dismal]

The foreign businesses are bailing out in droves and are taking huge write-downs on their Venezuelan assets by marking them to 0 value. If you consider this protection, remind me to never hire you as a financial controller or an asset protection manager.

"Yes boss, we are marking the value of our investments down to zero. Aren't you glad you hired me to do nothing but protect our investments?"

I'm not in favor of all of the policies of the Venezuelan government.

But they arose in a state of war. A secret war, mainly economic, but it included an attempt to remove the elected leader with force.

Even Castro recognizes the need for foreign investment.

But Venezuela is about average for Southern Western economies. Capitalist dreamlands like Haiti, Honduras and Guatemala exist in the Southern Western hemisphere.

This is the capitalism we see in action in the SWH.

What policies of the Venezuelan government do you disagree with?

Why, for example, do you think they are having problems keeping goods in stores?

 

[maxparrish]

I think the socialist countries are about as much under threat from CIA as capitalist countries are from KGB or its successors. Which is to say, not so much.

CIA and America are just a convenient external enemies they can blame for their own shortcomings.

The CIA runs a worldwide torture program and a drone assassination program.

Economic warfare is child's play.

Even if the Obama administration were reborn anti-communist/socialist cold war liberal warriors (about as likely as the Sun being frozen over next Thursday), why should they bother? The regime is a Charlie Chaplin parody of dictatorial buffoonery, and crude pandering to the pea-brained mobs of poor. Pick up a copy of Animal Farm, downgrade the quality of the intellect of the ruling pigs, and you've got Venezuela (well, also add a salting of the satirical Idiocracy to get the full flavor).

This is a small country with THE WORLD'S LARGEST PROVEN RESERVES OF OIL. It should be rich.

The problem with socialism isn't that you eventually run out of other people's money. It's that you eventually run out of oil money.

Well, at least in Venezuela. It doesn't have an economy, so much as a poorly run oil exporting business that isn't enough to subsidize everything else. And that was true even when oil was more than $100 a barrel. So now that it's under $50 a barrel, Venezuela's government has gone from defaulting on its own people, as former minister Ricardo Hausmann put it, in the form of rampant inflation and shortages, to really doing so, to the point that it might have to start defaulting on its debt, too.

It shouldn't be this way. Venezuela, after all, has the largest oil reserves in the world. It should be rich. But it isn't, and it's getting even poorer now, because of economic mismanagement on a world-historical scale. The problem is simple: Venezuela's government thinks it can have an economy by just pretending it does. That it can print as much money as it wants without stoking inflation by just saying it won't. And that it can end shortages just by kicking people out of line. It's a triumph of magical thinking that's not much of one when it turns grocery-shopping into a days-long ordeal that may or may not actually turn up things like food or toilet paper.

Consider the facts:

- Chavez and Maduro has driven off foreign investment. The State oil company is so poorly run that production has dropped 25%. Oil exports have fallen by half because Cuba and China get a major cut (in return for Chinas 45 billion dollar loan). And domestic consumption is subsidized to 1.5 cents per gallon.

- Venezuela's government has an annual 14% GDP deficit. In US terms that would mean an annuals deficit of 2.4 trillion dollars. Inflation is 64% (or 179 percent depending on who is doing the measuring).

And:

It goes something like this. The Maduro regime wants to throttle the private sector but spend money like it hasn't. Then it wants to print what it needs, but keep prices the same like it hasn't. And finally, it wants to keep its stores stocked, but, going back to step one, keep the private sector in check like it hasn't. This is where its currency system comes in. The government, you see, has set up a three-tiered exchange rate to try to control everything — prices, profits, and production — in the economy. The idea, if you want to call it that, is that it can keep prices low by pretending its currency is really stronger than it is. And then it can decide who gets to make money, and how much, by doling out dollars to importers at this artificially low rate, provided they charge what the government says.

This might sound complicated, but it really isn't. Venezuela's government wants to wish away the inflation it's created, so it tells stores what prices they're allowed to sell at. These bureaucrat-approved prices, however, are too low to be profitable, which is why the government has to give companies subsidies to make them worthwhile. Now when these price controls work, the result is shortages, and when they don't, it's even worse ones. Think about it like this: Companies that don't get cheap dollars at the official exchange rate would lose money selling at the official prices, so they leave their stores empty. But the ones that are lucky, or connected, enough to get cheap dollars might prefer to sell them for a quick, and maybe bigger profit, in the black currency market than to use them for what they're supposed to. So, as I've put it before, it's not profitable for the unsubsidized companies to stock their shelves, and not profitable enough for the subsidized ones to do so, either.

And, remember, this was a problem even when Venezuela had dollars. Now it doesn't. Not when 95 percent of its exports come from oil, and its price has fallen by half. (It's actually a little worse than that, since Venezuela's crude is so heavy that it sells at a $5 a barrel discount to the rest of the world's). Without as many petrodollars, Venezuela has had to cut back on imports so much that its shortages, which had already hit 30 percent of all goods before the central bank stopped keeping track last year, have gone from being a fact of life to the fact of life. Things are so bad that there isn't a bank run — who wants to save their worthless currency? — but rather, as Jonathan Wheatley puts it, a supermarket run. People have lined up for days to try to buy whatever they can, which isn't much, from grocery stores that are even more empty than usual. The government has been forced to send the military in to these supermarkets to maintain some semblance of order, before it came up with an innovative new strategy for shortening the lines: kicking people out of them. Now they're rationing spots in line, based on the last digit of people's national ID cards.

Venezuela can't afford food, diapers, or bond payments. It's so bad that Citgo (government owned) is planning to take out a 2.5 billion dollar loan to give to the government. Why? Because Citgo has a higher credit rating than the 'junk bond' status of the government.

http://www.washingtonpost.com/blogs...but-its-government-has-destroyed-its-economy/

 

[untermensche]

I'm not in favor of all of the policies of the Venezuelan government.

But they arose in a state of war. A secret war, mainly economic, but it included an attempt to remove the elected leader with force.

Even Castro recognizes the need for foreign investment.

But Venezuela is about average for Southern Western economies. Capitalist dreamlands like Haiti, Honduras and Guatemala exist in the Southern Western hemisphere.

This is the capitalism we see in action in the SWH.

What policies of the Venezuelan government do you disagree with?

Why, for example, do you think they are having problems keeping goods in stores?

Acute problems like this can be tied to the sudden drop in the price of oil.

 

[Derec]

Acute problems like this can be tied to the sudden drop in the price of oil.

The oil prices are still more than twice as much as when Chavez took over.
No, gross mismanagement of the economy, especially price and currency controls, is to blame.

 

[Loren Pechtel]

I tend to agree that Socialist nations in the Western hemisphere do develop a paranoia.

They are under so many real attacks in so many ways from the CIA they tend to think any opposition is another US attack.

It makes it hard to govern.

The real question is why does the US attack and try to undermine any socialist experiment and prop up any third rate dictator it can?

Why is foreign policy nothing but protecting foreign investments?

Nobody's been attacked for being socialist.

Most socialist countries were in the Russian camp and thus we tried to undermine them--it wasn't their economics, it was their politics.

Since the collapse of the Soviet Union this hasn't been an issue. The socialists destroy their own economies perfectly well without any outside pressure.

 

[Derec]

The problem with socialism isn't that you eventually run out of other people's money. It's that you eventually run out of oil money.

Reminds me of the old Radio Yerevan joke:
Radio Yerevan was asked: "Would it be possible to bring Socialism to the Sahara?"
"Yes," replied Radio Yerevan, "But after the first five year plan, we'll have to import sand."

- Chavez and Maduro has driven off foreign investment.

Not hard to do if you confiscate equipment of foreign companies for having the temerity to demand payment for services rendered.

The State oil company is so poorly run that production has dropped 25%.

Oil fields require constant investment just to maintain production. If investment is lacking because too much of the revenue is diverted to social programs. This is no more surprising than a cow producing less milk if you don't feed it enough.

Oil exports have fallen by half because Cuba and China get a major cut (in return for Chinas 45 billion dollar loan). And domestic consumption is subsidized to 1.5 cents per gallon.

Even low income Americans were beneficiaries of Chavez' largesse for a while. Never mind that they'd be rather well off by Venezuelan standards. Domestic gas price is a joke though. It just invites waste and smuggling.

 

[Loren Pechtel]

What policies of the Venezuelan government do you disagree with?

Why, for example, do you think they are having problems keeping goods in stores?

Acute problems like this can be tied to the sudden drop in the price of oil.

Except the problems started long before oil priced dropped.

 

[Derec]

Except the problems started long before oil priced dropped.

They did make it worse though.
The high oil prices for most of Chavez' reign did help mask the fundamental problems of the "Bolivarian Revolution".

 

[arkirk]

Except the problems started long before oil priced dropped.

They did make it worse though.
The high oil prices for most of Chavez' reign did help mask the fundamental problems of the "Bolivarian Revolution".

The "problem with the Bolivarian Revolution" is that its motives and goals are perhaps impossible for YOU TO UNDERSTAND. It is not fair to compare the "success" of a still up and running empire with the early history of a small freshly liberated ex colony still under attack by the empire. If you measure the progress of the Bolivarian Revolution against it's starting point, it has done remarkably well for a small country that doesn't attack and dominate other countries. They still do suffer from our activities and I felt they have made the mistake of relying too heavily on their oil production. I guess they share that with Exxon and Shell and Chevron.

Your talking points are tiring to see here over and over again...attacking the same people over and over again...and accusing them of what you treat as cardinal sins...when most of their mistakes are honest ones. You will never see anything like that from Bush or Goldman Sachs.

 

[Derec]

The "problem with the Bolivarian Revolution" is that its motives and goals are perhaps impossible for YOU TO UNDERSTAND.

The success of a government is not predicated on their "motives" and "goals" but on their results. I actually can understand some of their goals, like improving healthcare, housing and education of their poor citizens. However, that should have been done without demonizing the private sector (a "motive" of the Chavistas that I certainly cannot understand), scaring off foreign investment by expropriating foreign companies' property,

It is not fair to compare the "success" of a still up and running empire with the early history of a small freshly liberated ex colony still under attack by the empire.

Yeah, I heard Joe Biden is personally involved in a plot against the bus driver.
He also had to sleep in Nicaragua because he feared he'd be assassinated (by Joe Biden with a blow gun perhaps?) if he stayed on the hotel floor reserved for him in Costa Rica.
Venezuela is rapidly becoming a bad joke.

If you measure the progress of the Bolivarian Revolution against it's starting point, it has done remarkably well for a small country that doesn't attack and dominate other countries.

On December 7th, 1998, a day after the fateful Chavez election WTI oil price was at $11.61. Venezuelan oil is heavy and sells at a discount compared to this relatively light index. The oil price was very low for more the entire decade preceding this election causing much hardship for Venezuelan economy. Chavez had the good fortune that there was a rapid, more than 10-fold increase in oil prices in the decade following his election. But instead of using this increased revenue to diversify the economy and strengthen the private sector Chavez did the opposite. And for a long while high oil prices could largely mask the mess he (and now his mustachioed Mini Me) was creating. But no more, even though oil prices are now at ~$50 and thus much higher than they were when Chavez took over. Chavez' predecessor Rafael Rodriguez would likely have given up his left nut for oil prices in this range, even adjusted for inflation ($50 today is about $34 in 1998 which is still three times as much as the actual WTI price mentioned above).

They still do suffer from our activities and I felt they have made the mistake of relying too heavily on their oil production. I guess they share that with Exxon and Shell and Chevron.

Are you really comparing an oil company with the national economy of a country of 30 million? It's not a mistake for Apple to rely heavily on consumer electronics. If California were to do it though, it would be.

But yes, Venezuela is overly reliant on oil. But it is the bolivarian regime that is to blame for it.

Your talking points are tiring to see here over and over again...attacking the same people over and over again...and accusing them of what you treat as cardinal sins...when most of their mistakes are honest ones. You will never see anything like that from Bush or Goldman Sachs.

Nothing honest about the ideological and asinine policies of the Boligarchs.
Or do you think sending your secret police to arrest shop owners for the crime of their stores having lines is honest?
Pharmacies in Venezuela Are Accused of ‘Sabotage’

 

[dismal]

Acute problems like this can be tied to the sudden drop in the price of oil.

Except the problems started long before oil priced dropped.

Yes, they did.

One of the weirdest things about Venezuela not being a socialist country is the lengths some socialists go to defend it.

 

[untermensche]

Except the problems started long before oil priced dropped.

Yes, they did.

One of the weirdest things about Venezuela not being a socialist country is the lengths some socialists go to defend it.

What is weirder is how capitalists try to deny that places like Haiti and Honduras and Guatemala are capitalist.

Where would you rather live?

Socialist Venezuela or capitalist Haiti?

 

[dismal]

Yes, they did.

One of the weirdest things about Venezuela not being a socialist country is the lengths some socialists go to defend it.

What is weirder is how capitalists try to deny that places like Haiti and Honduras and Guatemala are capitalist.

Where would you rather live?

Socialist Venezuela or capitalist Haiti?

I thought you said Venezuela was capitalist?

 

[untermensche]

What is weirder is how capitalists try to deny that places like Haiti and Honduras and Guatemala are capitalist.

Where would you rather live?

Socialist Venezuela or capitalist Haiti?

I thought you said Venezuela was capitalist?

I thought you said it wasn't?

I'm an Anarchist, not a Socialist, so my dog isn't in this fight, but when we look at capitalism and then look at places that are definitely capitalist, like Haiti, and Honduras and Guatemala we can clearly see that capitalism is not something that magically creates success.

 

[dismal]

I thought you said Venezuela was capitalist?

I thought you said it wasn't?

I'm an Anarchist, not a Socialist, so my dog isn't in this fight, but when we look at capitalism and then look at places that are definitely capitalist, like Haiti, and Honduras and Guatemala we can clearly see that capitalism is not something that magically creates success.

I thought I said that Venezuela's specific policies will crush an economy regardless of what you call Venezuela.

And I would think an Anarchist would object to the sorts of heavyhanded government interventions into the economy we are talking about here.

 

[untermensche]

I thought you said it wasn't?

I'm an Anarchist, not a Socialist, so my dog isn't in this fight, but when we look at capitalism and then look at places that are definitely capitalist, like Haiti, and Honduras and Guatemala we can clearly see that capitalism is not something that magically creates success.

I thought I said that Venezuela's specific policies will crush an economy regardless of what you call Venezuela.

And I would think an Anarchist would object to the sorts of heavyhanded government interventions into the economy we are talking about here.

That is why I said there are things the government is doing that I don't agree with.

But that doesn't mean I know for certain they won't work.

There are countless adjustments that must be made to the US economy to keep it afloat and running.

These adjustments were learned through trial and error which included huge crashes and many smaller crashes.

What the Venezuelan's are trying to do is keep a command economy afloat. They will not learn how to do that in a year or even in a decade.

BUT they might learn it better if the economy was not under constant attack from within and without.

But that ultimately is what must be prevented.

All people must be prevented from learning another way to do things.

They must bend to the US will or die trying to learn how to do things differently.

 

[ksen]

I'm not in favor of all of the policies of the Venezuelan government.

But they arose in a state of war. A secret war, mainly economic, but it included an attempt to remove the elected leader with force.

Even Castro recognizes the need for foreign investment.

But Venezuela is about average for Southern Western economies. Capitalist dreamlands like Haiti, Honduras and Guatemala exist in the Southern Western hemisphere.

This is the capitalism we see in action in the SWH.

Is there any economy you don't consider capitalist?

If you consider this capitalist, then the term is meaningless:

Of particular concern is the poor regard for rule of law. Corruption is rampant, and the judicial system is ineffective and inefficient. Smuggling remains a huge problem and is exacerbated by poor trade freedom. Entrepreneurs find Haiti one of the world’s most difficult places to do business, as the regulatory environment for both business and labor is outdated and inefficient.

In 2013, Transparency International’s Corruption Perceptions Index ranked Haiti as the most corrupt country in the Western Hemisphere. Haiti is a major narco-trafficking transshipment point. The dysfunctional judicial system is underfunded, inefficient, corrupt, and burdened by a large backlog of cases, outdated legal codes, and poor facilities. There is no comprehensive civil registry. Clear property titles are virtually nonexistent.

http://www.heritage.org/index/country/haiti

Sounds like Haiti is a libertarian paradise.