Posts Tagged ‘Hugo Chavez’

Chavez is dead: now send on another clown

March 6, 2013

It is customary in the West to laud democracy – in the sense of one man one vote in a secret ballot – as the palliative for all ills. But custom does not necessarily embrace common-sense. And what passes for wisdom too often is arrant nonsense.

When a so-called democracy comprises a majority of voters who, as a consequence of low IQ and/or a lack of education, vote through ignorance, and on the basis of emotion rather than reason, then democracy is a disease. It is a morbid disease that will ravage the most initially healthy of organisms. Such was clearly the case in Argentina under Peron, of Chile under Allende, and of Germany under Adolf Hitler. It is a disease that does not spare skin pigmentation, be that white, brown, black, or yellow. In that sense, it is an equal opportunity disease.

Democracy in Venezuela has proved to be just such a morbid disease. A significantly illiterate, impoverished, ill-educated and low intelligence majority pumped itself up with emotion and voted into its presidency a populist caudillo who had been reared on the rhetoric of Karl Marx and Simon Bolivar. Sitting on the world’s largest reserves of black gold, Chavez was able to initiate and effect one of the greatest economic declines in history of the planet, throwing away the inherited wealth of his people on political objectives that were as grandiose as they were utterly ludicrous and misconceived.

Well, now that a merciful nature has stricken Chavez down, one might think that she provides a second chance for the people that he so badly mis-served. Unfortunately, in a country ravaged by the democratic disease, the people will replace Chavez with another caudillo, maybe less crazy in his designs, but ultimately no less destructive of the nation’s wealth. Given recent developments in alternative supplies of oil, the West will have little reason to do anything but shed crocodile tears for a population so little fitted for the ballot box, and so overwhelmed by the rhetoric of Marx and national socialism.

Send on the clowns! That is the circus to which the Venezuelan majority has become besotted.

Hugo Chavez and Venezuela ravaged by terminal disease

January 6, 2013

Hugo Chavez, having lied to his people about his state of health prior to his recent re-election, is now ravaged by the terminal stages of cancer. He will die within weeks, perhaps before his scheduled inauguration. Except for communist regimes propped up by subsidized Venezuelan oil supplies – most notably Cuba – the death of Chavez will be received with widespread rejoicing. Most especially among the unwashed masses of Venezuela, relief rather than mourning should be (though sadly it may not be) the predominant response. The better-educated and the better-off, no doubt by now, have fled the country, taking what they can of their accumulated wealth.

Hugo Chavez has deliberately and systematically destroyed the economy of his once prosperous country. Whoever succeeds the socialist caudillo who has ruled them over the past 13 years, will confront an economic catastrophe, much like the chaos that confronted General Augusto Pinochet in Chile when the Marxist president, Salvador Allende, committed suicide in the middle of a successful coup-d’etat.

To win re-election in 2012, Chavez spent wildly, way beyond any revenues that he could raise. The budget deficit runs at an unsustainable 20 per cent of gross domestic product. Devaluation, high inflation and shortages of staple foods will be inevitable consequences, whoever succeeds him. Like Juan Peron in Argentina, the disintegration of the Venezuelan economy into third world status will take generations to repair.

Whether Venezuala will ever return from autocratic populism to democracy is highly questionable. Surely Argentina has yet to do so forty years after the death of Juan Peron. For the Venezuelan people, the true catastrophe is that an ignorant majority stupidly voted him into office, and that his terminal cancer took 13 years to evolve.

Venezuela: where democracy threatens economic ruin

October 8, 2012

Ancient philosophers such as Plato and Aristotle did not view democracy as the best form of government. They much preferred government by the nobility, where self-interest would be less manifest. Most modern philosophers reject such notions out of hand. In the case of Venezuela, however, they may just wish to reconsider.

Venezuelan President, Hugo Chavez, has just won re-election to a six-year term by a majority of 54.4 per cent to 45.6 per cent of the vote. The comfortable victory gives Mr. Chavez a clear mandate to press ahead with his self-styled socialist revolution. If he survives his recent cancer scare, Mr. Chavez will have been in power for 20 years by the time he has to face another election. So democracy in Venezuela unequivocally supports socialism and, arguably, economic ruin.

Venezuela’s gross domestic product declined at a rate of 1.9 per cent in 2011 and continues on a downward trajectory. With a per capita income of only $11,829 this oil-rich country cannot easily deal with such economic decline. Yet, its institutions become increasingly adverse to economic growth as the socialist manifesto of Hugo Chavez falls increasingly into place.

In the 2012 Index of Economic Freedom, Venezuela ranked 174th with an overall score of 38.1 out of 100. This placed it among the bottom rung of worst performing African countries. With scores of 5.0 for property rights, 5.0 for investment freedom and 20.0 for freedom from corruption, one can understand why investment resources do not flood into such an unwelcoming economy.

Over the 14 years of his presidency, Hugo Chavez has brought sweeping changes to this South American nation of 29 million people.  He has centralized power by stacking the courts and many other institutions with his own supporters.  He has nationalized broad swathes of the economy from electricity to cement, and he has divided the nation with aggressive class warfare rhetoric.

Hugo Chavez has made social spending programs his signature policy, using high oil prices to spend billions of dollars providing free health care in the slums and free apartments for the poor and elderly.  By such devices, he has forged a winning vote coalition among the poor and the elderly.

In the long-run, this cannot be a recipe for economic success. Surely, however, it is a recipe for the success of Hugo Chavez for the remainder of his own life.

Hat Tip: David Luhnow and Jose de Cordoba, ‘Chavez Wins Election by Wide Margin’, The Wall Street Journal, October 8, 2012

Hugo Chavez: Harbinger of Failure for the United States Progressive Movement

January 31, 2010

In previous columns, I have raised concerns about the economic damage imposed by progressive politics on the once widely respected United States economy.  This column clearly identifies the predictable end-point of  such progressive politics in the nightmare form of the failed economy and brutal liberal fascism of Venezuela under the presidency of  Hugo Chavez.

Hugo Chavez was elected President of Venezuela in 1998 with a successful campaign that promised to help the country’s impoverished majority.  He was re-elected in 2000, and again in 2006.  In February 2009, he won a referendum to eliminate term limits on the presidency.  Although a controversial figure –  identified by the administration of George W. Bush, for example, as a threat to democracy in Latin America – Chavez is highly regarded within the international progressive movement.  In 2005 and 2006, he was named one of  the left-leaning Time magazine’s 100 most influential people.  As a man of limited education, he has been awarded honorary doctorates by universities in South Korea, the Dominican Republic, Brazil, Russia, and China.  In a list compiled by the left-leaning  magazine New Statesman Chavez was voted eleventh in the list of  “Heroes of our Time”.

So let us scrutinize the manner in which Chavez has earned his high standing within the progressive movement, the nature of the economy that he has transformed during a decade of populist arbitrary rule. The recently published Index of Economic Freedom for 2010 provides information directly relevant to this inquiry.

In 2010, Venezuela is ranked 174th out of 179 nations in terms of the index of economic freedom.  With an overall score of 37.1 on a scale of 100 (maximum economic  freedom) to 0 (minimum economic freedom) Venezuela is categorized as a repressed state.  Venezuela is ranked 28th out of 29 countries in the South and Central America/Caribbean region.  Its economic freedom score has deteriorated throughout Chavez’s rule, declining by 2.8 points during 2009.  Despite its oil wealth, Venezuela has a per capita income of only $12,804.

The authors of the Index characterize Venezuela as follows:

“Heading a government that has abandoned all but the trimmings of democracy, President Hugo  Chavez has positioned himself as the leader of Latin America’s anti-free market forces and sought allies in China and Russia, as well as Iran and other rogue states.  He has hobbled opponents, undermined speech and property rights, pursued a military buildup, and imposed foreign exchange controls….Venezuela has Latin America’s highest inflation rate.”

Most startling of all the specific freedom indices for Venezuela is the zero awarded to property rights protection. The authors note that the judiciary is completely controlled by the executive, that politically inconvenient contracts are abrogated, and that the legal system discriminates against or in favor of investors from certain foreign countries.  A close second in the dismal rankings is the  index of 5 allocated to investment freedom.  The authors note that investment laws and bureaucracy are non-transparent and burdensome, that the legal system is corrupt, and that government expropriation of key assets – in the cement, dairy, steel, and banking industries – is increasing. 

Other very low valuations are the scores of 19 for freedom from corruption, with Venezuela ranking 158th out of 179 countries in Transparency International‘s Corruption Perceptions Index, and of 20 for financial freedom, with Venezuela’s financial system subject to growing government control and nationalization.  Capital markets are small and subject to pervasive government interventions.

The Index of Economic Freedom does not focus attention on the erosion of civil liberties under the Chavez presidency.  Private radio and television outlets have been shut down and replaced with state networks.  Political opposition has been brutally suppressed, with protesters beaten by National Guard soldiers wielding metal chains. Rumors abound that the Venezuelan military is being placed under the control of Cuban officers  as the reign of terror advances. The recent resignation of the Venezuelan Defense Minister and Vice President, Ramon Carrizales is associated with this Cuban takeover.

Ironically, the immediate cause of fermenting protest in Venezuela is a sequence of rolling power blackouts instituted by the government in January 2010 in response to an electricity shortage.  Underlining this collapse is the fact that Hugo Chavez is running out of  foreign exchange because oil production is falling.  In 1998, the privately-owned oil companies pumped 3.3 million barrels a day. In 2010, the nationalized oil industry pumps only 2.4 million barrels a day – and that is an optimistic government estimate.  Venezuela is not running short of crude.  Having expelled or seized the assets of foreign companies capable of maintaining rhe country’s fields, and firing thousands of skilled employees of the state oil company PdVSA because he did not like their politics, Chavez is now reaping the economic rewards of  liberal fascism.

Be aware, my fellow Americans of the future that awaits the United States,  if progressive populism really takes hold and destroys the cherished economic freedoms that we currently still enjoy.


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