Dazzling Knowledge

Tuesday, June 03, 2008

The Road to Hell Is Paved with Nationalized Cement

Would anyone who still thinks socialism is a good idea please pay attention to what's happening in Venezuela right now? Hugo Chavez is doing everything in his (expanding) power to run that country into the ground, and is on course to accomplish this feat in record time.

Choosing to remain shockingly ignorant about what causes inflation, Chavez decided to address the nation's recent 29% surge in consumer prices by raising the average public worker's wage by thirty percent. Ho ho! How clever, SeƱor Presidente! Why didn't anyone think of this sooner? When the water rises, you just throw out more ice for the people to float on. Never mind if it melts later, there's plenty more ice where that came from (i.e., windfall taxes).

Why the sudden boost in bread for the masses? Perhaps it has something to do with Chavez and his Socialist colleagues seeking more power in November's elections. Remember that just last year, the majority of voters said "no" to Chavez's attempt to remove a constitutional limit on his terms as president. Further electoral setbacks could diminish his support among the governors of Venezuela's 23 states.

Chavez's economic policies, such as they are, have ruined what once was a period of economic growth spurred by foreign oil investment in Venezuela. The oil-rich nation's government has alienated those same investors by nationalizing oil fields and placing progressive windfall taxes on oil based upon its current revenue (e.g., 60% at $110 or more per barrel).

Any company who complains, as Exxon-Mobil has in a $12 billion lawsuit, is immediately labeled a "corporate terrorist." Rather than deal with such headaches, investors are taking their money elsewhere, and Venezuela's GDP is expected to be just over half of what it was only two years ago.

The latest outrage from Venezuela's dictator is positively Bushian in its sheer moxie: A new law proposed by Chavez that would imprison those refusing to cooperate with state intelligence agencies and secret police, as well as warrant-less wiretapping and the ability to detain anyone under suspicion without proper legal representation. Sound familiar, civil libertarians?

Chavez in pre-election cash spree [BBC News]
Venezuela 'spy' law draws protest [BBC News]
(Chavez supporter photo via AP; Exxon flyer photo via AFP)

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