Featured Post

Towards a Pro-America, Pro-West Foreign Policy

For years, I have written in this humble blog that Obama and his team have created an unprecedented foreign policy disaster. The disaster be...

Thursday, November 21, 2013

Venezuela: Bozo as Al Capone, or is it Vice-Versa? [[UPDATE]]

One of the world's biggest clowns-cum-thugs/thugs-cum-clowns is Venezuela's President Nicolás Maduro. He has filled that high office since he took over for the dead Hugo Chavez in March 2013, and "won" election on his "own merits" (Cough!) the following month.

In a world full of political clowns and thugs, Maduro belongs to a select club that admits only those adept at both professions. Other recent members of the club, in no particular order, have been Noriega of Panama, Ceausescu of Romania, the Kim family of despots of the DPRK, Burnham of Guyana, Amin of Uganda, Mugabe of Zimbabwe, Mobutu of Zaire, Zelaya of Honduras, Gairy of Grenada, Bokassa of the Central African Republic/Empire, and perhaps a tiny handful of others. Maduro has that je ne sais quoi quality that ensures his entry into the ranks of the clown-thugs. Bozo with a truncheon. Capone with big floppy shoes. You get the idea.

I met Maduro twice: once in Washington DC, and once in Lima, Peru. Both times at events of the OAS (Organization of American States). He was then Venezuela's Foreign Minister. I found the former bus driver to be a big  (6'3" - 6' 4") charmless, rude, crude, loud-mouthed slob, who resorted to insults and yelling to try to make his silly points. The Ralph Kramden of the diplomat set. I doubted then, and do so today, that he ever read a book, at least not one that did not require the accompaniment of a crayon. His "E-ticket" to the stratosphere of Venezuelan politics was a slavish and very public slobbering devotion to Hugo Chavez. He is Frank Nitti in a bad suit. Even after the death of his mentor Chavez, he must constantly refer to the late comandante and try to hitch himself ever more closely to the dead man's coat-tails--often in some truly bizarre ways.

Venezuela, one of the world's biggest oil producers and exporters, is in an economically and socially disastrous state. Margaret Thatcher once famously said that socialists eventually run out of other people's money. Venezuela has not yet run out of money, but due to horrid mismanagement, corruption of the highest order, and constant political interference in the workings of the marketplace it might as well have run out. The money, still pouring in although not at the same rate as in the past (we will discuss this below), should prove more than enough to ensure a good future for Venezuela and its people. Instead, it is used to crush liberty and democracy, buy or, better said, rent influence overseas, enrich an inner cabal, and run short-term cons to keep the restive underclass expecting more and more hand-outs. Lots of "free" stuff for regime supporters. Confiscations, jail, exile, and public abuse for opponents.

In an excellent article, Steve Hanke from CATO tells us, that since Chavez's death, Venezuela's currency, the bolivar, "has lost 62.36% of its value on the black market." Venezuela's official inflation rate now exceeds 54% while, "The implied annual inflation rate in Venezuela is actually now in the triple digits, coming in at a whopping 283%." That puts Venezuela in some very bad historical company as the country nears a hyperinflationary rate. Maduro and his backers have decided to make the situation even worse by continuing and even "doubling down" on the policies that got the country into this mess.

Some (pre-fracking) estimates have put Venezuelan oil reserves as the world's largest. Due, however, to corruption, nepotism, and mismanagement, all of which have stifled investment and driven out high quality technicians, Venezuela's nationalized oil production has gone into a slump. The Venezuelan regime, naturally, has resorted to what leftist governments do all over the world when the economic data does not correspond to their fantasy world. Reminiscent of the fake jobs data put out by the Obama misadministration just prior to the 2012 elections, the Venezuelan government lies, overstating oil production by over 420,000 barrels/day. The money from oil sales goes into unaccountable funds, and gets used for a variety of things many of which have nothing to do with reinvestment, and, as noted above, have everything to do with enriching the inner cabal and promoting lunatic economic schemes to keep that cabal in power.

Venezuela faces critical shortages of even basic consumer goods, such as toilet paper. Its retail sector is adopting the look I saw long ago in Guyana as a result of similar economic policies: stores look like they sell shelves. For political reasons, the government insists on maintaining an artificially low bolviar-dollar exchange rate of about 6.2 bolivars to the US dollar. The black market rate, in other words, the real exchange rate, is easily ten times that. The government strictly controls who can buy dollars at the cheap rate, forcing most businesses onto the black market. Combine that with government price controls, out of control government spending, and the fact that Venezuela depends on imported consumer and other manufactured goods, and, well, you don't need a PhD in economics to see what will result: shortages and inflation. Even big multinationals have had to suspend operations in Venezuela because they cannot get dollars to buy critical components.

The response of Maduro to the mess he inherited from Chavez and to the declining economic fortunes of Venezuela? More of the same but on steroids. Municipal elections next month pose a problem for the regime. Although elections in Venezuela are far from free and open, they still do have some ability to show dissatisfaction. The uncharismatic Maduro, himself, almost certainly lost the April elections, but managed to jigger the results just enough to eke out a win. Maduro simply does not have the pull that his predecessor had, and does not inspire the same sort of fanatical loyalty. He needs to show the Chavez base that he can deliver the goods--literally. He, therefore, has taken Chavez's war against free enterprise, liberty and democracy to another level. As you can read here, he has begun ordering troops into popular electronic stores and forcing the owners, often opponents of the regime, to sell their imported goods at cut-rate prices, in other words, at the prices the goods would have if the merchants could buy dollars at the official rate. Maduro has gotten the Chavista dominated legislature to give him economic dictatorial powers. He will govern for the next year by decree,
Maduro, 50, who is staking his rule on preserving Chavez's leftist legacy, says he has already planned the first two laws he will decree - maybe as soon as Wednesday. 
One is intended to limit businesses' profit margins to 15 percent to 30 percent as part of an "economic offensive" against price-gouging. Another would create a new state body to oversee dollar sales by Venezuela's currency control board. 
Diosdado Cabello, the head of the National Assembly and a staunch supporter of the president, said lawmakers had fulfilled an order by the late Chavez when they backed the legislation. 
"He told us to pass all the laws necessary to wring the necks of the speculators and money launderers," Cabello said.
Maduro will decide what can be sold, by whom, and at what price. Again, no PhD or Nobel prize is needed to see how this will end. Businesses will close, shortages will increase, prices will go up, and the people's dependency on the government will grow.

In short, Chavez ran Venezuela with the "long-con." Maduro does not have the skills for that, and came to power as the long-con was coming to an end. He has to go for the "Winner! Winner! Chicken dinner!" short-con approach. Constantly pulling rabbits out of his hat. Accuse the capitalists! Accuse the gringos! Accuse the political opposition! The end result, of course, is the destruction of liberty and the growing chaos, lawlessness, and violence we see in Venezuela.

The left has its way.

UPDATE: I got the text below from a friend who is an expert on and long-time observer of Venezuela. Thought you all might find it interesting to see his reaction to my piece and his perspective.
You are quite right that Maduro doesn't have Chavez's charisma -- and for the Venezuelan poor Chavez really did have charisma. My own observation of Maduro has led me to conclude that -- as with Chavez - the over-the-top posturing is to some extent theatrical and directed mostly at his domestic audience. 
But I think the Bolivarian antipathy toward the U.S. is real --as well as rhetorical. I also think there is an element of real desperation in Maduro's recent speeches. He may not be as gifted a leader but he is smart enough to see that the economy is spinning out of control. On some level I think he and the Chavista holdovers in his cabinet know they are not going to be able to evade responsibility for eviscerating the productive sector forever unless/unless they can somehow plausibly attach blame to sinister forces of the "right" (both foreign and domestic). 
The economy is a mess and a mess to an extent most folks can't quite grasp. The Maduro government, however, as you suggest, seems intent on doubling down on the same policies they have followed over the last few years. If oil dips, things could deteriorate further quickly. If it doesn't, of course, they could play this out for a long time.  

56 comments:

  1. You do realize that Frank Nitti was a clever and intelligent man according to many biographies that I have read. Maduro is not fit to lick Frank Nitti's shoelaces. I read your posts with great interest, but I feel you are incorrect with your analogy here.

    ReplyDelete
    Replies
    1. Ha! You might well be right. I was thinking of Nitti as the enforcer.

      Delete
  2. Today, I got to tell a class of high schoolers that Fleabag Castro and Cheese (shot full of holes) Guevara actually wanted the USA and Soviet Union to get into a nuclear war, hopefully with NY and Washington (both full of people who idolize those scumbags) blown to radioactive smithereens. I ended with, "think about that before you buy a Che Guevara handbag or shirt."

    ReplyDelete
    Replies
    1. Check out "Exposing the Real Che Guevara: And the Useful Idiots Who Idolize Him" by Humberto Fontava. I read it in college and would love to tell the idiot hippies that wore Che shirts, just how much of a psychopathic murderer their hero really was. One particular part I remember was that he loved to have the family members of, "dissidents" watch their loved ones be executed. That is the definition of a man of the people. I would feel bad for the idiots if it weren't for the fact that they are destroying our country.

      -Nick

      Delete
  3. Hmm, some of your post sounds like 2013 America, especially Harry Reid pulling the trigger on the Senate's "nuclear option". And zeroBama having the IRS shut down political opponents and a few other things. The Left has its way by any means necessary.

    ReplyDelete
  4. Maduro may need a bevy of Hollywood types to help him as well.

    ReplyDelete
  5. I am always slow on the uptake, but this just baffles me every time I see this. Why do it? Why turn your country into a toilet? Short term gain, but at a horrible cost for the rest of the people.

    ReplyDelete
    Replies
    1. A megalomaniac personality with a touch of narcissism in need of self enrichment is often typical of this type of person.

      Delete
    2. Thus beyond my ken. Thank you for responding to this newbe

      Delete
    3. Welcome, newbie. (Corrected from item below.)

      Delete
    4. Thanks for the welcome. I've been lurking a while and find myself learning a great deal from both our host and the commenters.

      Delete
  6. I bet Maduro wears red underwear.

    ReplyDelete
  7. Well, not hard to imagine where that country's headed. I wonder if there is a large percentage of private fire arms and if the Government has completely corrupted the military. Not hard to see civil war, the question is "how big and how long".

    ReplyDelete
  8. It's nice to read someone who has actually been there and met the monster personally.

    You probably felt you had to shower afterward ... twice.

    ReplyDelete
  9. The idiocy runs deeper than Maduro - Cabello, Jaua, and of course Chavez' radical Marxist "economist" Giordani. The list is long and (un)distinguished. This weekend should be interesting as Henrique Capriles has called for protests on Saturday. The PSUV has mass-produced propaganda posters in the lead up to the elections calling Capriles and two other opposition leaders the "Trilogy of Evil" - like something out of a bad 80s movie. Speculation in the Venezuelan press is that Maduro may use his new legislative powers to arrest Capriles on charges of economic sabotage. All while investigating businesses for "usury". (You can't make this stuff up) My guess is we will see a military coup, a temporary junta and possibly a new round of elections by June 2014. Unfortunately for Venezuela, it took 15 years to destroy their economy and it will likely take twice as long to recover from Chavismo.

    ReplyDelete
  10. With Maduro answering to and financially propping up Cuba, Honduras about to elect Zelaya's wife, Bachelet returning with a hard-left in Chile, and Santos - currently playing kissy-face with the FARC - likely to be re-elected in Colombia, is it time to despair?

    (And let's not forget that Kerry's declared the Monroe Doctrine officially dead as Iran continues to aggressively recruit in Latin America, while working with some countries to bypass UN sanctions.)

    ReplyDelete
    Replies
    1. The USA is now basically irrelevant to events in Latin America. Another triumph of the Obama foreign policy team.

      Delete
    2. "This must be some of that smart diplomacy we were promised." // Glenn Reynolds

      Delete
  11. Well
    This says it all.
    Doesn't it?

    http://www.youtube.com/watch?v=QPlMmwOq7U8

    leaperman

    ReplyDelete
  12. I remember that song well and even had a little bit of need for at least one of the three requests. Looks to me like Latin America may be sinking into some of what I remember back then. Honduras was a good hiding place but Costa Rica was better.

    It seems we have a full blown Bolivarian in the White House. He is gaining company in the Western Hemisphere.

    ReplyDelete
  13. Are human beings just idiots?
    MM

    ReplyDelete
  14. Call me a cynic but your description of Maduro could equally fit almost all our (and your) politicians too, no?

    My very limited (thankfully) contact with our 'great and the good' regularly left me with an urge to shower and disinfect. About the only difference between them and Maduro was that they spoke with Oxbridge accents and knew which cutlery to use. Con-men and (ideologically driven, self-interest fixated and foresight challenged) gangsters the lot of them.

    As to voting for such thugs? Didn't some once say that the IQ of a group of people is equal to the square root of the number in the group? I'd say that when groups of people vote a more accurate assessment is that their IQ seems to drop closer to the median of the groups shoe size.

    My (wishful thinking) investment tip of the week? Go heavy on the Venezuelan piano wire. If only!

    ReplyDelete
    Replies
    1. So then the effective IQ in the limit rises as the square root of the group size, or in the limit is a constant?

      The word for someone who thinks either is plausible is not "cynic."

      Delete
    2. Sorry. Dyspeptic me. I suppose it is plausible that in the limit, the effective IQ is independent of group size.

      Delete
  15. It seems to me that these strong-man, socialist governments are able to hang on for a very long time. Look at your list of names above: Mugabe, the Kims, Castro, ... I have no faith that an oppressed, beaten, ex-middle class has the ability to throw off the shackles of a socialist autocracy backed up by the poor classes (beneficiaries of wealth redistribution) very quickly. Ie, these hell-holes seem to exist for decades before they eventually fall. I fear the same for us.
    Mark in Portland

    ReplyDelete
    Replies
    1. I agree with you. Rarely do regimes implode dramatically. There is a very long descent into socialist hell.

      Delete
    2. My ear-drums are already popping.

      Delete
    3. Adam Smith wrote that there was " a lot of ruin in a country".

      Delete
    4. That was because Britain was just losing America. Whereas we are losing something much more important: America.

      Delete
  16. "One of the world's biggest clowns-cum-thugs/thugs-cum-clowns is Venezuela's President Nicolás Maduro."

    He is but a poor imitation of Barack Hussein Obama.

    ReplyDelete
  17. Re your update. I have used the term "Bolivarian" more than once to describe some of Obama's actions. He has used the financial collapse of 2008 to depress the middle class into lower class standards of living. He has launched attacks on bankers, manufacturing sectors, imaginary racists, energy execs and all political opponents. He has held himself out as the only thing standing between the mob and any opponents future prosperity. Threatening and intimidating the business and financial sector is his stock in trade. These groups, for now, are afraid of him.

    While doing this, he enjoys strong support from the poor, the under educated and oddly enough, from well off elites. His political party has just trashed the Constitution and grabbed more power in the Senate. The man is a traitor to his oath of office. Except for geography, how is Obama's m/o much different from any of the wretches mentioned in this column?

    ReplyDelete
    Replies
    1. I think the elites support him because they do not fear economic damage. They feel immune and the Socialist policies make them feel good about themselves. Potemkin works with the over credentialed elites. The Obamacare fiasco might be enough to shake their faith.

      Delete
  18. From an island [Continent and Nation] far far away I have always looked at Central and South American countries as something belonging to a Graham Greene novel or a B grade movie. Lots of machismo and precious little else. Certainly no history of any acknowledgement of true democracy.

    Chavez and now Manduro would be characters out of one of those movies and figures of some irreverence. However they are not on our doorstep and never will be unlike the US that sits so close to them.

    Militarily they cannot be a threat but it is in the damage they can do to stability in your region that must be of concern to the US in providing spring boards to people and ideologies that can do harm to you.

    Whitewall makes an excellent comparison between your current President and Chavez and Manduro. In my lifetime he is the one US President an allied nation would have cause to be concerned about in anything he says he commits to. If in doubt ask an Israeli.

    Many people watch closely how the US deals with these tin pot despots and will judge the reliability of any US Government commitment on what they see.

    ReplyDelete
    Replies
    1. Good morning David. Well I see the damnable Barack Obama and his cadaverous imp John Kerry have bent over and reached a sell out deal of Israel and the entire Gulf region. I have said before, Obama is a threat to America's national security. He and his fellow Leninists are managing to exact every twisted nightmarish acid induced dream the Leftist faculty lounge ever managed to conjure up. It's almost as if Obama and his junta know the sweep of history is upon them and their future is bleak, so do all the damage possible and go out in a blaze "glory".

      Delete
    2. I don't think Obama is a Leninist. I think he is a Lennonist.

      Delete
    3. G'day Whitewall and Alpha,

      Very clever Ww.

      However Lennon was a hypocritical wanker who advocated that others give up what he wanted for himself and his dreams were chemically induced. Maybe he and your President would have got along well.

      I suppose I am now on the list of "undesirables" for your current homeland security mob but then I won't be back to the US until the adults are back in charge so when that happens I'll be a "friendly".

      On a happy note and nothing to do with the topic the Australian very low level delegation to the current Climate Scam Conference in Poland has upset the luvvies by wearing T-shirts to functions and not subscribing to the "Rich nations should give lots of money to poor nations". In fact our new Prime Minister is on record as having called Man Made Climate Change "crap" and has started dismantling the public trough the parasites were supping at. Life can be good.

      Chin up mates - your day will come and sanity will return to great country.

      Delete
    4. Oops. That should have read "sanity will return to a great country".

      Delete
    5. David, "wanker" does fit Lennon. That word has always struck me funny. It's a shame we don't use it here in the states. He had to be under chemical influence to take up with that hag Yoko. Your new PM has an excellent command of the language. I'll bet pols in some quarters are wetting themselves by now. We hope to imitate you fairly soon.

      Delete
    6. Chavez and now Manduro would be characters out of one of those movies and figures of some irreverence. However they are not on our doorstep and never will be unlike the US that sits so close to them.

      Actually, Latin America has been more successful in the last 30 odd years at building an orderly political life than it ever was before. What looks to be happening now is the sort of long term decay experienced after 1955 in those Latin American countries which had had some time under constitutional administrations (Argentina, Chile, and Uruguay at that time).

      Delete
  19. Iran: "We're not building nukes."
    Clinton: "You're lying."
    Iran: "We're not building nukes."
    Bush: "You're lying and here's smoking-gun evidence showing that you're lying."
    Iran: "*gulp*"
    Iran: "We're not building nukes."
    Obama: "Sounds good to me."

    - reader #1482

    ReplyDelete
    Replies
    1. Can't wait to see Dips column on this little escapade.
      It will be interesting to compare this deal with the one Clinton did with NorK (and we know how that ended up).

      Delete
  20. Can we create an award for all-star thuggery/clownery? Perhaps call it the Antonio Lopez de Santa Anna Award?

    ReplyDelete
  21. Maduro does not have the skills for that, and came to power as the long-con was coming to an end. He has to go for the "Winner! Winner! Chicken dinner!" short-con approach.

    I got a nice agreeable laugh out of that.

    ---

    Noriega of Panama, Ceausescu of Romania, the Kim family of despots of the DPRK, Burnham of Guyana, Amin of Uganda, Mugabe of Zimbabwe, Mobutu of Zaire, Zelaya of Honduras, Gairy of Grenada, Bokassa of the Central African Republic/Empire, and perhaps a tiny handful of others.

    The analogy to Noriega, Burnham, Zelaya, and Gairy I think I understand. The rest seem too cruel and sanguinary for a match.

    ReplyDelete
  22. I think it was 15 years ago that Mark Falcoff said that Venezuelans from all strata of society had misconstrued the sources of affluence, thinking it was to be found in natural resource endowments and not in the assiduous development of human capital. Ordinary Venezuelans interpreted the country's economic problems as someone thieving from them (an impression aided by brobdingnagian corruption). He said that time that Venezuelans were just going to have to learn the hard way what was what.

    ReplyDelete