THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Volume X, Issue # 154, June 22, 2008
Dr. Almon Leroy Way, Jr., Editor
Government Committed to & Acting in Accord with Conservative Principles
Ensures a Nation's Strength, Progress, & Prosperity
VENEZUELA GOES TO THE DOGS
By Alan Caruba
THE CONSEQUENCES OF NATIONALIZATION OF VENEZUELA'S PETROLEUM INDUSTRY: ECONOMIC, POLITICAL, &
INTERNATIONAL REPERCUSSIONS -- DEVASTATION OF THE VENEZUELAN OIL INDUSTRY -- THE HIGHEST RATE OF
INFLATION AMONG LATIN AMERICAN COUNTRIES -- SUFFERING DOMESTIC BUSINESSES -- VIRTUALLY NO FOREIGN
INVESTMENT -- INCREASING POLITICAL INSTABILITY -- A GENERAL BREAKDOWN OF VENEZUELAN SOCIETY -- THE U.S.A.
WAITING FOR THE INEVITABLE OUSTER OF HUGO CHAVEZ, BUT CONCERNED ABOUT THE UNCERTAIN TRANSITION THAT
WILL FOLLOW HIS OUSTER
FULL STORY:
Coming just a week or so after U.S. Representative Maurice Hinchey (Democrat - New York) publicly said the U.S.
government should nationalize the nation’s oil refineries, echoing a similar earlier threat by Representative Maxine
Waters (Democrat - California) to nationalize the entire industry, it is instructive to see what has happened in Venezuela,
where a Communist wannabe dictator, Hugo Chavez, nationalized that nation’s oil industry.
One would think it was bad enough that Senator Barack Obama and the Democrats want to enact a windfall profits tax
on the U.S. oil industry, the same action that, in 1980, effectively has reduced exploration and production in the U.S.A. by
nearly sixty percent, but Venezuela’s takeover of its oil industry is a case history example of why so many of the world’s
national oil companies are badly managed and under-performing.
Venezuela has a long history of problems with its various governments dating back to the 1800s, when Simon Bolivar
fought for its independence from Spain. What followed “was characterized by coups, civil wars, and battle after battle,”
says Kyle D. Guerrero, an academic who has lived in both Venezuela and the United States.
The June, 2008, issue of Energy Tribune is devoted to Venezuela because, as its Editor Michael J. Economides
points out, it has the Western hemisphere’s largest oil reserves. Don’t bother looking for Newsweek or
Time to provide the real story because they are still telling Americans that global warming is real and “fossil
fuels” are bad, bad, bad.
Consider, instead, that, aside from its oil, Venezuela with a population of twenty-six million, most of whom reside in its
cities, could comfortably fit its 352,145 square miles into the State of Alaska’s 663,267 square miles. Despite the billions
President Chavez is spending on arms for its army of 120,000 soldiers, claiming that the U.S. intends to invade, the truth
is that the U.S.A. is wisely waiting for the inevitable ouster of this jackass.
Economides says that “Hugo Chavez is in free-fall” and warns that “the uncertain transition that will follow him bodes ill
for the stability of the country.” This is worrisome for the United States because, by 2006, our Venezuelan crude oil
imports amounted to about eleven percent of our needs. They represent 60 percent of Venezuela’s total exports. This
mutual dependency stands in vast contrast to the diplomatic relationship between our two nations.
“Chavez,” says Economides, “would be a comical character, were it not for the $100-plus oil prices which have papered
over his shortcomings and prolong the eventual day of reckoning.” It is astonishing to see the way he has devastated
the industry that permits him stay in power. In 2003, he fired more than 18,000 highly trained oil workers who went on
strike against him. This set in motion a huge brain-drain, as ten thousand of them have left the country. An estimated
two-thirds of the rest of the population wants to leave as well.
Proving once again that Communism is the worst possible political and economic system known to man, Chavez’s only
friends these days are people like Cuba’s Fidel Castro, and thugs like Iran’s Mamoud Amadinejad, Zimbabwe’s Robert
Mugabe, and the FARC guerillas in neighboring Colombia. The one thing they have in common is the way they have
destroyed their nation’s economies and spread misery among their captive citizens.
In 1992, Chavez led a military coup against the government of Carlos Andres Perez. In 1994, he was pardoned and, in
1998, he was elected President of Venezuela. If that sounds improbable, one has to consider the long history of coups
and other difficulties endemic to the governments and economies of South American nations. The Chavez platform was
one of “change” that would redistribute the wealth of the nation through a variety of “free” programs of medical care,
price controls, and other giveaways. It this sounds a lot like a certain Democratic Party candidate in the 2008 U.S.
presidential election, it is not a coincidence.
The result has been the highest rate of inflation in Latin America, 23 percent last year and still increasing. The
breakdown of society is reflected in the way Venezuela, in 1988, had 4,500 murders and, during the Chavez regime from
1999 to 2007, this increased to over 105,000. There is virtually no foreign investment in Venezuela, and domestic
businesses have suffered. Venezuela's health system reflects Chavez's “reforms,” as childbirth mortality rates rise and
cases of malaria have doubled.
Poverty is the only growth industry in Venezuela. Aside from oil, its position as a place for illegal drug transit keeps
the money flowing, but only for those in charge.
This is a nation that choose Communism at a time when the Soviet Union had already collapsed, a nation whose citizens
preferred a typical Latin American “strongman” over democratic reform, and who will suffer far more as the price of a
barrel of oil inevitably and eventually returns to a more realistic level.
The real question will be what kind of transition will follow the fall of Hugo Chavez and his followers, and the odds are
the answer will be very ugly.
LINKS TO RELATED TOPICS:
Latin America -- Economics, Politics, Political Regimes,
& Relations with the United States of America:
Problems & Opportunities for the U.S.A.
Political Economy -- Philosophies, Systems, & Public Policies:
Government, the Economy, & Economic Prosperity
War & Peace in the Real World
Page Two
Page One
Alan Caruba is a veteran business and science writer, a Public Relations Counselor, and Founder of the National Anxiety Center, a
clearinghouse for information about media-driven scare campaigns. Caruba writes a weekly commentary, "Warning Signs," posted
on the Internet website of the National Anxiety Center, which is located at
www.anxietycenter.com.
Caruba has a daily blog at http://factsnotfantasy.blogspot.com.
Caruba’s new book, Right Answers: Separating Fact from Fantasy, has been published by Merril Press.
© Alan Caruba 2008
Published with Permission of Alan Caruba
ACaruba@AOL.Com
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THE PROGRESSIVE CONSERVATIVE, USA
An Online Journal of Political Commentary & Analysis
Dr. Almon Leroy Way, Jr., Editor
Conservative & Free-Market Analysis of Government, Politics & Public Policy, Covering Political, Legal, Constitutional, Economic,
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Conservative Government Ensures a Nation's Strength, Progress, & Prosperity