Venezuela continues its freefall:
The courts? Closed most days. The bureau to start a business? Same thing. The public defender’s office? That’s been converted into a food bank for government employees.
Step by step, Venezuela has been shutting down…
Many people cannot make international calls from their phones because of a dispute between the government and phone companies over currency regulations and rates.
Coca-Cola Femsa, the Mexican company that bottles Coke in the country, has even said it was halting production of sugary soft drinks because it was running out of sugar.
Last week, protests turned violent in parts of the country where demonstrators demanded empty supermarkets be resupplied. And on Friday, the government said it would continue its truncated workweek for an additional 15 days.
It puts me in mind of Adam Smith’s famous saying:
Adam Smith once wrote that there’s a “great deal of ruin in a nation,” by which he meant that it takes an awful lot of bungling by political leaders to bring down a powerful and prosperous state.
But where there’s a will, there’s a way, and Venezuela’s government has been on this course of ruin ever since the presidency of Hugo Chavez and in some ways even earlier (part of the reason is the strong dependence of Venezuela’s economy on oil). The socialist Chavez was very intrumental in the country’s economic decline:
The other paradoxical””and bad””legacy of Hugo Ché¡vez is an economy in shambles. It is paradoxical because his term in office coincided with a boom in commodity prices and the presence of an international financial system flush with cash and willing to lend to countries like Venezuela. In addition, the president was free to adopt any economic policy he chose without any domestic or international constraints or institutional limitations. Yet, at the time of his death, few other countries had the economic distortions that besieged Venezuela.
It has one of the world’s largest fiscal deficits, highest inflation rates, worst misalignment of the exchange rate, fastest-growing debt, and one of the most precipitous drops in productive capacity””including that of the critical oil sector. Moreover, during the Ché¡vez era the nation fell to the bottom of the rankings that measure international competitiveness, ease of doing business, or attractiveness to foreign investors, while rising to the top of the list of the world’s most corrupt countries. The latter is another paradox of a leader whose rise to power rested on the promise to stamp out corruption and crush the oligarchy. The Bolivarian bourgeoisie””the boliburgueses, as Venezuelans call the new oligarchy formed by close allies of the regime’s leaders, their families, and friends””have amassed enormous wealth through corrupt deals with the government. This, too, is part of the unfortunate legacy Ché¡vez has left.
That quote was written about three years ago, when Chavez died of cancer. Things have only gotten worse (obviously) under his successor Maduro.
I decided to start this post by linking to an article about Venezuela from the NY Times because I had a hunch that, when I had read the whole thing, I would find that the Times would downplay the role of Venezuela’s socialist past and of Chavez himself. And sure enough, it did—even more so than I had expected. In fact, the Times’ only mention of the word “socialist” was in this segment:
The growing economic crisis ”” fueled by low prices for oil, the country’s main export; a drought that has crippled Venezuela’s ability to generate hydroelectric power; and a long decline in manufacturing and agricultural production ”” has turned into an intensely political one for President Nicolé¡s Maduro. This month, he declared a state of emergency, his second this year, and ordered military exercises, citing foreign threats.
But the president looks increasingly encircled.
American officials say the multiplying crises have led Mr. Maduro to fall out of favor with members of his own socialist party, who they believe may turn on him, leading to chaos in the streets.
That was it for “socialist” or “socialism,” which is treated by the Times as a non-issue except for the stated fact that Maduro is a member of the socialist party. As for Chavez, his name does not appear in the article at all.
The following is the closest the article seems to come to blaming socialism for the country’s ills, and it’s really not very close:
Venezuela’s government says the problems are the result of an “economic war” being waged by elites who are hoarding supplies, as well as the American government’s efforts to destabilize the country.
But most economists agree that Venezuela is suffering from years of economic mismanagement, including over-dependence on oil and price controls that led many businesses to stop making products.
So first we have some reporting of the leftist line of a class war with the elite as the bad guys. Next we have the blaming of the US, naturally. Lastly we have the vague “economic mismanagement” and problems with “wage and price controls,” which are not identified as a favorite instrument of the left.
The problem is that one has to read critically and to also know a fair amount of background information in order to decipher what’s being left out and what it means. The writers at the Times are not ignorant; they know exactly what they’re doing. By the way, the article contains approximately 1200 words, so the authors (and/or editors) had plenty of time to mention some of the most salient points of Venezuela’s history, and chose not to do so.
