Original art by @modográfico

The claim that the current all-out crisis is exactly what chavismo wanted has become widespread in opposition circles recently. This point of view didn’t come out of nowhere; not so long ago, for example, we heard Tareck El Aissami saying “The more poverty you find, the more loyalty there is to the revolution and the more love there is for Chávez.”

But what exactly is it about poverty that keeps people chavista? In my view, widespread destitution is useful, but not enough.

The real reason why chavismo doesn’t want Venezuelans to break out of poverty is to keep them economically dependent, forcing them to remain loyal. It’s not quite right to say chavismo wants people to be poor: it wants them to depend on the State. For that, it helps if they’re poor.

For over a decade, the oil boom allowed chavismo to finance all of the messy, arbitrary plans of every power group while keeping regular Venezuelans relatively happy. Yet no one got prepared for the logical conclusion, the day Papá Gobierno ran out of money and could no longer feed all those hijos de la Patria. The growth of public payroll, las Misiones and Grandes Misiones, the poor training of Venezuelans enrolled in the Bolivarian educational programs, the increasing number of pensioners, grassroot social and communal organizations and, more recently, the CLAPs, had one goal: to convince Venezuelans their survival depends on government gifts.

It’s not quite right to say chavismo wants people to be poor: it wants them to depend on the State. For that, it helps if they’re poor.

Now that shortages have met hyperinflation and PDVSA is about to collapse, Papá Gobierno can’t provide for its huge family. Raising the minimum wage is not enough, the Clap boxes tend to get lost and the subsidized pernil never appears. Having 16 million signed up for the Carnet de la Patria won’t do much if it comes with no benefits. Thus, loyalty trembles.

This doesn’t mean the poor will just switch sides, but the poorest will support whoever can deliver. Does the opposition know this?

International Humanitarian Aid used to be a distant hope, now it’s a necessity. What if the Maduro government uses it to gain political advantage, feeding the food-for-loyalty system it counts on?

Chavismo has created an awful reality: most people cannot fend for themselves in the economy we have now, so they (and any new government) will have to juggle: provide for people in the short term, while giving them tools to fend for themselves. The thing is, providing short-term help to the poor can either be done as a means of creating dependence or as part of a clear-eyed social policy to help modernize the country.

The difference between the two won’t be obvious right away, and we’re so used to criticizing any policy in this direction as mere populism that any new government will face plenty of criticism.

Will we have the wisdom to wait and see, and a new government to explain it in terms everyone can understand?

Color me skeptical.

52 COMMENTS

  1. “The government is good at one thing. It knows how to break your legs, and then hand you a crutch and say, ‘See if it weren’t for the government, you wouldn’t be able to walk.” ― Harry Browne

    • Anabella wrote a lot of words to tell us what most of us long ago figured out. The main theme of leftism is that the average person is incapable of taking care of himself and needs someone (the leftists) to do it for him. Once in control, the leftists then institute policies which ensure the desired outcome, dependence.

      • And I always point out that having governments that are decendants of Napoleons French Central Empire and the backward Castilla code empowers leftists. It’s like giving them them steroids. Having a Psuedo-Federation like Venezeula helps but if people are socialist and ignorant enough they can overcome the quasi decentralization.

        Although it helped Arg avoid what Chile and now Venezuela are going through and it’s not a coincidence. It’s not that Argentenians are inhernetly better than Venezuelans but they started with a US/French hybrid and had to reform it twice to get similar results to Venezuela. Argies had to vote many times to destroy the country and around the 5th or 6th they started to Question that all of the bad stuff was becuase of the CIA.

      • Well, I think she had the exact amount of words to describe something something, that some people, might know or not. This is an opinion article. It’s main purpose is not to inform and it is in the interest of everyone that this topic should be brought to light and discussed as much as possible. MRubio

    • A thinking group of people would respond, “So, Delcy… you recognize that there is a humanitarian crisis, but are willing to let your people starve to make political points?” One sentence. No other response needed. Chavismo then either accepts humanitarian aid or it doesn’t.

      Clearly, a “thinking group of people” doesn’t include the MUD. They don’t know dick about negotiating from a position of moral high ground.

    • “This way they can blame the opposition for the starvation. Bastards.”

      And then the “official opposition” doesn’t dare to say a peep about how chavismo has all the power and money and thus is the only responsible for it, they’re helping to cement that fallacy.

  2. “This doesn’t mean the poor will just switch sides, but the poorest will support whoever can deliver. Does the opposition know this?”

    I may be completely missing your point with that question Anabella, specifically the part “whoever can deliver”, but my knee-jerk response would be that what the opposition should be offering is not the notion that they can better re-distribute the wealth than chavismo, but that they have a plan to lift the entire country out of the economic abyss in which it finds itself today.

    And just in case you’ve never seen the quote, this is one of my favorites by Margaret Thatcher:

    “The problem with socialism is that you eventually run out of other people’s money.”

    Churchill had a way with words as well:

    “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”

    Both quotes pretty well sum up where we are today.

    • “…the opposition should be offering is not the notion that they can better re-distribute the wealth than chavismo, but that they have a plan to lift the entire country out of the economic abyss in which it finds itself today.”

      Well, I just had a very similar conversation with Mrs. Guapo 6 days ago, and I got lambasted. “Just because you married a Venezuelan doesn’t mean you know anything about Venezuelans! If you told them the truth, you would be wasting your time and money. They don’t want to hear the truth. It is a nation of toddlers. They want promises of FREE trinkets at Christmas. They don’t want to hear about being able to purchase new, fabulous toys of their own accord.”

      According to “She Who Must Be Obeyed”, Venezuelan politicians have made a habit of selling epic piles of bullshit to El Pueblo, and El Pueblo has only been too happy to buy what these con men are selling for over 50 years. So long as it is the Something for Nothing that generations have come to expect, courtesy of oil.

      If this is factual, what is the likelihood that anything will change, when the next generation of hucksters (MUD) come along and insist that the only problem with Chavismo was that the wrong people were administering it?

  3. “The real reason why chavismo doesn’t want Venezuelans to break out of poverty is to keep them economically dependent, forcing them to remain loyal. It’s not quite right to say chavismo wants people to be poor: it wants them to depend on the State. For that, it helps if they’re poor.”

    It’s worked in Cuba for sixty years. Why should it not work in Venezuela?

    • In a police state peoples deep disattisfaction with their govt doenst necessarily imply that a popular uprising will topple it , of course that means that the govt whatever its pretenses does not count on popular support to remain in power but in the loyalty and efficiency of its coercive apparatus, it also means that if such loyalty or fealty ever falters it will be toppled quite simply because the more desperate peoples situation the more willing they are to take violent action to bring it down……..!! it also means that the chances of a popular uprising and dissident members of the armed forces staging a coup increase the greater the failure of that regime to keep people fed and at least minimally supplied with essential stapples ……,

      Here the problem is not that people are subjectd to a life of deep poverty which makes it dependent onf govt hand outs but that worse still that corrupt and inept government is even unable to supply it with the essential for its survival , that may lead or not to its toppling but it certainly increases the chance that its hold on power will be challenged again and again as conditions worsen ….and right now they are worsening by the day……!! They may think themselves as impregnable but thats not the way history always works …they are as vulnerable as they have ever been , and the noose of outside sanctions and internal pressures is tightening ….time will tell !! and my guess than sooner rather than later.

    • “It’s worked in Cuba for sixty years. Why should it not work in Venezuela?”

      Because in Venezuela chavismo waited for too long for the extermination of all dissidents.

      Or for the genocide, if that term conveys the idea in a better way.

  4. “It’s worked in Cuba for sixty years. Why should it not work in Venezuela?”

    Exactly. As on this post, people keep saying that Kleptozuela’s dire situation is unsustainable. That money will run dry, and there will no more food, no more Clap Crap, thus inciting a popular rebellion.

    Think again. 1/ Cubazuela is still way richer than Cuba ever was. Cubazuela is just in the final stages of perfecting the iron grip of its dependent, ignorant people.

    On the contrary, quite conceivably, the people will be better fed, not worse.

    Sure, the Criminal Narco-Regime might go on default this year. Big deal. Sure, PDVSA and every industry will continue to fail and more business will shut down. So what? 2/ They probably just start stealing a little less, sharing the spectacular bounty a little more. Just in cash revenue from the USA, India and others, gasoline etc, there are more than enough crumbs left over to feed the remaining populace a bit better, while making them even more dependent, more complicit, and more corrupt. With plenty left to keep on stealing billions and keeping the Corrupt Military fat and satisfied.

    By the time the first Generation of under educated, ignorant, poor, often complicit and corrupt, dependent Venezuelans is completely brain washed (20 years down, just 10 years left) there will be more food.

    The full Cubanization of Kleptozuela will be complete by then.

    These are just Chavismo’s final years of growing pains. To become a fine-tuned criminal dictatorship and tame an entire population takes time. About 1 generation. Kleptozuela is right on schedule.Heck, this year, is the pueblo-people start to protest again, loot too much, etc, just shower them a bit more with freebies, minimum salary increases, more Guisos and fake jobs, more claps crap.

    And if things get a bit too crazy? 3/ accept some humanitarian help from certain countries, still blaming it all of Economic Wars from the Derecha, and such. Chicken from Uruguay, Rice from Colombia or Brazil, even some real Pernil from Portugal, but free this time. Y listo el pollo.

    Chavista Thugs in power are certainly too greedy, often incompetent. But they have shown they are not that stupid. They are realizing that people must be fed, hungry people can be dangerous, no matter how dependent, corrupt and subservient they may be. They will soon start throwing more left-over crumbs from Gas Cash sales at them, mas harina pan, and even accept some humanitarian aid after the Default.

    Anything to remain in power and avoid Jail Time. So stop taking from granted that there won’t be enough food in Cubazuela, so that people will revolt. This ain’t La Prise de la Bastille.

    Two more factors, (besides being much richer than Cuba was, Stealing a bit less, giving more claps, accepting some humanitarian help, food and medicines):

    4/ More repression is possible. More looting: More repression from the Sebin and GN thugs. Cuban style. Intimidation, pressure to lose the Carnet de la Patria, jail a few, gas a few, y listo. the Fear Factor, again.

    5/ Almost Three Million people already left Kleptozuela. As Uribe says, the effect is already being felt: That’s a LOT of middle, upper class people working abroad, making more and more $$$ and Euros, sending money back every month to support their families. Cuban Style. (Also 3 Million less people to feed, too. 3 million people less to worry about for being critical of rebellious). Lots of Cash is now coming from overseas. The only decent explanation I’ve been able to get thus far to the burning question: How on Earth can an honest family survive with “minimum salaries” without getting into Guisos and/or outright Stealing? REMESAS in $.

    This enormous flow of money already coming to more and more families (Much like Mexicans or Central American workers sending money back home too), this is what can also stabilize Kleptozuela in feeding the poor. These 3 million people, plus the thousands more that leave every month now, will be sending more and more fresh $$ and Euros. Ask any family now in Caracas, Guatire, Maracay, Maracaibo, Barquisimeto and other big cities how they buy food. (In the country they raise chickens and food themselves) My guess is that as in Cuba, more than half of the urban people get money every month from family members overseas. This will only increase, while Chavista Thugs couldn’t be happier.

    For these Five Specific reasons, we can’t bee too optimistic about the latest “pataleos” , lootings and scarcicity in the stores. Before people revolt, a few adjustments will continue to take place before the full Cubanization of Cubazuela is complete.

    • “5/ Almost Three Million people already left Kleptozuela. As Uribe says, the effect is already being felt: That’s a LOT of middle, upper class people working abroad, making more and more $$$ and Euros, sending money back every month to support their families. Cuban Style. (Also 3 Million less people to feed, too. 3 million people less to worry about for being critical of rebellious). Lots of Cash is now coming from overseas. The only decent explanation I’ve been able to get thus far to the burning question: How on Earth can an honest family survive with “minimum salaries” without getting into Guisos and/or outright Stealing? REMESAS in $”

      Long ago I spent most of my time in Maturin and had met a lot of people of course. Since I’ve been living here in the sticks now for many years and rarely go to Maturin, I’ve lost track of most of those contacts. Over dinner the other night, my woman and I began discussing those folks and I was absolutely stunned how many of them no longer live in the country……I’m talking about as much as 80% of those we discussed had picked up and hauled ass. Professionals, business people, teachers, and especially the younger ones who were students when I knew them. So yes, there’s fewer mouths to feed, fewer productive people, and those who are on the outside most certainly are sending money back to help family members still trapped here.

      Also, there’s now talk of $80 oil again. While PDVSA’s production is cratering, any such increase in prices will go a LONG WAY towards taking pressure off the regime.

      This one’s over folks. I just don’t see the people of Venezuela overthrowing this regime. It appears to me there are no longer significant, organized forces that can get the job done. I believe the last hope for change died with the ANC vote and the opposition then called for participating in elections.

      That was the white flag of surrender.

      • That may very well be true but there are many posible resolutions, There’s no longer a USSR or even Venezuela cow to feed the masses. Somalia never stablized the regime collpased, they couldn’t hold on to power and the government basically went away. It could end up with half of the states in venezuela having no government and the rest being managed independtly by the state governements.

        https://oilprice.com/Energy/Energy-General/3-Million-Barrels-Per-Day-Could-Go-Offline-In-2018.html

        According to this article Venzuela is losing 500,000 mbpd production a year so at least we have a time line of something. That would mean that Venezuela will lose all Oil production around Dec 2019 (The final death of PDVSA shoudl accelerate theloss) if things stay the same at leas Venezuela will no longer have any impact in the world oil market. OR money to finance leftist parties in Lat america. So it will become a literal subsitance backwater country or maybe it will be over, there’s really no way of knowing.

      • MR, agree completely. Btw, the white flag was flown by most corrupt HRA.

        There will never be change until the opposition cleans house.

        Any agreement from DR dialogue that does not include, as first points, the elimination of the anc, overhaul of enc, removal of Maduro and all the combo, complete disassembly of the chavismo regime, etc. will only be another corrupt lifeline to Maduro, Diosdado, narcomilitary, etc

    • I think the 60 years of Cuba isn’t necessarily a valid analogy, that this will follow in VZ.

      First, Cuba had a patron. The USSR, then VZ. VZ has no one to fall back on to prop them up, and don’t tell me China and Russia.

      Second, Venezuelans KNOW the Cuba story, and don’t want that.

      Third, fellow Latin American countries, despite their “defense” of Cuban sovereignty in the past, are overwhelmingly
      anti-Chavismo now, especially since the diaspora is negatively affecting THEM. They want this mess cleaned up.

      Finally, the depth of the VZ economic crisis is unparalleled. The lack of food, medicines, health care and security is unparalleled. It’s gonna explode.

      • Ira, your comment on patronage is correct. As someone who opposes US intervention, (actually oppose US occupation that would be necessary following intervention) it appears that there are only two “long” term (3-5 years) outcomes. Russia gets a base in return for bringing PDVSA back from the brink, with the obvious control over oil and other natural resources, allowing PSUV to remain in power. The second being the Somalization of Venezuela, where the local pranes/colectivos establish and fight for local control/power. Dialogue and elections seem like useless/unproductive exercises and I am of the opinion that MUD blew it last August and protests/strikes are unlikely to become manifest nationally in the near future.

        • Somalization YES!!!!!!!!! That is increasingly growing posibility. Venezuela’s State Governemnts might make Somalizuela diffrent. The richest or more advantageous states might be able to clean up large parts of the mess if they stableize the currency by bringing in Dolars or Euros and use their now free reign to rip the colectivos apart. My guess Zulia with the now own oil money and Tachira that might get massive support by the likes of the US or Colombia in the name of stability. They might end up like poor latinamerican states similar to central america (Zulia being The Costa Rica of the region), lots of the rest of Venezuela will be warlord country probably: Becuase: A it’s impossibly dificult to reestablish control over such large and collapsed areas and B once you secure buffer states you lose incentive to control more.

          • The only problem I have with your analysis is that those border states would be prime expansion territory for Colombia’s illegal armed actors. The break-away FARC factions, ELN, Urabenos and other Bancrim groups whom I am not aware of would gladly take advantage of Venezuela becoming a fully failed state. In the Somalizuela (as you termed it) scenario, as I see it, oil would no longer flow. There would not be rich and poor states, no state would become Costa Rica, they would all resemble El Salvador/Guatemala/Honduras.

        • Sorry but the comments don’t allow me to reply to you directly. We agree on 80-90% of things. Tachira may very well be Honduras and Guatemala, violent state with a mercantilist banana government and it would be a buffer zone. It will be exactly like the fargmented central american states. But you over estimate what the Bacrim and ELN groups can do, they are cowardly and like the easiest reign possible. That’s why they never attacked Boyaca in mass or tried to take B/quilla even at their peak. You just have to look at FARC’s last attck on a town like Mitu in 2001 Ithink, yeah they took teh town but the losses were masive and they started to lose lost of men.

          Basically why do you want get men killed in the more stable border zones, (if it only going to be Zulia and Tachira, maybe some zones near Brazil) when you have 21 states ripe for the taking in the rest of Somalizuela; you can set up come nice black market routes camps and not have to fight the police all the time. There are literaly thousands of square kilometers of easy pickings and the groups will go for those first. The armed groups need jungles and mountains to hide and tachira does have a bit near teh serrania but you have huge flat swaths.

          All of this depends of course on the state governemnt seting up “competent” defense forces, in any case most of the “stable” states in a future Somalizuela ending up with cronic violence problems like El Salvador it’s the most probable outcome. As for oil 2 million barrles is out of the question if they are abe to set up joint ventures in the stable zones probbly a million barrles a day tops.

    • Not true that money from Remesas is being sent to Venezuela, what happens is that this Remesa money ($ usually) is transferred from one account outside Venezuela to another account outside of Venezuela, and the person who has the account that receives the $, sends Bolivars (Bs.) to the person who send the $,at an agreed exchange rate, this happens inside Venezuela, so it really is a transfer of Bs. inside Venezuela.

      The problem is that with a Bolivar devaluating so quickly it is taking larger and larger amounts of Bolivars for each $ sold, and thus a huge amount of money (in Bs.) is getting more and more difficult to source (and move). There is currently a daily limit of 20.000.000 Bs per day in some banks (a little more than $100,00) so it is not an efficient way of receiving moeny, altough $100 can help a family survive for 2 – 3 weeks….

      • Correct. The argument about the remesas makes no sense as unlike Cuba or any other economy in the world, there’s no way of sending hard currency directly to vzla. The closest would be crypto currencies or food boxes from amazon.

  5. The time of Chavismo as an ideology has passed. Maduro, Cabello et al are but wards of the military government that Chavismo developed. They are valuable insofar that they are the scapegoat that the military will offer the Venezuelan people when they figure that the Chavismo model does not work.

    For now, the military profits, but even they are not immune to the deterioration and thus the threat that this decay is to their power.

  6. “The real reason why chavismo doesn’t want Venezuelans to break out of poverty is to keep them economically dependent, forcing them to remain loyal.”

    Americas Democrat Party has been doing this since LBJ and The Great Society. Chavez was no dummy. He saw what worked…

  7. A similar theory would have the right in other countries under the throes of right wing populism deliberately promulgating policies to keep people poor and uneducated because poor and uneducated people are a core constituency of those right wing populist governments. And there would be quotes from people here and there to support that particular theory as well.

    The theory floated here does not account for, among other things, the undeniable outpouring of resources by chavismo during the good times, into health, education, food subsidies and so on, which though ultimately a failure and economically ruinous for the country, supported chavismo’s massive popularity for a lengthy period of time.

    Another problem with this theory is that it dresses up massive ignorance, mediocrity and ineptitude in the regime’s decision-making, which flourishes under any form of personalist regime, as some kind of diabolically clever scheme. The theory has an appeal to the wing-nut, Ayn Rand book club crowd, with its theory of government being an inevitable tool of enslavement, but it gives the regime credit for a level of planning, skill and foresight that there is little evidence to support and truckloads of evidence to disprove.

    Chavismo is not a doctrine. It has no manifesto, it has no coherent ideological program. It is a military backed dictatorship of a small number of people with control over a vast store of valuable natural resources who use a combination of populism, clientelism, canned ideological symbolism, the dispensing of favours and freebies, and fear and paranoia, as cover for what is basically a system of corruption and theft. It is a story that predates “socialism” in the Americas, and which today, socialism, as well as other -isms, is invoked to justify.

    The theory floated here is speculation. A quote for Tareck Al Aisammi does not convert chavismo from what it obviously is: a corrupt and inept kleptocracy hell bent on maintaining power by the means available to it, to an ideologically driven death cult headed by diabolical masterminds (or at least, “minds”). There have been examples of those in human history- Nazi Germany, the Ukraine under Stalin, Cambodia under Pol Pot, Rawanda, the Islamic State (ISIS), the Indonesian Army’s anti-communist purge in the 1960s, and other examples come to mind.

    In Venezuela, things are extremely bad, but there is little evidence to support the theory that the suffering we see in Venezuela today is all part of some deliberate and intentional Chavista Master Plan of enslavement through imposed poverty and misery, and not something more simple, obvious and prosaic: the result of massive corruption, ineptitude and neglect by a group of morally bankrupt enchufados.

    • You quoted “the good times” under Chavez, which is ridiculous.

      They couldn’t afford it then, even WITH high oil prices.

      All they did was steal, and mortgage the future.

      You’ve been on this site long enough and studied VZ policies to the point where you should at least know THIS.

      Seriously, you’re behaving no differently than a typical Chavista, attributing today’s mess to the price of oil.

      • Wrong Ira! What he’s saying is that leftist policies need to be managed by leftists who understand how economies work. Unfortunately, such an animal has never been sighted.

      • Ira, alternatively, you could read and fairly characterize what I wrote, which is not an endorsement by any stretch of the imagination of chavista “economic policy”. Same goes for the guy who is not the Senator from Florida.

        There was a time in Venezuela, in the mid-2000s for example, when oil prices were at historically high levels, and there was significant positive economic growth of say 6-7% (but not as much as it could have been and it was in other regional neighours), relatively low unemployment (but not as low as the regime reported, I think), declining rates of extreme poverty (but not as declining as neighbouring countries), improving medical outcomes (-but again, arguably not as good as should have been the case), and so on and so forth. There was an explosion of shopping malls and shoppers. There was a party atmosphere in Caracas. The biggest critics of Chavez would complain about the end of the world coming over their cocktails on luxurious rooftop patios in Las Mercedes. You could go to Altamira and watch the intelligensia argue over the bleak fate of the country while eating the best pastries on the planet. The airport was clogged with super rich critics of Hugo Chavez sitting next to nouveau super rich Chavistas, all departing for Margarita Island, Miami, Panama and other destinations where they parked their money. Everybody seemed to have some business going on, some angle. American and European businessmen were booking up the good hotels, as always. The banks were giving anybody with a pulse a credit card and a loan. And Chavez was very popular and winning elections.

        Those were the times I’m referring to. Check out Juan Nagel’s article on this site that went up prior to the holidays. Its good. I’m not making some socialist endorsement. What I’m talking about was a disaster in the making. But it was not some carefully thought out Master Plan to put Venezuelans into abject poverty and enslave them. By my observation, what happened was their small-p plans – which was just more of the same – collided with reality: Hugo Chavez died, the accounts and lines of credit they were stealing from started to rapidly shrink, and they had wrecked the economic and political infrastructure of the country.

        • “There was a time in Venezuela, in the mid-2000s for example, when oil prices were at historically high levels, and there was significant positive economic growth of say 6-7% (but not as much as it could have been and it was in other regional neighours), relatively low unemployment (but not as low as the regime reported, I think), declining rates of extreme poverty (but not as declining as neighbouring countries), improving medical outcomes (-but again, arguably not as good as should have been the case), and so on and so forth. There was an explosion of shopping malls and shoppers. There was a party atmosphere in Caracas.”

          Cannuck, you may be right on the 6-7% economic growth number during the mid 2000’s, but I’m seriously having trouble wrapping my brain around it.

          Here’s what I saw starting in Feb 1992, and granted, most of my time was spent in the “oil boom” state of Monagas.

          When I first arrived, Maturin was what could be called a sleepy back-water town. Little traffic, one or two auto dealerships for a town of probably 400,000 people or more.

          With the opening of the oil industry to foreign investors, the place exploded almost overnight. Not only the E&P companies came in, but the drillers and service companies followed. Money poured in and all through the 90’s it boomed.

          As I’ve mentioned here before, after Chavez was elected and started applying the screws to the very entities that were responsible for the wealth pouring into the country, things changed for the worse, rapidy.

          By the early 2000’s, the downturn was noticeable…..at least in Maturin it was. Perhaps it was booming elsewhere, but with Chavez expropriating companies and inflation picking up tremendous steam, I have a hard time believing the Venezuela economy was expanding at that rate despite all-time high oil prices.

          • I’m going by memory on the growth rate. It was high. I am well aware that Chavez was killing businesses while the party was going on, but initially, it was largely about giving away goodies to friends, and political retribution- like when he had a TV show in Plaza Bolivar and ordered his people to expropriate all the gold vendors around there. It was stupid publicity, rewarding friends, slowly eating away at the foundations for investor confidence (the smart ones), and retribution. Like the Trump tax plan.

            During that time, I spent a lot of time in the interior. Barinas was booming. I’d ask who was doing all this building and luxury shopping, and people would say it was drug money, but it was obviously not just that. If you were connected, you were rich, and you had a little business empire, from the barrio on up the scale. Kids went to private schools, people drove multiple luxury cars, generals had their big fincas and farming interests, the well to do chavistas had excellent service at private hospitals and a nice little social scene with its own cheesy society press. If you spoke out, things tended to get a little tight and opportunities dried up- like say, what happens in China.

            There was no plan. Chavez was just imposing his will on the private sector to try to consolidate and demonstrate his power and reward his supporters- and it seemed that for every company he expropriated, a thousand shady business ventures bloomed.

            A great irony that no Chavez supporter could ever explain to me in any coherent way was that, when he had all the political power, and all the institutions, Chavez did not socialize areas and sectors that are socialized in many capitalist countries (like mine). As a matter of public policy, he arguably could not have passed as a weak social democrat, much less a socialist revolutionary. He was a fraud on his own terms (like Trump). He and Maduro and their buddies killed the Venezuelan economy before it bore any resemblance to any communist state. And I’ve seen the real thing.

          • GDP growth (annual %)
            1992 6.1
            1993 0.3
            1994 -2.3
            1995 4.0
            1996 -0.2
            1997 6.4
            1998 0.3
            1999 -6.0
            2000 3.7
            2001 3.4
            2002 -8.9
            2003 -7.8
            2004 18.3
            2005 10.3
            2006 9.9
            2007 8.8
            2008 5.3
            2009 -3.2
            2010 -1.5
            2011 4.2
            2012 5.6
            2013 1.3
            2014 -3.9

            One thing I don’t understand is the drop in 1999. 1998 was the year of $11 oil. By 1999, the price of oil had rebounded to above $20. So why the drop in the economy in 1999? Fear of who took office in Feb of 1999?

            While growth rates looked good in 2008, Venezuela’s growth from 1998 still lagged behind most of the world.

            http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators#

          • “One thing I don’t understand is the drop in 1999. 1998 was the year of $11 oil. By 1999, the price of oil had rebounded to above $20. So why the drop in the economy in 1999? Fear of who took office in Feb of 1999?”

            From what I recall, his election definitely had a chilling effect on the oil industry, both the international players and even within PDVSA. Both were apparently justified in their apprehension about the man’s motives.

        • The economic growth you quote has nothing to do with the money they pissed AWAY. On Cuba alone, the numbers have to be staggering.

          And they were still incurring debt. They spent their surpluses and more, which is why we see their tiny reserves now.

          I guess I’m having a hard time wrapping my head around your definition of “good times,” and I gotta grant you that if your figures on economic growth are accurate, I can kind of understand your use of that word.

          • The economic growth you quote has nothing to do with the money they pissed AWAY. On Cuba alone, the numbers have to be staggering.

            You do notice a number. of years with negative economic growth , do you not? Look at 2013: 1.3% growth even with $100 oil- that’s a good indicator things are awry. Which blog writers and commenters noted at the time.

            Overall, economic growth from 1998-2013 was anemic, even with oil going from $11 in 1998 to $100 in 2013.From the World Bank:

            GDP per capita, PPP (constant 2011 international$), % increase 1998-2013
            East Asia & Pacific (excluding high income) 192.1%
            Upper middle income 109.3%
            South Asia 102.4%
            Middle income 96.1%
            Low & middle income 91.7%
            Lower middle income 83.4%
            Least developed countries: UN classification 67.5%
            World 44.5%
            Sub-Saharan Africa (excluding high income) 42.4%
            Middle East & North Africa 39.5%
            Latin America & Caribbean 30.1%
            Venezuela 15.2 %

            Venezuela would have been classified as Upper Middle Income or above.In 1998, Upper Middle Income countries averaged $6,752 in the above income classification, compared with Venezuela’s $15,362.

            In spite of the bonanza in oil export income from 1999-2013,the performance of the Venezuelan economy was anemic compared to other countries. Chavista Venezuela’s economic problems cannot be blamed on a low oil price. Rather, a low oil price exacerbates the underlying problems of Chavista Venezuela.

            When Chavismo needed to borrow money to make its budget (NO investment, just ordinary expenses) even with $100 oil, that is a fairly good indicator the economy had problems. Which a number of blog writers and blog commenters stated at the time.

          • Boludo, I recall you and others at CC making this point about Venezuela’s economy lagging way back then, and it was a valid one. And even then, when the “party” in Caracas was in full swing, the signs of a disaster in the making were evident. Even then, I remember thinking from time to time that it was easier to find a Rolex than some basic food item, like ground beef, or milk.

          • Even then, I remember thinking from time to time that it was easier to find a Rolex than some basic food item, like ground beef, or milk.

            Which reminds me of this golden oldie from the “prosperous” times of 2007, of a long line for milk in Maracaibo. Got Milk?

            Back then the Chavista/PSF line about food lines was that they were an indication of prosperity, of demand outstripping supply. (Today that explanation doesn’t make much sense, so the food lines now are the result of economic war.)

            During the 2010 drought, there was a similar line about how Chavista-led prosperity led to increased electricity consumption which led to electricity supply shortages. The only problem with that explanation was that Venezuela was the only country in Latin America with electricity supply shortages while from 1998-2010 Venezuela had Latin America’s lowest increase in per capita electricity consumption. With the exception of Haiti, IIRC.

      • you say: “All they did was steal, and mortgage the future.” the Leadership just “Steal’, they where interested the future.

  8. Poverty was never an aim of the Chavistas. Dependency on the state was. Given a choice between a rich dependent society and a poor dependent society, the Chavistas would always choose the latter. The abject poverty in Venezuela today is a byproduct of government control of production and distribution via currency and price controls, fiscal mismanagement and de facto expropriations – spiced with corruption and ineptitude. Domestic production and diversification cratered under Chavez, but this was never an aim in itself. The aim was to increase dependency on the state and the rest follows. It is surely now obvious that the main reason that the regime will not accept humanitarian aid is nothing to do with image or propaganda, as as been suggested, and everything to do with the regime ensuring that it does not dilute the dependency of the population by allowing an alternative supply of food and medicines.

    Politicising of the justice system and police force had a similar motivation. People became more dependent on the “goodwill” of the state to stay out of jail or to avoid being targeted by the colectivos. Byproducts were a massive increase in personal fear of an action against you by the state and a massive increase in crime.

  9. One thing that is different from Cuba is how in Venezuela the crisis has let loose literally dozens of lootings and protests , the closure of roads , the sacking of food trucks etc all over the country , all pointing to an inability of the govt forces to contain wholesale public disorder at a scale that is rising every day , people are fast losing their respect and fear of military forces . !! and we have only just started ………..

  10. When cash for food runs out, chavismo discovers that bullets are far cheaper…

    …And that the dead won’t complain tomorrow for another broken promise.

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