Financial Wisdom of an Avowed Socialist

Discussion in 'Politics, Religion, Social Issues' started by Desertrat, Jul 8, 2008.

  1. Desertrat macrumors newbie

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    #1
    Various people and groups have oohed, aahed and neck-hugged all over Hugo Chavez. He allegedly has all manner of virtues. But, here is, "The rest of the story":

    http://www.latinbusinesschronicle.com/app/article.aspx?id=2559

    A lot of this is in no way new. I commented on some of it when he first took power:

    "After the oil stoppage of late 2002 to early 2003, Chávez decided to fire no fewer than 18,000 of PDVSA’s employees—almost a quarter of the total staff. Not only did he openly violate all labor laws, but he lacked the most basic common sense any business owner must possess. The dismissal left the company’s activities in complete disarray, especially because the majority of the dismissed employees were technical, scientific, and managerial workers—the backbone of the industry."

    I did not know of the 18,000, specifically, but the makeup of the fired group was commonly reported.

    Then there are the politics of oil:

    "More than half of the remaining 1.2 million barrels are sold to the local market, where incredibly subsidized prices encourage consumption. In addition, about 300,000 barrels are practically given away to the Cuban government and other, smaller allies."

    The subsidized price? Eighteen cents per gallon (18¢/gal). Which then gets us to his self-laid trap:

    "Thus PDVSA is left without any room to maneuver and has no possibility of restructuring its markets to obtain greater profits. Its only chance would be if Chávez decided to do what is currently impossible: raise the price of gasoline in Venezuela ten- or twenty-fold and simultaneously abandon his Cuban allies."

    And just what happens inside Venezuela if he goes to $1.80 or $3.60 per gallon? "Riot", I think, is too mild a word.

    And so we have:

    "While PDVSA faces a delicate legal situation worsened by the huge debt the company has incurred in recent years (it rose swiftly from $5 billion to $16 billion), the domestic situation in Venezuela has become increasingly complicated. Artificial prices produce a sharp reduction in the supply of staple goods—scarce and available only sporadically. Meanwhile, strict control of currency exchanges and continuous threats of expropriation hurled at food producers have reduced investments to zero and forced the government to spend an increasing amount of hard currency to import everyday foodstuffs."

    Note: "Artificial prices produce a sharp reduction in the supply of staple goods--scarce and available only sporadically." To some extent, Nixon discovered this harsh fact when he briefly tried price controls. It was true during WW II in the U.S., as well.

    And so to close:

    "Discontent is rising throughout the land, and Chávez’s popularity is in free fall. The president, who is more and more erratic and contradictory, has fewer resources to spend on remedying the situation and faces a unified opposition. Let’s hope that the country’s democratic forces can resolve what is a very tough situation for the government and put an end to a regime that has created nothing but unnecessary conflicts and greater poverty for almost everyone."

    Reading his obituary would be greatly pleasing. Any end to his style of a socialist regime is an end to unnecessary poverty.

    'Rat
     
  2. MacDawg macrumors P6

    MacDawg

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    #2
    'Rat says to himself... "self, wonder what will happen if I take this here stick and poke it into this hornets nest..."

    Woof, Woof - Dawg [​IMG]
     
  3. és: macrumors 6502a

    és:

    #3
    What a ridiculous signature.

    Loving the capitalist economy at the moment.
     
  4. iJohnHenry macrumors P6

    iJohnHenry

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    #4
    Financial Wisdom of an Avowed Socialist

    Is this not tantamount to Priests speaking about sex??
     
  5. themadchemist macrumors 68030

    themadchemist

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    #5
    He's not so bright.

    The right thing, I think, is not to be wedded to any particular system, but to find the best method to get to the desired end. For a great many things, markets are really really great. To manage risk a bit and prevent abuse, we've got regulations. And then, for those societal needs where the market doesn't work so great (and there are a number, to be sure), the government steps in and provides social services. The real challenge is finding the right mix for any given time. It changes, to be sure, but people who are wedded entirely either to socialism or to capitalism tend to fail at the most important -ism: Getting-things-accomplished-ism. They also, in my experience, tend not to be very good at socialism or capitalism, either.
     
  6. Ugg macrumors 68000

    Ugg

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    #6
    I must admit that in the beginning, Chavez was an appealing antidote to the everlasting meddling of the US in Latin America. After the bushco coup attempt of 2002, I was even more supportive.

    Chavez is pond scum on a power trip. Two things are feeding that power trip of his. The most obvious is the high cost of oil. The second is bushco's demonization of Chavez.

    After over a hundred years of utter failure when it comes to intervening in Latin America politics, you'd think the US had learned its lesson. We never learn, do we....
     
  7. themadchemist macrumors 68030

    themadchemist

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    #7
    Yeah, our last great success in intervention anywhere South of the border was the Mexican American War. And that got us Texas, so I guess it was pyrrhic.
     
  8. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #8
    Actually, I am. We have a GDP of $14 trillion.

    The current problems have to do with the administration's inability to spend (or save) money wisely which devalues the currency and leads to destructive interest rate cuts.

    EDIT:

    @madchemist: Pyrrhic is right...
     
  9. Iscariot macrumors 68030

    Iscariot

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    #9
    Your child poverty levels are deplorable (to be fair, your overall poverty rate is extremely respectable), your economic freedom levels are nothing to write home about, and your personal savings rate is in the tubes (heh, tube).

    American capitalism is totally kicking the butt of Chavez style "socialism", but places like Canada and the UK are meeting or exceeding your economic freedoms within socialism, and Denmark is kicking all our butts.

    Just pointing out that there are merits to both systems.
     
  10. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #10
    But my personal savings rate is not in the tube. That's a choice people make. People seem to be making the wrong one with spending money right when you get it, but it's not like we're being prevented from saving.

    And what do you mean by exceeding our economic freedom in terms of Canada and the UK? In what ways?
     
  11. Iscariot macrumors 68030

    Iscariot

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    #11
    (For starters, just want to point out that I edited my above post. I'm not trying to start a socialism vs. capitalism fight, just saying there are merits to both systems. There are certainly things in my own country that I can see would be improved by a little free enterprise.)

    It's still a measure of general economic health.

    Exceeding or meeting. Economic freedom as described by the heritage foundation, as well as (and more importantly) considerations based on poverty, personal savings rate, personal spending money, human development index, etc. Or "how much can I do with my post-tax income?" I pay more in taxes sure, but I don't feel the sharp cost of healthcare. Probably because my healthcard is padded by wads of cash.
     
  12. juanm macrumors 65816

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    #12
    Chevez is by no means a model to follow. He gets publicity because he stands againt Bush, but that doesn't make him right. I consider him only as a wannabe-Fidel, and in his own country, over 15 days, I couldn't find one person who liked anything about him. What's more, people would come to us (we were all Spanish) and laugh about what the King of Spain told him , a few months ago (during a conference, he told him to "shut the **ck up" because apparently, they all wished they were allowed to do the same thing.

    And I'm sorry, but when you're somewhere to make a documentary, and you're forced to hide the camera in the streets, something's very wrong...
     
  13. blackfox macrumors 65816

    blackfox

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    #13
    Though not really meddling in politics - the US has done (imo) a great job in Colombia. They have injected a lot of aid and brought in SF trainers to modernize and professionalize the Colombian military. This is all, of course, small-scale and under the radar - which I think is how it should be done - but I think Colombia, and the region is better for it.

    To point, Uribe - with his recent hostage success - is extremely popular and along with Brazil - they are taking the wind out of Chavez's sails.
     
  14. BoyBach macrumors 68040

    BoyBach

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    UK
    #14
    The above article reminded me of this John Pilger 'War by Media' essay:

    How dare Chavez use his countries oil for the benefit of the population instead of pumping it off the USA at a discounted price. :rolleyes:
     
  15. Ugg macrumors 68000

    Ugg

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    #15
    Is he really though? A lot of that money is being funneled to rather dubious projects. The rural health care has been somewhat hit and miss, the nationalization of food production has been disastrous for the poor. The massive subsidization of fuel means that Caracas is a polluted mess, there's no incentive to develop mass transit, the government spends billions that would be better spent elsewhere.

    If he's doing one positive thing it's increasing spending on education. Education in the long run will help Venezuela more than anything else.
     
  16. Desertrat thread starter macrumors newbie

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    #16
    themadchemist, you better recheck your history. You can start with San Jacinto, when Texas won the right to be a republic. My three-greats-uncle, "Cap'n" Frels was there. That was in 1836. Texas joined the Union in 1845. The Mexican-American war was 1846.

    But that's alright. I realize they don't teach much history in the schools, these days. :D

    'Rat
     
  17. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #17

    The M-A war legitimized the annexation of Texas into the Union, because it was still contested by Mexico. I think that's close enough to what themadchemist was saying...
     
  18. skunk macrumors G4

    skunk

    Joined:
    Jun 29, 2002
    Location:
    Republic of Ukistan
    #18
    Leaving aside for a moment the moot question of whether Texas is an asset or a liability, if indeed Chavez is as inept in every department as your link makes out, it is only because of your own Administration's idiotic and counterproductive machinations - just as in the case of Iran - that he has any legitimacy at all.
    However, since he has won a series of elections at least as convincingly as your own dear President, he has clearly been politically effective at any rate. The allegation that he is mishandling the economy is rich coming from the USA, whose economic mismanagement is in the process of screwing everything up to an unprecedented degree. If he is really so hopeless, why not leave him to hang himself instead of trying to foment unrest, instigate coups, talking of assassination, making unfounded accusations and comparing him to Hitler?
     
  19. GfPQqmcRKUvP macrumors 68040

    GfPQqmcRKUvP

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    #19
    Surely you're not trying to compare the economic management of the U.S. and of Mr. Chavez' vibrant economy, are you?
     

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