Driving around South Florida, one often see cars with bumper stickers saying, “SOS Venezuela”. SOS is the international code for extreme distress, but Venezuela is a country blessed with the world’s largest known oil reserves. What’s going on?
Well, it seems this guy, Hugo Chávez, was elected president about 1999. He and his Chavistas proceeded to create their socialist utopia by subverting the judicial and legislative branches of government then altering their constitution so the president could rule for his lifetime. Along the way, actor, director and certified celebrity Sean Penn, a dear friend of Chávez, rallied the American media to tout the triumphs of Chávez’s socialism, drawing the press like a light bulb attracts moths at night. Penn boasted to America and the world that Hugo Chávez has done “incredible things” for the Venezuelan people.
Chávez and his minions quickly put in place price controls on everyday goods including food so that the people would have “fair” prices. Unfortunately, the fair prices did not allow producers to make a profit so output was curtailed or shutdown altogether. Next, the government nationalized many private businesses resulting in a further reduction in supply and forcing some international companies to flee. Fair prices but nothing to buy – how is that fair? Apparently, the basic laws of supply and demand were not taught at Chávez’s military academy nor were they taught at his successor’s bus driver school.
Some commentators attribute Venezuela’s rapid decline to the fall in the global oil price – that is part of the story. However, the Chávez government mismanaged the state-owned oil company, PDVSA, causing revenue to further plummet. They practically gave away oil to friends like Cuba; domestic gasoline was set at $0.12 US per gallon (another fair price), and PDVSA technical experts and managers were fired and replaced by military officers and other Chávez loyalists who knew nothing about running the petroleum business or any business for that matter. While output fell, the regime tripled the employment of PDVSA to reward the party faithful.
Next, the problem of dissent was handled in the tried and true way of totalitarian regimes. Opposition leaders were jailed, Chavista thugs violently attacked protesters, and state propaganda controlled the media while the military and police stood at-the-ready to teach remedial patriotism.
With the economy imploding, what were the Chavistas to do? Answer: print currency. Hyper-inflation is a great way to steal from all the people. With an inflation rate of some 18,000%, a Venezuelan can be loaded with cash, but it’s worthless. What else? Default on government bonds to scare away foreign investment and dry up credit. Yes, the Chavistas’ reverse Midas touch is felt in all segments of the Venezuelan economy.
The U.S. government has slapped economic sanctions on the Venezuelan regime once again exercising the U.S.’s long-standing role as world policeman/judge/jury. More than likely, the U.S. has also been involved in covert intelligence gathering to undermine the Venezuelan government. When compared to air strikes or sending in soldiers, this seems like non-intervention, but it is not. A Libertarian would be apt to check the U.S. Constitution and, if one did, they would not find enumerated powers for our government to do the above. In fact, all they would find was the power to defend our country. The Venezuelan situation is repulsive and tragic albeit predictable, but the U.S. government has no right to pursue regime change, overtly or covertly, in either Venezuela or any other sovereign nation. U.S. actions are merely giving the Chavistas an outside enemy upon whom they can divert blame. Only Venezuelans have the right to choose their government. Will it be ballots or bullets?
In the meantime, what is a Venezuelan to do? With democracy short-circuited, many have voted with their feet. Those with means have emigrated to the U.S. to preserve what property the Chavistas have not yet confiscated and have fled for the personal safety of their families (some sporting SOS bumper stickers). Many of these people were the entrepreneurs, managers and technical people that were driving productivity in the Venezuelan economy. Others have fled on foot across the border to Colombia filling up refugee camps and trying to scratch out a living – a bleak existence but not as bleak as remaining in their homeland. Those left in Venezuela face a collapsing society and remain there without opportunity or hope as chavismo continues to shrink the pie. Scores must resort to begging in the street and prostitution amid rampant violent crime and looming starvation. Michael Moore, another Hollywood celebrity and Chávez aficionado, had once traveled to Florida to have his obesity treated. He would have been better served to hang out in Venezuela where three quarters of the population have lost an average of 19 lbs. on the Chávez-Maduro diet.
Chávez’s socialist utopia is as empty as Venezuelan store shelves. As fast as socialism is imposed on Venezuela, does Atlas shrug. Yes, Sean Penn, “incredible things” indeed.
by Steve Litton – Member of the County Executive Committee, Libertarian Party of Broward County