Socialism on Rampage - Venezuelan “Economic War” Against the “Bourgeoi

[dre]

While I have no love of Chavez I think we're past the days when we would say what's good for GM is good for the country. The tax rate for the wealthier 10% of Americans was far, far higher a half century ago, and they controlled far less wealth, and yet Americans - and Canadians - still look back on the Fifties as a golden era of prosperity.

BTW, that tax rate for the wealthy was deliberately raised because it was felt, by Roosevelt and others, that too high a percentage of wealth was in too few hands, and that this was not good for the health of a society.

The percentage of wealth in the hands of the few at the top is far higher now than when Roosevelt acted. Anyone calling this a golden age of prosperity?

BTW, that tax rate for the wealthy was deliberately raised because it was felt, by Roosevelt and others, that too high a percentage of wealth was in too few hands, and that this was not good for the health of a society.

Yup the genius of the American system was that it was designed to not concentrate wealth for the reason that on some level wealth is political power and you cant really have a functional democracy with extreme wealth concentration.

People back then acted on lessons we have long forgotten. People today didnt live through the aristrocies or the guilded age, and theyre apathetic. We will sit around and do nothing about it until it becomes so obsene that the shit hits the fan.

[KeyStone]

Don't worry, Chavez is doing a fine job of that. Floating on oil, potential emerging market and negative GDP growth.

You're just going to keep flogging that dead horse, aren't you?

Alberta, also floating on oil, had negative GDP growth in 2009. Do we need to push the panic button there, and suggest the sky is falling as well? Or, is that different?

Lots of countries have temporary setbacks, a combination of negatives, during a recession can cause it. A single year of low negative growth, does not mean that the economy is collapsing, as you seem to want to believe so desperately.

And this is how we make a country poorer. All that capital and job creation power goes next door.

Not only that, pro-Business Brazil has a faster growing middle class

Capital that is aimed slowly at extracting the natural resources of the country, in exchange for a pittance of the real value of those goods, and a few token jobs is not needed. Much better to take the resources yourself and re-invest the profits into the country.

It's worked for Ireland, Canada, USA, China, India, Australia, South Korea, Indonesia, Singapore, Brazil, Europe, South Africa. Ask Castro how going to war with foreign investment is going, he has an island full of poor people, but they are educated.

There are some obvious difference there.

Firstly, most of the countries you listed also provide free education to their citizens, so that they can compete for the real jobs. Not sure why you have China included as a bastion of free trade and democracy. Oh, and Ireland is just doing swimmingly now isn't it? All that money that they took in (thanks to lower taxes) and surprise, surprise - their economy is in such a mess, with such huge deficits that the EU has to step in and save them. I guess that is what happens when your economy is built on speculation - it crumbles like a house of cards, at the first sign of panic.

Do you know how much an inventor gets for royalties? Try 3%. A resource is only good if it can be exploited. By Chavez being a capital douche-bag, he is costing his country billions in opportunity costs and impoverishing them. His neighbour next door gets the program and Brazil has one of the fastest growing middle classes on the planet.

Sure, Brazil is doing well. But it is not because of opening the doors to free trade, free markets and unregulated capitalism. Nor is it because they allow foreigners to come in and take away all of their resources for nothing. Lula is generally considered socialist when not compared to Chavez. In fact, he was the one who stood up to the US and the EU and demanded better deals for Latin America if they wanted free trade.

That's 5 billion dollars the world is poorer thanks to Chavez's madness. Do you know how royalty rates work. Chavez doesn't give the oil companies money. The oil companies give Chavez money. No oil companies=No oil coming out of the ground = no revenue from resource = poorer country.

The oil companies don't give Chavez anything. They buy the rights for the minerals and oil. And Venezuela can take the oil out of the ground by themselves or get other partners. They don't need to be held hostage to Western oil companies demanding onerous percentages of the profit. In fact, after Chavez changed the deal to spend more on the people of Venezuela, most of the oil companies stuck around. They aren't making as much profit, but they are still doing quite well.

What myth, the evidence is all of the emerging countries around the world that are enjoying high GDP growth in spite of a recession. Your numbers say that Venezuela is in recession right now. Hell even the USA isn't in recession anymore.

You're hilarious. Year after year of ridiculous growth, and now the first year of negative growth since the strike/coup, and you're ready to declare Venezuela a huge economic failure, and it isn't even official yet. You can't have the level of growth that Venezuela had, without a downturn eventually. The infrastructure can't keep up.

Bottom line:

You don't have any facts. All you have is the fact that Venezuela will have negative growth for the first time in a long while, even though, including 2010, they are still well above Canada and the US when it comes to GDP growth. You're desperately cherry picking numbers to arrive at the flawed conclusion that Venezuela is collapsing as the result of Chavez policies - while ignoring the popularity he gets from the people who actually live in Venezuela, and the incredible social benefits he has brough to the country.

The way you talk, would suggest that Chavez just started making changes yeterday, which triggered the negative GDP - but in fact he's been putting these in place the last ten years, with strong economic growth until this year. Yet, you ignore all the positives and just focus on the few negatives that exist.

It would be like if the Maple Leafs beat the Canadians 10-1, and all you could do was suggest that the goal that was let in was indicative that the Leafs were a terrible team and in huge trouble. You conveniently ignore so many facts, that I have no choice but to conclude that you are intellectually dishonest and not worth any more time.

[Argus]

The 90's when Reagan's tax slashing policies came to bear fruit were also a golden era of prosperity. Also the longest period of economic expansion.

It was a golden age financed on debt, and it was a golden age replete with bankruptcies and poverty for tens of millions. It was an era of oursourcing, of downsizing, of shipping jobs overseas, of rising profits for multinationals but not much in the way of wage increases for ordinary people, of huge increases in the cost of health care in the US, and a fall in the quality of health care in Canada.

I don't consider the 90s to have been any kind of golden age.

[bloodyminded]

Where do you get off saying the ouster was illegal when their own supreme court okayed it?

Overthrowing an elected government is illegal...according to the Honduran Constitution.

[jbg]

Where do you get off saying the ouster was illegal when their own supreme court okayed it? Are you some sort of scholar on Honduran law?

Overthrowing an elected government is illegal...according to the Honduran Constitution.

Is there a Honduran constitutional expert in the house?

[blueblood]

You're just going to keep flogging that dead horse, aren't you?

Alberta, also floating on oil, had negative GDP growth in 2009. Do we need to push the panic button there, and suggest the sky is falling as well? Or, is that different?

Just like you flog the dead horse about how Chavez is the hero of the poor even though he keeps them impoverished.

Alberta is one of the most advanced economies on Earth. Every advanced economy went through a recession and has slow growth projections. Alberta is on pace for an approximate growth rate of 3% per year until at least 2013.

http://www.finance.alberta.ca/publications/budget/budget2010/economic-outlook.pdf

Venezuela's growth prospects however don't look so good

http://www.reportbuyer.com/countries/south_america/venezuela/venezuela_business_forecast_report_q4_2010.html

Ouch.

http://www.businessweek.com/news/2010-05-24/rbs-cuts-venezuela-2010-gdp-forecast-to-4-5-on-currency-rules.html

http://news.bbc.co.uk/2/hi/8464960.stm

http://www.businessweek.com/news/2010-06-07/venezuela-gdp-may-shrink-6-2-morgan-stanley-says-update1-.html

Ol Hugo is a prize!! Hyper inflation and GDP contraction for everyone!

Canada meanwhile will slogg it through at about 3%

http://www2.parl.gc.ca/sites/pbo-dpb/documents/CABB%20-%20E.pdf

Capital that is aimed slowly at extracting the natural resources of the country, in exchange for a pittance of the real value of those goods, and a few token jobs is not needed. Much better to take the resources yourself and re-invest the profits into the country.

Do you know anything about financing? Chavez cut off financing by foreign equity. How is Chavez supposed to pay for his poor crusade while at the same time financing oil production himself. He can't and the GDP numbers are showing it. The party is over for Chavez.

There are some obvious difference there.

Firstly, most of the countries you listed also provide free education to their citizens, so that they can compete for the real jobs. Not sure why you have China included as a bastion of free trade and democracy. Oh, and Ireland is just doing swimmingly now isn't it? All that money that they took in (thanks to lower taxes) and surprise, surprise - their economy is in such a mess, with such huge deficits that the EU has to step in and save them. I guess that is what happens when your economy is built on speculation - it crumbles like a house of cards, at the first sign of panic.

One, there is no such thing as a free education. Gov't picks up the tab.

Two, China has opened the door wide open to foreign investment, and as a result is the economy that is dragging the world out of recession.

Three, Lets talk about Ireland shall we? The main EU countries England, Germany, and France couldn't bail out Ireland fast enough. They were tripping over themselves to do it, why? To provide stability in the Eurozone and try to leverage Ireland to increase its 12.5% corporate tax rate which gave Ireland a huge advantage over these countries and was instrumental to growth. In all likely hood Ireland told France, and Germany to pound sand at the corporate tax increase. Ireland has taken severe austerity measures, and is slated for positive GDP growth in 2011 of 2.5%, and 4% by 2013. I like Irelands prospects much better than Venezuela.

http://www.aibeconomics.com/PDFS/Irish%20Economic%20Outlook%20-%20Oct%202010.pdf

Sure, Brazil is doing well. But it is not because of opening the doors to free trade, free markets and unregulated capitalism. Nor is it because they allow foreigners to come in and take away all of their resources for nothing. Lula is generally considered socialist when not compared to Chavez. In fact, he was the one who stood up to the US and the EU and demanded better deals for Latin America if they wanted free trade.

You keep telling yourself that. Lula will say one thing and do another. Brazil is a success because of freer trade, free markets, and capitalism. Brazil allowed foreigners to come in and invest and get a respectable return on investment that is in line with corporate policy. The companies are taking all the risk, providing all the capital, so why shouldn't they get a respectable return on investment? Lula's business friendly policy has made the lives better for Brazilians, what he wants to do with his cut is up to him. He chose to spend it on social programs. Unlike Chavez, Lula knows that getting 5-10% for owning a resource is better than trying to charge 50% and collecting nothing.

The oil companies don't give Chavez anything. They buy the rights for the minerals and oil. And Venezuela can take the oil out of the ground by themselves or get other partners. They don't need to be held hostage to Western oil companies demanding onerous percentages of the profit. In fact, after Chavez changed the deal to spend more on the people of Venezuela, most of the oil companies stuck around. They aren't making as much profit, but they are still doing quite well.

The oil companies give gov'ts a royalty for the right to extract a resource. How will Venezuela take oil out of the ground if they have no money to do it? Do you think labour and equipment are free? This is where the opportunity cost comes in because of Chavez's stupidity, there is a cost to unutilized labour, unutilized oil reserves, and lost royalties. How can Chavez pay for his poor people's crusade at the same time develop his resources? Is he going to print money? As for a partner, there is no country out there either stupid enough or has enough resources to participate in Chavez's madness. Why do you think the Chinese are investing in the oil sands and not in Venezuela? The only reason the oil companies stuck around in Venezuela is because their initial capital costs are already sunk in the assets and it is most cost effective to operate and wait for Chavez to nationalize them, rather than shut down. That is robbery and that is why no foreigners invest there.

You're hilarious. Year after year of ridiculous growth, and now the first year of negative growth since the strike/coup, and you're ready to declare Venezuela a huge economic failure, and it isn't even official yet. You can't have the level of growth that Venezuela had, without a downturn eventually. The infrastructure can't keep up.

I'll go with the various business columnists, analysts, CEO's over some wannabe communist any day of the week. Venezuela is projected for long term recession lasting years, suffers from hyperinflation, and can't even keep electricity going throughout the country. Wow what a prize!

You don't have any facts. All you have is the fact that Venezuela will have negative growth for the first time in a long while, even though, including 2010, they are still well above Canada and the US when it comes to GDP growth. You're desperately cherry picking numbers to arrive at the flawed conclusion that Venezuela is collapsing as the result of Chavez policies - while ignoring the popularity he gets from the people who actually live in Venezuela, and the incredible social benefits he has brough to the country.

The way you talk, would suggest that Chavez just started making changes yeterday, which triggered the negative GDP - but in fact he's been putting these in place the last ten years, with strong economic growth until this year. Yet, you ignore all the positives and just focus on the few negatives that exist.

It would be like if the Maple Leafs beat the Canadians 10-1, and all you could do was suggest that the goal that was let in was indicative that the Leafs were a terrible team and in huge trouble. You conveniently ignore so many facts, that I have no choice but to conclude that you are intellectually dishonest and not worth any more time.

Here's the bottom line:

I have facts and have backed them up. The fact that you think that Venezuela is above Canada and the US in terms of GDP growth this year shows how ignorant and blind you are. The fact that Venezuela as an emerging market can't put positive GDP growth when every other emerging market has outstanding growth is pathetic. Emerging markets are at a place where England was at the end of the 19th century when a whole new middle class of people emerged out of being poor peasants. The fact that Venezuela can't do this is pathetic.

The way you talk you sound like a commisar for the USSR, and that you need to make excuses for political intimidation, lack of growth, and bad policy shows what kind of a sheep you are. What positives are there in Chavez's rule? People are a little better off, when they should be much better off under a different gov't?

You are the one conveniently ignoring many facts, and the fact that you are trying to call me out on it makes you a hypocrite. I have no choice but to call you not only intellectually dishonest, but a shill for a failed ideology, and ultimately an ignorant fool. As for not being worth any of your time, it's too bad I won't get to make you look foolish anymore. You and your lousy argument are done.

[blueblood]

It was a golden age financed on debt, and it was a golden age replete with bankruptcies and poverty for tens of millions. It was an era of oursourcing, of downsizing, of shipping jobs overseas, of rising profits for multinationals but not much in the way of wage increases for ordinary people, of huge increases in the cost of health care in the US, and a fall in the quality of health care in Canada.

I don't consider the 90s to have been any kind of golden age.

You speak of outsourcing as if it were a bad thing. Do you have a problem with other countries being richer?

If somebody can do something for less cost, why not invest in them? The wage earners of North America cooked their own goose by trying to extort companies to pay for a livestyle they weren't worth. One day, the same thing will happen overseas. This is the "invisible hand" at work on a macroeconomic level, and the world is now richer for it. People in developed economies can either ride the wave or get sucked in the undertow. Canada as a whole is better off with a richer overseas market. The gravy train is over for wage earners in Eastern Canada and the US, and its about time.

Canada stands to become richer. I'll stand by the fact that the 90's was a golden age, and the world is richer because of it.

Also, debt financing was a big reason Europe got out of the dark ages, was the Renaissance not a golden age as well?

[jbg]

You speak of outsourcing as if it were a bad thing. Do you have a problem with other countries being richer?

If somebody can do something for less cost, why not invest in them? The wage earners of North America cooked their own goose by trying to extort companies to pay for a livestyle they weren't worth. One day, the same thing will happen overseas. This is the "invisible hand" at work on a macroeconomic level, and the world is now richer for it. People in developed economies can either ride the wave or get sucked in the undertow. Canada as a whole is better off with a richer overseas market. The gravy train is over for wage earners in Eastern Canada and the US, and its about time.

Generally I'm pretty free-market. Where I do have a beef with free trade though is competing with slave labor (spelled correctly and not as mis-spelled on this Board so often). Most people don't realize that the Asian manufacturing tigers such as China and Pakistan pay nearly slave wages to their workers. There are few or no enforced safety standards. There are few or no enforced environmental standards.

You have a point about wages being beyond the value of the workers. But should Canadian workers have to compete with uncompensated labor?

[bloodyminded]

Is there a Honduran constitutional expert in the house?

I strongly doubt it.

The only ones making the claim are the coup-supporters (ie the radical fringe minority) who harp about the ex-president's "breaking the constitution" through the apparently violently revolutionary act of proposing a referendum.

And since they bring it up, it's reasonbale to point out that militarily overthrowing the elected government is illegal...according to the very constitution that coup-supporters suddenly have discovered a profound love for.

[KeyStone]

Just like you flog the dead horse about how Chavez is the hero of the poor even though he keeps them impoverished.

But, I've given you statistics about the wide-sweeping changes in Venezuela to support my belief that Chavez is making things better for the poor. What have you provided? A prediction for GDP growth in 2010 and 2011?

You seem to put more stock in the negative predictions than in the last five years of actual results.

You don't seem to acknowledge the many positive statistics about Venezuela whatsoever.

Alberta is one of the most advanced economies on Earth. Every advanced economy went through a recession and has slow growth projections. Alberta is on pace for an approximate growth rate of 3% per year until at least 2013.

Sure, Alberta has a strong, robust economy that is swimming in oil. But even they had a downturn in 2009.

My point is that even strong economies have occasional downturns and it is not indicative of widespread economic failure.

Venezuela's growth prospects however don't look so good

Firstly, they are going through a transformation. Change always has some setbacks along the way.

Secondly, the Western economists always underestimate Venezuela. Talk to me when the numbers are in.

They've been crying about economic collapse for the last ten years.

One, there is no such thing as a free education. Gov't picks up the tab.

Well, play semantics if you like. The fact is very few countries that do not offer universal education are able to prosper.

Name some successful countries that leave education to free market forces. If you could take the blinders off for a second, you would realize that Chavez is doing a good thing by supplying universal education.

Two, China has opened the door wide open to foreign investment, and as a result is the economy that is dragging the world out of recession.

You obviously have never tried investing in China. Do you think you can just buy local businesses there? Do you think you can just open up shop in Beijing? The government has incredibly tight controls over foreign ownership and investment. China is hardly the shining example of free market success that you would like to believe.

Three, Lets talk about Ireland shall we?

Great. Well, gosh. Who cares if their deficit was 14% of their GDP, and their banks are failing.

Let's lower taxes some more. That will help pay the bills.

Perhaps Europe is concerned about businesses locating to Ireland because of low taxes.

Because if everyone adopts the same tax structure you have a zero-sum game, where all nations are in financial trouble because they can not balance their budgets due to lower tax revenues.

As for Brazil, they snapped out of the recession sooner than most countries, but each economy is different, and responds in its own way to global influences. Venezuela grew much more quickly than Brazil prior to 2009. Now, Brazil will do better than Venezuela for the next couple of years. Generally, Venezuela's economy is largely tied to oil, so as the global economy improves, there is more demand for oil, and Venezuela's economy will outperform Brazil again.

Unlike Chavez, Lula knows that getting 5-10% for owning a resource is better than trying to charge 50% and collecting nothing.

It's just like owning a store.

You can sell 200 units of milk a day at $1.00

Or you can sell 180 unites a day at $1.25

You're simply exaggerating the elasticity. Venezuela is not as productive as it was pre-strike and yes, more foreign companies would help increase production. But perhaps the cost is simply not worth it.

The oil companies give gov'ts a royalty for the right to extract a resource. How will Venezuela take oil out of the ground if they have no money to do it?

{/quote]

They continue to take oil out of the ground, so I'm not sure what you are talking about.

Why can the government not pay for the equipment etc? Why do you seem to be under the impression that only foreign companies are capable of providing the money?

Do you know anything about finance? Do you not think that if there is a resource in the ground worth $50 million dollars, that it will be fairly easy to find the $2 million it will take to bring it out of the ground? One can perceive an opportunity cost of oil not brought out of the ground, only if one thinks the oil is limitless. Do you think all the oil that Alberta does not sell this year, is a lost opportunity?

That is robbery and that is why no foreigners invest there.

Everyone of those companies got their money back, and plenty of return on their investment. They are merely pouting that they only got 500% on their investment instead of 5000%. The only robbery that took place happened before Chavez got into power.

I'll go with the various business columnists, analysts, CEO's over some wannabe communist any day of the week. Venezuela is projected for long term recession lasting years, suffers from hyperinflation, and can't even keep electricity going throughout the country. Wow what a prize!

[/quote[

I'll go with actual numbers than forecasts any day of the week.

The last five years of GDP growth are easily in the top 10% of global economies.

The only negatives you have are forecasts. Good years don't count to you apparently.

You put more stock in the predictions, than any actual numbers.

I have facts and have backed them up.

Yes, but you ignore other facts. You ignore positive years of growth, increased enrollment, increased literacy, decreased infant mortality, decreased maternal mortality. Instead, you just say Venezuela is poor because of Chavez with nothing to back that up other than predictions for future calamity.

Chavez has been in power for many years. Therefore, if his policies are so inept, Venezuela should be a shithole now.

Where are your statistics to show how awful Venezuela has become under Chavez? Where are your arguments? They have an electricity problem? Is that all you got?

I have no choice but to call you not only intellectually dishonest, but a shill for a failed ideology, and ultimately an ignorant fool. As for not being worth any of your time, it's too bad I won't get to make you look foolish anymore. You and your lousy argument are done.

Chavez's greatest failure is in providing an unpredictable investment climate, and he could have done a much better job of that. However, he has done amazing things for the people of Venezuela. And for some little arrogant shit to come in and try to tear down all that he has done for the poor, with no evidence to back it up other than some economic forecasts, which don't speak to literacy, poverty, health, education or general well-being is abhorrent.

[bloodyminded]

You obviously have never tried investing in China. Do you think you can just buy local businesses there? Do you think you can just open up shop in Beijing? The government has incredibly tight controls over foreign ownership and investment. China is hardly the shining example of free market success that you would like to believe.

What's even more amazing is that we see all talk of "tyranny" and so on is a blusterous smokescreen.

Criticize Venezuela, but defend the far, far more authoritarian China? Hell, you can't even compare the relative freedoms of the two countries, because the comparison is absurd.

In other words, for some people, moeny is the only indicator.

Well, not quite: I suspect there's a strong streak of servility to such arguments as well: "official" relationships are frostier with Venezuela than with China; therefore, whichever regimes are more supported by wealthy investors and corporations and political leaders...are automatically superior to those that aren't.

I love the smell of propagandized indoctrination in the morning!