Economic doom…

GDP growth in Venezuela over the last 5 years is 87% (only a small part of this is from oil). (1) GDP growth in the US over the last 5 years is 15%. (2) For the most recent data, in the fourth quarter of 2007, GDP growth in Venezuela was 8.5%. (3) GDP growth in the US for the fourth quarter 2007 was 0.6%. (4)

As for how this economic boom is being handled, it is quite different than the way the US runs its economy. Venezuela’s economy is currently running 8% in the black. If this were the case in the US, instead of a yearly deficit of 729 billion, we would have a 1.1 trillion dollar surplus. (see note 1)

The food shortages that are mentioned on this thread are a direct result of the economic boom. Poor people who in the past were never able to buy meat, milk eggs, etc, can now afford them. Demand for these items has increased dramatically (chicken consumption over the last four years has increased 49% (5) and egg consumption is up 40% over the past 6 years (6)). This shortage should only be temporary until they find a way to meet the booming demand. This “food shortage” meme is a ingenious way of portraying a booming economy in a negative way. Due to the booming economy, car sales have also went through the roof. (7) As a result, there are horrible traffic jams in Caracas. Maybe the right wing sites will start blaming traffic jams on Chavez.

As for the meme that Chavez is “nationalizing everything,” private sector GDP growth is much higher than public sector GDP growth during the Chavez era. (8)

As for inflation, the current rate is around 20%. This is high, but much better than in the mid 1990’s, when the rate was over 100% under the wonderful “capitalists.” (9)

It is hilarious that people in the US, who are about to go into a depression, are making comments about the Venezuelan economy. Priceless.

1) cepr.net/documents/publications/venezuela_research_2008_03.pdf
2) I looked up real GDP growth here:
measuringworth.com/usgdp/?q=hmit/gdp
3) economist.com/countries/venezuela/profile.cfm?folder=Profile-Forecast
4) bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
5) thepoultrysite.com/articles/897/venezuela-poultry-and-products-annual-2007
6) eluniversal.com/2008/03/11/eco_art_consumo-de-huevos-ha_751704.shtml
7) reuters.com/article/companyNewsAndPR/idUSN1032569020070110
8) see table 1 here:
cepr.net/documents/publications/venezuela_update_2008_02.pdf
9) venezuelanalysis.com/files/images/economy_figure_3.gif

dave742 on April 5, 2008 at 10:01 AM

Monterrey-based Cemex stands to lose in a dictated settlement

This is the kind of nonsense that is written about every Venezuelan takeover. When the deal goes through, the reality turns out to be far different. When Venezuela took over AES, “Venezuela paid 20% above the market price for their share of the company…At the signing ceremony, the CEO of AES Paul Hanrahan said that the negotiation process had been ‘fair’ and he also said that, ‘Of all the business we have done in 62 countries, this turns out to be the most beneficial.’” (1)

As for the oil takeover:

“Despite Chavez’s virulent anti-Americanism and ceaseless talk of ‘oil sovereignty,’ even Venezuela’s tough new terms are better than those offered by other oil-producing countries with closer political ties to the U.S. After all, Venezuela will continue to permit private companies an ownership stake in exploration and production projects — something prohibited by Mexico and Saudi Arabia.” (2)

After the takeover, instead of the oil companies raping Venezuela, they are now only making a huge profit. Only Exxon decided to fight. Initially, they won a freeze of some Veneuelan assets, (3) but that was quickly overturned. (4) So Exxon gets nothing. Oh well.

1) seekingalpha.com/article/27025-is-it-too-soon-to-celebrate-venezuela-exposed-stocks
2) usatoday.com/money/world/2007-04-04-venezuela-1b-usat_N.htm
3)news.bbc.co.uk/2/hi/business/7233964.stm
4)reuters.com/article/rbssEnergyNews/idUSN1822806220080318

dave742 on April 5, 2008 at 10:33 AM

burt:

Mexico nationalized it’s petroleum industry decades before Chavez did the same

“President Carlos Andrés Pérez nationalized Venezuela’s oil in 1976.”

Chavez did not nationalize the oil industry, he renegotiated the terms of the contracts with foreign companies, including a higher percentage stake in oil projects.

dave742 on April 5, 2008 at 11:04 AM

JiangxiDad :

If there’s a Mrs. Chavez

There is not a Mrs. Chavez, but there are rumors he is dating Naomi Campbell. Socialists get this, conservatives get this. I know what my choice is.

dave742 on April 5, 2008 at 11:28 AM

rhodeymark:
I assume that by CERN you mean CEPR. Pick out any fact you want from either of the two CEPR reports I linked, and I will find you as many sources as you would like that confirm that fact. Your insinuation that CEPR is fabricating data is ridiculous. Economic data for Venezuela is widely reported. Please tell me speifically what you are doubting.

dave742 on April 5, 2008 at 11:44 AM

Thuja:

Venzuela stock market fell 27.43% in 2007

You brought up a fact! Scary. First one so far by anyone but me. I congratulate you. Your suspicions about a “past bubble” are correct. The Venezuelan market was up over 100% in 2006. So if it is down 27% so far in 2007, it’s not the end of the world.

reaganaut:

By small, you mean about half of all revenue, and about 90% of all export revenue?

If you could read with comprehension, you would see that I said that only a small part in GDP growth is a result of the oil sector. I did not say anything about export revenue. If you are going to respond, it is best to respond to what I actually said. If you look at Table 1 that I referenced above, you will see that the oil sector is not fueling the outstanding GDP growth, and is actually contracting. So when you say “half the growth is from record high oil prices,” you are wrong.
You don’t think it is fair to use percentages when comparing the US to Venezuela. If it is not, then how do you compare the rate of growth between two countries that have different size economies? I don’t know of any other way. Please enlighten me.
Then you start comparing raw numbers, like saying “US per capita income is 4 times greater.” You say using percentages is wrong, but then make statements like this using raw numbers. This is silly. I realize GDP per capita is greater in the US than in Venezuela. This is not a shock to anyone. The fact, however, is that Venezuela is booming right now, and the US is about to enter a depression. A better comparison is to compare numbers within Venezuela pre-Chavez to post Chavez. Compare the socialist to the capitalists within the same coutry. There were oil booms before, and the Venezuelan economy did not perform anything close to what it is doing now, unless you look at the top 0.1% of the population. That was the deal pre-Chavez, the top 0.1% of the Venezuelan gets a small cut of the oil profits, and the US oil companies get the rest. Chavez simply wants to keep a greater share of the profits from the sale of the natural resources of his own country. How evil.

Fritz J:
I said “GDP growth”. Why is it so hard for people here to understand this concept?

“I would further add that when your inflation rate is about two and a half times the growth rate of your GDP, things don’t look very good for the future.”

I guess in the mid-1990’s, when the capitalists were in charge in Venezuela and GDP growth was non-existent along with a 100% inflation rate, the future looked even worse. Maybe that’s why Chavez got elected.

dave742 on April 5, 2008 at 1:56 PM

Volmagic:

GDP is several million dollars, its easy to get an 86% growth. It is more difficult to hit those percentages when your GDP is almost 14 trillion.

Venezuela’s GDP is 170 billion, not a few million. Despite your exaggeration, it is true that a country the size of the US cannot post these kind of growth numbers. It is not true, however, to say it is easy to do this in Venezuela, or any other country its size. If it is, why didn’t any of the previous capitalist leaders in Venezuela do it? As I said before, there were previous oil booms, and the economy did nothing comparable to what it is doing now. Are you saying that if a capitalist was running Venezuela the past 5 years, GDP growth would have been 200%? Why didn’t they do this before Chavez, then?

“What is GDP per capita in Hugo’s paradise?”

Let’s compare Venezuela’s GDP per capita to some other central and South American countries that have been lucky enough to benefit from US intervention over the years. I’ll also throw in Cuba as well:

Venezuela: 8,719
Nicaragua: 1,000
Columbia: 3,869
Cuba: 3,958
El Salvador: 2,912
Haiti: 608

I don’t see that US “involvement” has done Haiti, Nicaragua, Columbia or El Salvador any good.

“shutting down of the free press”

Do these ridiculous comments ever end? The license for RCTV was not renewed. RCTV was involved in a coup attempt on the democratically elected government, and they also participated in the lockout as well. Do these types of actions warrant a response? If NBC was involved in a violent attempt to overthrow Bush, do you think it might be OK to not renew their license years later? Would that be excessive? Did you know that the FCC has not renewed licenses for much less than that? Actually, they have done so over 100 times. If Chavez is “shutting down the free press” by not renewing the license of one station, how evil is the US for doing it 100 times?:

“Only about 100 stations have lost their licenses at renewal since the [FCC] was founded in 1934.”
The New York Times
February 25, 1989, Saturday, Late City Final Edition
SECTION: Section 1; Page 37, Column 6; Financial Desk
HEADLINE: Radio License Is Revoked

“An FCC spokesman says the agency denies applications for license renewals only about two or three times a year.”
Christian Science Monitor (Boston, MA)
April 28, 1982, Wednesday, Midwestern Edition
SECTION: Pg. 6
HEADLINE: A one-man radio station’s fight to stay on the air
BYLINE: By Janet Domowitz

Also, RCTV is still broadcasting in Venezuela on Cable and satellite.

Here are some specific examples of how the FCC has not renewed licenses here in the great USA:

1. License renewal denied for running a bogus contest. Is that worse than participating in a coup attempt?:

“The Federal Communications Commission voted Wednesday to revoke the license of an upstate New York radio station, saying the owner had lied, had run a contest where the prize was awarded to the station and had racially discriminated against a job applicant.‘He has 90 days to go off the air or 30 days to appeal’ to the United States Court of Appeals in the District of Columbia, said Rosemary Kimball, an F.C.C. spokeswoman. Among the charges against Mr. Serafin was that he discriminated against a black job applicant in 1980, calling her employment agency and demanding, ‘Don’t you have any white girls to send me?’ This was the first time since 1981 that the F.C.C. had pulled a station’s license on character grounds, Ms. Kimball said.”
(See NYT article above)

2) Obscenity reason, Worse than participating in a coup?:

“… last week, on another front – obscenity – the [FCC] moved against a Chicago television station in a way that pre-empted the jurisdiction of the courts, sparking a new row. As a result of an accusation of obscenity by a competitor for a broadcast licence, the commission decided not to renew the licence of Video 44 and granted it to the competitor: constitutionally, the courts are the sole arbiter of obscenity.”
The Guardian (London)
January 18, 1988
HEADLINE: The Media: Liberty and licence – The FCC controversy
BYLINE: By PHILIP ABRAMS and JEFFREY CUNARD

3) For lying about how many hours an employee worked. Is lying worse than participating in a coup attempt?:

“The Federal Communications Commission’s review board, in a rare action, has refused to renew the license of an Ohio radio station on charges the station’s owners lied to the commission. At issue in the case of WBBY-FM is whether the station owners were candid when they said Richard Nourse, a part owner, spent 40 hours a week as station manager. The review board did not believe that Mr. Nourse, who the F.C.C. staff said had no desk and no office at the station, was substantially involved in running the station.”
The New York Times
July 11, 1986, Friday, Late City Final Edition
SECTION: Section C; Page 30, Column 5; Cultural Desk
HEADLINE: F.C.C. Won’t Renew Ohio Station’s License

4) “misconduct”:
“A judicial panel of the Federal Communications Commission ruled last week that the government should not renew the broadcasting license of Washington radio station WOOK-FM. Citing past misconduct by WOOK’s owners, the FCC review board said District Broadcasting Co., a minority-owned firm, should take over WOOK-FM’s 100.3 frequency from the United Broadcasting Co. Inc., which has been operating that station since 1951. Affirming an earlier decision by an FCC law judge, the review panel concluded that District Broadcasting was a superior company because United’s record ‘is significantly marred by serious past misconduct.’ In previous FCC actions, United was penalized with monetary fines and ultimately with the loss of its AM radio license after the commission found the station had broadcast misleading advertising and lottery information.”
The Washington Post
August 29, 1983, Monday, Final Edition
SECTION: Washington Business; Regional Report; Pg. 5
HEADLINE: FCC Panel Rules License for WOOK-FM Should Not Be Renewed

5) For bogus reasons (having no relation to criminal conduct) so the FCC could take a license away from a guy in his basement so they could give it to a corporation. What would you say if Chavez did not renew the RCTV license in the absence of criminal misconduct?:

“The Federal Communications Commission has not renewed Mr. Geller’s license – the first time the FCC has denied a renewal in the absence of criminal conduct…Geller and his listeners say he has put in the sweat to maintain a radio station that fulfills their needs. Geller, whose downtown basement studio doubles as his home, has operated WVCA since 1964. Between signing on at 10 a.m. (11:00 on Sundays) and signing off near midnight, Geller plays from 37 tapes, each having 12 hours and 40 minutes of classical music….There are no news breaks, hardly any ads, few public service announcements, and, lately, pleas from Geller for help in appealing the FCC vote…Since January 1981 the FCC has not required stations to conduct surveys to determine community needs or set aside a minimum time for broadcasting non-entertainment programs such as public service announcements or public affairs programs. Still, sources on both sides of the dispute and at the FCC say Geller’s attention to these areas was judged insufficient…the commissioners, by a 4-to-2 vote, awarded the frequency to Grandbanke Corporation, a firm formed in anticipation of aquiring Geller’s license. Steve Harris of the FCC’s general counsel says one weakness in Geller’s renewal application was his sampling of community opinion.
Geller says his rate of less than 1 percent of non-entertainment programming, criticized by the commissioners last month as inadequate, was sufficient for his license renewal in 1972. Before deregulation, the FCC recommended that FM stations set aside at least 6 percent of their broadcast time for non-entertainment programming.”
Christian Science Monitor (Boston, MA)
April 28, 1982, Wednesday, Midwestern Edition
SECTION: Pg. 6
HEADLINE: A one-man radio station’s fight to stay on the air
BYLINE: By Janet Domowitz

6) fraud:
“A Federal Communications Commission administrative law judge has refused to renew the license of a television and radio station in Lansing, Mich., because of ‘misrepresentation and fraud’ in advertising and programming practices.”
The New York Times
November 14, 1981, Saturday, Late City Final Edition
SECTION: Section 1; Page 14, Column 5; Cultural Desk
HEADLINE: F.C.C. JUDGE BARS TV LICENSE

We must be living in the most oppressive country in the world considering all these “shut downs.”

Rhodeymark:

“Glad I didn’t listen to you back in 2000”

Actually, from 2003 to 2006 I gradually removed all my money from the US stock market. I have been out for 2 years. But don’t worry about me, I have a large safety deposit box filled with gold that I bought from 300 to 500 dollars. I am doing OK right now. Even better when the market hits 7,000 again.

“Guess you’ll be taking safe harbor in Caracas?”

Actually, I have invested in the Venezuelan market as well, and have done very well. Thanks.

Thuja:

“there is a chance that Chavez is more of a crony capitalist than a socialist and perhaps Venezuela will prosper under him”

That’s what’s so funny about you people. Chavez is much closer to a capitalist than a socialist. Venezuela is not even close to Sweden. But for some reason he is the evil commie.

Fusionaddict:

“The Venezuelan GDP growth has been roughly 10% per year, due solely to increases in oil prices”

Can you please look at table 1 here and tell me how you can make this statement after I keep referring to it?

“Venezuelan inflation is at a rate of 21.9% as of January, compared to 4.4% in the US.”

And what did you think of Venezuela in 1996 when inflation was 110%? Were they evil then? Was the inflation rate then due to socialism?

Poverty: There are more people that live in poverty in Venezuela than in the US? Wow. You are a research wizard. The point is that poverty under Chavez is decreasing under Chavez, and it is the reason the poor people love him and re-elect him time after time.

As far as inequality, it is also high. Again, inequality is being reduced sharply under Chavez. See the table of Gini coefficients here. In undeveloped countries the West has for years instituted a system where they steal that nations resources, pay the top 1% of the population a cut and have them violently rule over the vast masses of poor. Chavez has not completely undone the effects of this, but he is improving the situation. Funny how Chavez gets the blame when this was the system under capitalism for decades.

dave742 on April 5, 2008 at 4:32 PM