Venezuela cements its economic doom
posted at 8:00 am on April 5, 2008 by Ed Morrissey
Share on Facebook | regular view
Hugo Chavez has nationalized another economic segment in Venezuela, expanding his socialist vision while his economy continues to contract. Instead of oil, Chavez has gone after cement, attempting to monopolize the construction component. Mexico objected to the nationalization as its Monterrey-based Cemex stands to lose in a dictated settlement, but Chavez appears not to care about foreign investors at the moment:
Venezuelan President Hugo Chavez is planning a government takeover of his country’s cement industry, his latest effort to impose state control over key sectors of an economy battered by shortages and inflation.
Chavez made the declaration during a televised cabinet meeting late Thursday. He has long accused foreign cement companies of keeping prices high and supplies tight by exporting their products to other countries while Venezuela is suffering a housing shortage.
“We’re going to nationalize the cement industry. Enough already!” Chavez said.
The action is a blow to Monterrey, Mexico-based Cemex, the largest producer in Venezuela. Industry companies LaFarge of France and Switzerland’s Holcim Ltd. would also be affected.
Chavez nationalized the oil and telecommunications industries in Venezuela already — and has not shown much skill in managing either. Few believe he can manage the cement industry any better. The kinds of shortages he uses as excuses for nationalization will increase, as his interference has produced in milk, meat, and sugar production.
If Chavez thinks the economy looks bad now, the latest nationalization will force foreign investors out more quickly than ever. Many overlooked the nationalization of the oil fields, as most nations have nationalized oil production. However, with what looks like a petulant and capricious decision to squeeze Mexican and European companies out of Venezuela through a discounted asset grab, Chavez is running out of potential allies. Mexico, France, and Switzerland will not just protest the decision but, without any economic incentives left, will rethink their diplomatic stance towards Chavez as well.
While the world awaits Robert Mugabe’s departure from Zimbabwe, we have watched the start of another Zimbabwe in the making in South America. Chavez has followed Mugabe’s economic playbook, and he will find the same results: poverty, despair, and shortages in a land that should produce surpluses. Hopefully Venezuelans will draw the appropriate lessons from Mugabe’s regime and rid themselves of Chavez before complete economic collapse. Otherwise, they too will learn what 150,000% inflation means.
You must be logged in to post a comment.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « Previous 1 2 3 Next »
Seriously, I’d hold off on the victory parades until you can at least spell the name of the very country you are pretending to know something about.
Golden Boy on April 5, 2008 at 7:28 PM
Be nice he’s just using “logic and facts.” We used to call it “BullSh!!” now that we’re “progressive” it’s logic and facts.
jdkchem on April 5, 2008 at 7:33 PM
A decent analogy. I’ve always looked at them as wannabe plantation owners who look on the populace as their slaves who will be provided food and shelter in return for their labor. A socialistic society always has masters who receive majority benefits from production and serfs who receive a very small part.
a capella on April 5, 2008 at 7:34 PM
Yep, logic and facts, and Chimpy. I get it completely. I’ll vote socialist in the next round.
Entelechy on April 5, 2008 at 7:48 PM
Chimpy on April 5, 2008 at 7:14 PM
Do you also believe that nationalising industries is not communism ?
Johan Klaus on April 5, 2008 at 8:04 PM
The nationalising of farms in Zimbabwe really worked out well also.
Johan Klaus on April 5, 2008 at 8:10 PM
And which university do you attend?
Johan Klaus on April 5, 2008 at 8:13 PM
The leftest professors are really good at indoctrination.
Johan Klaus on April 5, 2008 at 8:16 PM
Employed as PR specialist for Uncle Hugo.
Hammie on April 5, 2008 at 8:53 PM
It would seem to be time to remind everyone of that ancient and revered old piece of advice…
“Please don’t feed the Trolls”
Thank you for your attention.
trigon on April 5, 2008 at 9:25 PM
Hi Chimpy! I am glad you’re still around. I look forward to hearing from you.
Johan:
I thought I already told you, but it’s been decades since I’ve been in school. I am not sure why you keep asking.
So when the UK nationalized their steel, airline, gas, oil industries, etc, they were a communist country? I did not realize the UK was communist in the 60’s and 70’s, I guess I can learn something here.
dave742 on April 5, 2008 at 9:54 PM
“Dave” used to infect (and eat up a lot of bytes at)drsanity’s site with the same “treasure-trove” of Venezuela-as-paradise-under-Chavez bushwa. “Dave” was usually shot down by commenters who had actually lived under Communist rule, particularly in the Soviet satellites.
What a PR flack for a despot!
(Your little simian friend has not raised the level of discourse much either… as usual.)
onlineanalyst on April 5, 2008 at 10:20 PM
The CEO’s making 100’s millions should look at Hugo and take a lesson. No free country can continue without a middle class. when you have the super rich and the poor you get revolutions and most of the side effects are not good. A major reason no revolutions has happened in the USA for the last 150 years has been the incredible gains made by the middle class. when you import cheap labor, export good jobs the middle class become anti-social, if you do this long enough you get revolutions. Already we are seeing protectionism, class warfare, a revival of unions, now we are starting to see strikes at GM, Ford, American axle, the slow down of the independent truckers.
You can not have a government by, for and of the corparations at the expense of the avgerage person. american pie is big enough for everyone and those at the top need to thing long and hard not just about the bottomline but also about the demand side of their business. If things continue on i can see in 10-20 years a socialist takeover of the country. BHO rises in the polls today show that the USA is increasingly moving to that regard. FDR was able to do it the last time the income earnings rose bewteen the rich and the poor. If the government wants to continue to have a stable economy and growth that must address the issue of wages. Not by a min wage but by enforcing the laws of immigration and taxing the imports to more equate with the real cost of exported jobs to China.
unseen on April 5, 2008 at 10:28 PM
You had to be there.
Open plea:- would everyone please stop using the phrase ” wealth redistribution” – it’s theft, pure and simple!
OldEnglish on April 5, 2008 at 10:59 PM
Hugo’s so Mickey Mouse–just like Dave.
andycanuck on April 5, 2008 at 11:46 PM
unseen on April 5, 2008 at 10:28 PM
So what are you saying?
That we should have socialism now to avoid it tomorrow?
The reason that a nullity like BHO is where he is right now is a combination of our brainwashed populace, propagandized by 30 years of PC crap, endless identity politics and a school system that refuses to teach American values. And, of course, a MSM that is pushing this witless slimeball down the nation’s throats.
If those are “racist” thoughts, then I couldn’t care less. It’s obvious what is going on here, and it’s both disgusting and seditious.
TexasJew on April 5, 2008 at 11:54 PM
dave742 on April 5, 2008 at 9:54 PM
You sound like you are in college. And nationalising the industries really worked well did’nt it?
Johan Klaus on April 6, 2008 at 12:31 AM
If you had ever been to Chechoslovakia and later returned to the Czech Republic, you could see the stark contrast between socialism { communism } and free enterprise. With socialism there were empty shelves and shortages and a very poor standard of living. Now the country is thriving and the prospects for the future are very good.
Johan Klaus on April 6, 2008 at 12:45 AM
I honestly don’t understand why socialism is still considered a viable political theory. It legitimately escapes me that people still believe in it despite historical record.
Interesting point, unseen. Adding the fluidity of the movements between the classes, I think you are onto something.
Spirit of 1776 on April 6, 2008 at 1:05 AM
The former Eastern bloc was communist, not socialist. I lived and suffered it for way too long.
Anyone from here who advocates communism, or its next up, but still anti-human spirit sister, is simply insane, and hasn’t been forced to exist in either.
A billion pages of comments won’t change this mind. Take your Utopian idiocy and go live there. I wish it on you with all I’ve got.
Entelechy on April 6, 2008 at 1:40 AM
With Englands foray into communism, it almost brought the country to the brink of collapse.
Johan Klaus on April 6, 2008 at 1:40 AM
dave742 on April 5, 2008 at 9:54 PM
There is not much to choose from, between socialism or communism. Of course there is no freedom with communism.
Johan Klaus on April 6, 2008 at 1:45 AM
The left is pushing the class warfare in the U.S.. We have very good upward mobility in this country. With hard work almost every generation improves. The opportunities that we have got, are because of our freedom and the more control that the government gets the more freedom we loose.
Johan Klaus on April 6, 2008 at 1:59 AM
Entelechy on April 6, 2008 at 1:40 AM
I was trying to make a point that there was not much to choose between communism and socialism. Just the degree.
Johan Klaus on April 6, 2008 at 2:04 AM
When England went socialist/communist in 1945, it was not officially communist, but the proletariat certainly behaved like little communists – until Maggie Thatcher sorted them out.
OldEnglish on April 6, 2008 at 4:09 AM
Hi TexasJew – if you check back I would like to ask a serious, but sensitive question. I don’t visit Dr. Santy’s site too often, so I wouldn’t know if she broached the subject, but it sounds as though commenters did. As a Jew, wouldn’t it take a very strong pathology to embrace a political system that inevitably veers toward totalitarianism and produces scapegoats for its failures? (Yes Fidel – your stinking carcass is a current example). Given the history of the Jewish people and the current climate of “progressive” anti-
SemitismZionism, why do you think a Jew would embrace a dictator, even one who hasn’t achieved fullness of purpose yet? The levels of ignorance and self-deception boggle my mind. And yes, Mr. Levy, I slept on that question and awoke troubled.rhodeymark on April 6, 2008 at 7:41 AM
hi
dave742 on April 6, 2008 at 7:42 AM
Mr. Levy, please also tell us how you feel about Chavez’ flirtations with virulent Islam. Also wonderful?
rhodeymark on April 6, 2008 at 7:46 AM
I am not able to post anything but a few words. Oh well. It’s not that I don’t want to talk to you wonderful people anymore. I know you will miss me.
dave742 on April 6, 2008 at 7:51 AM
fusionaddict:
The CIA world factbook does not address what sector is driving the current Venezuelan economic boom. The chart I pointed you to does. You looked it up, and unless you are stupid, you realize that it does, so you ignore it. Either you are intellectually dishonest, or you are an imbecile. Maybe you just need some help, so I will put the numbers here:
Here are the growth numbers:
2007: Oil, -6.1%, Non-oil, +9.9%
2006: Oil, -2.0%, Non-oil, +11.1%
2005: Oil, -1.5%, Non-oil, +12.2%
2004: Oil, +13.7%, Non-oil, +16.1%
Now look at these numbers, and tell me the boom is all about the oil.
dave742 on April 6, 2008 at 7:52 AM
Maybe Chimpy will pinch hit? I assume CEPR has no control over him/her/it.
rhodeymark on April 6, 2008 at 7:54 AM
fusionaddict:
In the early 1990’s, an IMF reform package was instituted by Perez. Why didn’t this gracious intervention do wonders for the Venezuelan economy?
dave742 on April 6, 2008 at 7:54 AM
I never heard this one before, and I thought I heard it all. A CNN host made the same claim, saying “the government found a new way to measure the poverty line and the numbers suddenly got better.” (i cannot put up the link – I think that is what was preventing me from posting).
Trouble is, he never said anything to back up this statement. Neither do you. I am starting to think that you are not intellectually dishonest, but you really are an imbecile
dave742 on April 6, 2008 at 7:56 AM
Volmagic:
Venezuela did not renew the license of one station because they participated in a violent coup attempt against the government, but they are allowed to broadcast on cable and satellite. You term this “shutting down the free press.” The FCC has shut down over 100 stations for much less of a reason, and you respond by saying “you will never find me defending [them].” I see a disconnect in your evaluation of the two countries. If Venezuela is “shutting down the free press,” would you agree that what the FCC did is far more repressive? Why are you not able to at least make the same comment about the US? Will you make the statement that the US is “shutting down the free press”? If not, why not?
Venezuela had a free market before Chavez. Still have one now. Please explain to me why the economy did not perform as it is now before Chavez. Your answer will be “oil boom.” My response is that the GDP growth is not fueled by oil, as I have showed and no one will respond to. Besides, there have been previous oil booms. So why haven’t previous leaders done what Chavez has?
If it wasn’t for the FARC, Colombia’s GDP would be more than doubled? That’s amazing.
What about addressing Guatemala? The US was nice enough to remove Arbenz so that the United Fruit company could work its capitalist magic on that wonderful country, but their GDP is less than one third that of Venezuela’s. How come? With the help of a US installed government and US corporations, shouldn’t they be doing much better?
Also, what about Venezuela itself? When Perez was elected, he immediately instituted an IMF reform package. Why didn’t the Venezuelan economy boom soon afterward? Shouldn’t a neoliberal reform package have resulted in an economic boom? It didn’t. It resulted in the Caracazo.
When you are poor, you do not buy a lot of meat, milk, eggs, etc. These things are expensive relative to many other foods. When your income goes up, meat consumption also goes up. This is not ridiculous.
NNtrancer:
The Venezuelan budget assumes a price of oil at $29 per barrel. When the price of oil goes below that, Chavez is in trouble. I guess he really is president for life.
dave742 on April 6, 2008 at 7:57 AM
Once again, you fail. I’m not saying the boom is about the oil, I’m saying THERE IS NO BOOM.
fusionaddict on April 6, 2008 at 8:24 AM
fusionaddict:
You said this:
“The Venezuelan GDP growth has been roughly 10% per year, due solely to increases in oil prices”
You say that the GDP growth in Venezuela is 10% a year, but you don’t consider that a boom. I guess we have different threasholds for what we consider an economic boom. To me, 10% growth for 5 years sounds like a boom, but I guess you are just hard to please.
I guess I’ll have to rephrase what I said. You said that Venezuela’s growth rate of “roughly 10% per year” is “due solely to increases in oil prices.”
Here are the growth numbers:
2007: Oil, -6.1%, Non-oil, +9.9%
2006: Oil, -2.0%, Non-oil, +11.1%
2005: Oil, -1.5%, Non-oil, +12.2%
2004: Oil, +13.7%, Non-oil, +16.1%
Now look at these numbers, and tell me the “roughly 10% per year” growth rate is all about the oil.
Imbecile.
dave742 on April 6, 2008 at 9:32 AM
Imbecile.
dave742 on April 6, 2008 at 9:32 AM
This type of post is why I ask if you were in college. You sound like my grandchildren. Are you by any chance a professor?
When oil prices go up it affects the whole economy. In Venezuel’s case {exporter} it helps every business improve and in our case {importer} it causes all prices to go up. Economy 101.
Johan Klaus on April 6, 2008 at 11:00 AM
dave742 on April 6, 2008 at 9:32 AM
The reason that I ask if you are a professor, is that it is hard to believe that anyone in the real world would imbrace communism. In the insulated world of academia, when surrounded with other like minded individuals with no real world experience, this could be expected.
Johan Klaus on April 6, 2008 at 11:05 AM
TexasJew on April 5, 2008 at 11:54 PM
There are two major competeing forces in the world. Capitalism and Socialism. this has been going on since the birth of human civilization. Neither can exist without the other. A constant battle of both brings the best, most stable government and economy. Unrestrainted capitalism brings socialism to power and unrestrained socialism brings capitalism
unseen on April 6, 2008 at 11:22 AM
Hey Dave,
With you being such a wizard with “stats“. Could you do us the great service of a comparison ?
1917 thru 1930 Mother Russia v Uncle Hugo’s reign. ummm? I’m most interested in the first few years in MR. I’m just asking….I don’t know. Just knew it ultimately failed. I was hoping you could enlighten us. With your superior research abilities and knowledge it shouldn’t be too difficult. I just don’t have the time.
I’m NOT being sarcastic. I genuinely want to know. If you are intellectually honest with yourself, you’ll look it up, then share it with us.
jerrytbg on April 6, 2008 at 11:25 AM
I keep on sayin’…we’re doing the front room (frunchroom in Chicago talk)this year and the floors on the first floor. Hugo, I need to talk to you about drywall and tape!!!
LtE126 on April 6, 2008 at 11:26 AM
just for the record Dave, I did google, too much data to sift through. I was hoping you could do a Nexus search.
jerrytbg on April 6, 2008 at 11:38 AM
Socialist think tank – an (often) incestuous cousin.
rhodeymark on April 6, 2008 at 11:48 AM
Yes, I said that, and no, I don’t consider that a boom.
If someone is making $10,000 a year and sees a 10% wage increase, that means he’s now making $11,000 a year, or $1000 more, hardly a life-changing raise. If someone is making $1 million a year and sees a 5% increase, they are now making $1.05 million a year, an increase of $50,000, equivalent to an upper-middle-class American’s annual salary. That’s big.
When your economy is on the low-end to begin with, 10% growth doesn’t amount to much. Once again, fool, you have to take raw number amounts into account ALONG WITH the percentages. If someone goes from $5 an hour to $15 an hour, they have tripled their salary, but if someone goes from $10 an hour to $20 an hour, they have doubled it…however, that double and triple are both equivalent to $10 in raw dollars. 3x = 2y.
Go back to math class, moron.
fusionaddict on April 6, 2008 at 11:52 AM
fusionaddict:
I guess the part about “due solely to increases in oil prices” is now off the table. Whatever word you want to use to describe an 87% increase in five years for a 226 billion dollar economy if fine. You can call it Steve for all I care. At least you have dropped the part where you say the inrease is “due solely to increase in oil prices.”
As for your definition, Venezuela 34th biggest economy in the world. How big do you have to be to have an 87% increase in 5 years be a boom? If it happened in Finland, would it be a boom? Canada? Or is that word only for the US?
Venezuela’s economy is bigger than GM. If GM’s sales went up 87% in 5 years, would their sales be booming?
The Economist doesn’t seem to agree with you. The even think that Sudan’s economy can boom. Idiots.
The Washington Post used the term “booming economy” for Venezuela. I guess they are a liberal rag.
dave742 on April 6, 2008 at 1:30 PM
Having recently returned from Venezuela, I have a few points to make:
1. Any economic numbers for Venezuela need to be reported in the black market exchange rates, not the artificial ‘official’ rates.
2. Oil revenue provides almost all of their hard currency revenue, which in the face of near worthless local currency, means that Hugo is facing disaster when oil prices fall (which they will, and you’d be surprized how fast).
3. Venezuelan crude is very sour and thick; the US is one of the few countries that can refine it – Hugo is pi$$ing on the wrong leg…..
Think_b4_speaking on April 6, 2008 at 1:37 PM
fusionaddict:
I hope you don’t read Newsmax. They described the Kurds in Iraq as having an “economic boom.” I doubt if the Kurdish economy is as big as Venezuela’s. Maybe you should E-mail them and tell them to go to math class. Aaaaaaaaaaaahhhhhhhhhhhhhh!
dave742 on April 6, 2008 at 1:50 PM
You’re gonna break dave’s heart with this boots on the ground stuff. He’s more into the math angle and stuff, much like Pravda or the Central Planning Committee.
a capella on April 6, 2008 at 1:58 PM
thinkb4speaking:
Not for long:
“PDVSA will invest $6 billion in the construction of the Cabruta refinery, which will have a production capacity of 400 thousand barrels of heavy and extra heavy crude oil from the Orinoco Belt region per day”
Business Wire
August 7, 2006 Monday 10:00 AM GMT
PDVSA to Build Three New Refineries in Venezuela, and Industrial Info News Alert
LENGTH: 694 words
DATELINE: CORDOBA, Argentina Aug. 7, 2006
“Venezuela’s state oil firm PDVSA will start up three new refineries by 2009, one year sooner than previously announced…The refineries will incorporate patented HDH Plus refining technology for Venezuela’s extra-heavy sour crude.”
Business News Americas – English
August 8, 2006 Tuesday 11:38 AM GMT
PDVSA;
New refineries to start ops in 2009
dave742 on April 6, 2008 at 2:10 PM
I don’t.
fusionaddict on April 6, 2008 at 3:09 PM
My peeve is not with you, but with the Arschlöcher who advocate something they’re not forced to live under.
Entelechy on April 6, 2008 at 3:16 PM
fusionaddict:
I hope you don’t read HotAir:
“Iraq’s economy is booming”
I guess this will be the last time I hear from you on this site. They don’t even know what a “booming economy” means.
Aaaaaaaaaaaaaaaaaaahhhhhhhhhhhhhhhhhh!!!!!!!!!!!!!!
dave742 on April 6, 2008 at 3:24 PM
“In 2007, Cemex obtained 3 percent of its total earnings in Venezuela.”
Xinhua General News Service
April 4, 2008 Friday 1:15 AM EST
3%. Wow. A crushing blow for Cemex.
dave742 on April 6, 2008 at 4:04 PM
If Venezuela was such a boomtown, you’d be living there, so don’t even feed us your bullsh*t.
Yes, Iraq’s economy is booming, percentage-wise. In 2003 there were 8,000 registered companies in Iraq, in 2006 that increased to 34,000, over a 300% increase. After Saddam’s removal, the GDP tripled. However, if you had actually bothered to read the article, you’d see it was predominantly focused on the negative aspects of the Iraqi economy.
And no, this will not be the last time you hear from me on this site, because I was here first, douche.
Again, you have FAILED to acknowledge what Venezuela’s actual economic numbers are in raw dollar amounts. This is immensely important. 10% GDP growth in a $226 billion economy is really not all that impressive. Consider that the US has a $13.84 trillion GDP, and its 2% growth would equal to $276.8 billion. That’s right, just our growth for a year is greater than Venezuela’s entire GDP.
By the way, in 2004, Venezuela’s per capita GDP was lower than it was 50 years before, prior to the widespread nationalization of industry:
http://eng.globalaffairs.ru/printver/939.html
And furthermore, those growth numbers you keep posting are growth numbers for INDIVIDUAL SECTORS, not what their actual contributions are to the GDP. What this meansis that, for example, petroleum industry net revenue shrank by 6.1%. It does NOT mean that oil make up 6.1% LESS of the TOTAL GDP, as you have repeatedly suggested. Non-oil revenue sources increased by 9.9%, however this does not make up a significant amount of growth in the total GDP, as the non-oil industries are incredibly small compared to petrol. Growth or shrinkage only becomes significant when the starting monetary value is high, because growth is geometric, not linear. This is why oil prices still contribute to most of Venezuela’s growth even though the industry itself has shrunk. It is so massive compared to the other industries that their contribution is negligible despite their growth. If an industry is contributing 10% total to the economy, and it experiences 9.9% growth, it now contributes…10.99%. Wow, what an explosion.
Read these:
http://news.bbc.co.uk/2/hi/americas/4692534.stm
https://www.cia.gov/library/publications/the-world-factbook/geos/ve.html#Econ
You’ll note that, as I said, the CIA World Factbook confirms that oil makes up 90% of Venezuela’s export earnings, half of government revenue, and 30% of its total GDP.
You’re wrong, I’m right, and everyone here agrees with me.
But please…don’t let the facts get in the way of your argument.
fusionaddict on April 6, 2008 at 4:23 PM
Earlier this year the state of Tamil Nadu threatened to nationalize its cement company:
“The state government has threatened to nationalise cement units in the state if manufacturers fail to bring down prices and make it affordable for consumers.”
Hindustan Times
January 2, 2008 Wednesday 2:25 PM EST
TN threatens to take over cement units
BYLINE: Lalatendu Mishra & GC Shekhar Hindustan Times
India is communist as well?
And Greece a while ago with their cement industry as well:
“The newly elected Greek government of Socialist Prime Minister Andreas Papandreou plans to nationalize 100 key industries. Initial targets include energy, production and sources of coal and oil, cement, fertilizers and pharmaceuticals, as well as possibly other chemicals.”
Chemical Week
October 28, 1981
Greece will nationalize industry
The commies are taking over the world!
dave742 on April 6, 2008 at 4:25 PM
Synergy is when we all go under, together. Kumbaya!
Entelechy on April 6, 2008 at 4:28 PM
Nationalizing industry for the express purpose of price fixing is a communist policy, yes. The free market should dictate pricing.
fusionaddict on April 6, 2008 at 4:46 PM
fusionaddict:
In your “Global Affairs” link it says this:
For Venezuela’s income, I find this:
“In 1951 the country income was 630 million dollars, of which more than 60 percent came from oil.”
Venezuela Uses its oil Wealth to Create Strong Economy
The Washington Post
Jan 20, 1953
Page 22
“Almost everything about Venezuela is faintly incredible – its $1,000,000-a-day income from oil (the population is only 5,000,000…”
Would You Believe Caracas Boasts Two TV Stations?
The Washington Post
Dec. 11, 1953
Page 53
With a national income of 630 million dollars and a population of 5 million, I see income per person being $126 per person.
As for the US:
“The report said the national per capita income was 1,639, or 4 per cent more than in 1951.”
Individual Income Rises 5% In a Year
New York Times
Aug 17, 1953
Page 15
US income was 13 times higher than in Venezuela. Illarionov says that Venezuelan income was a “notch below” that of the US. A 13-fold difference is quite a notch. Illarionov is an idiot.
Using this inflation calculator, I find that an income in 1953 of $126 per year would be $974 today.
Venezuelan income was $974 in 1953. Today Venezuelan income is $8,719. Per capita income is not lower today than it was in 1953, it is higher.
I’ll get to your other stuff later.
dave742 on April 6, 2008 at 6:43 PM
dave742 on April 6, 2008 at 1:30 PM
I see that you are a big fan of Hugo Chavez. Socialist dictators can control the economy for a little while, as Hitler did, but the economy cannot artificially be controlled for long. Would have been as big of a fan of Hitler since he made the Germaan economy grtow so fast.
Johan Klaus on April 6, 2008 at 7:33 PM
One small problem with that assessment, dave…you adjusted for inflation of the dollar, but you didn’t adjust for inflation of the bolivar.
fusionaddict on April 6, 2008 at 7:37 PM
dave742 on April 6, 2008 at 1:30 PM
I am sure that Hugo would be glad to have members of his fan club to move there.
Johan Klaus on April 6, 2008 at 7:37 PM
fusionaddict:
I found a better reference with all the countries in one article from UN data:
1950 US income: 1453
1950 Venezuela: 322
“Income per person in Soviet Held at $308″
New York Times
Dec. 4, 1950
page 1
So using this data, US income was 4.5 times higher than in Venezuela (close to what it is now). Using this better data, Ilarionov is still an idiot. Using the same inflation calculator, Venezuela’s 1950 income was $2773, today it is $8719. He is still wrong. The US income was 12,513, today it is 45,793.
Venezuela’s income has increased 3.1 fold. US income has increased 3.6 fold. Not much different.
dave742 on April 6, 2008 at 7:50 PM
But what was the currency exchange rate of the Bolivar back then? Hmmm?
fusionaddict on April 6, 2008 at 8:01 PM
fusion:
OH MY GOD. You really are a complete imbecile. The numbers I gave were all in US dollars. The exchange rate has already been accounted for. As for your earlier post, a shrinking sector of the economy cannot contribute to GDP growth, regardless of the size of that sector. Do you really think that a shrinking sector of the economy can contribute to GDP growth? Are you insane? The large size of the oil sector goes against your argument. If a sector that makes up a large portion of your GDP is shrinking, and your total GDP is still going up, that means those other sectors are going up very strongly because they have to make up for the large, shrinking oil sector. If you cannot understand this, it is very scary.
Can I ask what your occupation is?
dave742 on April 6, 2008 at 8:29 PM
dave742 on April 6, 2008 at 8:29 PM
With all of the name calling, you must still be in college. Let me guess, economics major and I bet that Dr. Thomas Sowell is not one of your instructors.
Johan Klaus on April 6, 2008 at 8:42 PM
Here’s a summary of the status of PDVSA, its assets, and its projects, dated November 12, 2007.
http://www.entrepreneur.com/tradejournals/article/171231635_1.html
Kralizec on April 6, 2008 at 8:47 PM
Here’s a bar graph of Venezuela’s per-capita gross domestic product. The sources are said to be the UN Common Database and the World Bank.
http://globalis.gvu.unu.edu/indicator_detail.cfm?Country=VE&IndicatorID=19
Kralizec on April 6, 2008 at 8:57 PM
Hey Dave,
Did you complete that assignment yet?
jerrytbg on April 6, 2008 at 9:31 PM
Johan:
I try not to be rude to anyone until they are rude to me first. When unintelligent/dishonest people are rude to me, it’s too hard for me not to return the favor. I am not sure what all your guessing about myself contributes to anything. Besides, I already told you my occupation.
Krazilec:
The GDP graph you link to looks right to me. The economy went to hell in 2002 after the opposition shut down and sabotaged the oil industry to try and get rid of Chavez. All the growth has happened since 2002, as the data I have linked to shows. Your bar graph does not cover the past 6 years.
Isn’t it wonderful that the opposition will sabotage the economy of their own country to try and get one of their own in power? How patriotic.
dave742 on April 6, 2008 at 9:45 PM
dave742 on April 6, 2008 at 9:45 PM
Not to my knowledge.
Johan Klaus on April 6, 2008 at 10:02 PM
Johan Klaus
The only thing you are an expert on is pigeonholing people.
I believe Dave742 is a college grad with a chemical engineering degree and has been working in that field for some time now.
I only have a HS diploma(1971) and went to an electronic tech school after graduation and work in that field. I have worked part time from the age 8 to 18 and full time since then.
RE: Johan Klaus on April 6, 2008 at 7:33 PM
I’m only a HS grad but at least I know the difference between Nazism and Socialism.
Chimpy on April 7, 2008 at 12:14 AM
EricPWJohnson on April 6, 2008 at 11:00 PM
NAZI, National Socialist Party.
Johan Klaus on April 7, 2008 at 1:38 AM
Chimpy on April 7, 2008 at 12:14 AM
NAZI, National Socialist Party
Johan Klaus on April 7, 2008 at 1:49 AM
Coming from you, I take that as a complement.
Sure it can. It simply makes up a smaller percentage of that growth.
YEAR 1: Sector X experiences 20% growth.
YEAR 2: Sector X experiences 10% contraction.
Year 3: Secrot X experiences 6% contraction.
The net growth of the sector over the course of the 3-year period is 1.52%.
Farting in your ivory tower.
fusionaddict on April 7, 2008 at 2:41 AM
fusionaddict:
Let’s use your math on these numbers:
2007: Oil, -6.1%, Non-oil, +9.9%
2006: Oil, -2.0%, Non-oil, +11.1%
2005: Oil, -1.5%, Non-oil, +12.2%
2004: Oil, +13.7%, Non-oil, +16.1%
Over the 4 years, oil, which is 30% of the GDP, grew 3.05%. Non-oil, which is 70% of the GDP, grew 59.05%.
Oil, then contributed 2.2% to the total growth over the period above, and non-oil contributed 97.8%.
If oil contributed 2.2% to the total GDP growth, maybe that’s why CEPR said that only a “small part” of the GDP growth is from oil.
Johan:
I have a PhD, but I have been out of school for decades. I am a pharmaceutical research chemist.
dave742 on April 7, 2008 at 6:57 AM
Johan:
The article I quoted above said Greece nationalized 100 industries back in 1981 (I wonder why we didn’t bomb them). After over 25 years, Greece still seems to be on the map. How long does it take before the artificially controlled economy collapses?
Also, could you tell me how companies survive? Many companies have an economy bigger than many countries. I have never worked in a “free market” company. All the companies I have worked for are controlled from the top down. Not much democracy or freedom. I am pretty much told what to do. I did not vote for any CEO board members. How is it that these top down companies can survive?
dave742 on April 7, 2008 at 9:41 AM
Dave742: Please shorten your posts…. They read like USSR “20 Year Plans”… Detailed ‘facts’ can be referenced by link… you need not foot-note.
darkpixel on April 7, 2008 at 10:17 AM
darkpixel:
Whenever I try to use more than 3 links in a post, the post does not go through. Also, I asked people to “look at chart 1″ four times, and people kept making comments that completely contradicted what was in that chart. When I actually put the numbers in a post, the numbers were finally addressed. People here seem unable to go through the effort to click on a link. Also, many of my references I cite are obtained through Lexis Nexis and other databases, and are not on the web. You have to go to the library for those. That’s why I quoted portions of those articles, which led to the long post. Sorry. You can also ignore me.
fusionaddict:
If you run the same calculation starting from 1999, when Chavez took office, the oil sector over that whole period shrank over 15%. A shrinking sector cannot contribute to growth.
Also, from 1999, the private sector has grown nearly 6 times as fast as the public sector. What kind of communist is this guy?
dave742 on April 7, 2008 at 10:33 AM
dave742:
It appears your thesis is that nationalizing the economy is the way to economic prosperity. That a government run economy will produce more than a free market. Is that correct?
If so, do you advocate that Chavez nationalize EVERYTHING in Venezuela? If the oil, cement, and other sectors he has taken over are now doing so much better, doesn’t it follow you put your faith in Chavez to run everything better?
Please, what is your prescription for the continued growth of Venezuela’s economy? More Chavez takeovers are good or bad?
Vanceone on April 7, 2008 at 12:12 PM
…this was before Hugo teed off the foreigners, who would provide the know how to do it, and they left….
Think_b4_speaking on April 7, 2008 at 12:17 PM
Johan Klaus on April 7, 2008 at 1:49 AM
There are people here that call themselves “conservative” but William F Buckley and Goldwater would not recognize them as such. National Socialist is an oxymoron. Socialism is international. The first thing the Nazi’s did when they gained power was to detain and or kill anyone they considered Socialist in Germany.
Chimpy on April 7, 2008 at 1:00 PM
Fixed it for you
Think_b4_speaking on April 7, 2008 at 1:34 PM
Vanceone:
My ideal would be for the workers to run the economy. No vice presidents/CEO’s, no government. Participatory Economy. Parecon, if you know Michael Albert.
Chavez has instituted some measures in this direction, but I think he likes to be the leader too much for him to allow it to really happen, but who knows.
Short of that, as far as government or private, I guess I don’t have enough information. In the real world today, I guess it would depend on the circumstances. Chavez seems to nationalize something when he feels the terms are unacceptable for Venezuela. He’s been threatening Cemex for months. I think he simply wants them to respond to his concerns, and if they don’t he nationalizes them. I don’t see any excessive desire to “nationalize everything.” I looked into the oil renogotiations, and Venezuela was getting raped before by the oil companies. In that case, yes, I support nationalization.
In general, the idea that competition fosters innovation is complete BS, IMO. I work in the pharmaceutical industry, and my entire career has involved making a “me too” copy of someone elses drug that does nothing different than the original, getting it out on the market, and paying thousands of salesman and advertisers to get the biggest market share they can. About 2% of my career has involved doing innovative research on novel medicines. In a state controlled pharmaceutical company, 100% of my career would be used to work on novel medicines, and there would be no advertising or salesman. All that stuff is a tremendous waste. 1 trillion dollars a year on advertising worldwide. It’s pathetic. Competition is 98% waste, and my salary for 25 years is largely the price of “competition,” which is nothing of the sort.
Thinkb4speaking:
There are things hapenning in Ecuador, Guatemala, Brazil, China. The world is busily planning for the US collapse. From recent news:
“PDVSA and Petroecuador also plan to speed up the building of a new refinery in Ecuador, whose processing capacity will stand at 300,000 barrels of heavy crude per day.”
Latin America News Digest
January 8, 2008 Tuesday 2:23 PM EEST
Venezuelan PDVSA, Petroecuador Strengthen Partnership in Oil, Gas Projects
“The joint Petrobras and PDVSA heavy oil refinery Abreu de Lima project, in Recife, Brazil, is under way.”
ICIS Chemical Business
November 12, 2007
Politicsand petrochemicals
BYLINE: Jorge B?hler-Vidal
“A key trend [for China] is the addition of new refining capacity geared heavily toward heavy, sour, and high-acid crude…the economics of using very large crude carriers that offloaded in the US Gulf of Mexico to carry Venezuelan crude on their “backhaul” voyage compares very favorably to the costs per barrel of carrying Venezuelan crude to US Gulf refineries on smaller Aframax tankers, as done in the current trade. Thus, if China continues to expand its heavy and sour refining capacity, it would become economically feasible to greatly expand the Sino-Venezuelan oil trade, should both sides agree to do so.”
Oil & Gas Journal
February 18, 2008
China’s refining expansions to reshape global oil trade
BYLINE: Gabe Collins, US Navel War College Newport, RI.
dave742 on April 7, 2008 at 1:49 PM
With all due respect, it doesn’t say where the Chinese refining will be – if in China, the VLCCs being larger than Panamax, it would require a substantially longer trip – basically around the world. Also, all the refineries in the best case would take three to four years to complete, so it is a race to see if the concept can be taken to reality before the collapse of the Venezuelan economy, and that assumption also relies on the continuing high price of crude. I for one tend towards Hugo losing that race.
Think_b4_speaking on April 7, 2008 at 2:25 PM
Thinkb4speaking:
I don’t know anything about the economics of shipping oil to China. The article speaks of many experts who say it makes sense, and my guess is that they know more than Thinkb4speaking on HotAir blog, so I guess I will have to side with them. Unless you have read the study by Roy Nersesian of Columbia University and Poten & Partners and can tell me the flaws in it.
I have been posting to conservative blogs for years now, and for years have been hearing about the imminent collapse of the Venezuelan economy. How about if you go on record now and tell me when this collapse should happen? That way I can ask you about it when it does not happen. While you are at it, can you let me know when the Iraq war will be “won,” whatever that means? I bet that one week after the invasion if I had challenged people here and said “if Iraq is still a mess after 5 years and over 4,000 soldiers are dead along with hundreds of thousands of Iraqis, would you at that point support a withdrrawal?” I think at that point, people here would have laughed at the thought, and sarcastically agreed to my proposal, thinking it would never happen. So when can I expect the war to be over?
dave742 on April 7, 2008 at 2:49 PM
I do, because that is the industry I am in. I can’t predict when the Venezuelan economy will reach a point where Hugo is dumped, any more than could have predicted the day the Berlin Wall fell, but I can tell you it Venezuela is on a downward path, with each passing idiocy by Hugo increasing the slope.
Think_b4_speaking on April 7, 2008 at 4:15 PM
Dave742, I haven’t seen such rosy numbers about the triumph of socialism since the Soviet Union stopped publishing its astonishing revelations of bumper harvests and astounding industrial victories.
I just hope somebody is carefully documenting the Chavez-ination of Venezuela to use as a classic case of death by socialism. I suspect that there will come a day within the next ten years after he’s gutted the economy that the main source of income for Venezuelans will be remittances sent from relatives in America. The next step, after Chavez’s reforms fail, is the search for traitors to shoot.
Tantor on April 7, 2008 at 5:05 PM
Chimpy on April 7, 2008 at 1:00 PM
The NAZI party was the National Socialist German Workers Party. Hitler imprisoned the members of the opposition, Social Democratic Party to gain control of Germany, as did Joseph Stalin, to purge his opposition in the Soviet Union. In Germany both parties were socialist and in the Soviet Union, Stalin and his opposition were both Communist.
Johan Klaus on April 7, 2008 at 5:14 PM
Johan Klaus on April 7, 2008 at 6:10 PM
It is a shame that history is not taught in our public schools.
Johan Klaus on April 7, 2008 at 6:12 PM
I think that you’re toooo close to the drugs or you’re smoking some real strong…..something.
That statement ranks among the most naive and asinine I have ever heard..
There must be some form of a hierarchy or you simply have anarchy, and within the confines of a business that is trying to make a profit………oh wait, you want it to all be equally divided ….yea right…that’s the ticket… As for Michael Albert….I’m assuming of Znet fame ….ahhhh …..yea right …..ROFLMAO…..
jerrytbg on April 7, 2008 at 6:22 PM
Let’s see, we are still in Germany, Japan and Korea after how many years? And, I think that we are still in Bosnia.
Johan Klaus on April 7, 2008 at 6:25 PM
You would’nt be in favor of communism would you?
Johan Klaus on April 7, 2008 at 6:28 PM
Communism does not work, has never worked and will never work, no matter who is in charge. The reason is human nature. It was tried by the early colonialist and they almost starved to death.
Johan Klaus on April 7, 2008 at 6:32 PM
dave742 on April 7, 2008 at 1:49 PM
It sounds like you would be happy for the U.S. economy to collapse.
Johan Klaus on April 7, 2008 at 6:40 PM
Johan Klaus on April 7, 2008 at 6:32 PM
agreed…
jerrytbg on April 7, 2008 at 6:40 PM
Johan Klaus on April 7, 2008
I was right…. Albert is of znet fame…If you don’t know who he is ck this out….OMG
jerrytbg on April 7, 2008 at 6:57 PM
Johan:
Parecon is the exact opposite of Communism. Maybe you have some readin to do. es, I will be very happy when theUS economy collapses.
dave742 on April 7, 2008 at 7:20 PM
It also seams to me that Davey boy has been lost to the dark side. still ROFLMAO….
jerrytbg on April 7, 2008 at 7:24 PM
mmmmm! nuff said.
Johan Klaus on April 7, 2008 at 9:14 PM
parecon……………Oh, my. That is dead wood which will not float. The exact opposite of communism? Maybe. Also the exact opposite of the free market. Parecon can only exist within a totalitarian vacuum. No wonder dave742 admires Chavez. Parecon requires oligarchs, the central committee, the elite designers. It derives from the least developed math models which attempt to predict the results of intersection between independent variables that are each trying to maximize without outside influence. This has always been the Achilles heel for smart guys who rely on central planning. Parecon and Scientology are birds of a feather. Time to let this dreamer go back to his computer games.
By the by, I can not find verification for any of dave 742’s stats.
heliotrope on April 7, 2008 at 10:19 PM
Comment pages: « Previous 1 2 3 Next »