President Duterte and Hugo Chavez

I am reposting this post last Tuesday by a friend, Bernard Ong. It has gone viral, shared nearly 6k since more than two days ago. Keep writing this kind of analysis, bai. Thank you.
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HE CROSSED HIS RUBICON

Bernard Ong

September 27, 2016 at 9:29pm

Updating my May 2016 post on Hugo Chavez. Very important lessons for the Philippines today. The photo collage shows 3 things: An emergency room in Venezuela - hospitals have broken down to the point that there are shortages of basics like soap, gloves & medicine. A nursery where babies are kept in boxes. And the man who started it all – who crossed his Rubicon, the “point of no return”, and dragged his country into the abyss.

In 1998, Hugo Chavez was elected president of Venezuela.

1. He promised “order" and a "strong hand to fight crime & corruption"

2. His friends, relatives, leftists & military cronies took key positions in government

3. He amended the constitution, giving himself greater powers; abolished existing checks and balances, congress & the judiciary; giving the military a major role in governance

4. He launched his paper, own radio show & TV show – where he mixed socialist rhetoric with songs & jokes

5. He alienated the Church

6. He waged war against "oligarchs" declaring "being rich is bad"

7. He nationalized companies in key industries – oil, finance, telecoms, transport, power

8. He demonized the US

9. He aligned with Russia, bought billions in arms from them

10. He allowed China to take over large areas of the economy.

Sounds familiar? Not a coincidence, Hugo Chavez is the template for modern-day socialist dictator wannabes.

Chavez stayed long in power, getting reelected several times & even coming back after being ousted by a coup. Venezuela was a major oil exporter & oil prices were high. Oil profits bankrolled his social welfare programs to buy popular support. He died in office in 2013.

Despite huge oil bonanza, Chavez mismanaged the economy.

1. He imposed currency controls to prevent capital flight. - This policy prevented companies from buying equipment, supplies & raw materials, eventually leading to shortages in production.

2. He imposed price controls – This policy drove local suppliers stop producing just as imports were scarce due to currency controls. This led to shortages & inflation.

3. His government spent far more than it could afford – This policy caused Venezuela to run huge fiscal deficits & incur heavy debts when oil prices collapsed from $120+ per barrel in 1998 to $60 in 2015.

Basically, Chavez didn’t know math & couldn’t care less about policy. In his mind, he was always correct & it was the world’s responsibility to adjust reality to his view.

Today Venezuela has completely collapsed.

There are shortages of everything – energy, gasoline, food, medicines. There is rationing & widespread looting. Crime is far worse. Consumers line up to wait for food from 4am. Those who buy “too much food” are arrested on grounds of violating laws against interfering with the production, transportation or sale of food. Pets like dogs & cats are let go by owners, because it is costly to feed them. Those are the lucky ones. The unlucky ones become meals to feed hungry humans.

Inflation was 150% in 2015, estimated at 481% in 2016, and 1642% in 2017. In Philippine terms, your one peso today will be worth 6 centavos in 2017. Tough labor laws make it impossible for business to fire workers. It doesn’t matter anyway as workers’ wages are unable to keep up with inflation - they provide cheap underpaid labor. GDP is forecast to decline 10% in 2016. There is massive unemployment. 75% of the population live in poverty.

And corruption? The richest Venezuelan today is reported to be Maria Gabriela Chavez, Hugo's daughter with $4.2 billion stashed overseas. She ignored daddy's "being rich is bad" dogma. Smart hija did not cross the socialist Rubicon.

Who does Venezuela blame for this policy-induced disaster? President Maduro – the successor of Chavez – blames the mess on a “conspiracy” by the United States.

We've seen his type here at home before. Marcos' 14-year dictatorship – hyped to fight communism & restore order – ended up sucking the Philippine economy dry & led to world-record plunder by the Marcos family. He too crossed his Rubicon when he imposed Martial Law & plunged the country into darkness.

The next time a leader says he is crossing his Rubicon, do your homework – check the policy implications, do the math, think steps & years ahead. If it does not make sense, step back from the abyss. Your country will need you to help clean up the mess after the disaster.

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See also:

BWorld 68, Criminal justice and Duterte, July 07, 2016 

BWorld 69, Foreign direct investments and Pres. Duterte, July 08, 2016 

BWorld 74, Pres. Duterte's anti-corruption programs and Transparency Intl., July 30, 2016 

The PH drugs war, part 2, July 27, 2016 

Pres. Duterte and UNexit, August 22, 2016

Pol. Ideology 67, Socialism and Venezuela

A friend said that my advocacy for “inviolable rights of the individual" means that one is detached from the rest of society and hence, he/she has no responsibility for the others, especially the less fortunate ones.

Wrong interpretation, of course. The “inviolable rights -- and responsibilities -- of individuals" simply follows what John Stuart Mill articulated something like "do anything you like provided you do not harm other people." Thus, if you want to work 15, 20 hours a day, do it. If you want to spend all your savings on travel, or fancy clothes, or parties and drinking, do it. It is different when a person steals, or destroys other people's property, to pursue his personal, political, religious or whatever goals.

That is why socialism is evil because it forces and coerces people to socialize many things they have -- their income, their savings, investments, etc. Ok sa mga batugan, the lazy because even if they do not work they will eat. Or for bureaucrats, even if they produce nothing useful, just issue endless regulations and prohibitions, they will eat and have various perks. For the hard working and efficient people, it's lousy.

Socialism encourages free riding problem. Why aspire to become efficient, one can be mediocre and below-average and still get paid almost similarly as the efficient ones.

The case of Venezuela is only the most recent example. Hugo Chavez, then Maduro, discouraged private enterprise innovation and competition by nationalizing and socializing many important sectors and companies.

Charity work, spending for other people voluntarily, that is civil society and volunteerism, or voluntaryism. If you have lots of resources and you share it willingly to the needy people, that's civil society.

In socialism, it's all coercion. That is why there is one-party state, "dictatorship of the proletariat". Even if you know that many of those hungry people are outright lazy, you must give your money and savings to the state, and the state will feed the irresponsible and a thick layer of bureaucracy.

In classical liberalism philosophy, civil society is the "replacement" of a big state. Things that can be done by parents, by siblings, by neighbors, classmates, officemates, church, etc. -- do NOT give that function to the state or local governments. Like telling people that over-smoking, over-drinking is bad, we do not need government bureaucracies to do that.

We only need a lean state or minimal government to perform things that cannot be done by civil society. Like dealing with armed and organized criminals, or armed harassment in the seas, or military aggression from other countries.

There is a belief that Scandinavian countries are socialist. No, one can own a factory, a bank, a school, land, an airline, etc. in Scandinavian countries. In socialism, all or most of the means of production – factories, banks, farms, land, etc. -- cannot be privately-owned, they are state-owned, socialized, communized. Things are socialized by force and coercion. 

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See also:

Pol. Ideology 64, Big World Government or Smaller Countries and Governments? June 03, 2015 

Pol. Ideology 65, Liberals and liberty, positive and negative freedom, January 06, 2016 

Pol. Ideology 66, On institutions, constitutional monarchy and liberal parliamentary democracy, May 10, 2016 

Surplus under socialism, January 30, 2010 

Welfarism 20: Hollande and Socialism in France, May 07, 2012

EFN Asia 15: Distortions of Welfare Populism, January 17, 2013 

Can UK hug socialism again? August 15, 2015

Oil Politics 1: Bush vs. Chavez?

As Bush tours a number of Latin American countries mainly to projectthe US government as not-as-evil-as-pictured by Hugo Chavez, theVenezuelan President, the usual anti-US government sentiments in the continent (and elsewhere actually) are fired up.

In most news analysis and stories, Mr. Bush is pictured as the leaderof "open capitalism" while Mr. Chavez is the leader of "modern socialism" in Latin America. The former is backed up by trillions of $ of American taxpayers' money, while the latter is backed up by millions of barrels of petroleum production and deposits. But are they really ideological nemesis?

Mr. Bush's government confiscates a big portion of American people's monthly and annual incomes, whether they work in the US or abroad. His government further collects taxes from the savings and consumption (the after-income-tax take home pay) of the citizens, a substantial portion of which goes to Iraq war (about $8 billion/month direct costsalone), in Afghanistan war, and anti-terror war elsewhere around the globe.

Mr. Chavez's government "nationalized" foreign petroleum companies (mainly American, British and French companies) and sold oil to manyLatin American countries at low prices. I dont know how much taxes from Venezuelan people Mr. Chavez also confiscates from their monthly and annualy income.

At the end of the day, both Mr. Bush and Mr. Chavez are not exactly "ideological enemies". Both believe in the coercive power of the state in taking away a big portion of the private citizens' income and savings, and both are practicing it. What distinguish one from the other, however, is the degree of coercion that they practice. While Mr. Chavez attempts a socialist, really-big-state model, Mr. Bush attempts a welfarist and militarist, still big-state model.

Meanwhile, I posted this last June 30, 2006:

World Oil Prices 


World oil prices, in US$/barrel

2006: New York, Dubai
June:
May: 70.96, 65.25
April: 70.25, 64.31
March: 62.97, 58.37
February: 61.93, 57.70
January: 66.15, 58.65(?)

2005:
December: 60.04, 53.04
November:
October: 62.22, 53.86
September:
August:
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World oil prices, 1970-2005
West Texas Intermediate (WTI) prices, $/barrel

Nominal price, Equiv. in current $
Feb. 1970: 2, 7
'73 1st oil crisis
Dec. 73: 5, 17
Feb. 74: 11.5, 39

'79-80 2nd oil crisis
Feb. 79: 22, 51
May 79: 30, 70
Nov. 79: 40, 87

'85-86 OPEC production hike
Feb. 86: 16, 26
July 86: 10, 15.5

'90-91 1st Iraq war
July 90: 17, 23
Oct. 90: 35, 47

'98 Asian crisis + OPEC production hike
Dec. 98: 10, 12

'99-00 OPEC production cut
Sept. 00: 32, 36

'02-03 Venezuela gen. strike + US invasion of Iraq
Jan. 03: 33, 35
June 03: 30.5, 32

OPEC production cut
May 04: 40, 41

2005 Hurricanes, Gulf of Mexico
Sept. 05: 66