What happens when a National Public Radio host interviews a New York Times reporter on the subject of Venezuela’s economic collapse? You get a perfect storm of cluelessness.
The host is Terry Gross, the guest is New York Times reporter Nicholas Casey, and the program is Fresh Air. Gross asks Casey about the utter disaster that Venezuela has become. Casey understands the depth to which Venezuela has fallen–he lives in Caracas!–but he can’t bring himself to offer an honest diagnosis.
First, the current state of Venezuela after 17 years of socialism:
[I]f you wake up in the morning and you go outside as early as 5 a.m, sometimes 4:30, you see people lining up in front of stores to try to see what’s going to be there when they open their doors. And sometimes even these stores – after you’re waiting through a line that might be 500, 1,000 people sometimes, you’ll see – you get to the front of the line, and you find that they’ve only got cooking oil. They don’t have flour. They don’t have any of the basic things that you need there.
So Venezuelans are living a total alternate reality from the rest of Latin America – really from the rest of the world right now because there isn’t anything there. You go into malls right now and you see, if the lights are on, they’re dim. They’re at half-level. The water is a huge issue right now. You don’t have water in large parts of Caracas now. So one thing that you see is people are almost trying to, like, hack this country to figure out where you get water.
Then there is inflation:
if you want to pay for things like lunch, you have to carry literally around huge, like, backpacks filled with cash.
Only governments can cause inflation, but this obvious truth escapes our NYT reporter, who seems to think the problem is that Venezuela’s government can’t print worthless currency fast enough:
And there’s no way that the Venezuelan government could print that much money to keep up with inflation. So what happens – they don’t. And there’s not enough money. There’s a shortage of money, just like there’s a shortage of electricity and water.
Ponder that for a moment. And then consider the fact that there are some people who actually depend on the New York Times for information!
What happened to cause the complete breakdown of Venezuela’s economy? NPR leads with this: “New York Times reporter Nicholas Casey talks about life in Venezuela, where the collapse in oil prices has caused shortages of everything….” But oil prices have declined worldwide. You can still buy toilet paper in North Dakota.
Interviewer and interviewee skate nervously around the blindingly obvious causes of Venezuela’s misery:
GROSS: So if Venezuela is an oil-rich country, why is it so poor right now? What happened?
CASEY: Well, yeah. A lot of people are looking at who or what is to blame. There’s a lot of things going on right now. One of them is the legacy in the years and aftermath after Hugo Chavez. There was a huge amount of hope throughout the left in Latin America when Chavez came to power.
He was saying many things that no one else was saying and talking about inequality in terms that hadn’t been heard in Latin America for years.
There is a reason for that. Latin American countries have repeatedly experimented with socialism, and the results have been disastrous. Some people learn from experience.
Unfortunately, what followed was years of mismanagement on every level – a lot of corruption, misunderstandings of how the economy worked or how to fix it.
Left unsaid is that socialism itself misunderstands how the economy works. The problem isn’t “mismanagement”–a term that Casey uses repeatedly–it is management. The whole point of socialism is to manage a complex economy by dictating just about every detail of everyone’s life. That management never has worked, and never will.
To his credit, Casey does understand that price controls are the immediate cause of Venezuela’s collapse. But price controls are not just one of socialism’s main tools, they are one of its principal objectives.
You know, I’ll give you one example that you see a lot. It is causing a lot of the problems in Venezuela – is price controls. During those years, they brought the price of selling something lower than what it cost to make it. So if you wanted to get milk, it was at a very inexpensive price, which was great if you were poor.
The problem was if you were a farmer or, you know, owned an operation that was producing milk. And you couldn’t produce it for the price that it was going to be sold for. So what happened next? Well, you just didn’t produce it anymore.
So you started to see this huge collapse of production throughout the country. People stopped making beans. People stopped making rice. Venezuela went from being an exporter of meat to importing it. And one by one, all of these things stopped being made in the country.
Most people would say this means that a government shouldn’t try to run a country’s economy, but NPR and the NYT never quite get there.
Finally we get to the real cause of Venezuela’s tragedy, Hugo Chavez:
GROSS: So Hugo Chavez was the head of the socialist party in Venezuela when he was president. How much do you think he was driven by ideals and how much just by power? Was it a corrupt government?
CASEY: It’s hard to say. I think every government is corrupt to some degree, and corruption in Latin America is almost impossible to escape. Was Hugo Chavez more corrupt than the others? Perhaps….
Hugo Chavez, like leftists around the world, was unbelievably corrupt. Perhaps Mr. Casey is unaware that Chavez’s daughter is worth over $4 billion, while his treasury minister squirreled away over $11 billion in Swiss bank accounts. This is not “normal” corruption, even by Latin American standards. That is how socialism always works: a few who are politically connected get rich, and everyone else slides downhill into poverty.
[O]ver the years many people accused Hugo Chavez of being a dictator. And the truth was was that he was very much a Democrat in a lot of ways.
Heh. That is correct, I think. Chavez’s philosophy is espoused by Democrat and fellow socialist Bernie Sanders, and, perhaps, by Hillary Clinton, who did her best to run to Sanders’s left. Chavez had a great deal in common with our Democrats, but I am pretty sure Mr. Casey meant that Chavez was “a democrat in a lot of ways,” i.e, he actually won an election (like Hitler and Mussolini, unlike Stalin and Mao). The capital “D” is probably attributable to the NPR staffer who prepared the transcript, and who likely doesn’t know that “democrat” is a word. It is hard to get good help these days.
Casey blames Venezuela’s downfall in part on “consumerism,” i.e., the fact that Chavez and Maduro handed out free stuff, and people voted for them in return:
So what happened was huge amounts of the government budget were going to giveaways of homes. They were going to giveaways of televisions, of refrigerators, of other things. Is that corruption? Well, yeah, it feels a lot like you’re buying votes from people.
Did they give away ChavezPhones?
There was this way in which there was a whole – unholy alliance between socialism, democracy and consumerism in Venezuela. And I think that was one of the things that drove Venezuela into the ground was the – you know, unlike somewhere if you look at the Soviets in the 20th century, you weren’t seeing massive amounts of consumerism that was taking place. Like, no one was talking about, at the end of the USSR, trying to keep things up by giving away more television sets.
This is almost too bizarre for comment. In the dying days of the USSR, the socialist government couldn’t afford to give away television sets. Is that because they failed to keep the presses running to print enough rubles?
I think if you had shown that to someone who had seen themselves as a real socialist, whether in Russia or in Cuba, they would say this is a totally different version of what we were expecting.
Really? Why? Didn’t the USSR and Cuba meet essentially the same fate? Both declined into poverty due to socialist governance and political tyranny. The details change depending on historical circumstance, but the trajectory is fated.
But socialism in the 21st century actually kind of took a different form under Hugo Chavez, something that was completely unsustainable….
So, where has socialism ever been sustainable? North Korea? The USSR? Albania? Cuba? We are still waiting, I guess, for “real” socialism. Maybe someday Bernie Sanders or Hillary Clinton will introduce us to the long-awaited socialist paradise.
…that led itself to corruption…
Socialism is always corrupt. If you are a socialist, that is the whole point. Just ask Hillary.
…and ultimately left the country without any money after having made so much during these years when the oil prices were high.
Venezuela didn’t reap large amounts of foreign currency when oil prices were high because it was socialist, it was because Venezuela has extraordinary reserves of cheap oil. Oil prices didn’t decline to zero, and, as noted above, all of the world’s other oil-producing countries still have food, electricity, medicines and toilet paper. Only Venezuela has plummeted into absolute deprivation. This is because it has a socialist government.
There is more, which you can read at the link. The NPR host and the NYT reporter couldn’t resist finishing up with commentary on Donald Trump:
So when you think of Trump and you think of other governments that you’ve covered, what do you think about?
CASEY: Well, I will just say it – and a lot of people in Latin America will tell you this very quickly – Donald Trump resembles Hugo Chavez. It’s a strange thing to think about in the beginning because Trump is from the right – or is painting himself as that – and Chavez was from the far left. But what unites both of them is populism.
So, how about Bernie Sanders? Is he united with Hugo Chavez and Donald Trump by populism? Ronald Reagan is often described as a populist. Is he therefore united with Hugo Chavez and Donald Trump?
Policies matter. When a country experiences hyperinflation, the cause is not a mystery. It is government policy. When there are no groceries on the shelves, the cause is obvious: it is price controls. When a once-rich country descends into abject poverty, the cause is not bad luck, it is socialism. Socialism is, always and everywhere, an economic and human rights disaster. The fact that most members of the Democratic Party do not understand this means that the United States could be in for hard times.