Venezuela 101

[TomAtAlki]

Venezuela should be a very rich country....oil, gold, beaches, location.

It seems that oil riches can somehow destroy some countries (Venezuela, Nicaragua)

Can anyone explain to me why a country that should be rich and happy has become poor, ridden by inflation, sort of a dictatorship, and basically a poor and very unhappy country. How did this fall happen? I don't think it can be 1 person's fault.

Thanks, T/

 

[GMXam]

The book “Nudge” gives a good socio-economic perspective on how change happens. In my opinion, any book that sparks question is a good read, especially in a time where information is so readily available on such a large and indiscriminate scale.

 

[TheDonald]

Venezuela is what economists call a "Rentier State." A large portion of the nation's budget is derived from natural resources with a high value. Because a significant portion of the national product is the result of what is in the ground, and not derived from the tax revenues produced by the labor of the people, the temptation for corruption, profligacy and extension of entitlement is strong. Examples of all three are rife in Venezuela. To take but one example, gasoline is essentially free in Venezuela. This has two destructive effects. First, a resource produced at significant cost to the country with considerable economic value is given away, thereby creating 100 different market inefficiencies. Second, the recipients, i..e the people, develop an intractable sense of entitlement to this resource. Wholesale revolt would erupt if Venezuelans all of a sudden had to pay market rates for gasoline.

The US now produces 10 times more petroleum than Venezuela. Can you imagine free gas in the US? It's a laughable idea.

Going back to Venezuela, don't underestimate the effects of complete political ignorance. Hugo Chavez was democratically elected by 63% of voters that turned out in 1998.

Most people don't remember this, so I'll repeat it: the Venezuelan pueblo was the entity that got this disaster rolling in 1998 when they freely elected Hugo Chavez as their president.

 

[London2Baires]

Here is some good background reading;:

https://en.m.wikipedia.org/wiki/Economic_policy_of_the_Hugo_Chávez_administration

 

[TomAtAlki]

[QUOTE="the Venezuelan pueblo was the entity that got this disaster rolling in 1998 when they freely elected Hugo Chavez as their president.[/QUOTE]Please explain.

 

[TomAtAlki]

Here is some good background reading;:

https://en.m.wikipedia.org/wiki/Economic_policy_of_the_Hugo_Chávez_administration

Thanks. That does help.

 

[Pensador]

Venezuela should be a very rich country....oil, gold, beaches, location.

It seems that oil riches can somehow destroy some countries (Venezuela, Nicaragua)

Can anyone explain to me why a country that should be rich and happy has become poor, ridden by inflation, sort of a dictatorship, and basically a poor and very unhappy country. How did this fall happen? I don't think it can be 1 person's fault.

Thanks, T/

In MHO! Much like Argentina but worse.

1. Populism - Hyper populism
2. Entitlement

Pushed by a corrupt political system. The Kool Aid sets in and the masses that do not even comprehend critical thinking are lead into what you see now. These masses if you recall, until recently voted themselves into this position. Much of that is also a lack of education without which one will typically never even be able to comprehend critical thinking.

The government overspending on social programs with dysfunctional spending towards developing a real economy in order to hold power. Short-sightedness concerning crude prices without any other underlying economic functionality and whalaa the perfect storm.

Have to feel sorry for them we even have them here in Corrientes now.

 

[TheDonald]

[QUOTE="the Venezuelan pueblo was the entity that got this disaster rolling in 1998 when they freely elected Hugo Chavez as their president.

Please explain.[/QUOTE]
Hugo Chavez was a corrupt socialist who ran on a platform (if you can call it that) of expropriation and disparagement of wealth; he encouraged and fostered the people's sense of entitlement. Chavez possessed all of the qualities you DON'T want in a leader. Yet the majority of Venezuelans who turned out voted for him.

Chavez began the process of running Venezuela into the ground. Chavez's death begot the current leader Nicolas Maduro, who is now finishing that process.

 

[toongeorges]

Can anyone explain to me why a country that should be rich and happy has become poor, ridden by inflation, sort of a dictatorship, and basically a poor and very unhappy country. How did this fall happen? I don't think it can be 1 person's fault

It is not all poverty in Venezuela, Maria Gabriela Chavez is not doing too bad

 

[sergio]

Venezuela should be a very rich country....oil, gold, beaches, location.

It seems that oil riches can somehow destroy some countries (Venezuela, Nicaragua)

Can anyone explain to me why a country that should be rich and happy has become poor, ridden by inflation, sort of a dictatorship, and basically a poor and very unhappy country. How did this fall happen? I don't think it can be 1 person's fault.

Thanks, T/

sort of a dictatorship?