Venezuela: Slow Motion Coup Engenders Slow Motion Implosion

When serving at the OAS, I wrote and gave several speeches in Washington, and at OAS gatherings in Lima and San Pedro Sula regarding the situation in Venezuela. I referred to the Chavez take-over of Venezuela as a "slow motion coup." He used the tools of representative democracy to disassemble bit-by-bit Venezuela's admittedly already rickety IKEA-like democratic structures. As the dismantling proceeded, as I wrote over two years ago, finding little resistance from the United States, the EU, the rest of Latin America, or from Venezuela's own rather confused opposition, Chavez

sped up the process, now repressing his people quite overtly. He is imprisoning democrats such as Alejandro Peña Esclusa on trumped up terrorism charges, shutting down the media--including using exile and murder--destroying the independence of the judiciary, and making Congress irrelevant as he rules by Presidential decree. He has engaged in ever more strident anti-Israeli and anti-semitic behavior, another staple of leftist dictators. Although the Venezuelan government has stopped publishing figures, reliable reports show Caracas now has the world’s highest homicide rate, in excess of 233 homicides per 100,000. Not to worry, Chavez recently has announced a gun control program--an excuse to take even more power from the people. We should note that in gun-toting, capitalist Utah, the homicide rate is 1.3 per 100,000.

Chavez is turning Venezuela into an economic wasteland. Despite huge oil reserves and rising oil prices, Venezuela’s GDP “growth” is in negative territory. Despite those negative numbers, the corruption, and declining oil production by the nationalized oil industry, the high price of oil still gives Chavez lots of cash to use on mad imperial dreams. The supermarkets might not have any food, but he is buying modern military equipment from Russia and Iran, building an AK factory, and allowing the Iranian Mad Mullahs to set up shop in Venezuela. He backs terrorist movements, such as the FARC in Colombia, and Hamas and Hezbollah in the Middle East. With oil money and military bluster he is buying the slavish backing of Nicaragua, Bolivia, Argentina, several of the Caribbean island nations, and Ecuador--where another leftist loon with drug ties, Rafael Correa, is running that country into the ground both politically and economically.

Chavez is trying to buy the elections in Peru, and has set himself up as one of the arbiters of whether or not Honduras returns to the OAS. He has Brazil frightened and cowed into an indecisive, equivocating, quivering bowl of Jello, even more so than is their pathetic norm. Brazil, a superpower? Right.

With the departure of Chavez, the situation in Venezuela has gotten even worse. I wrote on the occasion of Chavez's replacement by the thuggish clown Maduro that,

since Chavez's death, Venezuela's currency, the bolivar, "has lost 62.36% of its value on the black market." Venezuela's official inflation rate now exceeds 54% while, "The implied annual inflation rate in Venezuela is actually now in the triple digits, coming in at a whopping 283%." That puts Venezuela in some very bad historical company as the country nears a hyperinflationary rate. Maduro and his backers have decided to make the situation even worse by continuing and even "doubling down" on the policies that got the country into this mess.

Some (pre-fracking) estimates have put Venezuelan oil reserves as the world's largest. Due, however, to corruption, nepotism, and mismanagement, all of which have stifled investment and driven out high quality technicians, Venezuela's nationalized oil production has gone into a slump. The Venezuelan regime, naturally, has resorted to what leftist governments do all over the world when the economic data do not correspond to their fantasy world. Reminiscent of the fake jobs data put out by the Obama misadministration just prior to the 2012 elections, the Venezuelan government lies, overstating oil production by over 420,000 barrels/day. The money from oil sales goes into unaccountable funds, and gets used for a variety of things many of which have nothing to do with reinvestment, and, as noted above, have everything to do with enriching the inner cabal and promoting lunatic economic schemes to keep that cabal in power. 

Venezuela faces critical shortages of even basic consumer goods, such as toilet paper. Its retail sector is adopting the look I saw long ago in Guyana as a result of similar economic policies: stores look like they sell shelves. For political reasons, the government insists on maintaining an artificially low bolviar-dollar exchange rate of about 6.2 bolivars to the US dollar. The black market rate, in other words, the real exchange rate, is easily ten times that. The government strictly controls who can buy dollars at the cheap rate, forcing most businesses onto the black market. Combine that with government price controls, out of control government spending, and the fact that Venezuela depends on imported consumer and other manufactured goods, and, well, you don't need a PhD in economics to see what will result: shortages and inflation. Even big multinationals have had to suspend operations in Venezuela because they cannot get dollars to buy critical components.

I went on to note that,

The response of Maduro to the mess he inherited from Chavez and to the declining economic fortunes of Venezuela? More of the same but on steroids.  <. . . .> Maduro simply does not have the pull that his predecessor had, and does not inspire the same sort of fanatical loyalty. He needs to show the Chavez base that he can deliver the goods--literally. He, therefore, has taken Chavez's war against free enterprise, liberty and democracy to another level < . . . > [H]e has begun ordering troops into popular electronic stores and forcing the owners, often opponents of the regime, to sell their imported goods at cut-rate prices, in other words, at the prices the goods would have if the merchants could buy dollars at the official rate. Maduro has gotten the Chavista dominated legislature to give him economic dictatorial powers.  

It, of course, took no great powers of observation and analysis to see what would come in Venezuela, what all this economic and political madness would produce. You can Google and pull up the press stories, not as many as this deserves, or go to the always excellent Faustas Blog and get a pretty clear idea of what is happening. Increasingly the people of Venezuela are saying "Enough!" and are taking to the only venue still open to them, at least partially so, the streets and squares of the country.

The now undeniable crisis in Venezuela--Maduro can spin it however he wants, nobody is buying his story anymore--is immensely serious and will have ramifications throughout the region. We are going to see the start of the disintegration of the ALBA network, an alliance of countries bought off by Venezuela's money and Chavez's undeniable leadership skills, and major social upheavals in those countries as the madness of leftist economics finds that it can deny economic realities only for so long. We are seeing the development of an "arc of instability" in the region that will seriously affect much of the Caribbean, including Cuba, as well as Nicaragua, Ecuador, Bolivia, Argentina, and Brazil, and will have lesser but not negligible effects on Paraguay and Peru. Those countries such as Colombia, Panama, Costa Rica, and Chile which kept their minds and eyes clear, and their economic policies sensible and adult will be much less affected and, in fact, will provide the economic hope for the region.

A question for us, of course, is where is the United States? Nowhere. While our incompetent Secretary of State dashes about trying to convince Assad to give up power, and the Palestinians to stop being Palestinians, and the Iranians to stop being Iranians, and to convince us that "global climate change" is the gravest threat to our security, our neighborhood is on fire. Events are now transpiring in friendly and hostile Latin American countries with little or no regard or concern for the views of Washington. For the first time in some 150 years, the United States government (not so the private sector) is essentially irrelevant to much if not most of Latin America. In essence, we have no official views of any consequence re Latin America coming out of the White House, no functioning Bureau of Western Hemisphere Affairs at State, and no active and calming US Southern Command at the Pentagon.

The immediate future for Venezuela is grim. The repression is growing in intensity with one of the most prominent opposition leaders, Leopoldo Lopez, now in custody and facing trumped up charges. How the regime, the opposition, and the international community handle the Lopez arrest and trial could prove decisive in determining the fate of the madurismo variant of chavismo.

The consequences of the slow motion coup appear to be a slow motion implosion; that implosion, of course, could well gather force and speed, akin, say, to a collapsing star, particularly if the rebellion spreads into the ranks of the poor. With luck, and if the military keep their heads, the end result, in the medium to long term might prove positive. In addition, if we Americans of the United States variety can get rid of our own Maduro Mini-me, our government might again become a force for stability and democratic rule in the region.