Chavez goes nuts

The only question voters were asked to decide in the 15 February referendum was if the Constitution should be amended to allow President Hugo Chavez and all currently elected public officials to seek re-election indefinitely.

But since “winning” a rigged vote which the Chavez-controlled CNE ensured the president would not lose under any circumstances, “El Comandante” and his cronies in crime are behaving as if they won a broad mandate to transform Venezuela immediately into a socialist state.

This behavior is typical of Chavez, who has been plotting the wholesale expropriation of the privately-owned food industry for years. Other industries on the president’s takeover list include pharmaceuticals and the automotive sector, likely starting with General Motors when its parent firm goes bankrupt in a few months, etc.

With his referendum victory in hand, Chavez as always is (a) striking before the opposition regroups, (b) retreating from an immense economic crisis his regime is completely unprepared for by charging forward, and (c) setting up the private sector for all of the blame when Venezuela’s economy tanks in a few weeks.

The president’s latest wave of expropriations is pure populism, designed to convince the generally uninformed poor Venezuelans who constitute his core support base that the revolution really does have their best interests at heart

Chavez claims the private sector is responsible for increasing shortages of food products and soaring food prices. The private sector hoards, price gouges, manufactures shortages and exploits workers for very low wages, according to Chavez.

Many poor working Venezuelans believe what their president is saying. For example, the workers at Polar’s Primor rice plant cheering its expropriation by the regime illustrated how many poor Venezuelans feel about Chavez’s seizure of food companies.

The average poor Venezuelan doesn’t understand economic issues like demand, supply, currency controls, raw material imports, production and labor costs, etc.

All he or she knows is that (a) wages never keep pace with rising prices of everything the worker needs to buy, (b) employers usually appear to be much better off economically than the workers, and (c) for decades successive governments (even before Chavez) have always told the poor that the middle/upper classes (los empresarios, jefes, patronos, la empresa privada, etc.) are corrupt.

Chavez and his new Commerce Minister Eduardo Samán are on a rampage.

The president expropriated 1,500 hectares of productive farmland owned by the Smurfit Kappa Group. He also claims to have signed a decree nationalizing the local assets of “a transnational company” (Cargill?).

Separately, Samán announced that all “areperas” will be “fiscalized” nationally and anyone found to be pricing their arepas too high (i.e. BsF 18-20) will be jailed and their “areperas” will be expropriated.

“The law says usurers will be punished with prison of two to four years,” he said, adding that he also plans to move against pasteurized milk producers.

Many Aperera owners in Caracas, typically small business owners, told reporters that if the regime forces them to sell at BsF 1.50 – the price Samán threatened to impose – they would shut down their businesses because no one can profit at that price.

But Chavez already has a ready solution for that too, announcing he may create a national chain of “Chavez restaurants” where the “pueblo” will be able to eat at cheap prices while the government contains food price inflation.

Business leaders have issued several public appeals in the past week for a dialogue with President Chavez, who clearly has rejected any possibility of a dialogue with anyone who dares to criticize or resist his bully-boy conduct.

Chavez yesterday again warned Polar Group’s President, Lorenzo Mendoza, that if Polar picks a fight Chavez will expropriate “…up to the last plant you have, I’m warning you….if you want a fight, then come…but I don’t want to fight with anyone…I’m here to defend the interests of the people, not those of the bourgeoisie…”

Chavez also threatened to “eliminate Fedecamaras… I don’t care what the president of Fedecamaras says…get involved in a coup again and I will eliminate you… I was a pendejo five years ago, but I won’t allow this stateless bourgeoisie to continue abusing us…”

How long will this latest rampage of presidential expropriation continue?

Our guess: until all of the remaining large/medium Venezuelan and foreign-owned food companies are in government hands. The regime also likely will start expropriating other non-food companies soon.

Who will oppose these expropriations, the political opposition or business institutions like Conindustria and Fedecamaras?


What’s left of the private sector not in bed with the Chavez regime is completely excluded from the revolution’s policymaking process. The president couldn’t care less what the business sector thinks of his policies.

The political opposition is also completely lacking in public credibility/influence over Chavez.

Populism and class warmongering…but so far it appears to be playing well in the barrios. And as the economy’s crisis worsens in coming months, Chavez will start saying the expropriated private companies were found by the regime to be in a terrible state because the former private owners did not invest in maintenance or new capacity.


About Caracas Gringo

Representing less than 0.00000000001515152% of the world population as of 31 December 2011.
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2 Responses to Chavez goes nuts

  1. expaticus americus says:

    Everything happens in cycles and from a historical perspective… people get the government they deserve. Period, full stop. Before this is all over, as a result of the choices they’ve made, the Venezuelan people will receive the full measure of what they deserve. While I recognize that the social conditions in this country were shaped by custom and policy for decades, and I can sympathize with people who were born into squalor in a barrio with very few options and even fewer signposts pointing the way to escape… it is still not a justification for supporting the policies bringing about the destruction of the country.

    When Chavez has quashed the opposition enough to feel comfortable, he’ll focus on a consolidation of his power (just like every other dictator in history), and that requires elimination of the gangs that have the military capacity to threaten him… and that probably means a military assault on barrios like 23 de Enero and anywhere else that offers refuge and support to anyone who opposes him. Because the gangs are so well armed (thanks, Jefe) and organized, and because of the low quality of troops available to the government, the government’s only real choice is to use attack aircraft and artillery against these civilian residential areas. Chango-Presto: Instant civil war.

    The result of a nasty little civil war? Depends. If it can’t be won by the government quickly and decisively, then the infrastructure will quickly become a target as each side seeks to eliminate the advantages of the other. I don’t think Venezuela has much fault tolerance in it’s critical areas like oil production. Infrastructure destruction could quickly bring about the total destruction of the economy, resulting in the inability to import food or distribute domestic production of food. My guess is that at least a quarter of the population would die (maybe up to half) as the result of violence, starvation, malnutrition induced disease, etc., and the population that’s going to be paying the butchers bill will come from the very group that gave Hugo Chavez the most support: the urban poor.

    If the government can destroy the gangs in a decisive move, then there will be revolutionary courts to determine the guilt or innocence of everyone… and such a process will produce a Venezuelan Robespierre, or more probably a close resemblance.

    Would Colombia or the US intervene in a civil war in Venezuela? The US has an interest in maintaining the imports of oil from Venezuela and it’s only a question of whether a Marine Expeditionary Force could be dropped into the right spot to secure a beachhead and prepare for an armored division to roll in. Question is, does the US have anything available in this theater? Or would Colombia intervene as a proxy for the US and in their own interests?

    Who knows? We live in interesting times.


  2. Charly says:

    As a libertarian and a believer of Von Mises and Hayek’s economic analysis (Austrian school of economics), I personally believe that Obama’s policies will extend what should have been a 2 year recession into a 10 year+ depression. Chavez has got nothing to offer besides oil, a victim of the current economic situation. How long do you think he will be able to blame the so called ‘oligarchs’? There is a Venezuelan expression I love: “a cada cochino le llega su sabado”. How long do you think it is going to take before they BBQ that pig? Remember April 2002, it only took a few weeks and they nearly succeded. This time they will wise up and eliminate him physically before he raises back from the ashes like the phoenix. If he were a horse, I wouln’t bet a “locha” on him. People believe they can win the democratic way until they believe they cannot anymore. Then Watch out. And Chavez should not count on the armed forces, these people have got family too and those families are getting pissed off. His goose is cooked but before he goes he will do maximum damage. That is good because there will be no turning back. The real revolution is yet to come and it will be capitalistic, lean and mean.


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