Tuesday, January 09, 2007


"We're moving toward a socialist republic of Venezuela, and that requires a deep reform of our national constitution. We're heading toward socialism, and nothing and no one can prevent it." (AP, 01.09.2007)

--President Hugo Chavez showing the world what is really possible.

CARACAS, VENEZUELA--The AP and other wire services are falling-over-themselves today at Chavez's announcements that he will nationalize the country's telecom industries, along-with the leases on oil-wells in the Orinco River basin: "He did not spell out whether foreign investors would be compensated or simply expropriated." (AP, 01.09.2007) Since expropriation doesn't affect myself or other working-class Americans, it will be political and economic elites (and their employees in the media and elsewhere) who will crow about how horrible this all is. Never mind that tens-of-thousands of Venezuelans are being lifted out of poverty--the absolute rights-of-property are all that matter. People don't matter under the "market-economy" that favors state subsidies for corporations and investors, while shunning everyone else. Nobody takes more government welfare than the American corporation.

What some of the media tends to forget is that Chavez is now a major-player in OPEC. With oil at an all-time-high, he will be able to access more of the nation's oil-deposits that are embedded in their oil sands. With oil still hovering around $50-60-a-barrel, Venezuela is one of the single-largest reserves of peteroleum on earth, beating Saudi Arabia handily. Chavez knows this full-well:

Mr Ch├ívez said projects in the Orinoco River Belt, in which companies such as ChevronTexaco, ConocoPhillips, Total and Statoil have invested $17bn over the past decade, “should become state property”. Negotiations to increase the state’s equity stake in the projects from minority to majority have been under way for some time. (Financial Times, 01.08.2007)

The options are pretty marginal for Western elites. An invasion would not work, and could likely end-up as Iraq has: an insurgency without any end, causing attrition-rates that would wear-down anyone who invaded for decades. Invasion isn't much of an option these-days either, it being a quaint relic of the era of Bismarck. The concept of successful intervention and occupation died with Adolf Hitler in the Bunker, but some policy-makers around the world seem to be unaware of this fact. The irony (or not) is that many of Chavez's critics amongst the economic-elites in the hemisphere are accusing-him of their own tendencies:

"These disconcerting policy announcements represent a clear turn into deeper nationalist and interventionist policies, which can lead to further erosion of business confidence and the country's macro and institutional fundamentals," economist Alberto Ramos said in a Goldman Sachs research note. (Reuters, 01.09.2007)

He could be talking about the United States, but the crimes and mistakes of Western capital don't exist (unless you look closely). Chavez has given no-indication whatsoever that he's going to invade anyone, nor would he have capacity to do so with his military. As previously-stated, Ramos is simply pointing-out the tendencies and modus-operandi of his employers. He knows which side his bread is buttered-on: his posterior, which economic elites own.

Chavez has made it clear that he is preparing for a potential American invasion, and has been arming the nation with assistance from Spain, Russia and even China. Comparisons--even by Chavez himself--to Fidel Castro's rise-to-power don't fit. Castro seized-power through guerilla warfare, while Chavez has been elected multiple-times in what have been roundly-described as sound and fair-elections. This is a big-difference (even with the 200 & 2004 elections in America), and underscores the Populist nature of the push towards Socialism in the region. This trend has just-begun. Ironically, Canada also has some of the largest oil-deposits in the world too. But, the price of extraction in their case is still not economically-feasible.

The Wires:

The Financial Times: