That was then, this is now

Four decades ago Venezuelans could fly in and out of Caracas’s Maiquetía airport on Concorde. These days they are leaving the country on foot — walking over the border into Colombia, traipsing down the Andes to Ecuador and Peru or trudging through the Amazon basin to Brazil. As the economy collapses, the Venezuelan exodus “is building to a crisis moment”, the UN has warned. Drawing comparisons with the desperate journeys of Syrians and Africans through the Mediterranean in recent years, it says 2.3m people — 7 per cent of the population — have left Venezuela since 2015. On Monday, President Nicolás Maduro put the figure at just 600,000, and his vice-president Delcy Rodríguez said the outflow was “normal”. Outcry over the exodus, she said, was “designed by the Pentagon to justify intervention in Venezuela”.

That is from Gideon Long in the FT.

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And four decades ago, Washingtonians could fly with the Concorde from Dulles Airport. Such is the decline which marks the Trump years ... blah, blah, blah.

Nobody has flown on a Concorde for 15 years, of course.

The remark about the Concorde is indeed irrelevant. For that matter, you don't have to go back 40 years for a much more prosperous Venezuela. The basic truth is that Chavezism started destroying the economy in 2007. Eleven years later they've devalued their currency by a factor of 100 million. The majority of the population is hungry and a significant percentage are starving.

Socialism doesn't work. This is just another horribly failed socialist state.

The rot started in 2002-2003 when Chavez replaced the Board of PDVSA with his personal allies, crushed the striking oil workers and fired 40% of the oil workers.

PDSVA has been falling apart since then and along with it the primary funding mechanism for Venezuela's government.

Chavez won a short term political victory by crushing his political opponents but he sowed the seeds for the destruction of Venezuela's economy.

The curse of oil (and other minerals).

The only wealth of a nation is the labor of its people.

If socialism is from each according to his ability, and to each according to need, Venezuela has not been socialist for decades because it's been based on pillaging natural capital to trade for consumption. No work required.

The Norwegians, Saudis, Kuwaits, Emiratis and Qataris would no doubt all agree that people are their only resource. Well, except for a lot of oil.

+1 - plenty of countries have managed resource wealth without having the horror of Venezuela. Venezuela is all about what happens when people put their faith in simplistic top down solutions applied by Governments and nothing to do with the so called resource curse.

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You think pillaging is easy? Seriously....

“designed by the Pentagon to justify intervention in Venezuela”.

NOBODY wants to be in Venezuela right now. Not even the Pentagon. Ms. Rodriguez can rest easy.

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The Castillians' nature propels them to seek caudillos, strongmen such as Franco, the Castros, Maduro and Somoza.

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Not true socialism!!!

+1

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Socialism works pretty well in Norway, Sweden, Denmark, Finland, Canada, Japan, China, and Taiwan. The state of Alaska is pretty big on socialism and hasn't failed yet. Same with US Federal government owned Tennessee Valley Authority that generates electricity for socialism-happy Southern red states like Tennessee, Alabama, Mississippi, and Kentucky. Let's also not forget the Midwest Farm Belt that are receiving free billions of bailout dollars from the Trump administration for its disastrous tariffs. That's in addition to the tons of subsidies and tax carve-outs they've already been getting every time we get a new administration. Give Alexandria and Bernie some credit for at least being honest about how they call themselves.

The fact Socialism is widespread doesn't prove it make people better off on average. Swedish descended people in the mid west are typically better off in terms of net worth and income than Swedes. The mid west, despite being fairly blue politically is less socialist than Sweden.

Socialism being widespread in more "successful" parts of the world also proves that it is not an automatic failure as some comments here would lead us to believe. The typical "Venezuela is proof that socialism doesn't work" type of comment that is mindlessly parroted is what I find lazy and untruthful. For the record, I'm not a socialist but I enjoy calling out people's wronghead ideas from time to time.

Venezuela is actual socialism- state control of means of production.

Nordic countries are Democratic Socialism which can work if conditions are just right, wealthy society etc.

Random government subsidies are not socialism in any way.

Venezuela is socialism the same way Norway is. The government owns and controls oil production while agriculture and manufacturing are mostly privately owned, with the occasional crony capitalism deal to the elites that run those industries. Where it differs from Norway is quality of management. Hard fact: Bureaucrats in Venezuela aren't as good as government bureaucrats in Norway. Another fact is that the government of Norway owns even more industries like aluminum, banking, telecom, power generation, etc. So Norway is even more socialist than Venezuela. This actually puts Norway in the same league as China in that they both own key players in "strategic" industries.

PS You left out a few important conditions for Democratic Socialism which are low levels of corruption and a basic level of competency.

Even if your point is true, so what? At the very best, all you can say, is that in a very well manged country, socialism isn't any worst than capitalism. Everywhere else, of course, it's a disaster.

Is that the high point you were looking for?

How would the bumper sticker read:

Socialism, It's Not an absolute Disaster every Single Time!

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Claim: "Venezuela is socialism the same way Norway is. The government owns and controls oil production while agriculture and manufacturing are mostly privately owned, with the occasional crony capitalism deal to the elites that run those industries. Where it differs from Norway is quality of management."

Fact-check: Absolutely false. The Norwegian state is a major shareholder in Statoil, which is one operator of norwegian offshore oil fields.

https://www.marketbeat.com/stocks/NYSE/STO/

There are other operators without government ownership, however the tax on net oil profits is something like 80%, so a commercial operator might feel like he doesn't own the business.

If Norwegian bureaucrats were managing Norwegian oil companies, the results would probably be a lot closer to those of Venezuela, the cholo factor you referred to is probably not the total handicap of Venezuela.

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Canada is socialist? Wtf are you talking about? The only thing socialist in Canada is health care. Apart from that Canada's economy is pretty much like the US, only that the whole country is cold.

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Honduras is more socialist than the USA.

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Lulz. Enjoying that cognitive dissonance, prior?

????

Seems like free flowing conversation to me - with the only notable dissonance being this new found American 'democratic socialism,' a basically nonsensical term, compared to the 150 year old idea of social democracy.

But by this point, it is probably impossible to get any of those American democratic socialists to use a different name, regardless of how much more accurate it would be in the main. At least for those who aren't actually socialists, which is apparently just about all of them, according to their public proclamations.

Ah, referring to the conversation above - things go off the rails below. Pretty sure it had nothing to do with observing the Concorde was retired from service 15 years.

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This is a good cautionary tale about downward spirals, and how societies can stubbornly refuse to see them.

But as we are, in the midst of our own crisis of government, it would be a mistake to believe that there is only one form of decline.

“Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as "bad luck.” - Heinlein

Seeing as millions are fleeing Venezuela, and the United States continues to be the #1 destination for global investment capital (again. still.) and among one of the most desirable immigration destinations, "one form of decline" is spot on.

I think I am fairly up on all the statistics. GDP is growing. Life expectancy is growing over the long term. Death due to disease is falling. I think most measures of crime are falling.

But it isn't all sweetness and light.

US life expectancy drops for second year in a row

You can probably think of other examples.

Is it really a surprise that we would have retrograde motion at a time of such great political dysfunction?

"But it isn't all sweetness and light." Agreed but then again it never is, and of course I can think of other examples but I see "retrograde" and "decline" as two different words and concepts entirely. One can be a blip, the other - when used properly - represents a real trend.

We are also agreed that we have greater than usual (IMO greater than at any time since the Civil War) political dysfunction. That's a different story and by no means the only explanation for any retrograde motion.

I am trying to indicate that the destruction of a nation's economic health (in real time), the migration of millions of its people, flight of its monetary and intellectual capital (doctors, engineers, teachers, etc.), inability to properly utilize the resources that it has (oil), and provide proper nutrition and medical services are ON AN ORDER OF MAGNITUDE different than a retrograde motion on life expectancy and in other examples, all of which have additional complimentary causes in addition to "political dysfunction."

What is happening in Venezuela is not properly described as decline. It is a disaster. One that will take decades to fix. What we have here in the USA and what they have in Venezuela are as close together as the Sun and Alpha Centauri.

I agree with the vast majority of that.

But I think there is room for caution, and a reminder that every society should check how they're doing. So as not to fall into precipitous decline.

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"US life expectancy drops for second year in a row

You can probably think of other examples.

Is it really a surprise that we would have retrograde motion at a time of such great political dysfunction?"

So you are saying that political dysfunction caused life expectancy to drop two years in row? That's ridiculous.

Nope. I'm asking what we're doing about it. I'm asking if you're asking for us to do anything about it?

Or as part of our decline are we accepting it as our destiny?

It seems to be a direct result of obesity and drug abuse. I'm avoiding weight gain and avoiding drugs. So, far it's working out for me.

So you did go with "freedom."

Congratulations, you even derail a thread about Venezuela.

Venezuela has nothing to do with Trump, for the love of god.

And no, an economy growing at >4% combined with moronic tweeting is not the same as nationalizing the economy and the resulting economic collapse and hyperinflation.

Are you going to go after Francis Fukuyama as well?

From his article linked below:

Democratic societies are fracturing into segments based on ever-narrower identities, threatening the possibility of deliberation and collective action by society as a whole. This is a road that leads only to state breakdown and, ultimately, failure. Unless such liberal democracies can work their way back to more universal understandings of human dignity, they will doom themselves—and the world—to continuing conflict.

That is even more dire than my warning, and definitely on topic of societal decline and fall.

This has nothing to do with the article and is not in the spirit of the post or blog.

This is you injecting your unhealthy obsession with the Trump administration into every single post on an economics blog. And spamming the comments section with Trumpian “alternative facts” and bullshit narratives that rival Huckabee Sanders.

Also has Fukuyama ever made a prediction that has come true?

No.

As opposed to an unhealthy denial of our circumstance?

lol

Are you like this in real life?

You have a conversation with your boss or coworkers about a project and you randomly start ranting incoherently about Trump?

You need to seek mental help.

Idiot.

You made a strategic error when you blamed Fukuyama.

What you're really saying is I am as bad as an esteemed commentator on American politics.

Sure, I am as bad as Fukuyama. I'll take that.

Hey, there’s no need to sock puppet Anonymous/Bear/Shrug.

Let his lack of logic speak for itself.

No need for this blatant fallacious post in his name.

That is really funny.

Are you casting about for people to attack rather than ideas to deal with?

Read the darned Fukuyama article.

Maybe, just maybe, I'll check back tomorrow to see if you can come up with a smart response.

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"Democratic societies are fracturing into segments based on ever-narrower identities,"

The people who say "liberal democracy" means open borders, turn around and say fracturing into narrower identities is a crisis. They are the cancer. Trump, Orban, and the rest are the chemotherapy. Universal standards can be revived with homogeneous populations.

Trump isn't chemotherapy. He's Daraprim. Overpriced, underdelivers, and ultimately costing people too much money.

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But on a larger note and directly to the underlying point, the US is doing well. Median Household incomes are at an all time high. Unemployment is at or close to all time lows. The economy is prosperous. I strongly suspect that a few more years of this and the life expectancy drop of the Obama years will be wiped out by further gains.

... and we're back to time travel.

Obama causing, sometime after 2009, the Great Recession of 2007.

Did the logic stump you again? Let's go over it slowly:

You post "US life expectancy drops for second year in a row"

And you tie it in with political dysfunction.

The Life expectancy drop occurred in the years 2015 and 2016.

Those were the last two years of the Obama presidency.

Personally, I don't think Obama or any Presidency had anything to do with a drop in life expectancy. Indeed, it's not even related to political dysfunction. But you did indeed bring it up. And if you are going to make it about politics, then it clearly falls under the negative events of the Obama Administration.

Too bad you can't edit your comment above, and remove all that recession recovery stuff.

See Fukuyama below on how the Great Recession relates.

A masterful game of "hide the ball", Anonymous. Credit to you.

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You do know that the only mentions of recession are from you, right?

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Nitwits. This was the whole lead-in:

But on a larger note and directly to the underlying point, the US is doing well. Median Household incomes are at an all time high. Unemployment is at or close to all time lows. The economy is prosperous

That was ALL about recovering from the Great Recession, the extension of trends.

After that one throw away line about the fall in life expectancy being Obama's and not related to the Great Recession.

That's a really stupid argument. I mean what kind of economist reclaim that a Great Recession does not have knock-on effects on human welfare?

s/reclaim/would claim/

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Just to reinforce how stupid this is, how the heck can readers of an economics blog reject all business cycle theory and just attach performance to presidential term?

How the heck?

These specious connections are literally a figment of your imagination.

He said he doesn’t attribute it to which tribe owns the White House, that is entirely your projection.

You are the one who brought up the life expectancy decline during the Obama presidency as proof of decline during the Trump era.

One, it’s hilarious because the years are during the wrong presidency. Two, because it’s year 7 and 8 during said presidency. Three, because the presidency as cult should be abhorrent to anyone reading MR.

To think that the White House occupant affects religiousness, diet, and drug abuse, the major determinants of life expectancy is insane.

Idiot.

Look back at who introduced "Obama" to the thread.

You did.

You said life expectancy was declining, and implied it was due to the change in presidency.

JWatts pointed out the declines were during the wrong presidency.

Then you did your usual move when confronted with facts, throwing shit at the wall.

I'm pretty tired of you not reading.

I mentioned declining life expectancy as a societal problem, related to our ongoing politics.

Guess what, the Fukuyama piece in Foreign Policy is more or less in the same vein.

Read the whole thing.

Yes, most people who start injecting heroin into their veins cite gridlock in congress as the main reason.

Astute as always.

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"That was ALL about recovering from the Great Recession, the extension of trends.

After that one throw away line about the fall in life expectancy being Obama's and not related to the Great Recession."

I'm sorry, current economic conditions are all about something that happened 10 years ago? The fall in life expectancy in '15-'16 is about something that happened 8 years before that, and NOT about Trump (or Obama) politics, even though earlier you said that it was?

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"US life expectancy drops for second year in a row"
When were the last provisions of the PPACA enacted?

It would be a "novel" explanation, that increased insurance coverage reduced life expectancy.

It would also be a novel response, in the face of falling life expectancy, to say "hey, at least we are reducing health coverage!"

We don’t need to guess, we have the Oregon Medicaid randomized study.

The short term health effects of having health insurance is zero.

Long term remains to be seen. The data we have on “preventative care” suggests it is zero as well.

But why should the facts matter?

So you're saying you did *not* prove decline in life expectancy?

Um..what?

There’s no difference in health outcomes.

However you want to emotionalise and spin it is up to you.

We have the truth, and that truth is that literally no health outcomes are affected in the short term.

Not life expectancy, any health outcomes.

Can you even read?

Floccina asked of the PPACA could be an explanation for the fall in life expectancy .

Yes I can!

And because English is my first language I understand the concept of “tongue in cheek.”

I’m sorry I don’t know the Russian translation.

Gibberish is the final refuge of fools.

On the contrary, it seems to be your first and only refuge.

Wow, you really got him there, didn't you?

That was meant as sarcasm. I'm With Anonymous.

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(if you think a 40% obesity rate is fine, because "freedom," that might qualify as a particularly American form of denial.

it is kind of the opposite of a communist starvation problem, but that doesn't mean it's not a problem.

it's not really winning.")

Exactly! Everyone complains about Maduro, but do you see a lot of obese Venezuelans?

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Francis Fukuyama on what I'm really talking about:

https://www.foreignaffairs.com/articles/americas/2018-08-14/against-identity-politics

Next time, just let him say it, dummy, instead of engaging in these poo-flinging contests like you do.

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The Concorde thing is more a rhetorical device to emphasize how far they have fallen.

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Nearly twenty years ago, Mark Falcoff offered that Venezuelans from all walks of life were going to have to learn the hard way that resource endowments aren't a true source of affluence and that the source of their poverty has not been theft (even if Venezuelan politicians do have sticky fingers). Well, this is what the hard way looks like. Now, is anyone going to learn from this?

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Other countries in the Western Hemisphere with real income levels which are lower than they were in 1975: Haiti and Nicaragua. Countries wherein the political order is in worse shape than it was in 1975: Suriname (you might argue). Not too many examples of a place pissing away its advantages more thoroughly.

What have you got against Tabarrok? You dislike that he is the more libertarian of the hosts?

And he missed a chance to make a pun by using 'pillery' when referring to the Bartley J. Madden Chair in Economics at the Mercatus Center.

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Who ever knew that oppressive governments could rapidly destroy a stable economy and force citizens to reluctantly flee their homes ??

This black swan event is virtually unknown in world history.
American social scientists are quite justifiably surprised at Venezuela's demise and will closely study the situation for years to come.
Rising hardcore leftists in the US Democratic Party are certain that Venezuela's current troubles merely reflect an improper implementation of socialist economic principles.

Venezuela is simply Saudi Arabia without US workers doing the pillage of natural capital to fund people not working.

Saudi Arabia a monarchy. It's their lives and wealth on the line.

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Brazil's new motto: Not as wretched as Venezuela!

And tastier food, sweeter music, warmer weather, prettier beaches, than Canada.

Brazil and Colombia should invade Venezuela and split the oil. Appoint a governor, US and Germany economic advisers, no elections. Would be a great country in 20 years. MVGA.

Argentina used to have British economic advisers, but the British accent got too annoying, so they kicked them out.

Now, 100 years later, they have dropped from top 10 GDP/capita to near hyper inflation.

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Brazil is much better than Venezuela. We are housing, feeding and healing thousands of desperate Venezuelans.

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“designed by the Pentagon to justify intervention in Venezuela”

Like we care. Intervention in decrepit South and Central American countries went out with the end of the Cold War.

Look at Nicaragua. In the 1980s, a Stalinist in power nearly provoked a US constitutional crisis. Same guy now is totally ignored.

Without a large hostile Soviet Union backing up Socialist regimes with guns and money, the US just has to wait a decade for them to implode on their own.

Yup, the USSR spent a fortune keeping the Cuban economy afloat.

In 1988, it was estimated that Moscow spent $4-5 billion/year subsidizing Cuba. https://www.nytimes.com/1988/03/16/world/soviet-said-to-reduce-support-for-cuban-economy.html

That was somewhere in the neighborhood of 15-20% of Cuba's GDP at the time.

The Castros have a talent for finding suckers to fund their regime.

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What could the Pentagon do to Venezuela that is worse than Chavezism Maduro?

Dispose of a lot of DU rounds in urban areas while cleaning out those dead enders?

After all, the last times we helped out a couple of oil exporters out of a jam, the depleted uranium rounds were pretty much used in low population desert areas.

And the problem with uranium is not really radioactivity, it is the fact that it is a toxic heavy metal - 'The health effects associated with oral or dermal exposure to natural and depleted uranium appear to be primarily chemical in nature and not radiological, while those from inhalation exposure may also include a slight radiological component, especially if the exposure involves prolonged exposure to insoluble uranium compounds. This profile is primarily concerned with the effects of exposure to natural and depleted uranium, but does include limited discussion regarding enriched uranium, which is considered to be more of a radiological than a chemical hazard. Also, whenever the term “radiation” is used, it applies to ionizing radiation and not to non-ionizing radiation.' https://www.ncbi.nlm.nih.gov/books/NBK158798/

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Socialism done poorly is all encompassing.

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Just like you would expect, these refugees are a huge problem. Recently in Brazil there has been a big backlash against them https://www.reuters.com/article/us-venezuela-brazil-border/tense-calm-on-brazil-venezuelan-border-after-anti-immigrant-riot-idUSKCN1L40LU

Maybe if Americans took their fair share of the burden, Brazilians would not have to gouse, feed and heal thousands of Venezuelans! It is funny how there are always money for bombing and torturing Middle Eastern peasants, but there is never money for helping rwfugees.

So, exactly how many additional hundreds of thousands of Venezuelans would the US have to take before you considered the US to be taking its "fair share"?

I don't know what he'll say, I only know it will involve nuking China, India, and Japan.

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That's an odd coincidence. Official estimates put the crowd the day of Trump's inauguration at less than 600,000, while Trump's estimate is almost 2 million. So, what's Cowen's point? That Maduro is a liar.

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Has anyone done the CTRL-F "socialism" count for this article yet?

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On the bright side, a few ugly Hollywood actors got laid.

Crazy Days and Nights.

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1. this whole free speech thing looks like its working just like they
thought it would !!
whose cynical?
2 lack of empathy; also not the problem!
3 godbless John Mccain
4 go see john prine he will cheer you up
5 francamente tú ganas,
es un mundo maravilloso

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That will be the US in 40 years if Hilary or Cynthia have their way.

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