Trump Says Dems Support Venezuelan “High Taxes And Open Borders”

Trump Says Dems Support Venezuelan “High Taxes And Open Borders”

The  average tax rate in Venezuela is 25%. The average tax rate in the US is 26%.  Sorry, Trump, this is yet another lie by Trump, but what else is new on this?

I do not know the details of Venezuelan of immigration policies, but at this point in time the issue  in Venezuela is not immigrants freely arriving and causing economic problems, but just the opposite: people leaving in massive numbers leading to crises in all the neighboring countries of Venezuela.
So, bottom line: Trump not for the first time is totally full of it on all of this.
But now it is time to deal with the political-economic problem of Venezuela, a matter that may lead to some regular readers of this blog to differ with me.

Indeed, Venezuela has turned into a political-economic disaster: extreme hyperinflation with a plunging real output, with massive outmigration, so massive that the receiving nations (Columbia, Brazil, Guayana, Ecuador), have had serious public complaints.

So GOP standard stories have now focused  on Venezuela as the supposed world model of “socialism.”  Oh gag on many issues. I have from the moment Hugo Chavez came to power I never supported him, a military guy who had attempted a failed coup.  I shall not name prominent economists who now are fumbling with the current awful situation.

As it is, indeed for most of the time Chavez ruled the Venezuelan economy performed not too badly, and indeed had had reductions in inequality, long demanded for politically.   Even now, a substantial portion of the Venezuelan population is better off than in the past due to the Chavist policies, even as the general state of the economy is horrendously collapsing under his successor Maduro, who has suppressed normal democratic processes.  And while the economy maintained a not-too-bad performance while Chavez was in power, it has  totally collapsed under Maduro, his  successor.

Of course the critics have argued that the policies that led to this  hyperinflationary collapse were due to Chavez and not his pathetic loser  successor, Maduro. This is a more complicated matter, and gets to the systemic question: has Venezuelan policy been a world avatar of “socialism”?

Chavez avoided such claims, even as he cut a deal with Cuba for them to provide doctors for oil, a deal still in place last I heard. Regarding how “socialist” he was, a lot less than many would say, and that was not how  he described  himself  or his policies  He claimed a nationalist position derived from the great liberator of South America from Spanish rule, Simon Bolivar, who indeed did come from Venezuela.  So the original Chavismo was proclaimed by him to be “Bolivarianismo,” a term that has now basically disappeared, for better or worse.

So how “socialist” has Venezuela been, with its failed Bolivarianismo?  Much less than either it  s fervent supporters or its far more numerous critics have  claimed.  In terms of the most hard core definition of socialism, state ownership of the means of production, the  most important part of the economy, the oil sector, was nationalized decades ago, back when Venezuela and Saudi Arabia cooked up OPEC in 1960.  There have been nationalizations since Chavez took power, but most of the Venezuelan economy not in the oil sector actually remains privately owned, not soicialist.

Which brings us to how Chavez and Maduro really messed up the economy. Yes, they imposed some dumb price controls here and there, and since have been totally swamped by the  hyperinflation.  Yes, there were nationalization of some firms, even as most of the economy remains privately owned and pays lower taxes than in the US. But the real problem was/is corrupt political cronyism, with the  crucial oil sector the central problem for the economy. And the bottom line on that emanates from when Chavez took power and fired the competent managers of the state-owned  oil company and installed incompetent cronies who proceeded to destroy the Venezuelan oil industry.  I saw this from Day One and never supported Chavez or Maduro.

What we dealing with here is not socialism, but “corrupt incompetence.”  Venezuela is not a socialist economy more than it was before Chavez came to power.  It is just a corrupt loser oil exporter that has lost it.

Barkley Rosser

 

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