Avoiding Muggers the Old Fashioned Way: Run
We know that when crime makes residents feel less safe, they often move away. This has certainly been the history of New Orleans over the last 30 years, with decade after decade of population loss. New Orleans was once a city of about 600 thousand. By 2000, the population had fallen to about 450 thousand.
The mugger in question here is that master thief, Dictator Hugo Chavez of Venezuela. Instead of just losing what they have worked their lives for, wealthier Venezuelans are leaving in droves, and emigrating to safer places, such as the US. Take a look at this article from the AP sent to me by my brother, Paul. (the origina article my brother sent is no longer available, but take a look at this article  later in October of 2007).
Just think where this will leave Venezuela: fewer doctors, fewer businessmen, and fewer educated professionals. Also leaving will be capital — the equipment that workers need to be more productive. Venezuela will go from a society of haves and have nots, to just a society of have nots, and Chavez will have no one left to tax or steal from in Venezuela–then, he will have to resort to attacking his neighbors in the name of exporting his revolution. The Cambodians did the same thing with their “killing fields,” killing off and chasing away all of the talented, the educated, and the professionals — ridding the country of its essential human capital.
But to Chavez, that’s progress, “In death there is equality!”
MC
March 8th, 2007 at 8:00 am
Dictator Hugo Chavez of Venezuela is setting his economy up for all of the classic responses to Nationalization (thievery by State).
Capital, both realized economic (money/stored value) and potential economic (talent) is fleeing where mobile & possible.
The huge increase is risk his inane policies have brought are resulting in non-investment acceleration of stripping businesses not able to flee being location or resource bound (the management is diluting the risk by getting as much cash out as possible), outside vendors are offsetting their perception of risks by demanding higher payments from Venezuela, often on a cash basis, and Venezuela itself is at risk of loosing control of its political future as it makes “deals with the devil” with other states with extra-economic agendas to backfill desperate needs caused by the capital & intellectual flight to quality.
Basically his policies so increase risk that investors will accept damaging their investment’s long term health to get cash out now, investors want a huge risk premium to work with Venezuela, and Venezuela is at risk of becoming politically dependent on a “provider-State” willing to supply needed intellectual & technical skills.
Chavez apparently hopes to strike some sort of balance with “provider-States” like China while expecting continued free access to the USA market.
When that balance wobbles, Chavez’s experiment is done. The $64 question is whether a real democracy could emerge, or if Venezuela will become to China what Cuba was for the USSR?
It will be interesting times!
Steve