Tuesday, February 07, 2006

Our man in Caracas 

The Wall Street Journal was back on one of their favorite topics today – Chavez. Lets see what they had to say.

Their Man in Caracas

“Hitler would be like a suckling baby next to George W. Bush.” No, it wasn’t a Massachusetts Democrat who said that on Saturday. But it was one of the Bay State Congressional delegation’s best friends – Venezuelan strongman Hugo Chavez.

We criticized Congressman William Delahunt and Ed Markey late last year for accepting an enormous petro lagniappe from Mr. Chavez in the form of 12 million gallons of cut-price home heating oil. “To the people of Venezuela, our debt,” said Mr. Delahunt, playing along with this blatant attempt to buy opposition to U.S. foreign policy.

Leave aside the fact that the “people of Venezuela” probably have better uses for their prime national resource than the subsidizing American’s second richest state. Few leaders also work harder than Mr. Chavez to undermine bi-partisan U.S. interests around the world. For example: siding with Fidel Castro to support a resurgence of radical left wing politics throughout Latin America; or trying to thwart our efforts to stop Iran from acquiring a nuclear bomb. Only Cuba and Syria joined Venezuela in voting against the IAEA’s referral this past weekend of the Iranian nuclear dossier to the U.N. Security Council.

Mr. Chavez has been picking other fights too, recently expelling a U.S. military attache on charges of spying and telling Venezuelans to gear up for a U.S. invasion. We don’t see a compelling reason for the latter anytime soon. But it seems inarguable that Mr. Chavez ranks among the worst national leaders in the world today. If Massachusetts Democrats are having second thoughts about their friend in Caracas, we haven’t heard them.

Now, as has been said elsewhere, Chavez’s remarks were very irresponsible and over the top. I would certainly agree that in a world with justice there would probably be some people from the Bush government in court on war crimes charges. But that in itself does not make him at all comparable to the person responsible for the deaths of tens of millions in one of the worlds largest conflagrations. That said, though, it would have been nice if the Journal had pointed out that one of Mr. Bush’s cabinet members had compared Chavez to Hitler the day before Chavez’s remarks. That’s not an excuse but a paper with the pretensions of the Journal should at least mention relevant facts.

What’s more I really wish they would spare us the crocodile tears over “lost” Venezuelan revenue. After all, if the safeguarding of Venezuela’s financial interests was so close to their heart then Chavez should be THEIR man in Caracas. After all, it was the Chavez administration that successfully got rid of the sweetheart deals that robbed Venezuela of billions of dollars.

To take but one example, Chavez increased the royalty payments that the Big Oil companies in Venezuela’s Strategic Association pay from 1% to 16%. Lets do some quick calculations and see how much this recovers for Venezuela.

The S.A.’s produce 600,000 barrels of oil per day but only about half of that belongs to the foreign oil companies or 300,000. Lets assume the price of oil is $40 per barrel. So the increased royalty per barrel is 15% (61% - 1%) or $6 per barrel. $6 per barrel multiplied by 300,000 barrels gives $1.8 million per day, or $657 million per year in increased revenue [this number is not exact as there are other factors but it is a close approximation]. Another way to look at that number is that is how much money Venezuela would be losing every year if the opposition were still in power and left the royalty at 1%. And that money would be going straight into the pocket of the major oil companies. Lets also keep in mind this is only ONE example of the giveaways of Venezuelan oil negotiated by the Venezuelan opposition when they ran things.

So lets see, when Chavez gives away a few million or maybe a few tens of millions to poor people that is cause for outrage. But when hundreds of millions of dollars are given away to big, rich oil companies nothing is said – either by the Wall Street Journal or by the Venezuelan opposition. I wonder why, if they’re are genuinely concerned about Venezuela’s financial welfare? Then again we already know for a fact the Venezuelan opposition doesn’t care about Venezuela’s finances – they led a strike that cost Venezuela at least $13 billion in lost revenue and spent months doing everything they could to destroy its economy. And somehow I suspect the Wall Street Journal is a little less than sincere in its professed concern too. So to the Journal’s editorial writers: Thank you very much for your concern but I think the majority of Venezuelans know their national patrimony is finally in safe hands with the current government and are happy to keep it that way.


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